Hong Kong Broadband Network Ltd v. The Director of Highways and Another

HCAL 58/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 58 OF 2010

____________

BETWEEN

____________

Before: Hon Au J in Court

Date of Hearing: 26 & 27 May 2011

Date of Judgment: 12 August 2011

_______________

J U D G M E N T

_______________

A. Introduction

1.The Applicant has been granted a licence (“the FTN Licence”) by the Office of the Telecommunications Authority (“OFTA”) under the Telecommunications Ordinance (Cap 106) (“the TO”) to provide fixed telecommunications network (“FTN”) services to the public.

2.For the above purposes of providing FTN services under the FTN Licence, on 13 January 2003, the Director of Lands gave the consent and issued a licence (“the Block Licence”) to the Applicant, to allow it, subject to the conditions contained therein, to lay erect and construct cables, fibres, poles, joint boxes, etc, on unleased Government land.  The Block Licence was granted by the Director of Lands under section 5 of the Land (Miscellaneous Provisions) Ordinance (Cap 28) (“the LMPO”).

3.Between January and February 2010, the Applicant had carried out excavation works at 491 different locations on the Hong Kong Island and Kowloon, and erected a self-built pole on each of these locations^[1]. The Applicant considered the erection of the all these poles (collectively “the Poles”) to be necessary for the purposes of providing FTN services to these areas.   Each of the Poles is of about 2m in height and has been erected to mount the Applicant’s telecommunications facilities called junction boxes. 

4.By way of this judicial review application, the Applicant challenges and seeks to quash a number of decisions respectively and effectively made by the Director of Highways^[2] and the Director of Lands^[3] between 9 March 2010 and 27 August 2010 in saying that the Applicant was in breach of Condition 13 of the Block Licence in erecting the Poles and requiring it to remove all of them.

5.A number of issues initially arose in light of the grounds set out in the Amended Form 86 and the evidence filed by the Respondents. But when it comes to the substantive hearing and the position then taken by the Respondents through Counsel, the real issues become much narrower:  they turn mainly on the proper construction and meaning of Condition 13 of the Block Licence.  I will explain these in detail later.

6.But to understand the real issues in proper context, I need to first set out the relevant factual background as follows.

B.  The facts

7.In 2003, the Applicant was granted the FTN Licence for building up its own wire line to provide FTN services to the public.

8.As a FTN service provider licensee, under s. 14(1) of the TO, and subject to the consent of the Director of Lands, the Applicant may place and maintain a telecommunications line, and such posts as may be necessary over or upon unleased Government land.   It is also provided under General Condition 28(1) of the FTN Licence (“GC28(1)”) that the Applicant shall obtain the consent in writing of the Director of Lands before commencing any installation works for its network over or upon  any unleased  Government Land.

9.As mentioned above, for the purpose of, inter alia, s. 14(1) of the TO, and facilitating and giving effect to GC28(1), the Director of Lands issued the Block Licence to the Applicant on 13 January 2003. 

10.Subject to the conditions contained therein, the Block Licence generally allows the Applicant to lay, erect and construct “cables, conduits, ducts, fibres, filaments, lines, pipes, tubes, poles, joint boxes, chambers, manholes, pillars and cabinets including all associated protection, supports, ancillary structures, fittings and equipment” in, on, over, along, across and under Government unleased land as indicated in the Master Plans annexed to the Block Licence.

11.Such “cables, conduits, ducts, fibres, filaments, lines, pipes, tubes, poles, joint boxes, chambers, manholes, pillars and cabinets including all associated protection, supports, ancillary structures, fittings and equipment” have been referred collectively as “the System” in the Block Licence, and I will use this definition in this Judgment as well whenever necessary.  

12.There is no dispute in the present case that the definition of the System includes the Poles, and thus the installation and erection of the Poles was permitted under the Block Licence but subject to the conditions contained therein.

13.Condition 13 (“Condition 13”) of the Block Licence gives the Director of Highways a control on the “alignment and disposition” in which the System or any part thereof that could be installed on public road.  It provides as follows:

“The detailed alignment and disposition of the System or any part thereof in, on, over, along, across and under any public road or within any future road reserve shall be to the satisfaction of the Director of Highways.” (emphasis added)

14.Further, for the purpose of installing the System and any part thereof, it may be necessary for the licensee to carry out excavation works on unleased land.  There are also conditions provided in the Block Licence and provisions in the LMPO which deal with applications for such excavation permits.  Relevant for the present purposes are:

(1)  Condition 10(a) of the Block Licence, which provides that the Applicant shall in accordance with the LMPO submit an application for an excavation permit to the appropriate authority for approval before the commencement of any excavation in unleased land or before erecting any installations thereof.  No work shall commence until and unless such an excavation permit has been issued.

(2)  The Director of Highways may on payment of the appropriate fees and subject to such conditions as he thinks fit issue an excavation permit authorizing and maintaining excavations in unleased land which is a street^[4].

15.In other words, the licensee must apply for and obtain a relevant excavation permit from the Director of Highways before it could commence any such excavation works for installing the System or any part thereof.

16.At the same time, the Highways Department (“HD”) has published an Excavation Permit Processing Manual (“the Manual”) to provide guidance on the procedures for the application and administration of different types of excavation permit which can be issued by HD in various circumstances.   Section 5 of Chapter 4 of the Manual sets out the procedure for applications for block small scale works excavation permit (“SWP”) which is introduced for street excavation promoters to arrange more efficiently their small scale excavation works involving a total area of excavation not exceeding a 4m² boundary.

17.The HD has also maintained a web-based computer system known as the Excavation Permit Management System (“XPMS”), which provides for a single e-platform for the processing of all types of permit under HD’s jurisdiction (including excavation permit applications) through the internet.    The Applicant has been a registered XPMS user.

18.Moreover, under s. 12(1)(a) and the Schedule of the LMPO, the Director of Lands and the Director of Highways have the authority to serve written notice on the Applicant (as a licensee under the Block Licence) to require it to demolish any structures it has placed on unleased land in the urban areas in breach of the Block Licence. 

19.In 2007, the Applicant explored with the HD the possibility of using existing street furniture to mount telecommunications facilities for its provision of FTN services to the public.  This proved to be unsuccessful for various reasons which are not relevant for the present purposes.

20.As a result, the Applicant eventually decided to use self-erected poles to be installed on unleased land for the purpose of mounting its telecommunications facilities called “junction boxes” to provide its optical fibre FTN services.  For erecting these poles, it had to carry out excavation work on the streets.

21.Since the anticipated excavation work for the purpose of erecting each ofthese poles would not exceed a 4m² boundary, the Applicant applied for SWP via the XPMS in respect of each district to cover each of the contemplated excavation works to be carried out within that district.

22.Upon such applications through the XPMS, the HD had issued various SWP to the Applicant.  The Applicant had also registered the contemplated jobs via the XPMS in advance in accordance with the Manual.  For each of these registrations, the Applicant selected “Erecting/Recovering telephone poles” as “the Nature of Works” to be carried out for the excavation work jobs.   It had also specified the location of the work in each of the registration.

23.Between early January and February 2010, the Applicant carried out excavation works at approximately 500 locations, each of which was completed with a pole erected on each of those locations under the relevant SWP.  The Applicant had also submitted completion notifications to HD via the XPMS for all of these excavation works.    Initially, as of 3 February 2010, HD had via the XPMS approved approximately 150 of these completion notices.

24.The erection of the Poles in the various locations had however caused widespread concerns amongst members of the public.  The HD had received numerous enquiries and complaints from individuals, district councils and various institutions, as well as those referred from the LegCo.   The Secretary for Transport and Housing also had to reply to question raised by members of the LegCo in the meeting. 

25.At the same time, the HD wrote to the Applicant respectively on 3 and 5 February 2010 requiring it to cease the erection of poles and to removal all the erected poles.  The Applicant did not do so and contended that it had complied with all the statutory requirements and that the erection of the Poles was permitted under the SWP.

26.Moreover, on or before 17 February 2010, the HD changed retrospectively the “approved” status of the Applicant’s completion notifications submitted via the XPMS into “rejected” status. I will refer this acts of the HD in the Judgment as “the HD’s Completion Notices Acts”.

27.In light of the above, there had been various meetings held between the Applicant and OFTA[5], HD, the Lands Department jointly and severally from March to April 2010 to discuss about requiring the Applicant to remove the Poles and to consider other alternatives of installing the junction boxes.

28.The meetings were not fruitful.

29.On 9 March 2010, the Director of Highways had a meeting with the Chairman of the Applicant.  At the meeting, the Director of Highways said¸ inter alia, the Applicant had not observed Condition 13 and obtained the Director of Highways’ agreement to erect the Poles.  

30.I will refer herein this decision of the Director of Highways as “the Director of Highways’ 1^st Decision”.

31.There had also been exchanges of correspondence between the Applicant and the various Government departments including the HD and the Director of Lands concerning the same and exploring various alternatives of housing the Applicant’s junction boxes and telecommunications facilities instead of using the Poles.

32.By a letter dated 14 May 2010 signed by Mr Nip for the Director of Highways to the Applicant’s solicitors (“DLA”) in response to DLA’s earlier letter dated 6 May 2010, it was stated, inter alia, that “it is our view that [the Applicant] should unconditionally remove all the poles forthwith, which have been erected by means of inappropriate use of the SWP system”. 

33.I will call this “the Director of Highways’ 2^nd Decision” in this Judgment.

34.By a letter dated 27 August 2010 signed by the Chief Estate Surveyor under delegated authority of the Director of Lands and addressed to the Applicant, the Director of Lands (a) stated that the detailed alignment and disposition of the Poles encompassed in the project were, to date, not to the satisfaction of the Director of Highways, and therefore all the Poles have been erected in breach of the Block Licence, and (b) required[6] the Applicant to demolish all the Poles, together with all the junction boxes and/or cables affixed thereto, by 27 September 2010.  

35.The said decision of the Director of Lands will be referred to in the Judgment as the “Director of Lands’ Decision”.

C.      This judicial review

C1.    The decisions and acts under challenge

36.The Applicant principally seeks to challenge in this application the Director of Highways’ 1^st and 2^nd Decisions and the Director of Lands’ Decision (collectively “the Relevant Decisions”).

37.Further, insofar as necessary and relevant, the Applicant also challenges the following decisions or acts in this application:

(1)  The decision (“the CE/HK Decision”) of the Chief Highways Engineer/Hong Kong of the Highways Department (Urban Region) contained in the Highway Department’s letter dated 5 February 2010, that having regard to Condition 13, the Applicant’s “proposal” was “not acceptable from highways point of view” and that the Applicant was required to remove the Poles and provide permanent reinstatement to the conditions existing before the commencement of excavation works.  However, the Applicant only so challenges the CE/HK Decision if and only insofar as this decision constitutes a decision of the Director of Highways for the purpose of Condition 13.

(2)  The HD’s Completion Notices Acts.

38.On 3 June 2010, the Applicant applied for judicial review against the Director of Highways’ 1^st and 2^nd Decisions, the CE/HK Decision and the HD’s Completion Notices Acts.  Leave was granted by Fok J (as he then was) on 24 June 2010.  

39.With leave of the Court, the Applicant amended the Form 86 on 5 October 2010 to join the Director of Lands as the 2^nd Respondent and to also seek to judicial review the Director of Lands’ Decision.

40.In gist, the Applicant says the Relevant Decisions cannot stand as the Respondents had taken into account of irrelevant considerations in arriving at them and/or that they are also Wednesbury unreasonable. 

41.The Applicant asks:

(1)  to quash the Relevant Decisions,

(2)  to insofar as necessary, also quash the CE/HK’s Decision and the HD’s Completion Notices Acts and for an order for Mandamus to compel that the HD’s record in the XPMS be rectified in that the status of the completion notifications submitted by the Applicant be changed from “rejected” back to “approved’[7].

C2.    The Respondents’ position

42.Initially, in the affirmations and the skeleton filed by the Respondents, it was understood that the Respondents oppose the present application on a number of grounds.  These included that (a) the decisions under challenge were not amenable to judicial review, and (b) the Applicant’s use of the SWP to carry out excavation works and erect the Poles was inappropriate and a malpractice and thus the installation of the Poles had not be properly approved.  The Respondents also said the decisions were justified on the basis that the erection of the Poles was carried out in breach of Condition 13 and the Respondents were therefore entitled to require the Applicant to remove all the Poles. 

43.However, at the substantive hearing, Mr Johnny Mok, SC for the Respondents helpfully confined the Respondents’ contention to effectively the only ground that the Relevant Decisions were correct and justified on the basis that the Poles were erected in breach of Condition 13. 

44.Mr Mok also confirmed that the Respondents were no longer seeking to oppose the judicial review on the grounds that (a) the decisions or acts under challenge were not amenable to judicial review, (b) these decisions or acts were justified under what the Respondents said to be an inappropriate use of the SWP by the Applicant for the purpose of the excavation works relating to the Poles, and (c) even under the SWP applications, the Poles did not fall within the definition of “telephone poles” and therefore the Applicant was not entitled to employ that regime.

45.In light of the above final position adopted by the Respondents, the live issues arising from the Applicant’s grounds of judicial review that call for determination are much narrower and confined. 

46.I will now deal with them as follows.

C3.    The grounds of judicial review

C3.1  Irrelevant considerations and/or error of law/fact

47.It is well established in public law that if irrelevant factors have been taken into account by the public body, the decision concerned is bad in law unless the irrelevant factors are insignificant or immaterial. See:  R (Alconbury Developments Ltd) v Secretary of State for Environment Transport and Regions [2003] 2 AC 295; Fordham, Judicial Review Handbook (5^th ed), para 56.1; de Smith’s Judicial Review (6^th ed), paras 5-110 – 5-111).

48.The Applicant contends that the Relevant Decisions are all bad in law as the Respondents had taken into account of three irrelevant considerations in making them.   They are:

(1) The Applicant’s failure to obtain a prior consent from the Director of Highways as to the “alignment” and “disposition” of Poles before installing them.

(2) The alleged inappropriate use of the SWP system by the Applicant for obtaining the excavation permits for the purpose of erecting the Poles.

(3) The public concerns or responses to the existence of the Poles.  

49.I will examine these complaints in turn.

C3.1.1  The fact that the Applicant had not obtained prior consent from the Director of Highways

50.In relation to the Relevant Decisions, the Respondents says:

(1)  The Applicant had a right under the Block Licence to install the Poles only if it was done in compliance with the conditions provided therein.

(2)  On its proper construction, Condition 13 requires the Applicant to first obtain the Director of Highways’ prior consent or approval as to the “alignment” and“disposition” of the Poles that it intended to install on public land before it could in fact and physically install them. 

(3)  Since it is common ground that the Applicant had not obtained any such prior consent from the Director of Highways as to their “alignment” and “disposition” before erecting the Poles, it was done in breach of the Block Licence and the Respondents are therefore entitled and justified to require it to remove all of them. 

51.The Applicant on the other hand contends that:

(1)  On a true and proper construction, Condition 13 does not require the Applicant to obtain any such prior consent in erecting the Poles.

(2)  Thus, whether or not the Applicant had obtained such a prior consent from the Director of Highways is an irrelevant factor in considering whether Condition 13 has been breached.

(3)  As such, in taking into account the fact that the Applicant had not obtained the Director of Highways’ prior consent as to the “alignment” and “disposition” of the Poles, the Respondents took into account an irrelevant consideration in arriving at the Relevant Decisions based on the view that the Applicant was in breach of Condition 13.

(4)  The Relevant Decisions are therefore bad in law and should be quashed. 

(5)  Alternatively, the Respondents’ construction of the meaning of Condition 13 is wrong in law.   The Relevant Decisions based on such construction are similarly wrong in law and should similarly be quashed.

52.The competing contentions therefore turn solely on the proper construction of Condition 13.

53.As it is common ground that for the purpose of its proper construction, Condition 13 should be read together with some other conditions of the Block Licence, and some general conditions of the FTNS Licence, for convenience, I would quote them in full below:

The opening paragraph of the Block Licence provides:

“Licence is hereby granted by the Director of Lands (hereinafter referred to as the ‘Licensor’) to you [the Applicant] having its registered address …, to lay cables, conduits, ducts, fibres, filaments, lines, pipes, tubes, poles, joint boxes, chambers, manholes, pillars and cabinets (which “cables, conduits, ducts, fibres, filaments, lines, pipes, tubes, poles, joint boxes, chambers, manholes, pillars and cabinets including all associated protection, supports, ancillary structures, fittings and equipment are hereinafter collectively referred to as ‘the System’) for or in connection with the purpose of provision of fixed telecommunication network services, and thereafter to operate, inspect, maintain, renew and remove the System in, on, over, along across and under unleased land as defined under section of the [LMPO] (hereinafter referred to as ‘unleased land’) along the routes and at the levels or in the areas (hereinafter collectively referred to as ‘the Premises’) as indicated on the master plans together with any amendments thereto (hereinafter referred as the ‘Master Plans’) as approved by the Licensor subject to the following conditions and your acceptance in the manner stated in the last paragraph hereof:”

Condition 8(a) of the Block Licence (“Condition 8(a)”) provides:

“(a) At any time during the continuance of this licence the Licensor shall have full power to serve upon the Licensee an advance notice of not less than three calendar months in writing requiring the Licensee to remove, divert, reinstate or otherwise change or alter the position of the System or any part thereof if in the opinion of the Licensor it is necessary to remove, divert, reinstate or otherwise change or alter the position of the System or any part thereof for whatever reason and upon receipt of such notice the Licensee shall at his own expense and within such time limit as may be imposed by the Licensor carry out the work required by such notice in such manner as the Licensor shall prescribe. No compensation shall be payable to the Licensor for any work required to be done or necessary under this Condition No. 8(a).”

Condition 10 (“Condition 10”) of the Block Licence provides:

“10. The Licensee shall:-

(a) in accordance with the Land (Miscellaneous Provisions) Ordinance, Cap.28 submit an application for an excavation permit (hereinafter referred to as ‘Excavation Permit’) to the Licensor and/or the appropriate authority as specified in the said Ordinance for approval before the commencement of any excavation in unleased land or before erecting any installations thereon and no work shall commence until and unless an Excavation Permit has been issued;

(b) in accordance with the Road Traffic (Expressway) Regulations made under the Road Traffic Ordinance, Cap.374 submit an application for an expressway works permit (hereinafter referred to as ‘Expressway Works Permit’) to the Licensor and/or the appropriate authority as specified in the said Ordinance and Regulations for approval before carrying out any expressway works (as defined in the Road Traffic Ordinance, Cap.374) on an expressway (as defined in the Road Traffic Ordinance, Cap.374) or before erecting any installations thereon and no work shall commence until and unless an Expressway Works Permit has been issued;

(c) in accordance with Tsing Ma Control Area (General) Regulation made under the Tsing Ma Control Area Ordinance, Cap.498 submit an application for a road works permit (hereinafter referred to as “Road Works Permit”) to the Licensor and/or appropriate authority as specified in the said Ordinance and Regulations for approval before carrying out any road works within the Tsing Ma Control Area (as defined in the Tsing Ma Control Area Ordinance, Cap.498) or before erecting any installations thereon and no work shall commence until and unless an Road Works Permit has been issued; and

(d) comply with all the terms and conditions set out in the Excavation Permit, Expressway Works Permit and Road Works Permit.” (emphasis added)

Condition 13 provides:

“13. The detailed alignment and disposition of the System or any part thereof in, on, over, along, across and under any public road or within any future road reserve shall be to the satisfaction of the Director of Highways.” (emphasis added)

GC 28(1) of the FTN Licence provides:

“(1) The licensee shall obtain the consent in writing of the Director of Lands before the commencement of any installation works for its Network^[8] under, in, over or upon any unleased Crown land.” (emphasis added)

GC 32(1) (“GC 32(1)”) of the FTN Licence provides:

“(1)      The Network, or any part of it, if installed under, in, over or upon any public street or other unleased Crown land, shall be at such depth, course, route and position as may be determined by the Director of Lands or the Director of Highways.”

54.Mr Mok for the Respondents submits that the proper and objective construction of the words “shall be to the satisfaction” of the Director of Highways under Condition 13 denotes a “status” that needs to be obtained by the licensee under the Block Licence before it could proceed to implement the System or any part thereof.  He says this is so in light of the following:

(1)  Linguistically, the phrase “shall be to the satisfaction of the Director” does not describe an act of approval to be done by the Director at some future time.  The words “shall be” mean, in this context, “must be”; so the phrase is a description of the status of the System – that is the System or any part thereof, being “on, over, along across and under any public road or within any future road reserve”, “must” have the quality or characteristic of being “to the satisfaction” of the Director alignment and disposition.  Interpreted in this way, a System or any part thereof which, when installed, fails to have this status will constitute a breach of Condition 13.

(2)  Condition 13 is intended to give effect to GC 32(1) by designating the Director of Highways as the authority for the purposes of GC 32(1).  The above interpretation of Condition 13 is the only sensible interpretation which fully gives effect to, and is consistent with, GC 32(1). The plain meaning of this provision is that the “depth, course, route and position” of the Network or any part of it are to be “determined by the Director”.  In other words, these are not things which may be “determined” by the licensee.

(3)  The above interpretation of Condition 13 is also consistent with GC 28(1), which requires the licensee to “obtain the consent in writing of the Director of Lands before the commencement of any installation works its Network…”  This condition is given effect to by the opening paragraph of the Block Licence – i.e., licence to establish the System “as indicated on the [Master Plans] as approved by the Licensor subject to the following conditions…”

(4)  Nowhere in the Block Licence does it confer on the licensee the right to erect its cables and equipments anywhere it likes on unleased land without the prior approval of having the status of being “to the satisfaction” of the Director of Lands or Director of Highways.

55.With respect to Mr Mok, I am unable to accept his submissions on the construction of Condition 13.  In my view, on its proper construction, Condition 13 does not require the licensee to obtain prior consent or approval from the Director of Highways as to the alignment or disposition of the System or any part thereof before its installation.    On this I accept the submissions of Mr Yu for the Applicant that:

(1)  The plain and ordinary meaning of the words “shall be to the satisfaction” of the Director of Highways in Condition 13 does not per se prescribe any point of time in which such satisfaction has to be obtained or met. 

(2)  However, when Condition 13 is construed together in the context of the Block Licence, it points objectively to the intention that it does not require the licensee to obtain the prior satisfaction of the Director of Highways before installation of the System:

(a)  If there is an intention to require anything that needs to be done before something else, the drafter of the Block Licence would expressly provide for it (and use the word such as “before”) in the relevant condition:  see Condition 10.  The lack of any such express provision in Condition 13 shows that the intention of the drafter was not to mandatorily require “the satisfaction” to be obtained before the installation of the System.  This is particularly so as, given that the Block Licence is a detailed legal document carefully drafted up by lawyers, one would expect that if such “prior approval” were intended for Condition 13, it would have been so expressly provided for.

(b)  This interpretation of not requiring a “prior approval” is consistent with the general intention of the Block Licence in providing a in principle block approval in advance of the installation of the System or any part thereof for the purpose of providing the necessary FTN services to the public, subject to the ultimate control and approval of Director of Highways (under Condition 13) as to its installation and the Director of Lands’ unrestricted rights (under Condition 8) to require for its removal and diversion with notice and without compensation.

(3)  GC28(1) does not assist the Respondents as suggested, as rightly and fairly accepted by Mr Mok, this (the requirement of a prior consent in writing by the Director of Lands to allow the Applicant to lay and install its Network) is reflected and given effect to by the Block Licence itself.  It therefore does not add anything to the construction of Condition 13.  If anything, the express requirement of a prior consent provided in GC28(1) contrasted with the lack of such an express requirement provided in CG32(1) [which effect is given to by Condition 13] underlines the objective intention that, under GC32(1), a prior approval of the Director of Highways of the “depth, course, route and position” is not mandatorily required.

(4)  In the premises, GC32(1) also does not assist the Respondents as suggested by Mr Mok, as it similarly does not provide expressly for the requirement of obtaining prior approval.  In other words, it is not what Mr Mok submits that the Respondents’ construction of Condition 13 is more consistent with or provides a more sensible interpretation consistent with GC32(1).

56.For these reasons, I conclude that:

(1)  On a proper construction of Condition 13, the Applicant (as licensee under the Block Licence) is not required to first obtain the satisfaction of the Director of Highways in relation to the alignment and disposition of the before it could install the System or any part thereof. 

(2)  The installations of the Poles are not in breach of Condition 13 simply because they were so erected without having first satisfied the Director of Highways of their disposition and alignment.

57.I therefore accept the Applicant’s submissions that the Applicant’s failure to obtain a prior consent from the Director of Highways before erecting the Poles was an irrelevant factor that the Respondents should not have taken into account in considering whether to make the Relevant Decisions.   Further and in any event, the Respondents’ view that the Applicant was in breach of Condition 13 (based on their construction of condition) is also wrong in law.

58.These decisions are therefore bad in law and should be quashed.   

C3.1.2  The inappropriate use of the SWP system

59.It is the HD’s view that the SWP only applies to small-scale excavation works intended say for maintenance and repairs.  They do not apply to the type of excavation works that had been carried out by the Applicant for the purposes of installing some 500 poles.  In HD’s view, these excavation works, in light of the large number of them to be carried out within a short period of time under a global plan, are in substance a large-scale excavation works which are not covered by the SWP.    It was therefore an abuse or wrongful use of the SWP regime by the Applicant for the purpose of obtaining permission to carry out excavation works to erect the Poles.

60.In the evidence filed, including the notes of various meetings held between the parties and correspondences, which led to the Relevant Decisions, there have been many discussions on the respective party’s views on whether the use of the SWP to carry out excavation works to erect the Poles was proper and appropriate.  It had been the HD’s consistent view that what the Applicant did amounted to a malpractice.  This is also the view set out in the affirmations evidence filed by the Respondents in the present application. 

61.The Applicant submits that, in reading the relevant correspondences between the parties leading to the Relevant Decisions and the above evidence, the Respondents had also taken into account of what they regarded (albeit wrongly[9]) to be the Applicant’s abuse or wrongful use of the SWP system.    

62.Mr Yu says that this is an irrelevant factor that they should not have taken into account. 

63.In response, Mr Mok emphasised that it is the Respondents’ position that licensing issue is distinct from excavation issue, so the granting or withholding of any SWP is not equated to obtaining the necessary satisfaction under Condition 13, because these matters look into different things.  The Respondents are not saying that it was because the Applicant had used SWP procedure improperly that “satisfaction” was withheld.

64.In light of Mr Mok’s above confirmation, I do not think it can be disputed that the view that the Applicant had abused the SWP system is an irrelevant factor to the question of whether the Applicant was in breach of the Block Licence in erecting the Poles.  The Respondents should not take that into account in deciding whether or not the Applicant was in breach of the Block Licence and to require it to remove the Poles.

65.The question is only whether the Respondents had in fact taken that factor into account in forming the Relevant Decisions. 

66.Mr Mok says they had not.  He submits that properly and objectively reading the said correspondences, the Respondents had not relied on the HD’s view as to the inappropriate use of the SWP system to make the Relevant Decisions.  Although the Respondents did express in the correspondences the view that the Applicant’s use of the SWP system was incorrect and wrongful, they were only made as responses to the Applicant’s other contentions and allegations.   These have only been introduced in the affirmation evidence by way of background materials.

67.Having looked at all the evidence in its entirety, I am of the view that the Respondents had taken into account of the alleged inappropriate use of the SWP system as a factor in coming to the Relevant Decisions.  

68.In particular and by way of an example, I think the Director of Highways’ letter dated 14 May 2010 (in which the Director of Highways’ 2^nd Decision was stated) is telling.   I would quote it in full:

“ I refer to your letter dated 6 May 2010.

We are well aware of the arguments put forward by your client, HKBN, on various occasions in support of the erection of the 500+ telephone poles. However, we do not agree with the arguments and hereby reserve all the rights of the Government to take actions against the erection of the poles. This letter deals with your letter dated 6 May 2010. We shall issue a substantive reply to your letter dated 12 April 2010 and to your client's letter dated 26 April 2010 in due course.

Instead of applying for a normal excavation permit, your client has made use of the Small Scale Works Excavation Permits (SSWXP) system introduced in 2004 (which, as they know very well, is a simplified excavation permit processing system designed to facilitate utility undertakings to carry out small scale repairs or minor utility connection works in a timely manner) for the swift erection of 500+ poles in the first two months in 2010. Government has every reason to believe, and therefore stands on solid ground, that your client has inappropriately made use of the SSWXP system. Having regard to the circumstances in which the poles were erected and to the public concern over the proliferation of the poles in various districts in Hong Kong in a short period of time, the reply by the Secretary for Transport and Housing to the question about this manner raised at the Legislative Council meeting on 5 May 2010 was only proper. Therefore, even if your client's reputation has been tarnished as you alleged, the Secretary is not to be held responsible.

HyD has all along adopted an open attitude in providing highway facilities to fixed telecommunication network service providers to install fixed telecommunication network facilities. At the meeting on 19 April 2010 held with your client, HyD presented conceptual proposals on mounting of junction boxes of fixed telecommunication network service (FTNS) on highway facilities. HKBN raised enquiries on some technical aspects, to which HyD has responded positively. It was also suggested at the meeting that, subject to submission of acceptable details by the telecommunication operator, trials could be carried out to ascertain their viability.

In the circumstances, it is unreasonable for your client to impose the four conditions set out in your letter for dismantling the 350+ poles. They are unacceptable to the Government. It is our view that your client should unconditionally remove all the poles forthwith, which have been erected by means of inappropriate use of the SSWXP system. That said, HyD remains open to feasible alternatives for housing the wireline FTNS facilities if the poles are removed at the cost of HKBN. Your client should not proceed with using the 500+ poles to provide FTNS.

All the rights of the Government are hereby reserved.”

69.Looking at this letter as a whole, it is clear that in coming to the Director of Highways’ 2^nd Decision, the Director had stated the “inappropriate use of the [SWP] system” as the reason for requiring the Applicant to remove all the Poles.  The Director did not even state any additional reason, such as that the Applicant was in breach of Condition 13 in failing to obtain his satisfaction (prior or otherwise) as to the alignment and disposition of the Poles, for requiring it to remove the Poles.

70.This is an irrelevant factor that the Director of Highways should not have taken into account. 

71.I therefore accept the Applicant’s submissions that the Relevant Decisions should also be quashed on this basis.

72.For this purpose, I would wish to add that, contrary to my above conclusion and had I come to the view that the Respondents’ contention on the proper construction on Condition 13 were correct, I would still have also quashed the Relevant Decisions on the basis that the Respondents had taken into account of this irrelevant consideration which had a substantial influence on their decisions even though the Applicant’s breach of Condition 13 itself constituted a good ground to support the decisions.  See:  Capital Rich Development Ltd v Town Planning Board [2007] 2 HKLRD 155, at paras 70-78 per Cheung JA; R v Lewisham London Borough Council, ex p Shell UK Ltd [1988] 1 All ER 938 at 951 per Neil LJ. 

C3.1.3   Public concerns and responses

73.I can deal with this quickly. 

74.In my view, reading all the correspondences and evidence as a whole placed before me, the public concern and responses had probably alerted the HD and the Respondents to the existence of the Poles within a short period of time over various districts in Hong Kong and Kowloon, and had prompted the Respondents to look into the matter.  But I can see nothing in the evidence that establishes that the Respondents had taken those concerns and responses into account in making the Relevant Decisions.

75.I therefore reject this as a valid ground in support of the judicial review.

C3.2  Wednesbury unreasonable for the request to remove all the Poles indiscriminately

76.The Applicant also challenges the Relevant Decisions in requiring it to remove all the Poles indiscriminately to be Wednesbury unreasonable. 

77.It says the Block Licence in general, and Condition 13 in particular, clearly contemplate that the System is divisible into parts (and the Poles, which are separate and distinct from each other as aforesaid, are indeed divisible), so that non-compliance of part of the System as to “alignment and disposition”, should not have affected the remaining part of the System so long as the non-compliant part is severable from the remaining compliant part (which is in the case insofar as the Poles are concerned).

78.In my view, whether the Director of Highways under Condition 13 is entitled to look at the alignment and disposition of the Poles as a whole instead of individually to decide whether to give his satisfaction or not also depends on the proper construction of the condition. 

79.In relation to this, I accept Mr Mok’s submissions that the meaning of “alignment and disposition of the System or any part thereof”, on its proper construction, gives the Director the right to look at the disposition and alignment of the Poles as a whole, and “alignment” includes the meaning of “course” and “route” and “disposition” includes the meaning of “depth” and “position”.  This is so because:

(1)  There is no real dispute that Condition 13 gives effect to and facilitate GC32(1).  They should be read and construed together.

(2)  As such, the word “alignment” in Condition 13 should include the meaning of “course” and “route”, and the word “disposition” in Condition 13 includes the meaning of “depth” and “position” under CG32(1). 

(3)  In any event, I believe the above meanings of the words “alignment” and “disposition” also fall within their respective natural and ordinary meaning.

(4)  Insofar as the reference to “the System or any part thereof” is concerned, there is nothing in this phrase which mandates, as suggested by Mr Yu for the Applicant, that if the System is somehow severable, the Director must and can only look at its individual and severable parts alone instead of the System as a whole.  I cannot read any such restriction in these words.  Plainly and ordinarily understood, this phrase gives the Director of Highways the discretion and power to look at either the System as a whole or any part thereof as he thinks fit and necessary in the circumstances when considering its or their “alignment” and “disposition”.    This construction of a general power on the part of the Director of Highways’ discretion to decide whether to give his satisfaction is also in my view consistent with the nature of a Block Licence (which has to cater for many and various possibilities of installation by the licensee under the Block Licence) and the condition provided therein that gives a general power to the licensor to require the licensee to remove and divert the installed System or any part thereof.

80.However, notwithstanding the fact that the Director of Highways is entitled to look at the “alignment” and “disposition” of thePoles as a whole to decide whether he should give his satisfaction under Condition 13, he must give his reasons as to why he is not so satisfied  as a whole (if that is the case).

81.He has not done so in the present case.  There are no reasons given in the Relevant Decisions as to why all the Poles must be removed by reference to their “alignment and disposition”.  The decisions are therefore Wednesbury unreasonable. 

82.The Relevant Decisions are therefore Wednesbury unreasonable and should also be quashed.

C4.    Matters that no longer need to be decided in this application  

83.Given the issues that remain alive as a result of the Respondents position adopted at the hearing, and the conclusions I have reached above, it is not necessary for me to deal with the question (which initially was debated) as to (a) whether the SWP is applicable to the installation of the Poles, and (b) to that extent, the relevant proper construction of the Manual and the relevant statutory provisions under the LMPO.

C5.    The CE/HK’s Decision and the HD’s Completion Notices Acts

84.For the present purposes, I do not find that the CE/HK’s Decision amounts to a decision of the Director of Highways on its view as to whether the installation of the Poles are in breach of Condition 13:

(1)  The Director of Highways is the only person given the authority under Condition 13 to give the requisite “satisfaction”;

(2)  For the CE/HK’s Decision, there is no evidence to suggest that the Director of Highways had delegated the Chief Engineer to make it on his behalf;

(3)  In the circumstances, the CE/HK’s Decision could not amount to a decision of the Director of Highways as to whether the Applicant was in breach of Condition 13 in relation to the installation of the Poles. 

85.The CE/HK’s Decision therefore does not fall within those decisions that the Applicant seeks to challenge under the present application.  I would not make any order in relation to it.

86.Similarly, I do not find it necessary to deal with the HD’s Completion Notices Acts, as they do not amount to any decisions or acts of the Director of Highways as to whether the Applicant was in breach of Condition 13 in installing the Poles.  The acts only relate to the use of the SWP system for applying for excavation permits, the appropriateness of which is no longer a live issue in this application.  The correctness of these acts, as now accepted by the Respondents through Mr Mok, has nothing to do with whether the Respondents were entitled to require the Applicant to remove all the Poles, which is the core and material question in this judicial review application.

D.      Conclusion

87.For the above reasons, I would allow the judicial review application and quashed the Relevant Decisions. 

88.However, given my above determination on the proper construction and the meaning of Condition 13, the Director of Highways is of course entitled if he so wishes to reconsider whether he is satisfied with “alignment and disposition” of the Poles either individually or as a whole.

89.I will further make an order nisi that costs of the application be to the Applicant, to be taxed if not agreed. Unless any of the parties applies by Summons to vary it, the costs order nisi shall become absolute 14 days from today.

90.Lastly, I thank Counsel for their assistance in the matter.

Mr. Benjamin YU, S.C., leading Mr. Johnny MA, instructed by Messrs DLA Piper Hong Kong, for the Applicant.

Mr. Johnny S.L. MOK, S.C., leading Mr. Jin PAO, instructed by Department of Justice, for the 1^st and 2^nd Respondents.