Building Authority v. Appeal Tribunal (Buildings)

HCAL 20/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 20 OF 2011

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Before: Hon Lam J in Court

Dates of Hearing: 9-10 November 2011

Date of Judgment: 20 December 2011

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J U D G M E N T

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1.In this matter, the Building Authority [“BA”] applies for judicial review in respect of the decision of the Building Appeal Tribunal [“BAT”] on 6 January 2011 concerning the building plans submitted on 26 and 30 March 2010 respectively by a developer regarding a proposed development at Ying Wa Terrace. The plans submitted on 26 March 2010 were drainage plans and they were disapproved by the BA on 20 May 2010. The plans submitted on 30 March 2010 were general building plans and they were disapproved by the BA on 29 April 2010. The developer appealed against such disapprovals and the BAT allowed the appeals.

2.BA contended that the decision of the BAT [“the Decision”] was flawed in several respects and asked this court to quash its decision.

3.Starting from para. 6 of the Decision, the BAT gave a brief overview of the case.  Subject to what I shall say below as regards the relevance of the earlier approvals for the development at Nos. 10-12 of Ying Wa Terrace, I gratefully adopt paras. 6 to 8 of the Decision by way of introduction to the background facts,

“6. This matter concerns a proposed development at Ying Wa Terrace, Sai Ying Pun, Hong Kong. The Terrace has three buildings. Wah Fai Court, which sits on Inland Lots 6495 to 6500, has long been developed. The site in this dispute comprises a building to be re-developed on Inland Lots 6501 to 6503 and the Ying Wah Court on Inland Lots 5404 to 6506. These are all rectangular lots, lying side by side. In Inland Lots 6501-6503, each of the three lots is about 17’6” wide and 94’2” long. Each has a total area of about 1,648 square feet, and thus the total area of the lots is about 4,944 square feet.

7. The three buildings on the Terrace have been divided, for the purposes of postal addresses, into Nos. 1-6, Nos. 7-9, and Nos. 10-12, Ying Wa Terrace. At the back of each of the lots is a slope which leads up to Bonham Road, and a public lane - material to this appeal. Along the front part of each of the lots is a long right of way (ie Ying Wa Terrace), which allows access to each of the lots from Centre Street, a Street which climbs up the hill from High Street up towards Bonham Road. If you walk up Centre Street, up the hill towards Bonham Road, you turn left onto this right of way. Immediately in front of you is Nos. 1-6, then you come to Nos. 7-9, and then 10-12. In other words, you must pass in front of Nos. 1-6 and 7-9, before you can access the land locked 10-12 Ying Wa Terrace.

8.   Dobrowen Investment Limited, a subsidiary of Henderson Land, a well know property developer in Hong Kong, proposed to build two blocks of flats on the six Inland Lots.  The first block of flats, was to be Phase 1, which would be located at Nos. 10-12 Ying Wa Terrace.  The second block was to be Phase II, which would be located at Nos. 7-9 Ying Wa Terrace.”

4.It is however necessary to read para. 8 with the following caveat.  In the context of the analysis under the heading of legitimate expectation, I shall return to the implications of the earlier submissions and approvals of building plans.  At this juncture, it should be mentioned that,

(a)  Whilst para. 8 may be a correct general summary of the aspiration of the developer at some point in time, it is important to note that there have been changes of plans over the years and, as we now know[1], the developer had not acquired Nos. 7-9 when plans were submitted in 1997 in respect of a site combining Nos. 10-12 with Nos. 7-9 (despite the representation by the authorized person to the BA that the developer was the owner of all the lots when the submission was made);

(b)  As a matter of fact, the developer did not at any one point in time own all the interest in Nos. 7 to 12.  The so-called Phase I development (at Nos. 10-12) were completed in 1999 and units thereat were sold to individual owners (though three companies still retained some interest in Nos. 10-12 in respect of a reserved portion as spelt out in the DMC for Nos. 10-12).  The developer only started to acquire the interest in Nos. 7 to 9 in 1999 and it completed the process in about 2006[2];

(c)  Though there were plans in respect of Phase II (to be erected on Nos. 7-9) submitted on behalf of the developer on 8 July 1997 which were approved by the BA on 6 August 1997, the developer had not proceeded under such approved plans.  Instead, the developer submitted another set of plans for the development of Nos. 10-12 alone.  The relevant set of plans shown to me were described as Amendment E and they were submitted on 5 December 1997 and approved by the BA on 8 January 1998. The site area in Amendment E, as set out at plans B1 and B8, was stated to be 463.768 m²  as compared with the site area of 923.077 m² in the plans for a combined site (for Nos. 7-12) approved earlier.

(d)  Permit for commencement of works were applied for pursuant to this later set of plans (for Nos. 10-12 only) and granted by the BA on 8 January 1998.  Though one of the conditions for this grant of permission to commence work was that building amendment plans with updated plot ratio calculations for Phase II development should be submitted, the developer did not submit such updated plans.

(e)  There was a time lapse of more than 6 years between the completion of the development at Nos. 10-12 (in 1999) and the further submission of plans for development of Nos. 7-9 (in 2006).  When such plans were submitted in 2006, they were not submitted as amendments to the plans approved in 1997.  They were treated as a new submission with a new file reference No. BD 2/2022/06.  Those plans were approved by BA on 16 August 2006.  But the developer did not proceed under those plans.

(f)  The set of building plans in question in the appeal before the BAT was first submitted on 7 December 2009 and disapproved by the BA on 4 February 2010.  The plans submitted on 30 March 2010 were amendments to this set of plans.

5.Mr Lam SC agreed that each submission should be considered by reference to the prevailing circumstances at the time of the submission.  Subject to the argument as to legitimate expectation, there is no nexus between the latest set of plans with the earlier plans approved, whether in 1997 or in 2006.

6.It should also be stated at the outset that (as I understand from counsel) the present case does not involve any utilization of additional plot ratio or site coverage attributable to Nos. 10-12 in the development of Nos. 7-9.  The real concern of the developer is whether the area at Nos. 7-9 subject to a right of way described at para. 7 of the Decision  (which Mr Lam described as the forecourt) can be included as part of the site area.  This involves two questions,

(a)  Whether that area should be regarded as a street (by reason of the right of way) and as such excluded from the calculation of site area pursuant to Regulation 23(2)(a) of the Building (Planning) Regulations;

(b)  Whether an exemption should be granted under Section 42 of the Building Ordinance in respect of such exclusion. 

Mr Lam does not dispute about the existence of the right of way.

7.Though the plans were disapproved, it is important to have regard to the grounds for disapprovals to understand properly the scope of the appeals at the BAT.  The scope of the appeal is important because even though the BAT is given the power to substitute the decision of BA for such other decisions or make such orders as it thinks fit under Section 50(2) of the Buildings Ordinance, the scheme of the Building Ordinance is that the BA should remain as the primary decision maker and the BAT should not usurp that role.  For reasons elaborated below, this point has some significance in the present case.

8.In the letter of 29 April 2010, the BA disapproved the general building plans on the following grounds,

“7. Your plans are disapproved under section 16(1)(i) of the Buildings Ordinance in which the following further particulars/information/clarifications should be provided:

(a) Demonstrate that the owner of I.L. 6501 R.P., I.L. 6502 R.P. and I.L. 6503 R.P. has control of the land at No. 10-12 Ying Wa Terrace for its inclusion into site area. I reserve my position under Building (Planning) Regulations 20, 21 and 23(2)(a). In this connection, your attention is drawn to paragraph 7(B) of my disapproval letter dated 4 February 2010 under reference BD 2/2058/09.

(b) The status of the lanes at rear and side of the site.

(c)     Demonstrate that the owner of I.L. 6501 R.P., I.L. 6502 R.P. and I.L. 6503 R.P. has the right to carry out the proposed works and designate the means of escape route at No. 10-12 Ying Wa Terrace.”

9.In the letter of 20 May 2010, the BA disapproved the drainage plans on the following grounds,

“7. Your plans are disapproved under section 16(l)((i) of the Buildings Ordinance in that the following further particulars/information/clarifications should be provided for my consideration:

(a) You should clarify whether there are valid corresponding approved building plans to the submitted drainage plans. In this connection, I reserve my position under section 16(1)(a) of the Buildings Ordinance. Your attention is drawn to the comments at paragraph 13 below.

(b) It is noted that this submission covers 7-12 Ying Wa Terrnce. As such, you should clarify whether the developer of 7-9 Ying Wa Terrace has full control of the land at 10-12 Ying Wa Terrace. Your attention is also drawn to the comments at paragraph 13 below.

(c)     You should address to items (a) to (e) of the comments from the Drainage Services Department in paragraph 9 below.”

10.Both disapprovals were made pursuant to Section 16(1)(i) of the Buildings Ordinance [“the Ordinance”].  That subsection reads,

“The Building Authority may refuse to give his approval of any plans of building works where in his opinion, it is necessary for him to have further particulars of such plans or of the building works shown thereon or, where all the plans prescribed by regulations have not been submitted, to have one or more of the other plans prescribed by regulations, to enable him fully to consider such plans.”

11.Thus, instead of disapproving the plans on substantive grounds, when plans were disapproved under Section 16(1)(i) the BA actually asked for more information which he considered to be necessary for the purpose of processing the applications for approval.  In an appeal against such a decision, the BAT should allow an appeal if it is satisfied that the BA did not have any proper reason to seek the required information.  If the BAT were not so satisfied, generally it is neither here nor there that the required information was supplied by the time of the hearing.  The appeal should be dismissed by the BAT.  The BAT should not usurp the role to the BA to go further to examine such information as if it were the primary decision maker and make a substantive decision on the approval or disapproval of the plans.  Opportunity should be given to the BA to consider the information and exercise its primary discretion and power in assessing whether the plans should be approved or disapproved.

12.This flows from the nature of an appeal to the BAT.  It is important to bear in mind that under Section 44(1) of the Ordinance there can only be an appeal when a person is aggrieved by a decision made by the BA.  Thus, the BA is the primary decision maker and until a decision had been made by the BA on a substantive ground, a party who submitted plans for approval cannot be said to be aggrieved by a relevant decision on such ground.

13.In other words, in the context of an appeal based on an exercise of discretion under Section 16(1)(i), the BAT should not embark upon the consideration of any substantive ground unless the BA had exercised its primary discretion in respect of such ground.  An appeal under Section 16(1)(i) should not be used as a platform for sidestepping the BA as the primary decision maker. 

14.In view of that analysis, in most cases one would expect a developer to furnish the requested information instead of mounting an appeal to the BAT right away. 

15.As shown below, the present case provides a good illustration as to the undesirability of the BAT usurping the role of the BA in dealing with an appeal against a decision based on Section 16(1)(i).  

16.Thus, in general, in an appeal against a disapproval under Section 16(1)(i), the BAT should only consider whether the BA should have asked for the information in question and this is to be determined by reference to the necessity of having the information for the proper consideration of the application for approval.  In so saying, I must not be taken as holding that the BAT must not entertain new arguments or take account of new materials or evidence under any circumstances.  For example, in cases where the BA agreed to deal with the substantive merits in light of new information furnished, it would be appropriate for the BAT to exercise its power accordingly.  However, such power should be exercised with circumspection and due regard must be given to the role of the BA as primary decision maker.

17.The main grounds of the BA’s challenge can broadly be summarized under the following heads,

(a)  Requirement of ownership or realistic prospect of control;

(b)  Legitimate expectation;

(c)  The Rear Lane;

(d)    Means of Escape;

(e)  Drainage plan.

18.Mr Cooney SC also contended that the BAT had taken irrelevant consideration into account in terms of what it perceived to be changes in policy.  At paras. 78 to 96 of the Decision under the heading of “Changing Government Policy”, the BAT referred to some changes in the policies of the Government in the second part of 2010.  At para. 93 of the Decision, it said,

“In our view, both of these new policies may have had an effect on the disapprovals in this appeal, in which there has clearly been a request to demonstrate control/ownership, and in which the BA can be seen to clamp down on the gross area for the site.”

19.Whilst there is some force in Mr Cooney’s submission that the BAT had no business in making such speculation, in my judgment whether the advent of these new policies had any influence in respect of the disapprovals is not germane.  The crucial question is whether the BA’s requests for further information were justifiable as being necessary for the proper processing of the application in the context of the function of the BA under the Ordinance.

Requirement of ownership or realistic prospect of control

20.In performing its function under the Ordinance, the BA does not act as an adjudicator of private dispute as to ownership or private rights over land (see Re Ho Mei Ling HCAL 51 of 2011, 29 Aug 2011, paras. 40 to 46 and 68 to 70).  However, in considering whether approval should be given to plans the BA has to have regard to the compliance with the Regulations made under the Ordinance, including the Building (Planning) Regulations.

21.Under the Building (Planning) Regulations [“the BPR”], calculation of permissible plot ratio and site coverage depends on the site area and the classification of site depends on the locality of a site.  Thus what is the site in question is important for the proper processing of an application for approval of plans.  The word “site” is neither defined in the Ordinance nor in the BPR.

22.In AG v Cheng Yick Chi [1983] 1 HKC 14, the Privy Council addressed the question what is a site for the purpose of the BPR.  At p. 19 to 20, Lord Fraser said,

“ Neither the Regulations nor the Buildings Ordinance contains a definition of ‘site’. The respondents contend that the site is the whole of the properties, including the unbuilt on land. The appellant contends that, in this case, it is only the land on which the houses at present stand. It was common ground between them that the site, in the sense of the Regulations, is not necessarily limited to the ground on which buildings actually stand. That it cannot always bear such a limited meaning appears from several provisions in the Regulations. For example, reg 5(2) refers to the provision of an access lane ‘within the site’ of a new building, and reg 25(1)(a) requires that every domestic building shall have ‘within the site’ an open space at the rear. Clearly, neither an access lane nor an open space can be on ground on which a building stands.

Mr Widdicombe for the respondents said that the site for purposes of development is normally a whole ‘lot’, using ‘lot’ to mean the leased area held directly or indirectly under a lease from the Crown. That may well be so. But (rightly), he did not contend that the ‘site’ was necessarily coextensive with the ‘lot’, because the word site must be flexible enough to apply to a case in which the person holding several adjacent lots under Crown leases proposes to develop them together as a single site. It must also apply where the owner develops only part of his lot, or develops it bit by bit at different times. For example, if a development scheme applies to a substantial area of perhaps an acre or more, to be developed by building a detached house on part of it, with the rest of the land being laid out as a garden and tennis court, the whole area would be the site. If some years later the tennis court is sold off in order to build a separate house on it, the site for that later development would be limited to the tennis court.

Their Lordships are of the opinion that the land which forms a ‘site’ for the purposes of the Regulations must be ascertained as a question of fact in the case or each development.  It means, in addition to the land on which it is proposed to erect buildings, any land which the developer bona fide proposes to include in the development.  It can only include land which he owns or which he has a realistic prospect of controlling.  The additional land must be at least sufficient to enable the proposed building to comply with the Regulations and it must, of course, not have been taken into account and, so to speak, used up in enabling some other existing building to comply with the Regulations.”

23.Mr Lam SC, appearing on behalf of the Interested Parties (the developers), submitted that this part of Lord Fraser’s judgment was obiter.  I cannot agree.  It is clear that the Privy Council arrived at its conclusion on declaration (c) by reference to the considerations set out in these paragraphs, see p. 20D to F. 

24.This dictum has since been regarded as authority for the proposition that an applicant can only include land which he owns or which he has a realistic prospect of controlling in a site, see also Cinat v Attorney General [1995] 1 HKC 1 at p. 4D to H. It has recently been applied by Reyes J in Ashley 121 Ltd v Appeal Tribunal (Buildings) [2011] 2 HKLRD 728.

25.On this basis, subject to the argument as to legitimate expectation, the BA was entitled to enquire with the Interested Parties as regards the ownership or realistic prospect of control of the land which was identified as the site in the plans.

26.However, the BAT came to a different conclusion. After considering the statutory provisions without any reference to AG v Cheng Yick Chi, it said at paras. 117 and 118 of the Decision,

“117.    Because there is no statutory obligation for the purposes of a building plans approval application to define a site with reference to land held under a Government lease, there is therefore no nexus between a “site” and a Government lease, under the legislation.

118.  Because there is no obligation under the legislation to demonstrate ownership of the land, to which a site is notionally related, there cannot be any statutory reason to request a developer to demonstrate that he controls the land which he purposes to include notionally in the site.”

27.The BAT regarded the word “site” as a notional concept for the purpose of an application for building plans approval.  At para. 113 of the Decision, it went as far as describing the concept of a site as a statutory fiction.

28.With respect, the approach of the BAT to the construction of the Ordinance is flawed.  Though there is no obligation on the part of an applicant to commence work in respect of every building plan approved, the process of approval of building plans is not intended to be a purely notional exercise.  It is the initial stage for getting approval for building works to be commenced on the site.  Thus, in the performance of its function in considering whether approval should be given for a building plan, the BA must have regard to the prevailing reality.  As explained above, it must have regard to the locality of a site to classify the same and then to check the calculation of permissible plot ratio and site coverage by reference to the site area.  As I shall explain further below, the BA must also consider whether an area in the site should be excluded as a street.  All these must be done by reference to the actual physical characteristic of the site, including ownership and control of the land in question.  It is not the purpose of the scheme under the Ordinance to waste public resource[3] on a purely fictional exercise. 

29.It is incorrect for the BAT to jump from the proposition in para. 117 of the Decision (which is correct) to the conclusion at para. 118 (which is incorrect).  Though the concept of a site is not tied in with a demarcation by reference to the lot numbers of the land, it does not mean that ownership or control cannot be relevant for determining whether the piece of land identified by an applicant as a site in a building plan can properly be regarded as a site for the purpose of the Ordinance.  In the course of the hearing, I have tested the validity of the conclusion of the BAT by asking this question: suppose an applicant were to submit a building plan on the basis that the whole of Hong Kong Island is the site, could the BA challenge it on the basis that the applicant does not have any realistic prospect of control of the site and disapprove the plan accordingly?  It seems to me that the answer must be in the affirmative.  This illustrates the need to give the Ordinance a purposive interpretation having regard to the function of the BA by reference to the provisions in the Ordinance and the subsidiary regulations.

30.Therefore, it is not difficult to see the rationale behind the test laid down by Lord Fraser in AG v Cheng Yick Chi. In effect, having regard to the context in which the word “site” is used His Lordship gave a purposive interpretation to the word in the Ordinance.  On the contrary, the BAT apparently construed the word “site” as a notional concept which an applicant could choose to apply to whichever piece of land he likes irrespective of his complete lack of prospect in controlling the same at the time of submission of plans.  As explained, this interpretation would lead to absurdity.

31.Mr Lam agreed that the BA was entitled to have regard to ownership or control but he submitted that it should only do so at the stage of granting approval for commencement of works.  With respect, once it is accepted that ownership or control is relevant within the context of the scheme of approval by the BA in the performance of its function under the Ordinance, I fail to see why there should be a distinction between the approval of building plans and the approval for commencement of building works.

32.The BAT did consider the judgment in AG v Cheng Yick Chi at paras. 123 to 139 of the Decision.  It also acknowledged that the judgment remains binding in Hong Kong after 1997, see para. 125.  However, instead of reading Lord Fraser’s judgment as construing the meaning of the word “site” in the Ordinance, the BAT regarded it as a common law supplement to the statutory provisions (see in particular para. 128).  Then, with reference to the following dicta of Lord Scarman in McLoughlin v O’Brien [1983] AC 410, the BAT held that the court cannot extend the statutory requirement by common law.  The dicta relied upon by the BAT is as follows,

“The common law, which in the constitutional context includes judicially developed equity covers everything which is not covered by statute. It knows no gaps: there can be no ‘causus omissus’. The function of the court is to decide cases before it, even though the decisions may require the extension or adaptation of a principle or in some cases the creation of new law, to meet the justice of the case. But, whatever the court decides to do, it starts from a baseline of existing principle, and seeks a solution with or analogous to a principle or principles (newly) already recognised.”

33.Pausing here, I must say I do not find the citation of the dicta of Lord Scarman to be of much relevance in the present context.

34.The BAT concluded at para. 131,

“In a word, the manner of making an application for building planning and construction has been dealt with exhaustively by statute. It is not for the courts to supplement that exhaustive process with additional requirements in case law. This would impose an unfair obligation on the public, to have to read through volumes of cases to determine how to make a planning application. That would not be desirable development of the common law.”

35.Then, after a few paragraphs, the BAT said the following at paras. 136 to 139,

136.  If we be wrong on that matter, in our opinion, the Privy Council was not addressing its attention to the issue of how land ownership, and site ownership should be determined as a matter of Hong Kong law, and obviously, now that the Basic Law is in effect.

137.  Ownership was not an issue in that case.  It is therefore a misapplication of the doctrine of precedent to read into that case what was said by the Privy Council, and by reference to what was only in the peripheral attention of the court.

138.  We do not see the Privy Council as “legislating” on how a building plans application is to be made, but merely applying the law to determine how a “site” is to be-defined.  By reference to “landwhich the developer has a realistic prospect of controlling”, clearly the Privy Council had in mind the possibility that the land might not be in the ownership of the applicant at the time of the application.  Equally, by parity of reasoning, it could include land owned at the time of the application, but which, after development under the plans, had been sold off prior to other land under the planning application being developed.

139.  In other words, although the Privy Council put ownership/control into the definition of site, the process as to how that is determined is not stated, being a matter for parliament.”

36.With respect, it seems to me that the BAT had failed to understand the judgment of Lord Fraser properly.  Lord Fraser did not make a common law supplement to the statutory provisions.  Instead, His Lordship explained how the word “site” should be construed in its context and the requirement of ownership or prospect of control actually stemmed from the statutory provisions instead of being grafted onto it by way of common law.  I have already explained why the dictum of Lord Fraser in this respect should not be regarded as obiter or something “only in the peripheral attention of the court”.

37.I also have difficulty with para. 138 of Decision where the BAT said that under Lord Fraser’s approach, a site could include “land owned at the time of the application, but which, after development under the plans, had been sold off prior to other land under the planning application being developed”.  Irrespective of the correctness of this proposition, it has no application in the present instance.  The applications we are concerned with are the applications made on 26 and 30 March 2010 respectively and the BA asked for information pertaining to the ownership or prospect of control as at those dates.  It may be that in this paragraph, the BAT had treated the relevant application as some earlier application before Phase I was built and sold.  The validity of that approach would be considered below under the discussion on legitimate expectation.

38.I also reject Mr Lam’s submission that Lord Fraser’s approach has no application to the present case where there is a combined site and one part was developed first and sold with the remaining part to be developed later.  As I have explained in Re Ho Mei Ling HCAL 51 of 2011 paras. 45 to 53, subject to the Cinat factor, there is no locking up of different plots of land simply because they had been included as one site in an earlier approved building plan.  The BA has to consider each submission of plans on its own merits based on the then prevailing circumstances.  Thus, where a developer intended to develop a large plot of land owned by him in different stages, he could obtain approval for the whole development at one go and, based on such approved plans, apply for permission to commence work on different parts of the development at different times.  If he does not do so and chooses to obtain approved plans for one portion only and developed that portion first, he has to accept the consequence flowing from it.  The consequence is that when he submits plans in respect of the other portion for approval, the BA has to consider those plans on their own merits in view of the prevailing circumstances at the time of the relevant submission.  If the first portion has been sold by that time, the BA is entitled to query whether there could still be a combined site due to the change in ownership or control in the meantime.    

39.In conclusion, the BAT erred in law in holding that the Ordinance does not require an applicant to demonstrate that he has ownership or realistic prospect of control of the land which forms the site or part of the site.  In my view, the BA was entitled to ask for such information.

40.Before I turn to the next heading, I need to address a point which was briefly dealt with by the BAT at paras. 189 to 193.  In those paragraphs, the BAT arrived at these conclusions,

(a)  Clause 9(f) of the DMC for Nos. 10-12 Ying Wa Terrace gave the developer sufficient control of the land (see para. 191);

(b)  It is sufficient that the developer did own Nos. 10-12 Ying Wa Terrace at the time of the development of the building erected on that piece of land.  It does not matter that it sold off a part of the site before the rest of the site was developed (see paras. 193).

41.I cannot agree with (b) for the reasons I have already given at para. 38 above.  As regards (a), I repeat what I said above on the BA being the primary decision maker.  Thus whether Clause 9(f) gave the Interested Parties sufficient control should primarily be determined by the BA. It should be noted that the BA had cross-referenced to BPR regulations 20, 21 and 23(2)(a) in requiring further information regarding control of Nos. 10-12.  Regulations 20 and 21 deal with site coverage and plot ratio respectively.  The requested information is necessary for deciding whether Nos. 10-12 can properly be regarded as part of the site and as such its area can properly be added to the site area.  Regulation 23(2)(a) relates to the exclusion of street from the calculation of site area.  According to Mr Cooney, the question of ownership and control is relevant to the exercise of discretion by the BA under Section 42.  It would not be appropriate for the BAT to pre-empt the BA in that regard. 

42.In any event, I do not think Clause 9(f) enables the developer to say that it has sufficient control over Nos. 10-12 for present purposes.  To start with, it is only a clause in a DMC governing the rights of the co-owners of Nos. 10-12. The DMC is not an instrument governing the rights between the owners of Nos. 7-9 and the owners of Nos. 10-12.  Owners of Nos. 7-9 cannot evoke the provision of DMC against the individual owners of Nos. 10-12.

43.In the definition clause at Paragraph 7 of the Recitals, “Land” is defined by reference to the lots which made up Nos. 10-12.  “Building” is defined as the building constructed on the Land, known as Ying Wa Court, No. 12 Ying Wa Terrace. “Approved Plans” are the plans for the development of the Land and the Building. In other words, it means the plans approved by the BA in 1998 by reference to which the Building was erected at Nos. 10-12.  It has nothing to do with the plans for the development of Nos. 7-9.  There is no reference whatsoever in the DMC to Nos. 7 to 12 as one single site or to Nos. 10-12 as Phase I of a development with Phase II to be constructed on Nos. 7-9.

44.Clause 9(f) reserved to the developer its successors and assigns the following rights,

“The right to change, amend, vary, add to or alter the Approved Plans and/or to change or alter the user and/or the areas of the Units in the Building and any other part of the Building or any amenities, facilities or parts of the Building whatsoever without the concurrence or approval of any Owner Provided that such change, amendments, variation, addition or alteration shall not interfere with Owners’ right to the exclusive use occupation and enjoyment of their Units …”

45.I fail to see how this clause can give the developer the necessary control over Nos. 10-12 so as to facilitate its utilization of Nos. 10-12 as part of the site for the development of Nos. 7-9. Neither can I see how this clause can give the developer such control so as to abrogate the interest of the other owners of Nos. 10-12 over the right of way at the forecourt of Nos. 7-9.   

Legitimate expectation

46.At paras. 149 to 188 of the Decision, the BAT considered a submission of the developer based on legitimate expectation.  At para. 188, it concluded that the BA had defeated the legitimate expectation of the developer that the site would be treated as a one site development.

47.Whilst the BAT correctly held that there had to be a promise or a representation before the doctrine of legitimate expectation can be evoked, it did not clearly spelt out what representation was made by the BA.  At para. 163, it set out its reasoning as to how it came to the conclusion that there was a legitimate expectation,

“163. It is not suggested that there was any express promise or representation made by the Building Authority in this case. Nonetheless, we are of the· view that such a legitimate expectation did arise from the conduct of the BA for the following reasons:

(i) aside from the one set of plans which were produced in 1996, as amended in February 1997 and January/April 1998, ever since, the BA was only presented with plans which showed a one site development in two phases. The plans of August 1997, 2006, 2007, 2008, 2009, 2010 were all for a one site development in two phases;

(ii) the BA approved plans for a one site development in two phases in August 1997, 2006, 2007 and 2008;

(iii) the approved plans of 2006, incorporated the August 1997 two phase/one site design, which in turn contained the February 1997 approval, and which in turn was the basis upon which 10-12 Ying Wa Terrace was actually constructed (the “link issue”);

(iv) up to 4 February 2010 and the rejection letter of that date, the BA neversuggested that the sites should be divided into two sites, nor did they seek justification for including both sites in the development;

(v) the BA encouraged the developer to provide up to date plot ratio calculations for Phase I and Phase II, in its letters of 6th August 1997, 8th January 1998, and 2nd May 1998;

(vi) in approving Phase I in August 1997, the site was considered as a one site development, and the plot ratios were calculated on the basis of a combined site;

(vii) at the time of the approval in August 1997 of Phase II, Phase II was still being purchased by the developer. Gary Chung testified that Phase II was purchased over time from 1999-2006. The BA did not require proof of ownership of Phase II at the time of its approval in 1997;

(viii) at all times, until 11th March 2010 and the rejection letter, the BA included the right of way at 7-9 Ying Wa, in the gross floor area of the site;

(ix) the plot ratio was never over8, and always based on a one site development, save for the 1996 approval;

(x)the developer always treated the gross area of the site as some 9,088 square feet, as in the August 1997, 2006, 2007, 2008 approvals, including both 7-9 and 10-12 Ying Wa Terrace in the area, with the right of way in front of 7-9, and there is no evidence of it trying to engage in some “sharp practice” by inflating the area of the site.”

48.Judging from what was said at para. 188, the BAT probably considered the BA as having made a representation that Nos. 7 to 12 could be regarded as one site.  But it is not enough that the BA had made such a representation in respect of a specific application, e.g. the approval in 1997 in respect of the plans submitted on 8 July 1997.  In order to establish a legitimate expectation relevant for present purposes, there has to be a representation that Nos. 7 to 12 would be regarded as one site irrespective of any changes in circumstances (including changes in ownership or control in the meantime) [“the Relevant Representation”].  Has there been such representation?

49.Further, in order to be legitimate an expectation has to be reasonable.  In Ng Siu Tung v Director of Immigration (2002) 5 HKCFAR 1 at para. 101, the majority of the Court of Final Appeal said,

“… it is now firmly established that to be legitimate, the expectation must be reasonable (AG of Hong Kong v Ng Yuen Shiu [1983] 2 AC 629 at p.636 per Lord Fraser of Tullybelton), that is, reasonable in the light of the official conduct which is said to have given rise to the expectation. Whether an expectation is legitimate in this sense depends, at least in part, upon the conduct of the relevant public authority and what it has committed itself to. Whether an expectation is legitimate, and to what extent, must also depend upon what the applicants are entitled to expect. The requirement of legitimacy means that judicial decisions ‘must be founded not only on what the claimant factually expected, but also on what the claimant, bearing in mind any relevant considerations of policy and principle, was entitled to expect’. … It follows that, to the extent that an expectation of a benefit which cannot legally be accorded, it is not a legitimate expectation.”

50.The matters relied upon by the BAT at para. 163 must be considered against the backdrop of the statutory scheme for approval of building plans including the proper construction of the word “site” in accordance with AG v Cheng Yick Chi.  Further, it is correctly accepted by Mr Lam that the BA has a statutory duty to process each submission of plans for approval by reference to the prevailing circumstances at the time of submission, see Building Authority v Head Step Ltd (1996) 6 HKPLR 87.  The relevant proposition was set out clearly at p.100,

“Each application is a fresh application.”

51.Against such background, it is difficult to understand how the BAT could have come to the conclusion that by reason of earlier approvals (when the ownership or control of the relevant plots of land were different) the BA implicitly represented to the developer that it had committed to accepting Nos. 7 to 12 as one single site.  I do not think it is necessary for me to go through the list of matters set out at para. 163 item by item.  Suffice to say the BAT attached great significance to the descriptions of the projects in different sets of plans and approvals as Phase I and Phase II respectively.  But I do not think one can infer from such approvals that the BA had made the Relevant Representation.  A developer can choose to call his projects by whatever names he like and he is at liberty to call one development Phase I and a development at an adjoining piece of land Phase II.  But he cannot prevent the BA from raising queries in accordance with the statutory scheme in respect of a second set of plans despite change of circumstances simply because in an earlier set of approved plans the land in question has been earmarked as Phase II.

52.This is particularly so when, as mentioned above, the actual building on Nos. 10-12 was constructed in accordance with a set of plans approved on the basis that Nos. 10-12 was a single site (viz. without Nos. 7-9).

53.In short, the developer was not entitled to expect that no query would be raised despite change of ownership and/or control. The BAT had failed to address the question of legitimate expectation by reference to the Relevant Representation and whether the expectation of the developer that no query would be raised despite change of circumstances was reasonable.  Had it done so, with a proper understanding as to the statutory scheme including the construction of the word “site”, it would inevitably come to the conclusion that there is no scope for the operation of the doctrine of legitimate expectation in the present case.  Because of that, the BAT had misdirected itself in law in coming to the conclusion that the query by the BA defeated the legitimate expectation of the developer.

The right of way

54.Before I move onto other topics, I would comment on the right of way in the light of what the BAT said at para. 148 of the Decision and the submission of Mr Lam advanced before me.  At para. 148, the BAT said,

“The question whether the right of way should be excluded is a side issue generated by stance taken on the ‘one site or two site’ question. We therefore say no more about it here, and disagree with counsel for the Respondent that the Building Authority is concerned about contravention of the Building (Planning) Regulation 23(2)(a). They are not. This complication only arises when the sites are divided into two sites.”

55.Mr Lam seemed to adopt the same analysis when he argued that there should not be any concern under Regulation 23(2)(a) because if the whole of Nos. 7 to 12 were treated as one site, there would not be any right of way as there was no alien interest within the site.

56.In my view, there is a fundamental misconception here.  Whether Regulation 23(2)(a) applies depends on whether the forecourt should be regarded as a street.  And whether it should be regarded as a street depends on whether some third party could exercise any right of way over the forecourt.  The underlying assumption of the BAT and Mr Lam is that if Nos. 7 to 12 is regarded as a single site, there would not be any right of way over the forecourt.  But that ignores the reality that given Nos. 10-12 and Nos. 7-9 are held in different ownerships and control the right of way must exist as a matter of law irrespective of them being combined together to form one single site.  The only way that such right of way would extinguish is when they come under common ownership.  That would not happen in the present case.

57.Thus, even if Nos. 7 to 12 were to be treated as a single site, due to the diversity of ownership Regulation 23(2)(a) still applies.  However, as stated above, the developer may apply for exemption under Section 42 and if such application is made, whether such exemption should be granted in the present case is a matter for the BA.

58.On this ground alone, the BA was entitled to seek information regarding ownership and control in respect of Nos. 10-12.

The rear lane

59.The request for clarification in respect of the status of the rear lanes were explained by Mr Cooney at paras. 52 and 53 of his skeleton submissions and I do not think there is any disagreement to that analysis on the part of Mr Lam.

“52. Section 16(1)(i) was invoked by the BA to require further particulars of the status of the rear and side lanes of the proposed site. For the purposes of the appeal, the BA maintained this ground of disapproval in relation to the rear lane only. The focus of the BA was in relation to the status of a 2 foot strip of land which formed part of the rear lane. This information was necessary for the BA to consider whether the Appeal Site had an adequate MOE along the rear lane. This is because the Code of Practice for Provision of Means of Escape in Case of Fire 1996 provides that the minimum width of the lane onto which the combined escape routes discharge should not be narrower than 2,100mm. If the 2 foot strip of land was excluded, the width of the lane would only be 1,850mm.

53.    Paragraph 4 of PNAP 179 states that where an exit route is required, it would not be acceptable if it discharges into a partly private service lane unless it can be demonstrated that the users of the proposed building would have unfettered rights of way over the lane [BE5/16/1098].”

60.At paras. 205 to 206 and 218 of the Decision, the BAT agreed that the BA was entitled to the information.  However, the BAT took it upon itself to consider the status of the rear lane in the light of the information set out in a letter of 7 February 2008 from the authorized person and went on to say that there was either an estoppel against the owner of the 2 foot strip of land or an agreement to surrender which, by reason of the principle of Walsh v Lonsdale, should be treated as an equitable surrender.  The BAT therefore held that the lane should effectively be regarded as a public lane.  It then purported to exercise its discretion under Section 50(2) and “rule on this ground of appeal in favour of the developer” (see para. 218).

61.Insofar as the BAT intended to hold that the lane (including the 2 foot strip) can serve as the means of escape or access when it ruled in favour of the developer, it is not clear whether it had properly addressed to the requirements under Practice Note 179.  The relevant question under paragraph 4 of the Practice Note is whether it can be demonstrated that the users of the proposed building would have unfettered rights-of-way over the lane.  Instead the BAT examined the position as between the Government vis-à-vis the owner of the 2 foot strip.  Whether in terms of estoppel or the principle of Walsh v Lonsdale, the party who could evoke the same is the Government instead of the developer of Nos. 7-9.  The BA had put forward objections on the part of the Transport Department as regards why the 2 foot strip should not be regarded as surrendered.  In my view, the BAT should not take it upon itself to overrule such objection in the context of this appeal. 

62.Further, the BAT attached some significance to previous approved plans.  However, it had apparently overlooked the submission of counsel for the BA that those approved plans did not involve a MOE exit point leading into the rear lane and the subject plans of the appeal were the first time when such a proposal was raised.  

63.In any event, as mentioned above, the crucial issue in an appeal in respect of disapproval under Section 16(1)(i) is whether the BA was entitled to request for the information.  Once the BAT concluded that it was so entitled, it should leave the BA to consider whether the information given addressed its concern.  In the present context, it is for the BA to decide whether in view of all the matters now relied upon by the Interested Parties the requirement of paragraph 4 of Practice Note 179 can be satisfied.

The means of escape

64.In the building plans submitted on 30 March 2010, the means of escape was re-directed to go through Nos. 10-12 and then exit to the rear lane at the back of Nos. 10-12.  The BA therefore required information as to the right of owners of Nos. 7-9 to carry out such works over Nos. 10-12.

65.Given that this was the design which the developer sought approval from the BA, it must be justified for the BA to seek such information.

66.The BAT was of the view that the means of escape proposed by the developer was not viable.  Instead it took a different approach: it regarded the problem pertaining to the means of escape as stemming from the two foot strip and once that issue is resolved in the way it did the means of escape could be re-routed to avoid straddling over Nos. 10-12.

67.Again, the BAT lost sight of the fact that the decision of BA was made under Section 16(1)(i) and in the appeal it should focus on whether the required the information is necessary for the proper processing of the plans by the BA.  If the information is necessary, the matter should be left to the BA in the exercise of its primary role in decision making as to approval of plans in the light of information provided.

68.It is not part of the BAT’s function to re-design the means of escape for the developer.  Further, for reasons canvassed above, the answers given by the BAT to the question relating to the 2 foot strip are problematic.   

Drainage plans

69.In the letter of 20 May 2010, the BA disapproved the Drainage Plans under Section 16(1)(i) on three grounds.  The first two grounds related to issues already canvassed above.  The third ground directed attention to the comments from the Drainage Services Department.  The relevant comments were as follows,

“a) The AP shall clearly indicate on the plans how the terminal manholes are to be connected to the downstream public drainage systems. The downstream details from the sewage and stormwater terminal manholes, including alignments, invert levels and pipe sizes, in conjunction with the public drainage system outside the boundary shall be provided in the drainage layout plan for our consideration.

b) The terminal manholes should maintain a 150mm difference between I.L. and D.T.I.L. and their details should comply with current Government standard.

c) The minimum size of stormwater pipe should be dia. 225mm.

d) The AP shall be reminded that, if the stormwater & sewage terminal manholes are to be connected to private drainage and sewerage system respectively. Written consent from the owner of the downstream drainage/sewerage system shall be obtained prior to the commencement of the construction works.

e)   The AP should ensure that, if the existing drainage connections from the previous developments of the same site are no longer in services, the developer shall abandon the said connections by removing them off site or filling them up with foam concrete.”

70.It is not disputed that the comments needed to be addressed and the BA was justified in asking for such information.  New drainage plans were actually placed before the BAT and it was invited to approve such plans.  In my judgment, this is an abuse of the appeal process.  If the developer accepted that the comments of the Drainage Services Department needed to be addressed, it should not appeal against the disapproval under Section 16(1)(i).  It should submit the necessary information or revised plans for BA’s consideration.  It is not the purpose of an appeal under Section 16(1)(i) to give an avenue to a developer to avoid the primary consideration of the plans by the BA and to obtain an approval from the BAT in lieu of the BA.

71.The BAT acknowledged that it was not proper for it to usurp the role of the Drainage Services Department at para. 239 of the Decision.  However, the BAT considered that the developer had substantially succeeded in the appeal on the main issue.  The BAT then concluded by saying that the drainage plans were approved conditionally, and that the developer was to submit updated drainage plans addressing all concerns raised during the hearing within 15 days of the Decision for approval by the BAT.  At para. 242, the BAT expressed a view with regard to the timing of obtaining the consent from the owners of Nos. 1-6.

72.Mr Cooney said it was unclear to the BA what the BAT meant by conditional approval and the BA felt constrained by it to approve the plans subsequently submitted.  Counsel invited this court to nullify such approval by the BA in the event I come to the conclusion that the BAT should not give the conditional approval.  Mr Lam accepted such course should follow if the court shall come to that conclusion.

73.The BAT did not state why it regarded the developer as substantially successful in the appeal regarding the drainage plans notwithstanding that the comments of the Drainage Services Department had to be dealt with.  If the BAT focused on the real issue (whether the BA was entitled to ask for the information), it should at least have concluded that the information sought in relation to the comments of the Drainage Services Department had to be supplied.  Until such information is supplied, the BA was entitled to disapprove the plans under Section 16(1)(i) and the appeal should therefore be dismissed.  Under such circumstances, it is wrong in principle for the BAT to give a conditional approval.

74.It is also wrong in principle for approval (conditional or otherwise) to be given on a set of plans which had yet to be submitted and as such the BAT had no idea as to whether the revisions made would adequately address the concerns of the Drainage Services Department and whether it would in turn trigger some other queries by the BA or other departments.

75.It may be that the BAT intended to refer to the success of the developer before it in respect of the requirement of ownership or control and the legitimate expectation argument which ties in with the requisitions under para. 7(a) and (b) of the letter of 20 May 2010.  If that were so, for the reasons given above, the BAT was in error in coming to such conclusion.

76.No matter how one sees it, the BAT fell into error in giving conditional approval to the drainage plans.  

Results

77.For these reasons, I grant a certiorari to quash the decision of the BAT in allowing the appeal.  As suggested by Mr Cooney, consequential upon the quashing of that decision, the subsequent approval of the drainage plans by BA pursuant to the conditional approval by the BAT should also be set aside. 

78.I do not see any reason why the matter should be sent back to the BAT.  Subject to comments by the parties, it seems to me that the matter should proceed by the developer setting out all its responses to the queries of the BA in the light of the requests in the letters of disapproval and what is said in this judgment.  If any party shall think otherwise, written comments shall be lodged within 14 days of the handing down of this judgment.

79.I shall also make a costs order nisi that the Interested Parties shall pay the costs of the BA in this judicial review and in the appeal before the BAT, such costs to be taxed if not agreed.

Mr Nicholas Cooney SC and Mr Abraham Chan, instructed by the Department of Justice, for the Applicant

Mr Godfrey Lam SC and Mr Anthony Ismail, instructed by Messrs Lo and Lo, for the Interested Parties

Please refer to CACV19/2012 for the relevant appeal(s) to the Court of Appeal.