Re Profit Success Development Ltd

HCAL 158/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 158 OF 2013

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J U D G M E N T

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A. INTRODUCTION

1.This is the applicant’s leave application to apply for judicial review against the determination (“the Determination”) of the Appeal Tribunal (Buildings) (“the Tribunal”) dated 31 July 2013.

2.The brief background leading to the Determination is as follows.

3.In HCAL 94/2011, this court by way of its judgment (“the Previous Judgment”) dated 8 November 2012 quashed the previous decision (“the Previous Decision”) of the Tribunal, which dismissed the applicant’s appeal against the demolition order (“the Demolition Order”) dated 21 August 2009 issued by the Building Authority (“the BA”).  The Demolition Order was issued under s 24 of the Buildings Ordinance (Cap 123) (“BO”) in respect of what have been termed for convenience as Structure 1 and Structure 2 located at the applicant’s building.  It is the BA’s view that the Structures are building works under the BO.  As the applicant had not obtained prior approval from the BA for carrying out those building works, they have to be demolished and be reinstated.  The Demolition Order thus requires the applicant to so demolish the Structures and reinstate the building within the time specified therein.

4.In quashing the Previous Decision, this court remitted the appeal back to the Tribunal for reconsideration of two questions:

(1) Whether Structures 1 and 2 are building works[1].

(2) Whether on the evidence of the case (and the Tribunal is at liberty to call for further evidence if it thinks fit), the necessary approval and consent required under s 14(1) of the BO for the demolition stated under the Demolition Order can be regarded as having already been given by the BA at the time of the Order.

5.The background to the issue of the Demolition Order and the appeal has been set out in details in the Previous Judgment.  I would adopt it herein, and would not repeat the same.  This judgment should also be read together with the Previous Judgment for the reasons for quashing the Previous Decision.

6.By the Determination, the Tribunal after reconsidering these two questions again dismissed the appeal:

(1) In relation to the first question, after reconsidering the relevant evidence, the Tribunal finds that Structures 1 and 2 are both building works.  See paragraphs 5-28 of the Determination.

(2) In relation to the second question, the Tribunal concludes at paragraph 43 as follows:

“43. Hence, the Tribunal’s reply to the second question raised by the learned Judge is the previous approved ‘plans’ only covers the reinstatement works. For demolition works, it is clearly and specifically stated in paragraph 5 of the Order that the Appellant has to engage an Authorized Person or a Registered Structural Engineer who has the statutory duty under the provisions of the Buildings Ordinance to advise the Appellant on the details of the required demolition including the precautionary and other protective measures and to ensure that it is being complied with such requirements. The necessary approval and consent required under S.14(1) of the Buildings Ordinance for the demolition works to be and should be handled (including plans yet to be submitted) by the Appellant’s Authorized Person can not be regarded as having already been given by the Building Authority at the time of the Order. This Tribunal stands on its decision that the Order is not invalid, void or unenforceable as complained.”

(3) Effectively, the Tribunal’s conclusion is that, on a proper understanding and construction of paragraph 5 of the Demolition Order, it requires the applicant to engage an authorised professional to apply for the approval and consent required under s 14(1) of the BO before the commencement of the works as required under the Demolition Order. There is thus no question that the necessary s 14(1) consent or approval had already been given by the BA as at the time of the Order.  The Demolition Order is thus not invalid or unenforceable as contended by the applicant[2].

7.The applicant now asks for leave to apply for judicial review against the Determination.

B. THIS LEAVE APPLICATION

8.The court will only grant leave if it is satisfied that the intended grounds of judicial review are reasonably arguable with a realistic prospect of success.  Chan Po Fun v Winnie Cheung (2007) 10 HKCFAR 676, at paragraphs 14-17.

9.A number of grounds are raised in the Form 86 in support of the intended judicial review.  In my view, none of these grounds are reasonably arguable.  My reasons are as follows.

B1. The Tribunal had failed to give any or any adequate reasons in the Determination (Section II.1 of the Form 86)

10.The applicant again complains that the Tribunal had failed to give any or any adequate reasons in relation to its conclusion on building works.

11.The Tribunal has in my view given adequate reasons.

12.In the Determination, the Tribunal has set out what parts of the evidence it has accepted which supports the finding that both Structures 1 and 2 are predominantly fixed, immovable, and enormous in size, resulting in a heavy loading on the slab.  The evidence as accepted by the Tribunal also shows that Structures 1 and 2 are used not only or principally as control room or for loading and unloading purposes.  Thus, the Tribunal is of the view that given their more fixated, immovable nature and that they are heavy and bigger in size, the Structures are more of the kind of building works than others, such as machinery and plants.  This amounts to adequate reasons to inform an objective reader or the applicant as to the bases upon which the Tribunal (after weighing those relevant factors) has come to the conclusion that the Structures are building works.

13.Mr Ismail for the applicant says this is not adequate as this court has said at paragraphs 31(3)(b) and (c) of the Previous Judgment that the Tribunal in giving adequate reasons should set out the “benchmark” it has relied on in weighing the evidence in relation to each of the relevant factors.  The Tribunal has not set out those benchmarks, and therefore it has failed to give adequate reasons.

14.I do not think Mr Ismail is correct.

15.When this court spoke of the need (when giving reasons) to identify a benchmark, it has to be understood in the context (a) of the nature of those relevant factors, and (b) that it is entirely a matter of weighing exercise for the Tribunal to assess these factors in concluding whether a structure is building work.  Understood as such, what the court intended to mean is that the Tribunal has to explain in comparative and relative terms why certain evidence (as accepted) in relation to certain factors points more towards building works but not otherwise.

16.The Tribunal has done so in the Determination.  As mentioned above, it has based its finding on the assessment of the evidence that Structures 1 and 2 are relatively predominantly fixated, immovable, heavy and big.  Given such nature, they are therefore more of a kind of building works instead of plants or machinery.  The applicant therefore should have no difficulty in understanding why the Tribunal has come to that conclusion although it may disagree with it.

17.This ground therefore is unarguable.

B2. Error of law and irrelevant consideration (Sections II.2 and 3.3 of the Form 86)

18.The applicant says that in answering the second question in the way it did, the Tribunal is saying that the Demolition Order is a “conditional” order, in that the applicant can only carry out the works required under the order upon satisfying the condition that it has obtained the necessary s 14(1) approval.  However, the applicant argues that on a proper construction of s 24 of the BO, it does not permit the BA to issue such a “conditional” order.  The Tribunal has therefore erred in law in this.

19.Further, the applicant contends that, in arriving at the conclusion of a “conditional” order, the Tribunal has also taken into account irrelevant considerations: (a) by referring to paragraphs 3(a)[3] and 5[4] of the Demolition Order which require an authorised person or resident site engineer to first apply for BA’s agreement of the plans for the demolition work, and (b) in also saying at paragraph 4 of the Determination that the applicant can always seek an extension of time to commence and complete the demolition and reinstatement works.  These are irrelevant considerations because (the applicant says) they are not within the scope of either the first or second question remitted by the court under the Previous Judgment.

20.I do not think the Tribunal has committed an error of law or taken into account irrelevant considerations in this part of the Determination.

21.In relation to the error of law argument, the applicant submits that under the plain language of s 24 of the BO, it is legally not permissible for the BA to issue a conditional s 24 Order, which has a built-in requirement that the applicant should obtain the approval under s 14 of the BO before it could commence the required demolition work.  This is so because s 24 specifically requires the BA to specify in the order (a) the time within which the applicant shall commence the work, and (b) the time within which the applicant shall complete the work.  Given these time specifications, it is (the applicant contends) not permissible (as it would be inconsistent) to require also in the same order the applicant to first obtain approval, since it would then be uncertain (and unreasonable) to have required the applicant to commence the work and complete the work within those respective time limits.

22.I do not agree.

23.The applicant was required to commence the demolition work ordered within 90 days of the date of the Demolition Order.  Given this length of the specified preparatory time for commencing the work after the service of the Demolition Order, it is not inherently impracticable and thus not inconsistent to also require the recipient of the order to obtain within that preparatory period the necessary s 14 approval before the commencement of the work.  There is thus no inherent impossibility and inconsistency in, on the one hand specifying first in the Demolition Order a time within which the applicant is to commence work, and on the other hand, requiring the applicant to obtain all the approval necessary for commencing the work within that period.  If of course the specified period is already too short, or turns out to be so as the event develops, it is always open to the applicant to ask, and/or for the BA to grant extension of time.  Whether it is or is not reasonable for the BA to grant or not to grant extension of time is an entirely different question, and has nothing to do with whether s 24 by itself permits the BA to issue an order with a condition that approval must first be obtained within the preparatory period before work could commence.

24.In further support of its above construction arguments, the applicant also relies on the other subsections of s 24 and s 40(1BA) of the Ordinance, which set out the potential penalty or consequences (including a fine and imprisonment) that a person may be subject to for failing to comply with a s 24 order.  Mr Ismail submits that these potentially grave consequences for non‑compliance underline the above primary submissions that s 24’s clear language does not permit the issue of a “conditional” order.

25.I am equally not persuaded by these submissions:

(1) As I said above, it is not inherently impossible to comply with the Demolition Order even if it has a built-in condition requiring approval to be obtained first.  As such, these sections do not in any way add to the primary argument.

(2) Moreover, the real question that may arise from these subsections and s 40(1BA) is, if an applicant is unable to comply with a conditional order on the facts of that case because it could not obtain the approval at all or within time to carry out the work in accordance with the time limit specified therein, whether it is reasonable and correct for the BA to exercise its discretion to impose those sanctions (if that is the case). This is a question of the propriety and reasonableness of the BA’s exercise of discretion when it arises.  It has nothing to do with whether, on a proper construction, s 24 itself permits the BA to issue a “conditional” order.

(3) In this respect, it is pertinent to note that (a) under those subsections of s 24, the BA has a discretion whether to impose those sanctions for non-compliance (the sanctions are in essence the recovery of the cost of the demolition and alteration works which have been carried out by the BA instead of the person under the relevant order), and (b) under s 40(1BA), it provides for a defence of reasonable excuse.

26.Finally, the applicant says the Tribunal’s construction of paragraph 5 of the Order to include a s 14 approval application cannot be correct, since the use of the language (such as the use of the words “for agreement”) does not match or track the words used under s 14.

27.I am also unable to accept this submission.  The Demolition Order is not a statute and the language used therein should not be read as if it were a statute.  It is clear to me that, in their ordinary and reasonable meaning understood in context, what paragraph 5 is saying is that the applicant must through its qualified professional apply and obtain all the necessary permissions that are legally required from the BA to commence the demolition work.  They include, if applicable, a s 14 approval under the BO.

28.The contentions on irrelevant considerations are also unarguable:

(1) The Tribunal does (and has to) take into account the court’s view in the Previous Judgment that the demolition work is (as submitted by the applicant) building work as defined under the BO, and thus its commencement must require prior approval by the BA of the relevant plans under s 14(1) of the BO.  After taking note of this, it must then be necessary for the Tribunal to further decide whether the Demolition Order is (as contended by the applicant before the Tribunal) invalid or void since no s 14(1) approval had been obtained for its commencement as stipulated in the order.  This question necessarily arises from and is connected to the second question, especially in light of the invalidity arguments advanced by the applicant before Tribunal.  In answering this question, the Tribunal looks at paragraph 5 of the Order.  It comes to the conclusion that this amounts to requiring the applicant to first obtain a s 14(1) approval from the BA of the plans of the demolition work before its commencement.  Therefore, the Order itself does not permit the commencement of the demolition work without such approval, and is thus not invalid.  When the conclusion is understood this way, the Tribunal is fully entitled to look at the provisions of the Demolition Order, including paragraphs 3(a) and 5, to decide whether the order itself is invalid as contended.

(2) Similarly, in support of its submissions on the invalidity of the Demolition Order, the applicant has advanced arguments based on the delay of the commencement and completion of the demolition and reinstatement works.  It is in response to these arguments that the Tribunal has also looked at the applicant’s right to apply for extension of time for compliance (see paragraph 42 of the Determination).  In the premises, it cannot be seriously contended by the applicant that in doing so, the Tribunal had taken into account irrelevant consideration.

29.For these reasons, these grounds also fail.

B3. Mistake of facts, irrelevant consideration (Sections II.3.1 and 3.2 of the Form 86)

30.Under section II3.2 for mistakes of fact, the applicant says this at paragraph 45 of the Form 86:

“45. In deciding that Structure 2 was ‘building works’, the Tribunal decided that ‘Structure 2 itself is 400,000 lbs in weight’ and that ‘it is supplied with electricity’: see paragraph 27 (at page 10) of the Determination. However, such findings were mistaken because 400,000 lbs included the ‘equipment plus water and admixture tanks’ referred to in paragraph 23 (at page 9) of the Determination which were not the subject matter of the Order and only the equipment but not Structure 2 was supplied with electricity.”

31.The Tribunal’s assessment of the weight of Structure 2 must be read in proper context as set out in the Determination at paragraphs 23 to 28 as follows:

“23. According to the evidence of the Appellant’s witness, Mr Cheung Wing, a member of the Hong Kong Institution of Engineers and Registered Professional Engineer, Structure 2 together with the equipment plus water and admixture tanks are very heavy and carrying the weight of around some 400,000 lb.

24. The site inspection on 16^th March 2011 gives this Tribunal the opportunity to see and note some equipments of Structure 2 are connected with electricity. Some water tanks are connected to the water mains of the Building. Some equipments are bolted onto the platforms. The various platforms of Structure 2 are fixed to the structure of the Building with anchor bolts of large size.

25. It was agreed by the Appellant’s witness and expert, the said Cheung Wing and Fan Siu Kay, an Authorized Person and Registered Structural Engineer, that since Structure 2 is fixed to the structure of the Building, it will transfer the loading and weight to the structure of the Building. Not like Structure 1, there is no evidence before this Tribunal that Structure 2 had been moved or relocated. Bearing in mind that Structure 2 as a whole is a complex structure with heavy equipments placed over and bolted to it, it cannot be easily moved or relocated. There is no evidence from the Appellant about the workmanship of Structure 2. Yet, if one wants to relocate or move Structure 2, it is necessary for one to dismantle the platforms and staircases. To do so, one would have to disconnect and dismantle those equipments thereon first. This Tribunal is of the view that Structure 2 cannot be easily constructed, ensembled, removed and dismantled.

26. This Tribunal accepts the intended use of Structure 2 is for loading and unloading purpose. But this will not mean for this very factor, it will fall outside the definition of building.

27. Structure 2 itself is 400,000 lb in weight and it gives this Tribunal an expression that it is a huge and complex structure consisting of a number of substantial size metal elements connected, if not welded together. It is anchored and bolted to the Building and cannot be moved around. The degree of permanence is apparent. Further, it is supplied with electricity. The water tanks thereon are connected to the water mains of the Building. It cannot be moved to another location without dismantle the whole structure. No doubt its erection and dismantling require operations normally associated with normal building works.

28. That is why this Tribunal says in its Decision that taking into consideration all the circumstances of the case and the Relevance Factors in Leung Lai So’s case, Structure 2 is a building works and falls within the definition of building.”

32.When read together, the Tribunal’s reasoning in taking into account the 400,000 lbs of Structure 2 is clearly not premised on saying that that is its net weight.  The Tribunal has expressly referred to the evidence that this weight included the equipment plus water and admixture.  The Tribunal relies on this total weight to reflect that Structure 2 itself together with the things it was used to or intended to be used to contain is so heavy to result in heavy loading on the slab.  That makes it (the Tribunal reasons) a factor pointing towards building work.  There is no mistake of fact as argued by the applicant.

33.As to the connection of electricity, the Tribunal has referred expressly to the fact that there was electricity connection to the equipment within Structure 2 at paragraph 24 of the Determination.  There is therefore also no mistake of fact.  The Tribunal refers to all these matters to demonstrate that Structure 2 could not be said to be easily constructed, ensembled, removed or dismantled (see paragraph 25 of the Determination).  It is legitimately open to the Tribunal to look at this.

34.This ground is similarly unarguable.

35.Under section II3.2 for irrelevant consideration, the applicant says this at paragraph 46 of the Form 86:

“46. In deciding that Structure 1 was ‘building works’, the Tribunal stated that it accepted the BA’s evidence that Structure 1 was ‘not just used as a control room but was also used as an office’: see paragraph 17 (at page 6) and paragraph 18 (at page 7) of the Determination. The use of Structure 1 as an office was irrelevant because the Order only stated that Structure 1 was used as a ‘control room’.”

36.Given that the applicant contends in the appeal that Structure 1 was used as a control room as its main plank of opposition, it must be open to the Tribunal to see if that is correct and established.  This is particularly so as the applicant now accepts that (contrary to Mr Ismail’s initial otherwise submissions made at this hearing) it was the BA’s position before the Tribunal that Structure 1 was also used as an office[5]. Thus, the Tribunal has not taken into account irrelevant consideration when finding that Structure 1 was not just used as a control room but also as an office.

37.This ground must also fail.

C. CONCLUSION

38.For the above reasons, the applicant’s intended grounds of the judicial review are not reasonably arguable.  I therefore refuse to grant leave.

Mr Anthony Ismail, instructed by Mayer Brown JSM, for the applicant

Please refer to CACV87/2014 for the relevant appeal(s) to the Court of Appeal.