The Real Estate Developers Association of Hong Kong V . Building Authority

HCAL 95/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 95 OF 2011

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R E A S O N S   F O R   J U D G M E N T

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A. INTRODUCTION

1.This is REDA’s application to apply for judicial review against the policy (“the Policy”) adopted by the respondent (“BA”) of requiring applicants submitting general building plans pursuant to s 14(1)(a) of the Buildings Ordinance (Cap 123) (“BO”) to provide particulars and proof of ownership or realistic prospect of control.

2.I dismissed the application at the hearing with costs, and with reasons to follow.  I now give my brief reasons.

B. BACKGROUND AND PROCEDURAL HISTORY OF THIS APPLICATION

3.The relevant background and procedural history of this application are not in dispute.  They have been helpfully summarised by the applicant’s leading counsel, Ms Yvonne Cheng SC (with Mr Wilson Leung), in her skeleton.  I respectfully adopt some of them herein.

4.REDA is an association of persons engaged in or connected with real estate or allied business in Hong Kong.

5.The Policy was stated by BA in a letter dated 8 August 2011 to REDA.  It was also stated in a letter dated 20 October 2010 to all authorised persons, registered structural engineers and registered geotechnical engineers.

6.REDA applied for leave to apply for judicial review in 4 November 2011.  Lam J (as the learned VP then was) granted leave on 8 November 2011.

7.In the original Form 86, the grounds in support of the judicial review are premised on contentions (a) that the Policy is ultra vires, (b) based on legitimate expectation, and (c) based on the failure to take into account of relevant considerations.

8.On 21 March 2012, the BA filed an affidavit in opposition.

9.At the same time, subsidiaries of Henderson Land (a major developer in Hong Kong) were involved in two appeals to the Court of Appeal raising, among others, similar issues regarding the Policy.  The appeals are respectively CACV 19/2012 (“Dobrowen Appeal”) and CACV 113/2012 (“Case Stated Appeal”).[1] REDA applied to join as an intervener in those two appeals, but this was dismissed by Fok JA on 15 March 2013.[2]

10.On 5 June 2013, REDA filed a second round of affidavits in support of the present proceedings.

11.On 13 June 2013, the present proceedings were stayed by consent pending the resolution of the Dobrowen Appeal and the Case Stated Appeal.[3]

12.The Court of Appeal (constituted by Fok, Cheung JJA and McWalters J) heard the Dobrowen Appeal on 10-11 April and 18 June 2013, and the Case Stated Appeal on 19 June 2013.

13.On 2 August 2013, the Court of Appeal handed down its judgments in the Case Stated Appeal and the Dobrowen Appeal (collectively, “the CA Judgments”).[4] In both appeals, the Court of Appeal ruled in favour of the BA.  The Court of Appeal held inter alia that the BA has power to reject building plans on the basis that the applicant does not own or have a realistic prospect of controlling the land.  See: Judgment in Case Stated Appeal (Lai Siu Kin Rembert v Building Authority [2013] 4 HKLRD 74); Judgment in Dobrowen Appeal (Building Authority v Appeal Tribunal (Buildings)[2013] 4 HKLRD 52).

14.The unsuccessful appellants in the Case Stated Appeal and the Dobrowen Appeal have declined to pursue the matter to the Court of Final Appeal.

15.As a result of the determination of the Case Stated Appeal and the Dobrowen Appeal, the stay in the present proceedings was uplifted.

16.Between January and March 2014, the Department of Justice (“DOJ”) (the BA’s legal representatives) and REDA’s solicitors exchanged correspondence regarding the further conduct of these proceedings :

(1) By letter dated 24 January 2014, REDA indicated its intention to: (a) amend the Form 86 so as to confine these proceedings to the question of whether the Policy is ultra vires (ie REDA would no longer pursue its other arguments based on legitimate expectation and failure to take account of relevant considerations); (b) fix a short hearing before this court, on the basis that the court would be bound to follow the CA Judgments on the ultra vires question; and (c) make, in due course (and subject to the BA’s consent), an application to use the “leap frog” procedure in ss 27A-27E of the Hong Kong Court of Final Appeal Ordinance (Cap 484) (“CFAO”) to appeal against the Court of First Instance’s judgment directly to the Court of Final Appeal.

(2) By letter dated 24 February 2014, the DOJ stated that: (a) the BA had no comment on REDA’s proposal to fix a short hearing before the court to dispose of the present proceedings; (b) it was premature for the BA to consent to the leap frog procedure.  The DOJ also asked for further confirmation on whether REDA would only rely on the ultra vires ground.

(3) By letter dated 27 February 2014, REDA reiterated that it did not intend to advance any public law challenge other than on the grounds set out in Part C of the draft Amended Form 86 (ie ultra vires and misdirection in law).  In particular, REDA did not intend to advance any argument based on failure to take into account relevant considerations or taking irrelevant considerations into account.

17.The DOJ then consented to the amendment of the Form 86, and the fixing of the present hearing, and an order was made accordingly by consent on 1 April 2014 by this court.

18.By the Amended Form 86, REDA has limited itself to argue only that the Policy is ultra vires on the grounds that:

(1) There is nothing in the BO or the regulations made thereunder which entitle the BA to require persons applying for approval of general building plans to provide proof of their ownership or realistic prospect of control of land (Amended Form 86 paragraphs 27-30).

(2) On a proper construction of the BO and its associated regulations, any power on the part of the BA, when considering applications under s 14(1) BO, to require particulars or proof of ownership or realistic prospect of control of land, is at most limited to the situation where such particulars and proof are reasonably necessary to enable the BA to decide whether to disapprove the building plans under one or more grounds under s 16(1) BO (other than for ownership or control per se).  Similarly, any power on the part of the BA to refuse approval of building plans, on the ground that an applicant has failed to provide particulars or proof of ownership or realistic prospect of control of land, or does not have ownership or realistic prospect control of land, is limited to the situation where such failure or status establishes a further and separate ground for disapproval under s 16(1) BO (other than for lack of ownership or control per se).

(3) Lord Fraser’s remarks in AG v Cheng Yick Chi[5] were obiter and not part of the ratio decidendi (Amended Form 86, paragraphs 31-36).

(4) In any event, Cheng Yick Chi did not address the issue of whether the BA is entitled, when considering applications under s 14(1) BO, to require particulars or proof of ownership or realistic prospect of control of land, or to refuse approval of building plans on the ground that such ownership or control has not been established or that particulars or proof thereof has not been provided (Amended Form 86, paragraphs 36A‑37).

(5) Alternatively, if Cheng Yick Chi did lay down a rule that land proposed to be included within a site for the purpose of the BO and its associated regulations must be land which a developer owns or has a realistic prospect of controlling, it is wrong (Amended Form 86, paragraph 38).

(6) Insofar as there are authorities which interpret Cheng Yick Chi as laying down such a rule, or which otherwise are relied upon by the BA to support the Policy, they have been misinterpreted or alternatively have been wrongly decided (Amended Form 86, paragraphs 43-49).

(7) In construing the BO and its associated regulations, a purposive construction should be taken, having regard to the background and context of the legislation (Amended Form 86, paragraphs 55-68).

The CA Judgments

19.In the Case Stated Appeal, the CA was asked to resolve the following questions of law:[6]

(1) Question 1 – Does the BA in exercise of its statutory powers (or in exercise of any principle of common law) have the power to reject building plans on the basis that a developer does not own or have a realistic prospect of controlling the land forming the site of the proposed buildings shown on those plans?

(2) Question 2 – Does the BA in exercise of its statutory powers (or in exercise of any principle of common law) have the power to require in respect of any building plans submitted for approval particulars of ownership or proof/substantiation of realistic prospect of control of the site of the proposed buildings shown on those plan?

(3) Question 3 – If the answer to Questions 1 and 2 is in the affirmative, is the power of general application or limited to specific factual situations?

20.The Court of Appeal answered (at paragraph 103) the above questions as follows:

(1) Question 1 – Yes.

(2) Question 2 – Yes.

(3) Question 3 – Subject to ordinary public law requirements (as to fairness, rationality, etc.) and to the appeal process under Part 6 of the BO, the relevant statutory powers may be exercised whenever the BA in his judgment considers that the developer has not shown ownership of or a realistic prospect of control over the land within the proposed site.

21.Fok JA[7] considered Questions 1 and 2 together.  He essentially concluded (at paragraphs 86-95) that: (a) Lord Fraser’s dictum in Cheng Yick Chi at pp 19I-20A was directly on point as regards Questions 1 and 2; (b) Lord Fraser’s said dictum was part of the ratio decidendi in Cheng Yick Chi, and was not merely obiter; (c) therefore, Questions 1 and 2 were to be answered in the affirmative.

22.As for Question 3, the developer sought to argue that the BA’s power to require proof of ownership or realistic prospect of control of land, or to reject plans for lack of such proof, was limited to the factual circumstances of Cheng Yick Chi.  This was rejected, Fok JA holding that the BA’s power was subject only to the ordinary public law limitations on the exercise of power by a public body (as to fairness, rationality, etc.) (see paragraphs 48, 69, 96, 99-100).

23.In the Dobrowen Appeal, the Court of Appeal dismissed the developer’s appeal against the BA’s rejection of its building plans for failure to demonstrate control over certain land:

(1) Fok JA rejected the argument that the BA had no power to ask for the information, reiterating that Lord Fraser’s remarks in Cheng Yick Chi were part of the ratio decidendi and binding on the Court of Appeal.

(2) He went on to hold that in any event, aside from the general application of Cheng Yick Chi, the BA had the necessary power to seek information regarding ownership and control of the land as a matter of construction of s 16(1)(i) BO, given the factual circumstances of the case.

See: paragraphs 41-44 of the judgment.

C. THE PRESENT JUDICIAL REVIEW

24.Given that REDA is now relying only on the grounds of ultra vires as set out in the Amended Form 86 (as summarised above), it is accepted by Ms Yvonne Cheng SC for REDA that this application for judicial review should be dismissed, as the CA Judgments are against those grounds and this court is bound by those judgments.

25.On this basis, I therefore dismissed the application.

26.Upon the dismissal of the application, Ms Cheng at the hearing urged this court to perhaps make use of this occasion to comment on the propriety to have the intended appeal leap-frogged directly to the Court of Final Appeal.

27.Although intended by REDA, there is not yet a leap-frog application made before this court under ss 27A-27E of the CFAO.  I therefore do not think it is appropriate for me to make any preliminary observations (as invited by Ms Cheng) at this stage.  This is particularly so since, as mentioned above, the BA (through DOJ) has not indicated that it would be prepared to consent to that application (which is one of the statutory requirements for a leap-frog application to be granted). Mr Yu SC (leading Mr Bernard Man) for the BA also confirmed at the hearing that the BA was still considering whether to consent to the application, and it would decide whether to do so when the application was formally made.

28.As a result, notwithstanding Leading Counsel’s persuasion, I would for the above reasons decline to do so.

29.Lastly, I thank counsel for their assistance in this matter.

Ms Yvonne Cheng SC, leading Mr Wilson Leung, instructed by Messrs Mayer Brown JSM, for the applicant

Mr Benjamin Yu SC, leading Mr Bernard Man, instructed by the Department of Justice, for the respondent