Source: http://www.ipsofactoj.com/DecidedCases/international/2016/part05/int2016(05)-011.htm
Timestamp: 2018-04-27 08:11:55
Document Index: 462217519

Matched Legal Cases: ['art 5', '§63', '§38', '§31', '§4', '§51', '§14', '§36', '§16', '§39', '§38', '§54', '§36']

The Real Estate Association of Hong Kong vs The Building Authority [CFA]
Final Appeal No 19/2015 (Civ)
IpsofactoJ.com: International Cases [2016] Part 5 Case 11 [CFA]
The Real Estate Developers
I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice Tang PJ.
I have had the benefit of reading in draft the judgment of Mr Justice Tang PJ and I am respectfully broadly in agreement with it.
A. The background and the decisions below
Section 14 of the Buildings Ordinance[1] (“BO”) prohibits anyone from commencing or carrying out any building works without having first obtained approval by the Building Authority (“BA”) of the building plans and his consent for commencement of the building works. Accordingly, anyone who wishes to develop any site must first submit building plans for approval.
On 20 October 2010, the BA issued a circular to all authorized persons,[2] registered structural engineers and registered geotechnical engineers setting out its policy as follows:
The Building Authority has always taken the stance that the site of a proposed building for the purpose of the Buildings Ordinance .... can only include land which the applicant owns or which he has a realistic prospect of controlling. To facilitate the Building Authority to consider whether this requirement is satisfied, the applicant is required to submit a Form BA5 .... and particulars of ownership or realistic prospect of control of the land forming the site, together with the required documentary proof, when submitting new general building plans of any proposed new building on or after 21 October 2010.
That circular followed earlier correspondence between the appellant (“REDA”) and the BA which stated its policy along the same lines and gave examples of the types of documents required:
Examples of documents or records which have been accepted as demonstrating a realistic prospect of controlling the land forming the site include agreements for sale and purchase, as well as authorization letters signed by registered owners authorizing an applicant to act on their behalf in pursuing the redevelopment of the subject building such as applying for approval of building plans for the proposed redevelopment. Moreover, an applicant may be considered as having a realistic prospect of controlling the land where he has successfully bid for a site at an auction (although he has yet to complete the payment and other land ownership registration procedures), or where he has a reasonable chance of success in a case involving land exchange with the Government.[3]
Those communications took place against the background of Attorney General v Cheng Yick Chi,[4] a 1983 Privy Council decision on appeal from Hong Kong (to which I shall return) in which Lord Fraser of Tullybelton held that the land which forms a “site” for the purposes of the relevant legislation means land which a developer bona fide proposes to include in the development, being land which he owns or which he has a realistic prospect of controlling.
On 2 August 2013, applying Cheng Yick Chi,the Court of Appeal delivered judgments in two cases upholding the BA’s disapproval of the building plans submitted by two developers on the basis that they had failed to provide sufficient particulars of ownership or of a realistic prospect of control over parts of the proposed development sites. These were the Court of Appeal’s decisions Lai Siu Kin Rembert v Building Authority,[5] and Building Authority v Appeal Tribunal (Buildings)[6] respectively.
The parties in those proceedings did not seek leave to appeal to this Court. However, the present appeal flows from judicial review proceedings brought by the appellant for an order quashing the BA’s abovementioned policy as ultra vires and a declaration that the BA is not entitled, when considering building plans submitted, to require particulars and proof of ownership or realistic prospects of control, or to refuse his approval for failure to provide such particulars and proof. These proceedings therefore do not involve the submission or rejection of any actual building plans.
The application for judicial review was dismissed by Au J on the footing that he was bound by the abovementioned Court of Appeal decisions.[7] The present appeal is effectively a leap-frog appeal from his Lordship’s judgment to this Court since the Court of Appeal[8] held that it too was bound by those judgments and did not enter into any analysis of the issues. It granted leave to appeal to this Court on the basis of the following question of law:
Does the Building Authority have an unqualified power in all cases, subject only to ordinary public law requirements (such as fairness or rationality), to:
reject building plans submitted for approval under s.14(1) Buildings Ordinance on the basis that a developer does not own or have a realistic prospect of controlling the site shown on the plans, or
require particulars or proof of ownership or realistic prospect of control of a site shown on building plans as pre-requisites for his approval of such plans under s.14(1) Buildings Ordinance?
B. A question of statutory construction
The issue being one of vires, the question is whether power to refuse approval of building plans because the applicant has not provided sufficient particulars or proof of ownership or of a realistic prospect of control over the relevant site is conferred on the BA by the BO and the Regulations made thereunder.
This raises a question of statutory construction that has at its core, section 16(1) of the BO which specifies a series of grounds on which the BA may refuse to give his approval to building plans or refuse consent to the start of building works. By section 16(1)(i), he may refuse approval where:
.... in his opinion, it is necessary for him to have further particulars of such plans or of the building works shown thereon .... to enable him fully to consider such plans.
Lord Pannick QC[9] submits that this power is confined to particulars which are reasonably necessary to enable the BA to decide whether to disapprove the plans under one or more of the other limbs of s.16(1).[10] Counsel also accepted that the BA has implied power to do that which is incidental to, or consequential upon, the express functions which are conferred by the legislation.[11]
C. BO section 16 construed in the light of its context and purpose
In my view, construing section 16 in the light of its context and purpose, the BA’s policy of seeking particulars or proof of ownership or realistic prospects of control of a site is reasonably necessary to enable him fully to consider whether submitted plans should be approved.
First, in my view, section 16(1)(d), taken in combination with section 16(1)(i), supplies a statutory basis for the BA’s abovementioned policy. This involves construing section 16(1)(d) in the context of the provisions of the BO and the Building (Planning) Regulations (“BPR”)[12] which limit the density of development on building sites. Secondly, the BA’s policy is justifiable on a broader construction of section 16 in the context of other BO provisions which make clear the purpose of the approval process.
C.1 Section 16(1)(d) and the statutory maxima
Section 16(1)(d) provides:
The Building Authority may refuse to give his approval of any plans of building works where ....
the carrying out of the building works shown thereon would contravene the provisions of this Ordinance or of any other enactment ....
One of the main concerns of property developers as well as the BA relates to the maximum development potential of any particular site. Arguing against the BA’s policy and advocating greater commercial certainty for developers, REDA submitted:
The reason why unapproved plans give rise to uncertainty is because there are a large number of development parameters which cannot be known until the BA gives approval (for example, whether the site will be accepted as a class A, B or C site, whether bonus plot ratio will be granted, whether discretionary gross floor area will be granted, whether modifications or exemptions from the operation of the BO will be granted, and so on).[13]
Such development parameters bear on permissible building densities and the setting of statutory maxima constitutes one of the most important functions[14] of the BO and its subsidiary legislation. As Lord Keith put it in Cinat Co Ltd v Attorney General,[15] referring to the BPR:
.... the whole purpose of the regulations .... is to secure that in a particular locality the density of commercial and domestic buildings is no greater than accords with the public interest.
It is therefore the BA’s duty to satisfy himself that all plans submitted do not propose building works which would contravene the BO and its subsidiary legislation, particularly the BPR, by exceeding the statutory maxima.
Building density is regulated by the combined effect of the BPR provisions on site classification, site coverage, plot ratio and building height.
“Site coverage” is defined relevantly to mean “the area of the site that is covered by the building that is erected thereon”[16] and “plot ratio” is defined as a value “obtained by dividing the gross floor area[17] of the building by the area of the site on which the building is erected”.[18]
“Permitted plot ratio” is defined to mean “the maximum plot ratio permitted under .... regulation 21”.[19]
Both “site coverage” and “permitted plot ratio” depend on how the site is classified and BPR reg 18A classifies sites according to how many streets of a stated width the site abuts on.[20]
BPR reg 19 provides that maximum site coverage and maximum plot ratio are to be ascertained, depending on the site classification, in accordance with regulations 20 and 21.[21]
BPR reg 20 lays down the maximum permitted site coverage by reference to percentages laid down in the First Schedule, related to the height of the building in question.[22]
Similarly, BPR reg 21 lays down the maximum permitted plot ratio by reference to the First Schedule.[23]
By way of illustration, under the First Schedule a domestic building of a height of over 36 m but not exceeding 43 m is permitted a maximum site coverage of 39% for a Class A site, 44% for a Class B site and 47% for a Class C site, with corresponding maximum plot ratios of 5.4, 6.1 and 6.5 for the respective site classifications.
The concept of “the site” is therefore plainly an essential element of this regulatory scheme. It is, however, nowhere defined in the legislation. Yet, it is necessary to know, as a matter of law, what constitutes a “site” to be able to classify the relevant land as a Class A, B or C site; to be able to determine what percentage of the land area ascertained to constitute the “site” would be covered by the proposed building; to be able to work out the plot ratio by reference to the gross floor area and the site area; and thus to determine whether the site coverage and plot ratio of the building shown on the plan would contravene the BO by exceeding the permitted maxima.
Faced with the absence of a statutory definition, Lord Fraser had to decide what ‘site’ means for the purposes of the BPR. His Lordship held that the land which forms a “site” must be ascertained as a question of fact in each case and that the concept includes “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”. He held that a “site” could “only include land which he owns or which he has a realistic prospect of controlling”.
In my view, the approach adopted by Lord Fraser to the meaning of “site” is compelling and should be adopted for present purposes. This is because ownership and realistic prospects of control are often directly relevant to ascertaining the extent, position and nature of the site as an essential step in calculating the permitted parameters of the development.
This is illustrated by the Privy Council’s decision in Cheng Yick Chi[24] itself. In that case, the developers owned five adjoining houses which they wished to develop into a single new building. One of the main questions was whether a strip of land which had been dedicated to the public for pedestrian passage running in front of the five houses could be included as part of the “site”. If it could, the gross floor area of the proposed new building permitted by the BPR would be materially larger than if that strip of land were excluded from the calculations.
In addressing this issue, Lord Fraser elucidated the difference between a “lot” and a “site” as follows:
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.[25]
This passage demonstrates the close nexus between ownership or control of the land and ascertaining the nature and extent of the site. In the instances adumbrated by Lord Fraser, what constitutes the “site” is wholly dependent on decisions taken by owners or those in control of the land. Thus, proposals to amalgamate different lots to form one development site; to develop only part of a lot as a site; or to develop a lot in phases as a series of sites, are proposals that necessarily rest on decisions that can only be taken by the person who owns or who at least has realistic prospects of controlling the land. They are decisions which someone who has no realistic prospects of controlling the land could not possibly take.
The Privy Council accordingly concluded that “site” has to be given a meaning which recognizes that nexus, holding that a “site” for the purposes of the BPR, can only include land which the applicant for approval owns or has a realistic prospect of controlling. Lord Fraser’s approach was adopted in Wharf Properties Ltd v Eric Cumine Associates, Architects, Engineers and Surveyors,[26] where Lord Oliver of Aylmerton stated:
In general, the owner of land which he desires to develop is at liberty to designate as his site the whole of any part of the land which he owns, including land which already has existing buildings on it, although, of course, the floor area of the existing buildings will have to be taken into account in determining whether any new buildings planned will exceed the permitted plot ratio. This may seem almost self-evident but if authority is needed for the proposition it is contained in the decision of the Board in .... Attorney General v Cheng Yik Chi .... [citing the aforesaid passage from Lord Fraser].
Lord Fraser’s approach was also acknowledged in the Privy Council decisions in Hinge Well Co Ltd v Attorney General,[27] and Cinat Company Limited v The Attorney General of Hong Kong.[28]
It was also applied by the Court of Appeal in Building Authority v Appeal Tribunal (Buildings)[29] which provides a further illustration of how ownership of the land can be decisive in determining the extent or area of a site. The development proposal in that case was in respect of Nos 7-9 Ying Wa Terrace which was adjacent to Nos 10-12. The issue was whether the area in front of Nos 7-9, over which the owners of units in Nos 10-12 had a right of way, could be included as part of the site area of Nos 7-9 with consequences for calculating permitted site coverage and plot ratio.[30] The BA refused building plan approval pending clarification by the developers of “whether the developer of 7-9 Ying Wa Terrace has full control of the land at 10-12 Ying Wa Terrace”.[31] Applying Cheng Yick Chi, Fok JA (as he then was) held that “the BA was entitled to seek information from the Developers regarding ownership and control of Nos 10-12 for the purpose of determining whether or not the right of way should be excluded from the calculation of site area and plot ratio for Nos 7-9.”[32] As his Lordship explained:[33]
In order to ascertain the status of that right of way, it was necessary to ask for particulars of the Developers' control of Nos 10-12. If that site was in the common ownership of the Developers then the right of way would be extinguished and it could be ignored for the purposes of reg.23(2)(a)[34].
REDA accepts that the BA has power to seek the relevant information in cases like Building Authority v Appeal Tribunal (Buildings)[35] “where such information is necessary in order to determine whether a specific, identified provision of the building legislation has been or will be complied with”, but argues that the BA’s policy impermissibly claims a general, free-standing power to reject general building plans for lack of proof of ownership or control “even where there is no other ground for disapproval in issue”.[36] That is too narrow an approach. Common experience shows that there are often cases where the connection between ownership or control and ascertainment of the statutory maxima is important and may be decisive. Possible grounds for disapproval because of contravention by exceeding such maxima may only emerge as issues as a result of the BA requiring particulars and proof in the first place, making the BA’s policy intra vires, rational and reasonable.
C.2 Section 16(1) in its broader context and purpose
REDA’s challenge to the BA’s policy connotes the proposition that a person who does not own and does not have any realistic prospect of controlling the land comprised in the building plans is legally entitled to require the BA to undertake the approval process. That is a surprising suggestion since it would be natural to assume that a person asking for approval of specific plans for putting up a building on a particular site is able or has realistic chances of being able to carry out the proposed development because he owns or has realistic prospects of controlling the land in question.
Moreover, by virtue of BO section 15(1)[37] and regulation 30(3) of the Building (Administration) Regulations (“BAR”),[38] the BA would have no more than 60 days to reach his decision on approval, in default of which he would be deemed to have given his approval. If REDA’s proposition is correct, it would follow that anyone could impose that public duty on the BA even if he has no realistic prospect of controlling the site. It would also mean that there could be several separate applications for approval of plans regarding the same site where none of the applicants have a realistic prospect of gaining control thereof, even if, for instance, the owner had made it clear that he had no interest in selling the property or having anyone else develop it.
Resources naturally being limited, such a state of affairs would place heavy administrative burdens on the BA and cause delays in the approval process in relation to owners or persons who do have genuine and bona fide development projects.
Lord Pannick QC reminded the Court of Lord Millett’s often-cited warning in China Field Ltd v Appeal Tribunal (Buildings) (No 2),[39] against a consequentialist interpretation of a statute unsupported by the statutory language, where his Lordship said:
There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of it context and the statutory purpose, is incapable of bearing: see HKSAR v. Lam Kwong Wai (2006) 9 HKCFAR 574 at §63.
However, for the reasons discussed in Mr Justice Tang PJ’s judgment which I respectfully adopt, REDA’s argument, with its untoward consequences, can properly be rejected by construing section 16 purposively in the broader context of the other provisions of the BO dealing with the approval of building plans and consent to the commencement of building works.
As Tang PJ points out, the statutory scheme is not merely concerned with paper approvals of what may only be speculative and academic applications but with approvals as a necessary condition of carrying out building works. The whole point of obtaining approval is to be permitted to carry out building works. BO section 14 provides:
Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority –
his approval in writing of documents submitted to him in accordance with the regulations; and
his consent in writing for the commencement of the building works or street works shown in the approved plan.
Section 14 is thus structured as a prohibition against carrying out such works without first having obtained building plan approval and without first obtaining consent to the commencement of the building works shown on the plan. The implicit premise is that the applicant owns or controls the site and so is able to carry out the building works depicted in the submitted building plans.
The provisions of section 15 which place pressure on the BA to reach a decision regarding approval or to give reasons for a refusal within 60 days, deeming approval given unless a refusal is notified, have been mentioned above. The injection of such urgency is only explicable on the basis that the BO recognizes that plan approval is the first step of the process and that the second step involving the commencement of building works should not be held up. The statutory intent therefore maintains its focus on an actual, and not a purely hypothetical, development project. The BO would hardly have injected such urgency into the scheme if it was intended that plan approvals could be sought by persons with no realistic prospects of controlling the site and so no realistic prospects of starting construction work thereon if approval is given. Section 16(3) makes it clear that building works should begin not more than two years after plan approval.[40]
Construing section 16 in the aforesaid context, I respectfully agree with Lord Fraser’s conclusion in Cheng Yick Chi that, for the purposes of the BO and its subsidiary legislation, for land to qualify as a site it must be “land which the developer bona fide proposes to include in the development” and thus, “can only include land which he owns or which he has a realistic prospect of controlling”. That approach was adopted by the Court of Appeal in Lai Siu Kin Rembert v Building Authority,[41] which was, in my view, correctly decided.
For the foregoing reasons, the BA’s policy of requiring the applicant to provide the requisite particulars and proof is not ultra vires.
Section 14(1) of the Buildings Ordinance (“the Ordinance”)[42] provides that no person may commence or carry out any building work[43] without having first obtained from the Building Authority (“BA”):
his consent in writing for the commencement of the building works .... shown in the approved plan.
Under Regulation 8 of the Building (Administration) Regulations (“BAR”), the documents which have to be submitted include:
plans showing –
the width of every street adjacent to the site; and
a block plan, showing the size and position of the building and of other buildings in the immediate vicinity, and neighbouring streets;
where the position of the site is not clearly identifiable from such block plan, a key plan showing the position of the site;
a diagrammatic plan, with full dimensions and calculations, showing –
the height, site coverage, plot ratio and disposition of the building in accordance with regulations 19, 20 and 21 of the Building (Planning) Regulations .... ;
The grounds on which approval of plans or consent to the commencement of building works may be refused are set out in s 16.[44] Section 16(1) sets out the grounds upon which the plans could be refused approval and s 16(3) where the BA may refuse consent to commence work.[45]
In these proceedings, the applicant, the Real Estate Developers Association of Hong Kong (“REDA”), challenges the lawfulness of the BA’s disapproval under s 16 of building plans on the basis that the developer does not own or have a realistic prospect of controlling the site of the proposed development shown on those plans.
Lord Pannick QC who appeared for the applicant, together with Ms Yvonne Cheng SC and Mr Wilson Leung, submitted that the Ordinance does not expressly or by implication require an applicant to be the owner or have a realistic prospect of control of the site and that any requirement by the BA for proof of the same is ultra vires and unlawful.
In this court, Mr Benjamin Yu SC who appeared for the BA together with Mr Bernard Man SC relied on s 16(1)(a), (c), (d) and (i) in support of the BA’s policy to require proof that the developer owns or has reasonable prospect of control over the site the subject of the building plans and to reject them when such proof is unavailable. In brief, the BA’s case is that the concept of site is central to the regulation of the design of buildings and hence, of approval of building plans under the Ordinance and Regulations.
This is not the first time that the BA’s policy has been challenged, although it is the first time that it has come before this court. In Lai Siu Kin Rembert v Building Authority[46] the Court of Appeal upheld the BA’s decision to reject plans submitted by an applicant who owned 85% of the units on the proposed site. There, the court followed Attorney General v Cheng Yick Chi,[47] by which it regarded itself bound, where Lord Fraser, in the advice of the Board said:
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 of 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.[48]
Cheng Yick Chi is not binding on this court and Lord Pannick submitted that the words of Lord Fraser relied on by the Court of Appeal in the Case Stated Decision were not of general application and if they were meant to be of general application, they were wrong and we should take this opportunity to say so.
In these proceedings, the courts below regarded themselves bound by Cheng Yick Chi and on 10 September 2015, the Court of Appeal[49] granted leave to appeal to this court on the following question:
The parties are agreed, and it is plainly right, that the resolution of the question turns on the proper construction of the Ordinance. That being the case, I shall first endeavour to come to a view on the proper construction before turning my attention to Cheng Yick Chi.
The immediate origin of these proceedings could be traced to the 2010-2011 Policy Address[50] on 13 October 2010 where it was announced that concessions regarding gross floor areas[51] in return, for, inter alia, green and amenity features would not apply to new building plans submitted on or after 1 April 2011.
Following the Policy Address, a BA circular letter dated 20 October 2010, to all authorised persons,[52] registered structural engineers, and registered geotechnical engineers, stated that the site of a proposed building for the purpose of the Ordinance could only include land which the applicant owned or which he had a realistic prospect of controlling and an applicant was required to submit a new Form BA 5 and particulars of ownership or realistic prospect of control of the land forming the site, together with the required documentary proof, when submitting new general building plans of any proposed new building on or after 21 October 2010, failing which BA might refuse to approve the plans under s 16(1) of the Ordinance.[53]
BA also explained in correspondence with REDA, dated 8 August 2011, that the “step up enforcement .... in respect of ownership or realistic prospect of control of the .... site” was made in the midst of “rising public concern”, that plans approved could not be implemented within a reasonable time so that by the time the plans were implemented, they would no longer “be conducive to a quality and sustainable built environment”.[54]
Litigation followed the stepped up enforcement of the ownership and control requirement. The plans which were the subject of the Case Stated Judgment were submitted during the window period between 13 October 2010 and 1 April 2011. The plans in the Dobrowen appeal had been submitted earlier but one of the reasons for disapproval was that the applicant had failed to demonstrate ownership or realistic prospect of control of the entire site. Both these proceedings terminated in the Court of Appeal. There was no appeal to this court. REDA had sought leave to join the Case Stated Proceedings which was refused. The present application was commenced by REDA so that this court should settle the point. It was said in the Case Stated Judgment that there were 116 appeals before the Tribunal which were in abeyance pending the resolution of the question.[55] Presumably they now await our decision. Our decision is likely to have important practical consequences, because if plans had been wrongly rejected which ought to have been approved earlier, they might be entitled to the concessions referred to in para 50 above. Also, according to Mr Lau Chi Keung[56] the earlier approval of building plans might reduce the risk of the developer being affected by changes in law including adverse changes in the zoning plans.
Lord Pannick submitted that as “site” is not defined in the Ordinance or the Regulations, the starting point is to take the ordinary meaning of the term, viz a piece of land. It is simply a question of physical area and “site” is what the applicant chooses to put on the plan. But as the Chief Justice said in Fully Profit (Asia) Ltd v Secretary for Justice[57]:
.... that in the area of statutory and constitutional interpretation, it is context that is key: context is the starting point (together with purpose) rather than looking at what may be the natural and ordinary meaning of words.
I have no doubt that I should interpret “site” according to its context and purpose.
The context is the approval of plans and consent to commencement of building works and the purpose of the Ordinance can be gathered from its long title, viz “To provide for the planning, design and construction of buildings ....”
BAR 8(1)(g) requires the site to be identified. Identification of the site on the plans is of critical importance because depending on its classification, location and size, the permissible building is determined. Three classes of sites are defined in the Building (Planning) Regulations (“BPR”). Classes B and C respectively are corner sites which abut on 2 or 3 specified[58] streets, none of which is less than 4.5 m wide. A Class A site is a site, not being a Class B or Class C site, which abuts on one or more of such specified streets. The maximum site coverage[59] and plot ratio[60] for Class A, B or C sites are regulated by BPR 20 and 21 respectively.[61] Site coverage and plot ratio in turn depend on the height of the proposed building.[62] For a site which is neither Class A, B or C, its height, and the maximum site coverage and plot ratio are determined by the BA.[63]
Under BPR 25 and the second schedule of the BPR, each domestic building must have an open space at the rear. The size of such open-space differs according to whether the site is a Class A, B or C site. Also, under BPR 2, the definition of site will affect whether a building can be classified as a detached or semi-detached building, which in turn will determine (a) whether it is necessary to build a service lane and (b) the height of windows.
It is no exaggeration to say that the site is the single most important determining factor in a plan.
If Lord Pannick is right and a site is simply any physical area delineated on the plan and it could be hypothetical, then as Lam J (as he then was), said at first instance in the Case Stated Appeal, a site could cover the whole of the Hong Kong Island or as Reyes J said in Ashley 121 Ltd v Appeal Tribunal (Buildings) [2011] 2 HKLRD 728 at para 83, the BA could be vexed by a flood of hypothetical proposals. These are far-fetched examples and Lord Pannick submitted that given the substantial expense involved in any submission of plans, it is unlikely that there would be a flood of frivolous applications following a decision in favour of REDA. Even so, these possibilities support the view that Lord Pannick’s submission is unlikely to be correct.
I have mentioned the opening words of its long title: “to provide for the planning, design and construction of buildings ....” Control over density of buildings is unquestionably one of its objects of the Ordinance.[64] BA’s functions and duties in these regards are no less important than their functions and duties in ensuring the safety of buildings. Lord Pannick submitted, however, that anyone who is prepared to incur the expenditure of an application should be permitted to do so even though there is no realistic prospect of his being able to build on the site. He sought to justify this submission by saying that this would enable a developer to know the potential of a made-up site. It is said that one of the benefits is that a developer would know how much he should pay to acquire the site. But this has to be balanced against the rising public concern referred to in BA’s letter of 8 August 2011.[65] Moreover, the approval process is transparent and there is an enquiry service provided by the BA for persons who desire clarification relating to the interpretation of or compliance with the Ordinance and its Regulations, including the development potential of a site. In any event, I do not believe these considerations assist in the interpretation.
Approval of building plans is dealt with in the context of a prohibition against building works without the necessary approval. Section 14 not only requires approval of plans, it also provides that building work could not be commenced without BA’s consent. The context is clearly of an approval of plans for intended building works.
Section 14 requires the submission of documents in accordance with the regulations for the approval of plans. The regulations, as discussed above, require the identification of the site on which building work was to be performed, and any approval would be site specific. Section 14 also provides for application for the consent to commence work at such site and in accordance with such approved plans. I do not believe it was ever envisaged that a site could be hypothetical. Under s 15, the plansare deemed to have been approved and consent to commencement of work are deemed to have been given unless the BA had notified his refusal to approve or consent setting out the grounds for such refusal within a prescribed number of days, namely, 60 days,[66] after their respective applications. Also, s 16(3) provides that the BA may refuse to give consent to the commencement of work if (d) a period exceeding two years has elapsed since (the plans were approved). Thus, the building plans were required to be approved or disapproved within a tight time table for a development which is expected to be commenced within 2 years. They show clearly that the plans to be submitted were expected to be plans for intended developments.
Lord Pannick relied on s 14(2)(a) which provides that neither the approval of any plans nor the consent to the commencement of any building works can be deemed to confer any title to land. This does not support the view that the legislature had in mind hypothetical applications. The purpose of s 14(2)(a) was to avoid any argument that any defect in title had been cured by such approvals. In other words, third party property rights should not be prejudiced by such approvals.
Lord Pannick submitted that s 16(1) does not expressly say that plans could be disapproved if the applicant was not the owner of the site or had no realistic prospect of control of the site. That is so. Nor does it expressly provide under s 16(3) that consent to commence work could be refused if the applicant was not the owner or had no realistic prospect of control of the site. In the case of consent to commence work, it is clearly unarguable that the BA would be obliged to give consent even if the applicant was neither the owner nor had any realistic prospect of control of the site. That would make any such consent meaningless. I believe there is no express provision under s 16(1) or s 16(3) because it was assumed that the plans would have been submitted by or on behalf of a person who bona fide[67] intended to develop the site. An applicant would not be so regarded unless he had the means and ability to do so. That is why requirement of proof of ownership or realistic prospect of control may properly be required before plans are approved.
Section 16(1) contains 17 sub–clauses and Mr Yu relied on four of them:
the Building Authority may refuse to give his approval of any plans of building works where –
the plans are not such as are prescribed by regulations or are not such as he may have required under this section;
he has not received application for their approval in the specified form or any such application does not contain the particulars required therein;
the carrying out of the building works shown thereon would contravene the provisions of this Ordinance or of any other enactment, or would contravene any approved or draft plan prepared under the Town Planning Ordinance (Cap 131);
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;
Given my view that the site for which application for approval was made must be a site on which it was bona fide intended that the approved building would be built, the BA was entitled to require particulars of ownership or realistic prospect of control of the site under s 16(1)(i). It also follows that the other provisions were also engaged: under (1)(a), the plans could be refused approval because that did not relate to such a site; under (1)(c) because the application did not contain the particulars of ownership or realistic prospect of control required and under (1)(d) because only building works in relation to which plans had been properly approved could be built.
For the above reasons, as a matter of construction, I am of the view that the certified question should receive an affirmative answer.
I turn now to consider Cheng Yick Chi. Here I have the benefit of the Case Stated Judgment where Fok JA (now Fok PJ) dealt fully with the scope and application of Cheng Yick Chi. In Cheng Yick Chi, the issue was what was the meaning of a site for the purpose of the BPR and BO. Lord Fraser’s answer was quoted above at para 46 and I will not repeat. It was argued before Fok JA that that was not part of the ratio and therefore not binding on the Court of Appeal. That is not a matter which concerns us. But, with respect, I fully agree with Fok JA that it was part of the ratio of Cheng Yick Chi. In order to examine the contrary argument it is necessary to go briefly into the facts. There, the respondent owner wanted to include in a site, the subject of the application for the approval of plans, a strip of land which he owned but which he had previously dedicated to the public for passage and the question was whether it remained available for inclusion in the proposed development. The passage would not be built upon and would remain a passage in the proposed plans. It was in such context that their Lordships considered the meaning of “site” in the BPR, after noting at 19C that “Neither the Regulations nor the Buildings Ordinance contains a definition of site”, they concluded that a site “can only include land which he owns or which he has a realistic prospect of controlling.” This was the answer given to one of the declarations appealed against, namely, declaration (c), which concerned whether the proposed site formed “one site for a single building is a Class A site within the meaning of reg. 2 of (BPR)”. It was in that context, that Lord Fraser said:
.... the land which forms a ‘site’ for the purposes of the Regulations must be ascertained as a question of fact in the case of each development .... It can only include land which he owns or which he has a realistic prospect of controlling. (19I)[68]
After dealing with declaration (c), Lord Fraser went on to deal with another question, declaration (a) which concerned the proper construction of Regulation 23(2)(b) .
Regulation 23(2)(b) has two limbs and reads:
In determining for the purposes of regs. 20, 21 or 22 the area of the site on which the building is erected –
no account shall be taken of any part of any street or service lane; and
there shall be included in any area dedicated to the public for the purposes of passage.
The owner relied on BPR 23(2)(b) on the basis that the passage had been dedicated to public passage. Lord Fraser was of the view that BPR 23(2)(b) only applied to the areas which, in accordance with the relevant scheme for development, are proposed for dedication in the future, as if the words “to be” occurred between “area” and “dedicated” (p 21 I). That being the case, Lord Fraser said at 22D:
.... in determining for the purposes of regs 20, 21 and 22 the area of the site, no account is to be taken of any part of any existing street, but account is to be taken of any area which, in the proposed development, is to be dedicated to the public for passage. Areas dedicated in the past are excluded.
Lord Pannick is right that the answer given to declaration (a) would have disposed of the appeal in Cheng Yick Chi. But Lord Fraser’s dictum regarding the meaning of “site” for the purposes of the regulations was given in answer to one of the grounds of appeal. So, I agree with Fok JA that he was bound by Cheng Yick Chi.
Lord Pannick noted that Lord Fraser did not give any reason for his statement that a site could only include land which the developer owns or controls. I rather think that was because the conclusion was too obvious to require elaboration.
Nor does Cheng Yick Chi stand alone. I will mention only three decisions of the Privy Council in which Lord Fraser’s dictum was cited without reservation. I will deal with them chronologically.
Hinge Well Co Ltd v Attorney General [1988] 1 HKLR 32[69] was concerned with the construction of Regulation 23(2)(a). (See pp 43-44) There, a scavenging lane divided two plots of land owned by the applicant and the question was whether the two plots formed one site for the purpose of BPR. Lord Pannick submitted that Hinge Well turned on Regulation 23(2)(a) and provided no support for Lord Fraser’s dictum. But at p 39 Lord Oliver said the respondent’s (BA) argument was based on Lord Fraser’s words “land which he owned or which he had realistic prospect of controlling”. In response, his Lordship said a landowner whose land is subject to a private easement could negotiate with those entitled to the easement, and whether he had any realistic prospect of controlling the land over which the easement is exercisable must be a question of fact in each case. This, I believe, was an affirmation of Lord Fraser’s dictum.
Wharf Properties Ltd v Eric Cumine Associates, Architects, Engineers and Surveyors [1991] 2 HKLR 6, was concerned with professional negligence and the facts do not concern us. But at p 13, Lord Oliver of Aylmerton,[70] cited Lord Fraser’s dictum as authority that a developer was at liberty to designate as his site the whole of any part of land which he owns.
In Cinat Company Limited v The Attorney General of Hong Kong [1995] 1 HKLR 128,[71] the question was whether development could take place on a vacant piece of land once it had been included as part of a site for the purpose of calculating permitted site coverage and permissible plot ratio of another development. The only authority cited in the judgment was Cheng Yick Chi and the dictum at para 46 above was cited together with the words which followed, namely that the site must not include:
land [which] ...., so to speak, used up in enabling some other existing building to comply with the regulations.
The additional words were decisive of the appeal in Cinat, because:
It was thus recognised that a development site might include some particular area of land owned or controlled by the developer which was not intended to be built on but which was necessary to enable the proposed building to comply with the regulations.
I also note that Lord Keith said at p 131 the whole purpose of the regulations, was to secure that in a particular locality the density of commercial and domestic buildings is no greater than accords with the public interest.
With respect, but for the fact that our decision is of great importance to the community and the real estate industry, I would have been content to say that I agree with Cheng Yick Chi without further elaboration. As it is I have endeavoured to explain why as a matter of construction I would have come to the same conclusion as Cheng Yick Chi.
For the above reasons, I would dismiss REDA’s appeal.
In Lai Siu Kin Rembert v Building Authority[72] and Building Authority v Appeal Tribunal (Buildings)[73], one of the issues had been whether Lord Fraser of Tullybelton’s dictum in Attorney General v Cheng Yick Chi[74] was part of the ratio decidendi of the Privy Council’s decision and therefore binding on the Court of Appeal hearing those cases (of which I was a member). The present appeal from the Court of Appeal (of which I was not a member) is not an appeal from those decisions but is instead a challenge to the correctness of Lord Fraser’s holding that, for the purposes of the Buildings Ordinance (Cap.123), a site can only include land which a person owns or which he has a realistic prospect of controlling. That was not an issue determined in the two earlier cases before the Court of Appeal in which I participated. I have had the benefit of reading in draft the judgments of both Ribeiro PJ and Tang PJ in which they each conclude that Lord Fraser was correct in so holding. I agree with their reasons for reaching that conclusion and that, accordingly, REDA’s appeal should therefore be dismissed.
I agree that REDA's appeal should be dismissed for the reasons given by both Mr Justice Tang PJ and Mr Justice Ribeiro PJ.
For the above reasons, the appeal is dismissed. We would also make an order nisi that the appellant pay to the respondent the costs of the appeal, such costs to be taxed if not agreed. Should any party wish for a different order for costs, written submissions should be served on the other party and lodged with the Registrar within 14 days of the handing down of this judgment, with liberty to the other party to serve and lodge with the Registrar written submissions in reply within 14 days thereafter. In the absence of any submissions seeking to vary within the time limited for their service, the costs order nisi will become absolute.
[1] Cap 123.
[2] Defined in the BO as persons whose names are in a statutory register as architects, engineers or surveyors.
[3] BA to REDA 8 August 2011.
[4] [1983] 1 HKC 14 at 19.
[5] [2013] 4 HKLRD 74, referred to below as the “Case Stated appeal”.
[6] [2013] 4 HKLRD 52 referred to below as the “Dobrowen appeal” since the 1st Interested Party was Dobrowen Investment Limited.
[7] HCAL 95/2011 (Reasons, 30 June 2014).
[8] Lam VP, Chu and McWalters JJA, CACV 105/2015 (10 September 2015).
[9] Appearing for REDA with Ms Yvonne Cheng SC and Mr Wilson Leung.
[10] Appellant’s Case §38.
[11] Appellant’s Case §31(3).
[12] Cap 123.
[13] Appellant's Case §4.
[14] Along with promoting safety in building design and structure: Gammon v A-G of Hong Kong [1985] AC 1 at 14; and Mariner International Hotels v Atlas Ltd (2007) 10 HKCFAR 1 at §51.
[15] [1995] 1 HKLR 128 at 131.
[16] BPR reg 2.
[17] “Gross floor area” being “the area contained within the external walls of the building measured at each floor level (including any floor below the level of the ground), together with the area of each balcony in the building, which shall be calculated from the overall dimensions of the balcony (including the thickness of the sides thereof), and the thickness of the external walls of the building.” (BPR reg 23(3)(a)).
[18] BPR reg 21(3).
[19] BPR reg 2.
[20] BPR reg 18A: “(1) In this Part and the First and Second Schedules – ‘class A site’ means a site, not being a class B site or class C site, that abuts on one specified street not less than 4.5 m wide or on more than one such street; ‘class B site’ means, subject to paragraph (2), a corner site that abuts on 2 specified streets neither of which is less than 4.5 m wide; class C site’ means, subject to paragraph (2), a corner site that abuts on 3 specified streets none of which is less than 4.5 m wide.” Sub-regulations (2) and (3) contain elaborations.
[21] BPR reg 19: “(1) The maximum site coverage permitted in respect of a building or buildings on a class A site, class B site or class C site shall be determined in accordance with regulation 20. (2) The maximum plot ratio permitted in respect of a building or buildings on a class A site, class B site or class C site shall be determined in accordance with regulation 21.” Sub-regulation (3) deals with special cases requiring ad hoc determination of the maxima.
[22] BPR reg 20(1)(a): “Subject to regulation 22 and depending on the height of the building- the site coverage for a domestic building, or for the domestic part of a composite building, on a class A site shall not exceed that percentage of the area of the site specified in the second column of the First Schedule....” The rest of reg 20 deals with sites with other site classifications, non-domestic buildings and so forth.
[23] BPR reg 21(1)(a): “Subject to regulation 22 and depending on the height of the building- the plot ratio for a domestic building on a class A site shall not exceed the plot ratio specified in the fifth column of the First Schedule ....” The other provisions of reg 21 deal with other site classifications, non-domestic buildings and so forth.
[24] [1983] 1 HKC 14.
[25] [1983] 1 HKC 14 at 19.
[26] [1991] 2 HKLR 6 at 12-13.
[27] [1988] 1 HKLR 32 at 39.
[28] [1995] 1 HKLR 128 at 131.
[29] [2013] 4 HKLRD 52.
[30] At §14 and §36.
[31] At §16.
[32] At §39.
[33] At §38.
[34] Which excludes streets or service lanes from the calculation of permitted site coverage and plot ratio.
[35] [2013] 4 HKLRD 52.
[36] Appellant's Case §54.
[37] BO s 15(1): “Where an application is made in the specified form for the Building Authority to approve plans or to consent to the commencement of building works or street works, he shall be deemed to have given his approval or consent, as the case may be, unless within the period prescribed by the regulations he has notified his refusal to give his approval or consent, as the case may be, in writing setting out the grounds for such refusal, and where one of such grounds is that further particulars and plans are required, he shall specify such plans and particulars.”
[38] BAR reg 30(3): “For the purposes of section 15 of the Ordinance, the period after which the Building Authority shall be deemed to have given his approval of plans submitted to him shall be- (a) in relation to plans which are submitted for the first time to the Building Authority for approval, 60 days from the date on which the plans were submitted;....”
[39] [2009] 12 HKCFAR 342 at §36.
[40] BO section 16(3)(d): “The Building Authority may refuse to give his consent to the commencement of any building works or street works where .... a period exceeding 2 years has elapsed since the approval of any of the prescribed plans in respect of the building works or street works.”
[41] [2013] 4 HKLRD 74.
[42] All references are to the Ordinance unless otherwise stated.
[43] In these proceedings we are concerned with building plans for new buildings.
[44] It is unnecessary to decide whether these grounds are exhaustive since the BA only relied on s 16.
[45] Section 16(2) concerns street works and is irrelevant.
[46] [2013] 4 HKLRD 74. A decision of the Court of Appeal, Cheung and Fok JJA and McWalters J. This was referred to the Court of Appeal by the Appeal Tribunal under s 53C(1) and has been referred to as the Case Stated Judgment. I will refer to it as such. This judgment was delivered on the same day as the judgment in Building Authority v Appeal Tribunal (Buildings)[2013] 4 HKLRD 52 (the Dobrowen judgment), which is intended to be read together with the Case Stated Decision. At p 56, para 3.
[47] [1983] 1 HKC 14. Lords Fraser, Roskill, Brightman, Templeman and Sir John Megaw.
[48] P 19.
[49] Lam VP, Chu and McWalters JJA.
[50] B140.
[51] B143.
[52] An authorized person is defined in s 2 and includes, amongst others, an architect.
[53] The circular letter also mentioned a time limit for the validity period of modification/exemption under s 42 of the Ordinance, which has no direct relevance.
[54] B140, BA’s letter to REDA, 9 December 2010.
[55] Para 13 Case Stated Decision.
[56] A fellow of the Hong Kong Institute of Surveyors and a fellow of the Royal Institution of Chartered Surveyors who has made an affirmation in support of REDA’s application.
[57] (2013) 16 HKCFAR 351 at 361, para 15.
[58] Specified street is defined in BPR 18A(3) and the details do not concern us.
[59] Regulation 2 defines site coverage as: “.... the area of the site that is covered by the building that is erected thereon and, when used in relation to a part of a composite building, means the area of the site on which the building is erected that is covered by that part of the building.”
[60] Regulation 21(3) provides that “the plot ratio of a building shall be obtained by dividing the gross floor area of the building by the area of the site on which the building is erected.”
[61] BPR 19(1) and (2).
[62] First Schedule BPR.
[63] BPR 19(3).
[64] See para 79 below.
[65] Para 52 above.
[66] BAR 30(3).
[67] It is to be noted that in the passage from Cheng Yick Chi referred to in para 46 above, there is a reference to “any land which the developer bona fide proposes to include in the development.”
[68] Declaration (c).
[69] Lords Keith, Roskill, Templeman, Ackner and Oliver of Aylmerton.
[70] With Lords Keith of Kinkel, Brandon of Oakbrook, Goff of Chieveley and Jauncey of Tullichettle.
[71] Lords Keith, Mustill, Woolf, Lloyd of Berwick and Nicholls of Birkenhead.
[72] [2013] 4 HKLRD 74.
[73] [2013] 4 HKLRD 52.
[74] [1983] 1 HKC 14 at 19.
Lord Pannick QC, Ms Yvonne Cheng SC and Mr Wilson Leung (instructed by Mayer Brown JSM) for the applicant (appellant).
Mr Benjamin Yu SC and Mr Bernard Man SC (instructed by the Department of Justice) for the respondent (respondent).