RE HO MEI LING

HCAL 51/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 51 OF 2011

_____________________________

	HO MEI LING	Applicant
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IN THE MATTER of an Application for Leave to Apply for Judicial Review by Madam Ho Mei Ling pursuant to Order 53, rule 3 of the Rules of the High Court, Cap. 4A   and   IN THE MATTER of Decision of the Building Authority Approving Building Plans in October 2010   and   IN THE MATTER of Sections 14 and 16(1)(d) of the Buildings Ordinance, Cap. 123   and   IN THE MATTER of Regulations 19, 20, 21 and 23(2)(a) of the Building (Planning) Regulations, Cap. 123F   and   IN THE MATTER of the Approved Lai Chi Kok Outline Zoning Plan No. S/K16/14

_____________________________

Before:  Hon Lam J in Court

Date of Filing of Written Submission on Costs by the Applicant: 4 October and 4 November 2011

Date of Filing of Written Submission on Costs by the Respondent: 18 October 2011

Date of Filing of Written Submission on Costs by the Interested Party: 21 October 2011

Date of Judgment on Costs: 28 December 2011

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JUDGMENT ON COSTS

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1.  After I handed down my judgment on 29 August 2011, the Applicant applied to vary my costs order nisi.  The costs order nisi is that the Applicant shall pay the costs of the putative Respondent and the putative Interested Party.  The Applicant contended that costs should not be awarded to those parties.

2.  The Applicant referred to, amongst other authorities, the decision of the Court of Appeal in Sky Wide Development v Building Authority [2011] 5 HKLRD 202 in support of her submissions.  She distilled the following principles from the authorities,

“(1) An application for leave to apply for judicial review is mandatory ex parte as required by Order 53, rule 3(2) of the RHC;

(2) Beforeleave is granted, there is no respondent – the presence of the putative/proposed respondent is only by way of an indulgence granted to it by the court;

(3) The presence of the putative respondent (either invited by the court or allowed by the court) should be seen as a discharge of a public responsibility to provide assistance to the court;

(4) It is only in exceptional circumstances such as “when the court, in the exercise of its discretion, considers that an application for leave is so frivolous, so vexatious or motivated for a tactical purpose that indicates bad faith” that it should award costs to the putative respondent for its presence in the leave application; and

(5) The court should not exercise its discretion in a way that seriously impedes the right of citizens to have access to justice.”

3.  The Applicant further submitted that in any event the Applicant should not be ordered to pay more than one set of costs.  On the facts of the present case, the Applicant submitted,

In the present case, given the ex parte nature of the leave application, costs should not be awarded to the putative Interested Party because:

(1) the Applicant only proposed to join Billion Star as an interested party “if leave is granted” and on the condition it “will not seek costs from any other parties nor will be made liable for any party’s costs”: see §198 of the Form 86;

(2) the proposed Interested Party Billion Star asked for the Court’s indulgence to be heard in the leave application;

(3) following the principle identified by the Court of Appeal in 梁海朋 and Sky Wide Development Ltd, since the Applicant was not the person who caused the putative Interested Party to incur costs to attend the leave hearing, costs should not be ordered against her; and

(4) the issues argued on behalf of the putative Respondent and the putative Interested Party were largely the same, if not perfectly identical, rendering the latter's participation in the hearing unnecessary.”

4.  The putative Respondent and the putative Interested Party opposed the application for variation and each of them argued that the costs order nisi in their favour should be upheld.  To simplify matter, I shall just refer to them as the Respondent and Interested Party respectively in this judgment.

5.  Since the Applicant placed much emphasis on the ex parte nature of the hearing for leave, it is necessary for me to set out how the matter came to be heard by this court on 2 and 3 August 2011.

6.  Before the issue of the Form 86 in the present proceedings, the Concerned Group (which I have found to be the driving force behind the present proceedings) had been engaging in protest against the Interested Party as regards the proposed development of RP II and Section B.  The actions of the Concerned Group had led to the commencement of High Court Action No. 708 of 2011 by the Interested Party seeking inter alias injunctive relief.  The application for interlocutory injunction was adjourned on 29 April 2011.

7.  At the hearing on 29 April 2011, the Interested Party learned that judicial review application would be made to challenge the decision of the Respondent to approve the building plans.  This prompted the solicitors for the Interested Party to write to the court on 6 May 2011 requesting as follows,

“We write to put the Court on notice that our client would be an interested party and respectfully ask for an opportunity to be given to our client to appear and be heard in their application for leave to judicial review for leave to apply out of time. The general building plans for the Site were approved by the Building Authority in October 2010 so their application will be out of time and they will need leave to apply out of time. Our client would wish to be represented and heard should there be a hearing called to consider the application for leave.”

8.  The Form 86 was filed on 14 July 2011.  In it, the Applicant accepted that she needed to obtain an extension of time under Order 53 Rule 4(1).  The Interested Party was identified in the Form 86 as one of the parties which, upon leave being granted, would be joined as parties to these proceedings.

9.  It is plain that the Interested Party would be affected if the Applicant succeeded in her application for judicial review.  Not only would the grant of substantive relief have an adverse effect on the development plan of the Interested Party, the grant of leave with the extension of time would inevitably delay the project pending the final resolution of the judicial review application.  Though the injunction application in HCA 708 of 2011 was adjourned to December 2011, there was no guarantee that if leave were granted the judicial review proceedings could be finally resolved before that date.

10.  Further, in view of the letter of 6 May 2011, this court deemed it fair and just that an opportunity to be heard should be afforded not only to the Respondent but also the Interested Party to address it on the application for extension of time.  Thus, notice of hearing was issued on 14 July 2011 to the Applicant, the Respondent and the Interested Party.

11.  On 27 July 2011, this court gave directions for the service of the papers on the Respondent and the Interested Party.  In respect of the application for extension of time the court directed that certain paragraphs of the Form 86 shall be treated as the Applicant’s skeleton submissions and supplemental submissions shall be lodged and served by 28 July 2011.  Directions were also given as to the lodging of skeleton submissions by the Respondent and the Interested Party by 1 August 2011.

12.  In such special circumstances, parties were fully prepared to argue the matter on an inter partes basis when the court heard the case on 2 August 2011.  The depth in which the parties have advanced their arguments is reflected in the length of the hearing and the issues covered in my judgment.

13.  Though Order 53 Rule 3(2) provides for the making of application for leave on ex parte basis, for the reasons I have canvassed in my judgment in Sky Wide Development v Building Authority [2009] 1 HKC 450 at paras. 3 to 9, this cannot prevent the court from hearing the putative respondent (and indeed in a proper case, a putative interested party) before deciding whether leave should be granted and to order an applicant paying the costs of such putative parties.  Whether the court will do so is a matter of discretion.

14.  In any event, this is not a usual application for leave.  The Applicant also applied for extension of time under Order 53 Rule 4(1).  The rules do not provide whether extension of time should be granted on ex parte or inter partes basis.  In Hong Kong, there were occasions where the court granted extension of time on ex parte basis whilst on some other occasions the court insisted on hearing other putative parties before extension of time was granted.  It depends on the exercise of discretion of the judge dealing with the application for extension in view of the facts of each case.

15.  The effect of an extension of time granted under Order 53 Rule 4(1) was considered by the House of Lords in Reg v Criminal Injuries Board, ex p A [1999] 2 AC 330 at p.341,

“It seems to me that the two provisions produce the following result. (a) On an ex parte application, leave to apply for judicial review out of time can be refused, deferred to the substantive hearing or given. (b) Leave may be given if the court considers that good reason for extending the period has been shown. The good reason on an ex parte application is generally to be seen from the standpoint, as here, of the applicant. Thus the reason for the delay here was “the practical difficulties [the applicant’s solicitors] have encountered in trying to bring this matter before the court” (counsel for the applicant before Carnwath J.). It is possible (though it would be unusual on an ex parte application) that if the court considers that hardship, prejudice or detriment to good administration have been shown, leave may still be refused even if good reason for an extension has been shown. (c) If leave is given, then an application to set it aside may be made, though as the Court of Appeal stressed, this is not to be encouraged. (d) If leave is given, then unless set aside, it does not fall to be reopened at the substantive hearing on the basis that there is no ground for extending time under Ord. 53, r. 4(1). At the substantive hearing there is no “application for leave to apply for judicial review,” leave having already been given. (e) Nor in my provisional view, though the matter has not been argued and the question does not arise here, is there a power to refuse “to grant ... leave” at the substantive hearing on the basis of hardship or prejudice or detriment to good administration. The court has already granted leave; it is too late to “refuse” unless the court sets aside the initial grant without a separate application having been made for that to be done. What the court can do under section 31(6) is to refuse to grant relief. (f) If the application is adjourned to the substantive hearing, the question under both Ord. 53, r. 4(1) (good reason for an extension of time) and section 31 (6) (hardship, prejudice, detriment, justifying a refusal of leave) may fall for determination.”

16.  See also the discussion of Simon Brown LJ  in the Court of Appeal in that case reported at [1998] QB 659 at p. 676B to D and p. 676H to 677B as to the different perspective of the court when the question of delay is considered at the substantive hearing after leave had been granted and time extended,

“If, of course, at the substantive hearing it appears that the grant of relief would be likely to cause hardship, prejudice or detriment, then clearly the reasons for the earlier delay may come back into play.  But by that stage the applicant will have established his substantive challenge (else he will in any event fail on the merits and all questions of delay will be irrelevant) and the question will be: should the applicant have to suffer an unlawful decision or should the respondent (or third party) have to suffer the hardship, prejudice or detriment which would result from its being quashed? (I pose the question by reference to a certiorari challenge such as this.) It is into that balance that the earlier “undue delay” must then be put, …”

“In short, quite different questions arise with regard to delay depending upon whether the point is raised at the leave stage or at the substantive hearing.  At the leave stage (putting section 31(6)(a)aside), the question is whether there is “good reason” for extending time and allowing the substantive application to be made.  This involves consideration both of the reasons for the delay and the apparent merits of the challenge; the better the prospects of success, the readier will the court be to extend time even where the delay is unjustifiable, i.e. the merits themselves can contribute to or even supply the “good reason.” At the substantive hearing, however, the question is whether, in a case where there was initially “undue delay” (which may have been wholly justifiable), the merits of the challenge (by now actually established) should be overridden by the hardship, prejudice or detriment that would result from the grant of relief.”

17.  Based on these authorities, whilst it is open to the court to extend time without hearing the putative respondent or other parties affected, such parties may apply to set aside the extension on an inter partes basis.  Since the effect of granting an extension is to prevent any revisit of the question of delay in the context of grant of leave, if a party affected indicates he wishes to make representation on the question the court will usually afford him the opportunity to do so.  Whether this should take the form of an oral hearing or written submissions is a matter of case management for the judge.

18.  In the present case, in view of the request of the Interested Party in the letter of 6 May 2011 and the history of the dispute, this court deemed it appropriate to hold a hearing for the application for leave and extension of time and gave notice and directions for lodging of submissions by all the parties.  It does not matter much whether the hearing should be labeled as ex parte on notice or inter partes.  In substance, it is a full inter partes hearing.  The matter can be tested as follows: assuming this court ruled against the Respondent and the Interested Party, can they apply again for the setting aside of leave and extension of time? In my judgment, that would plainly be impermissible and the application would probably be regarded as abuse of process.

19.  Therefore, on the facts of the present case, I do not think the ex parte nature of general application for leave under Order 53 Rule 3 carries much weight as to how the discretion on costs should be exercised.

20.  But it does not follow that having heard the Respondent and the Interested Party on 2 and 3 August I must give them costs of the hearing.

21.  As the Court of Appeal said in Sky Wide, the court’s discretion as to costs is a broad one.  I have also emphasized at para. 25 of my judgment in that case that it is not desirable to fetter such discretion by formulating a test of universal application.

22.  Insofar as the Applicant suggested that costs should only be awarded in favour of putative parties at this stage if the application for leave is so frivolous, vexatious or motivated for a tactical purpose that indicates bad faith, I must reject this as being inconsistent with the holding of the Court of Appeal in Sky Wide.  Whilst Tang VP agreed at para. 28 of the judgment that it takes unusual circumstances for an award of costs to be made against an applicant for leave and the power should be exercised sparingly, His Lordship did not say that costs could only be awarded when the application is frivolous, vexatious or motivated by bad faith.

23.  When Sky Wide was argued at the first instance, one of the arguments advanced was that there should be no order as to costs unless the application is frivolous or vexatious.  The argument was rejected, see para. 13 of my judgment at [2009] 1 HKC 450.  In the reasons given by me as to why I awarded costs for the leave hearing against the applicant in that case, I did not make any finding that the application was frivolous or vexatious or that the applicant was motivated by bad faith.  My decision on costs was upheld by the Court of Appeal.  Tang VP said at para. 32 that if His Lordship were to exercise such discretion, he would exercise it in exactly the same way.

24.  The Applicant referred to the judgment of the English Court of Appeal in R (Ewing) v Deputy Prime Minister [2006] 1 WLR 1260 which basically confirmed the approach in England as to the award of costs at permission stage as laid down in R (Mount Cook Land Ltd) v Westminster City Council [2003] EWCA Civ 1346.  In my judgment in Sky Wide I have explained the difference between the procedural regime for permission to apply for judicial review and that in Hong Kong.  Two important differences have to be borne in mind in considering the application of the English authorities in Hong Kong,

(a)  Paragraph 8.6 of the Judicial Review Practice Direction in England provided that a claimant at a permission hearing will not generally be ordered to pay the costs of a defendant or any other party who attends;

(b)  There are provisions for pre-action protocol and acknowledgment of service to be filed by a defendant setting out in a summary of his grounds for resisting the claim.  It was held in R (Leach) v Commissioner for Local Administration [2001] EWHC Admin 445 that the costs of the preparation of the summary can be recoverable if permission for judicial review is not granted.

25.  Subject to these considerations, I think it is helpful to have regard to the English authorities for reference as to how the discretion as to costs should be exercised.  In Mount Cook Auld LJ gave the following guidance at para. 76,

“1) The effect of Leach, certainly in a case to which the Pre-Action Protocol applies and where a defendant or other interested party has complied with it, is that a successful defendant or other party at the permission stage who has filed an acknowledgment of service pursuant to CPR 54.8 should generally recover the costs of doing so from the claimant, whether or not he attends any permission hearing.

2) The effect of paragraph 8.6, when read with paragraph 8.5, of the Practice Direction, in conformity with the long-established practice of the courts in judicial review and the thinking of the Bowman Report giving rise to the CPR 54 procedure, is that a defendant who attends and successfully resists the grant of permission at a renewal hearing should not generally recover from the claimant his costs of and occasioned by doing so.

3) A court, in considering an award against an unsuccessful claimant of the defendant’s and/or any other interested party’s costs at a permission hearing, should only depart from the general guidance in the Practice Direction if he considers there are exceptional circumstances for doing so.

4) A court considering costs at the permission stage should be allowed a broad discretion as to whether, on the facts of the case, there are exceptional circumstances justifying the award of costs against an unsuccessful claimant;

5) Exceptional circumstances may consist in the presence of one or more of the features in the following non-exhaustive list:

a) the hopelessness of the claim:

b) the persistence in it by the claimant after having been alerted to facts and/or of the law demonstrating its hopelessness;

c) the extent to which the court considers that the claimant, in the pursuit of his application, has sought to abuse the process of judicial review for collateral ends – a relevant consideration as to costs at the permission stage, as well as when considering discretionary refusal of relief at the stage of substantive hearing, if there is one; and

d) whether, as a result of the deployment of full argument and documentary evidence by both sides at the hearing of a contested application, the unsuccessful claimant has had, in effect, the advantage of an early substantive hearing of the claim.

6) A relevant factor for a court, when considering the exercise of its discretion on the grounds of exceptional circumstances, may be the extent to which the unsuccessful claimant has substantial resources which it has used to pursue the unfounded claim and which are available to meet an order for costs.

7) The Court of Appeal should be slow to interfere with the broad discretion of the court below in its identification of factors constituting exceptional circumstances and in the exercise of its discretion whether to award costs against an unsuccessful claimant.”

26.  Though we do not have the equivalent of paragraph 8.6 in our Practice Direction, in the light of the Court of Appeal’s affirmation in Sky Wild that costs should only be ordered against an unsuccessful applicant at the leave stage in unusual circumstances, paras. (3) to (7) of the guidance of Auld LJ are also relevant in Hong Kong. As stated in para. 77 of Mount Cook, the approach of Auld LJ was formulated to accord with public policy in ready access to courts balancing with protection to public bodies and public funds against unnecessary, burdensome and costly litigation in exceptional cases.

27.  In view of the submission advanced on behalf of the Applicant, I need to emphasize that Auld LJ’s list of circumstances at para. (5) is not meant to be exhaustive.  His Lordship made the same point at para. 79 of the judgment,

“What amounts to exceptional circumstances for not following the general rule may vary considerably according to the circumstances of the case, including the strength or weakness of the application and the respective conduct and circumstances of the parties.”

28.  In the present instance, having regard to the following matters, I come to the conclusion that there are unusual circumstances calling for the court’s exercise of discretion against the Applicant in respect of the costs of the Respondent,

(a)  In substance, there had been an inter partes hearing necessitated by the application for extension of time;

(b)  The delay is serious when it is considered against the background to the underlying dispute between the Concerned Group and the Interested Party and the potential implication as regards the progress of the development project;

(c)  The intended judicial review is a forensic attempt by the Concerned Group to shift the private dispute between them and the Interested Party to a public law matter involving the Respondent with reference to its exercise of its public function in approving building plans.  As analysed in my judgment, the arguments of residual plot ratio and site coverage is constructed on the misconceived notion as to the public function of the Respondent;

(d)  In light of the full deployment of arguments at the hearing in August, the Applicant has had in effect the advantage of a rolled-up substantive hearing;

(e)  The Respondent attended the hearing at the court’s request to address the extension of time application which, in the present circumstances, involves considerations as to the merits of the Applicant’s application for leave;

(f)  This is not a case where the Applicant sought to defend some public interest instead of her private personal interest in the matter;

(g)  The Respondent did not advance any unnecessary argument or otherwise conduct himself in a manner which escalates the costs of the hearing.

29.  In respect of the Interested Party, the position is different.  But for the letter of 6 May 2011, this court would not have given it notice nor invite submissions from it at the hearing.  Although the court would not refuse to hear it, its attendance by a team of counsel at such hearing had to be considered on the footing of attendance at its own risk as to costs.  Though Mr Yu had been very helpful in his submissions at the hearing, there are overlaps between the Respondent and the Interested Party in the arguments on the merits of the leave application.  I accept that from a practical point of view the Interested Party has a separate (and perhaps more direct) interest in the matter.  But the fact remains that the decision being challenged is that of the Respondent and the Respondent did resist the application for leave by leading counsel.  For the purpose of resisting the application, their interests are in common.

30.  I was referred to some authorities as to the award of a separate set of costs in favour of an interested party.  There is no need for me to discuss them at length.  For present purposes, I can take the proper approach from the judgment of Ma CJHC (as he then was) in Shiu Wing Steel Ltd v Director of Environmental Protection CACV 350 of 2003, 18 March 2005 at para. 158,

“158. From these authorities, it is clear that while costs are of course in the discretion of the Court, the following factors offer some guidance (they are not exhaustive) : -

(1) The mere fact that a person has the necessary locus standi to appear does not by itself entitle that person to an order for costs should the outcome be successful:- see R v Registrar of Companies, Ex parte Central Bank of India [1986] QB 1114, at 1162F.

(2) Where several parties appear having the same interest in proceedings, the starting point is that the unsuccessful party should not have to pay more than one set of costs:- R vIndustrial Disputes Tribunal, Ex parte American Express Co Inc [1954] 1 WLR 1118; Ex parte Central Bank of India at 1162F-G. The rationale here is simply that an unsuccessful party should not have to pay for costs which are unnecessarily incurred. Either the different parties with the same interest engage the same solicitors and counsel or they adopt the position of one of the other parties.

(3) Where, however, the party can show that there is a separate issue on which he was entitled to be heard, being an issue not covered by the other party or parties in the proceedings, he would be entitled to his costs:- see Bolton Metropolitan District Council at 1178H.”

31.  One must also bear in mind that this is only a leave application and what I said above as to the approach as to costs for such application.

32.  Applying these principles, the starting point is that the Defendant should not be saddled with another set of costs.  There is however one area where the Interested Party had provided material assistance to the court which the Respondent was not in a position to provide.  This is in respect of the history of dispute between the Concerned Group and the Interested Party.  Though I do not think the Applicant had been guilty of deliberate non-disclosure of information in that regard, there were indeed material information which Mr Yu had referred to in the history of dispute that she failed to mention in her evidence.

33.  In the circumstances, I would order the Applicant to pay ¼ of the costs of the Interested Party.  Further, for that particular aspect, I do not think the engagement of three counsel by the Interested Party can be justified.  I would only allow ¼ of the costs of attendance of one junior counsel.

34.  To conclude, I would maintain my order as to costs in favour of the Respondent but substitute my costs order in favour of the Interested Party by the one set out in para. 33.

(M H Lam) Judge of the Court of First Instance High Court

Messrs Ho, Tse, Wai & Partners, for the Applicant

The Department of Justice, for the Respondent

Messrs Kao, Lee & Yip, for the Interested Party

HCAL 51/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 51 OF 2011

____________

HO MEI LING

Applicant

____________

	IN THE MATTER of an Application for Leave to Apply for Judicial Review by Madam Ho Mei Ling pursuant to Order 53, Rule 3 of the Rules of the High Court, Cap. 4A
	and
	IN THE MATTER of Decision of the Building Authority Approving Building Plans in October 2010
	and
	IN THE MATTER of Sections 14 and 16(1)(d) of the Buildings Ordinance, Cap. 123
	and
	IN THE MATTER of Regulations 19, 20, 21 and 23(2)(a) of the Building (Planning) Regulations, Cap. 123F
	and
	IN THE MATTER of the Approved Lai Chi Kok Outline Zoning Plan No. S/K16/14

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Before: Hon Lam J in Court

Dates of Hearing: 2 and 3 August 2011

Date of Judgment: 29 August 2011

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J U D G M E N T

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1.  Mei Foo Sun Chuen is a large private housing estate at Lai Chi Kok, Kowloon.  It was developed in stages between 1965 and 1978.  Before such development, the land was used as an oil depot.  After the development, it was turned into an estate with 99 residential towers with 13,500 flats.  According to the Form 86, there are around 60,000 people residing there.

2.  The Applicant is the owner of a unit at Stage 8 of the estate.  She acquired the unit in 2004.  In terms of title, her unit is situated on the Remaining Portion of Section A of NKML No. 25 and she has one equal undivided 1300^th part or share of the interest in the land.

3.  Stage 8 was developed in the 1970’s.  Building plans for such development were submitted in May 1973. These plans included a Site Coverage and Plot Ratio Calculation Plan of 15 May 1973 which was identified by the parties as the First Building Plan.  I shall adopt the same nomenclature.  The site as shown on such plan was NKML No. 25 [“the Lot”].  The plans provided for the construction of 10 residential towers with ancillary commercial facilities.  At the south western corner of the site, a liquefied petroleum gas plant was to be constructed. 

4.  At that time, the Lot was not subdivided.  Before the plans were approved by the Building Authority, by a Deed Poll dated 20 February 1974 the lot was subdivided into 2 portions: Section A on which the residential towers were to be built and the Remaining Portion on which the gas plant was to be constructed.  I shall call the Remaining Portion after such subdivision RP I.  RP I had an area of 1,354.70 square metres.   

5.  The building plans (including the First Building Plan) were approved by the Building Authority on 20 March 1974. 

6.  Construction of the gas plant was completed in 1974 and Occupation Permit was issued on 9 May 1974.   

7.  On 20 December 1976, Section A was further sub-divided into two portions: Sub-section 1 and Remaining Portion.  In order to avoid confusion, I will call the Remaining Portion of Section A as RP of s. A to distinguish it from RP I.  The residential towers were built upon RP of s. A.

8.  On the same date, RP I was sub-divided into two portions: Section B and the Remaining Portion.  I shall call the Remaining Portion after this subdivision RP II[1].  RP II had an area of 1,291.40 square metres.  The gas plant was situated on it. 

9.  Sub-section 1 of Section A and Section B formed a strip of land at the western side of the Lot. It was used as a road within the whole estate. 

10.  Construction of the residential towers was completed in 1978 and Occupation Permit was issued on 16 May 1978.

11.  On 24 January 1978, the grantee of the Lot assigned the four subdivided portions to the same company, Mei Foo Investments Limited [“MFIL”].  On 15 April 1983, MFIL assigned RP II back to the grantee, Mobil Oil.  It is not necessary for present purposes to go through the whole history of the devolution of titles.  The gas plant was relocated in about 1999.  Since then there were plans for redevelopment of RP II and Section B. 

12.  As regards the residential towers, the flats and units[2] were sold.  As a result the legal title of RP of s. A is held in common by the owners of these flats and units, each of them (like the Applicant) holds some equal undivided 1300^th part or share of the interest in the land.  The first assignment in respect of these flats or units was an assignment of Flat B on 12^th Floor, No. 130 Broadway and around the same time a Deed of Covenant (dated 15 June 1978) was executed to govern the management of the residential towers. 

13.  The significance of this history, for present purposes, is that upon the sale of the flats and the units, different portions of the Lot were owned by different owners.  In other words, whilst the whole Lot was the regarded as the site at the time when the Building Authority approved the First Building Plan in March 1974, due to subsequent developments different portions of the Lot fall into the hands of different owners.  This has implications for future development and, as I shall explain below, indeed led to the present dispute.

14.  Since 2004 (if not earlier) the residents of Stage 8 have been concerned about the possible redevelopment of RP II and at different times actions were taken by different bodies or persons, including the Incorporated Owners of Stage 8, to express such concern.  Some of the actions were set out in a chronology produced by counsel for Billion Star.  The actions taken included writing letters to the Building Authority, making application to the Town Planning Board to change the user of RPII under the relevant Outline Zoning Plan without success, meeting with Legislative Councillors, lobbying through a District Councillor of the Shamshuipo District Council.  In 2009, a Concerned Group against the Construction of Mei Foo Sun Chuen Walled Building [“the Concerned Group”] was formed.  It became the coordinator which organized activities to oppose what the residents perceived as illegitimate redevelopment of RP II and lobbied support for their cause.  The Applicant is a member of the Concerned Group. 

15.  In 2009, a company called Billion Star acquired RP II and Section B.  Billion Star submitted building plans to the Building Authority for approval.  Based on what I have been told by Mr Yu SC at the hearing, one set of plans had been rejected and there is an appeal to the Building Appeals Tribunal.  The present proceedings are in respect of another set of plans which were approved by the Building Authority on 11 October 2010.  The Applicant applies for leave to bring judicial review proceedings to quash the approval.  The relief sought are, as stated in the Form 86, as follows, 

“1. An order of certiorari to bring up and quash the decision of the Building Authority made on or about 11 October 2010 approving the building plans of Billion Star Development Limited (“Billion Star”) to build a 20-storey apartment (“the Proposed Building”) with a gross floor area of 4,788.40 m on the Section B and the Remaining Portion of New Kowloon Marine Lot (“NKML”) No. 25 at Mei Foo Sun Chuen Stage 8 (“the Billion Star Building Plan”);

2. A Declaration that the inclusion of the area of Section B of NKML No. 25 and part of the Remaining Portion of NKML No. 25 (as more particularly delineated in the hatched area in blue on the plan in Annex II attached hereto) (“the RP Pedestrian Area”) for the purpose of the calculating the site area and/orsite coverage in the Billion Star Building Plan was unlawful in that there is a subsisting right of way by the Applicant in common with other owners of Mei Foo Sun Chuen Stage 8 over Section B of NKML No. 25 and the RP Pedestrian Area;

3. A Declaration that Billion Star is not entitled, for the purposes of calculating the permissible site coverage and plot ratio of the Proposed Building in the Billion Star Building Plan, to have the Remaining Portion of NKML No. 25 and Section B of NKML No. 25 be treated as if they were an entirely independent ‘site’ because they were an integral part of a land, namely NKML No. 25 (“the Land”), which formed one single site in the first set of building plans for the development of Mei Foo Sun Chuen Stage 8 approved in 1974;

4. A Declaration that:

(1) Billion Star is not entitled to further develop Section B of NKML No. 25 and the Remaining Portion of NKML No. 25, in terms of plot ratio and site coverage, beyond the one-storey building that was previously on that portion of the Land;

(2) alternatively, if Billion Star is entitled to further develop Section B of NKML No.  25 and the Remaining Portion of NKML No.  25 beyond what was previously built on that portion of the Land, the additional development shall not, apart from any other applicable limitations in law, exceed a proportionate share of the residual plot ratio and residual site coverage of the Land, such proportionate share being determined by reference to the area of Section B of NKML No.  25 and the Remaining Portion of NKML No.  25 relative to the area of the rest of the Land.”

16.  Because the Applicant only filed her application for leave on 14 July 2011 which is more than three months after the approval of 11 October 2010, she has to seek an extension of time pursuant to Order 53 rule 4.  The putative respondent, the Building Authority and the interested party Billion Star opposed the extension of time. One of their main arguments in opposing extension is that the intended judicial review has no arguable merit.  They also contended that the Applicant has failed to show good reasons for the delay.   

The grounds relied upon by the Applicant to challenge the approval by the Building Authority

17.  Four grounds were set out in the Form 86.  In the light of the submissions of counsel, those grounds can be grouped under two heads,

(a)   Contentions in respect of the Building Authority’s error in calculating the permissible redevelopment potential for RP II and Section B in terms of plot ratio and site coverage (Grounds 1, 2 and 4);

(b)   Contentions in respect of the Building Authority’s error in failing to exclude Section B and pedestrian area in RP II from the site area on the account that they were streets (Ground 3).

18.  Towards the end of his submissions, Mr Chang SC indicated on behalf of the Applicant that he would add further grounds based on the judgment of the Court of Appeal in HCMP 1042 of 2011.  These additional grounds were formulated in a document submitted through a 2^nd letter dated 3 August 2011.  They are as follows,

“150A. Further, as an alternative in support of the Applicant’s contention that Billion Star is not entitled to redevelop the RP (the ex LPG site) beyond the one-storey building that was previously on that portion of the Land, it is submitted that the 1983 Assignment in which the RP and the LGP were expressly recited as forming part of the Estate known as Mei Foo Sun Chuen (B, Exhibit Tab 13,) did not have the effect of assigning to Billion Star’s predecessor-in-title any such right and in particular any residual plot ratio and site coverage referable to the entirety of the Land of which the RP formed part in the original one-site development.

150AB. If and insofar as it is necessary to do so the Applicant relies on the development history of the Land and the background to the erection and assignment of the former LPG facilities on the Land, the use of the LPG for storage and supply of LPG to the residential flats and shops within the Mei Foo Sun Chuen under the monopoly granted to Mobil Oil for the rest of the term of the government lease (See pages 4, 6 & 7 of Assignment).  There was no reservation or indication in the assignment that there would or might be further development on the RP, and the assignment of the residual plot ratio and site coverage was not within the contemplation of the 1983 Assignment.”

The development potentials in terms of plot ratio and site coverage

19.  One of the matters that the Building Authority has to consider before approving building plans is spelt out under Section 16(1)(d) of the Buildings Ordinance read in conjunction with Regulations 20 and 21 of the Building (Planning) Regulations [“BPR”].  In a nutshell, there are limits as to permissible site coverage and plot ratio.  Site coverage and plot ratio are concepts created by statutes.  Site coverage is defined in regulation 2 of the BPR and plot ratio is defined in regulation 21(3).  For present purposes, it suffices to note that they are determined by reference to the site area.

20.  Thus, based on the size of a site, the BPR prescribed the maximum permissible area that could be covered by building to be erected on it (the permissible site coverage) and the maximum permissible gross floor area of such building (the permissible plot ratio).  As explained in the Affirmation of Ho Chun Hung, applying the BPR, the relevant permitted site coverage is 34% and the relevant permitted plot ratio is 6.8.  In approving building plans, the Building Authority has to ensure that the proposed new building does not exceed these limits.  

21.  In addition, the Building Authority has to consider the restrictions laid down in the relevant Outline Zoning Plan regarding site coverage and plot ratio, if any.  The relevant Outline zoning Plan in the present context is OZP S/K16/14 which does not have restriction on site coverage but set a restriction on plot ratio at 7.5. 

22.  The detail calculations are set out in the Affirmation of Ho Chun Hung and I do not think it is necessary for this court to repeat the same in this judgment.  It suffices to say in considering the relevant set of building plans of Billion Star, the Building Authority had deducted an area of about 590 square metres from the actual site area because those 590 square metres had been “used up” in the approval of the First Building Plan.  This came about because in 1974 the whole Lot was included (thus, including Section B and RP II) in the site for working out the permissible site coverage and plot ratio.  And if one were to exclude those portions, viz. working on Section A alone, there is a shortfall of 590 square metres.  Thus, in accordance with the approach laid down by the Privy Council in Cinat Company Ltd v AG [1995] 1 HKLR128, such 590 square metres had to be deducted from RP II and Section B.

23.  In so doing, as demonstrated by the calculations set out in the Affirmation of Ho Chun Hung, the Building Authority was satisfied that the site coverage and plot ratio limits were not exceeded whether the site was considered on its own or together with the Lot as a whole.

The Applicant’s submissions on site coverage and plot ratio

24.  But the Applicant said that Building Authority’s approach is flawed in law.  Mr Chang submitted that once approval had been sought and granted in respect of the whole Lot (in 1974), the development potential of all the land within the Lot is locked up as one integral site.  Therefore, irrespective of the sub-divisions, in the further re-development of any portion of the Lot, counsel derived three propositions from Cinat and the earlier Privy Council decision in AG v Cheng Yick Chi [1983] 1 HKC 14.   

25.  These propositions are set out at paras. 146 to 148 of the Form 86,

“146. The first corollary is that the putting up of a building at any part of the land forming a site is an utilisation of building potential not only of that part but of every part of the rest of the land forming one site. This is true even if the land forming the site is subsequently subdivided. No one can point to any part of the land forming one site whether subsequently divided or not to say that ‘the building potential of this part has not been utilized’ or that ‘it has been utilised disproportionately in relation to another or any part of the land comprised in the one site.’

147. The second corollary is that once developed as part of a single site, no part of the land comprised in that site can be treated wholly as an independent site for the purposes of redevelopment when determining its building potential in terms of plot ratio and site coverage. Thus even if there is an unbuilt land that has been carved out from land comprised in the original site, that unbuilt land cannot be treated as if it were an independent piece of land, regardless of whether the unbuilt land has been sold to a third party.

148. The third corollary is that even in a case where there is residual plot ratio and site coverage left by the original development, no owner can point to a part of land forming the original site to claim that that particular part (even if carved out from the rest) has the whole of the residual plot ratio or site coverage.  This is because the residue is referable not to any particular part of the land but to the whole of the land.”

26.  The consequence of these propositions are then set out at paras. 149 and 151 of the Form 86,

“149. Accordingly, there would be no basis in law for an owner of a carved out land unilaterally to put up any further development in excess of the pre-existing development potential, at least not if it would require more than a ‘proportionate’ share of any residual plot ratio or site coverage. Since plot ratio and site coverage speak in terms either of area of the site or percentage of coverage of the site, the relative sizes of the component lots provide ‘a proportionate’ share or measure in the present context.

150. In the present case, Section B and RP amount only to approximately 7.9% of the area of the Land. Billion Star, if allowed to further develop Section B and RP, should therefore only be, at best, entitled to plot ratio not exceeding 0.095 of the Land and a site coverage of 0.136% of the Land (i.e. a roofed-over area of 23.165m²). It follows that the residual plot ratio available to Billion Star would permit it to build at most a GFA of 1,619.36m². The detailed calculation of the residual plot ratio and site coverage is contained in Annex I attached hereto.

151. The Billion Star Building Plan permitted Billion Star to have a GFA of 4,788.431 sq m (51,542.34 sq. ft.).  In approving the Decision, the BA must have wrongly allowed Billion Star to make use of the residual plot ratio exceeding what it could lawfully be entitled to or to reuse plot ratio that has already been used up or both.”

27.  Similar contention is advanced in respect of the permissible site coverage under Ground 2 in the Form 86.

28.  Under Ground 4, it is contended that by giving approval to Billion Star the Building Authority has unfairly discriminated against the Applicant in terms of the allocation of the residual development potential in terms of plot ratio and site coverage attributable to the whole Lot.  The point is put in the following terms at para.183 of the Form 86,

“183. Secondly, by approving the Billion Star Building Plan, the BA was in effect permitting a development which exceeded the plot ratio and site coverage of the development as-built pursuant to the original Stage 8 (including the LPG Plant) development; the said excess was to the tune of more than 8% of the plot ratio and site coverage left over by the original development. In so doing the BA was approving building plans which had the effect of enabling Billion Star to arrogate for itself a disproportionate percentage the said residual plot ratio and site coverage (having regard to the relatively small size of its land when compared with the area of the original site and/or with the rest of the land within the original site not owned or otherwise under the control of Billion Star) - land which does not belong to Billion Star and of which the Applicant is a co-owner with other owners of units or flats in Stage 8. The Decision is, it is submitted, contrary to the principles of fairness and equality as summarized below.”

29.  The Applicant relied on Article 25 of the Basic Law and Article 22 of the Hong Kong Bill of Rights as well as the principle of equality derived from common law in cases: Aylesbury Vale DC v Secretary of State for the Environment [1995] JPL 26 and North Wiltshire DC v Secretary of State for the Environment (1993) 65 P&CR 137. 

30.  In his oral submissions, Mr Chang explained that the three propositions were derived from the two Privy Council decisions as a matter of logic.  Counsel said once a site has been locked up by approval being given to a building plan, the residual development potential of the land made up of that site cannot be utilized unless you have the consent of all the owners of that site.  Thus, if the land has been subdivided after the original development with different owners for different portions, one must have the consent of all these owners before the residual development potential can be tapped. 

31.  As an alternative, Mr Chang submitted that the residual development potential should be distributed proportionately between the different portions according to their respective size.  When this court asked counsel as to the legal basis for proportionate distribution of the residual development potential, Mr Chang said it stemmed from the fact that the statutory concepts of plot ratio and site coverage were worked out by reference to the site area. 

32.  In the course of his submissions and reply, Mr Chang accepted that as a matter of law the owner of the Lot can subdivide it after approval was given in respect of the First building Plan based on a site area of the whole Lot.  However, counsel submitted that the use of the residual development potential of all the portions in the Lot is subject to constraints as contended.  Mr Chang also accepted that plot ratio and site coverage are not proprietary rights.  Although he suggested that there are cases concerning the transfer of plot ratio and site coverage, he has not referred this court to those cases as he did not intend to rely on them.   

Submissions of the Building Authority and Billion Star on plot ratios and site coverage

33.  Mr Lam SC, for the Building Authority and Mr Yu SC for Billion Star reminded this court that the present proceedings concern public law challenge to the decision of the Building Authority instead of private law action between the owners of Stage 8 and Billion Star.  They invited the court to examine carefully the statutory function of the Building Authority.  The Building Authority has a statutory duty to decide whether to approve or disapprove the plans within the prescribed time under Section 16 of the Building Ordinance.  Further, as illustrated by Section 14 of the Ordinance, the Building Authority shall not be involved in adjudicating between competing claims to private property rights.   

34.  Both of them argued that the Building Authority’s statutory function and duty is to apply the relevant statutory provisions to examine the building plans submitted for approval.  The statutory provisions direct the Building Authority to consider whether the plans exceeded the maximum permissible site coverage and plot ratio for the site in question.  The site in question is the one as depicted in the building plans.  The only rider is the one laid down in Cinat: if there are plot ratio or site coverage already “used up” previously when building was erected on adjoining portion of land, that have to be deducted.

35.  Counsel submitted that this rider does not mean that there is a crystallization of the plot ratio or locking up of the development potential as suggested by Mr Chang.  By reference to the example given by Lord Fraser in Cheng Yick Chi at p. 19, counsel said the contention of Mr Chang was inconsistent with the case law.  In that case Lord Fraser said the following when considering the meaning of a “site” for the purposes of the BPR,

“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 to a case 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.”

36.  The next paragraph in His Lordship’s judgment is also important,

“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. 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.”

37.  Mr Yu submitted that applying this approach to the present case, in processing the application of Billion Star, the Building Authority has to regard RP II and Section B as the relevant site and ask what are the maximum permissible plot ratio and site coverage for this site according to the BPR.  Subject to deduction for what had previously been used up, these are the only parameters that the Building Authority should consider in checking whether the building plans of Billion Star complied with the BPR. 

38.  As shown by the Affirmation of Ho Chun Hung, this was the approach of the Building Authority in the decision under challenge.  Therefore, the Building Authority did not make any error of law in its decision.

The court’s decision on the challenges based on plot ratio and site coverage

39.  For present purposes, I should adopt the threshold laid down in Po Fun Chan v Winnie Cheung (2007) 10 HKCFAR 676 as the relevant criteria for considering the merits of the Applicant’s intended challenge.  In other words, I shall ask myself whether the Applicant has a reasonably arguable claim which enjoyed realistic prospect of success.

40.  The present proceedings are public law challenge to the decision of the Building Authority.  The pertinent question is whether the Building Authority has discharged its public function according to the law.  The relevant public function in the present context is the approval of building plans.  Such approval is required because under Section 14 of the Buildings Ordinance [“BO”], save as otherwise provided, no person shall commence or carry out any building works without having first obtained from the Building Authority the approval of the building plan and the consent for commencement of works shown in the approved plan. 

41.  Section 14(2) makes it clear that the approval of plans and the consent of the Building Authority would not confer any title to land.  Thus, the approval would not have any effect on private rights[3]. This means if a person does not have the proprietary right or licence to carry out building works on the land in question, the approval of the plans by the Building Authority would not confer such right on him.  Those other persons who have any private right to stop such works can still come to court to enforce their private right in a private law action.  But that should not be the concern of the Building Authority as it is not within the remit of its public function in approving plans.

42.  Under Section 15 of the BO, unless the Building Authority notifies its refusal within the prescribed period (viz. 60 days[4]), approval is deemed to have been given.  Grounds of refusal have to be stated and the grounds are limited to those set out under Section 16.  The manner in which application for approval is made is set out in Regulation 29 of the Building (Administration) Regulations [“BAR”].  In respect of plans, the requirements are prescribed under Regulation 8 of the BAR.  In respect of site coverage and plot ratio, the relevant requirement is Regulation 8(1)(h).  Although there is a power on the part of the Building Authority to require additional plans and other particulars under Regulation 10, the scheme of the BAR envisages the process to be a paper exercise.  Cross-referencing that with the permissible grounds for refusal, and bearing in mind Section 14(2) of the BO, I agree with the submissions of Mr Lam and Mr Yu that the public function of the Building Authority does not include the adjudication of private disputes between adjoining landowners. 

43.  Mr Chang did not have instructions to tell this court whether the Applicant has any cause of action based on her private right to stop Billion Star from developing RP II and Section B as per the plans approved by the Building Authority.  That is perfectly understandable.  However, in effect, counsel said the same can be achieved by relying on the public law challenge in the present proceedings.  In terms of development potential, the challenge hinges upon the argument that the Applicant has some interest in the residual plot ratio and site coverage of the Lot and Billion Star cannot tap into the same without regard to her interest (or the interest of other Stage 8 owners).  Though counsel argued his case in terms of the legality of the Building Authority’s approval instead of a contest between the Applicant and Billion Star as to the use of the residual plot ratio and site coverage, it is inescapable to observe that the substance of the Applicant’s challenge is based on her claim that her interest in such residual development potential has been compromised.  Implicit in her contention is the proposition that the Building Authority has a duty to safeguard such interest of the adjoining landowners in working out the permissible site coverage and plot ratio in processing Billion Star’s application. 

44.  Where does such duty stem from?  Mr Chang suggested that his submissions on plot ratio and site coverage were logical propositions derived from Cinat and Cheng Yick Chi. 

45.  With the greatest respect, in my judgment such submissions stem from some fundamental misconceptions as to the public function of the Building Authority and the statutory concepts of plot ratio and site coverage.  Although the Building Authority has a public duty to ensure the plot ratio and site coverage would not exceed the statutory permissible maximum and such duty extends, according to Cinat, to ensure that development potential of a vacant piece of land cannot be relied upon after it has previously been exhausted, such public duty cannot be extended to deal with the distribution of development potential between different owners of adjoining lots.  The justification for the Cinat duty is the public interest identified by Lord Keith at p. 131 of the judgment of the Privy Council,

“… once the development potential of an unbuilt on piece of land has been utilized for the purpose of calculating the site coverage and plot ratio of a permitted building, that potential is exhausted and cannot be relied on again. If it were otherwise any purchaser of the unbuilt on land, or even the original developer himself, would be in a position to claim that he was entitled to build on it in accordance with the regulations. That would defeat the whole purpose of the regulations, which is to secure that in a particular locality the density of commercial and domestic buildings is no greater that accords with the public interest.”

46.  The public interest referred to by Lord Keith is the overall public interest of the community within the locality as a whole.  Such community extends beyond the owner or occupier of the site in question.  However, I do not believe Lord Keith would classify the private interest of the owners of the adjoining owners qua owners in having a fair distribution of the development potential within a lot as falling within such overall public interest.  And it would not be possible for the Building Authority to determine what would be a fair distribution of the development potential.  Take the present case as example, whilst the Applicant contend that proportionate distribution of the residual potential as a fair alternative, I fail to understand why there should not be proportionate distribution of the overall potential before the approval of the First Building Plan.  Faced with such a dilemma, one may ask rhetorically how can the Building Authority be expected to resolve such issues and how can that be within the remit of the public function of the Building Authority? 

47.  As explained above, plot ratio and site coverage are statutory concepts adopted in the BPR (and sometimes in OZPs) to facilitate the Building Authority in the discharge of its public function when it processes application for approval of plans.  By these concepts, the development potential of a site depends on its site area.  It is established in Cheng Yick Chi that a developer can carve out a portion from a plot of land for further development notwithstanding that the whole plot had been put forward as a site supporting an earlier development.  For the purpose of the second development, the site is the carved out portion and it is a question of fact to be decided by reference to the plans for each development.

48.  Therefore, it follows that for the purpose of calculating the permissible plot ratio and site coverage in respect of the second development, the site area shall prima facie be the area of the carved out portion and BPR regulations 20 and 21 should be applied accordingly.  Up to this stage, there is no question of the locking up of the carved out portion with the original lot.  This seems to me to be clear from the example of the tennis court given by Lord Fraser. 

49.  That prima facie position would have to be changed if the first development had used up more potential than that can be absorbed by the remaining portion.  The shortfall has to be deducted from the potential of the carved off portion as well.  Thus, in Cinat even though the subject land was not developed (as it had been earmarked for the Mass Transit Railway), the court held that the Building Authority was entitled to refuse approval because its development potential had been used up in an earlier development in terms of a mansion built adjacent to it.  I shall call this the Cinat factor.

50.  On the other hand, if the first development did not use more potential than that supported by remaining portion, there is no need to adjust the prima facie position. The carved out portion can be developed up to the maximum permitted by reference to its own site area.  The public interest identified by Lord Keith in Cinat does not require further adjustment to be made and the Building Authority has to apply BPR by reference to the site area of the carved out portion.    

51.  The last scenario exposes the fallacy of Mr Chang’s primary contention.  If counsel were correct, that would mean that even if there is no shortfall in development potential arising from the developed portion that have to be absorbed by the undeveloped portion, there cannot be any further development of that portion unless the owners of the developed portion agree.  This is plainly inconsistent with the suggestion of Lord Fraser that a portion which had previously been used as part of a site can subsequently be carved out for its own development.

52.  There is another fallacy in the Applicant’s case: she claims she had an interest in the residual development potential of the Lot.  But she never has any interest in the whole Lot.  All she has ever acquired is an interest in RP of s. A. As shown in the calculation, if one were to consider RP of s. A on its own, it has used up more than its proportionate share of the development potential.  In other words, if there were to be a redevelopment of RP of s. A alone in the future, the site area could not support the same gross floor area as Stage 8 currently has.  Because the owners of Stage 8 do not have any interest in RP II and Section B, in any future redevelopment they cannot include these portions as part of their site.  Under such circumstances, how can the Applicant claim that she has any interest in the residual development potential of the Lot?

53.  In my judgment, the use of the expression “residual development potential” is prone to confuse.  Given that the site coverage and plot ratio have to be calculated in respect of each development by reference to the actual site area of that development, once the lot is subdivided into different portions and ended up under different ownership with different intention as to future development, the only significance of the history of development that can justifiably be grafted upon the basic statutory provisions is the Cinat factor.  But the Cinat factor does not lead to the locking up of the whole lot.  The Cinat factor does not prescribe that one must work out the residual development potential of the whole lot to see how the residue should be distributed amongst different portions and whether the development of a particular portion can be permitted. As explained, the Cinat factor only has significance if there is a shortfall in respect of a portion in terms of development already approved.  Thus, it would not be right to speak of the development potential of all the portions as if they were still in common ownership or one big composite site.  To that extent, any reference to “residual development potential” may lead to confusion. The proposition of Mr Chang that the residual development potential referable to the whole Lot suffers from the same defect. 

54.  Once the fallacies in the Applicant’s premise are identified, it is obvious that the challenge based on alleged errors of law in the Building Authority’s calculation of the plot ratio and site coverage has no prospect of success. 

55.  In his oral submissions, Mr Chang did not suggest that the 4^th Ground adds much to his 1^st and 2^nd Grounds.  Based on the above analysis, once the notion that there is a common interest in the residual development potential in the whole Lot is rejected, there is no premise for evoking Article 25 of the Basic Law and Article 22 of the Hong Kong Bill of Rights as well as the principle of equality.

Ground 3: the “street”

56.  Under this ground, the Applicant contended that the Building Authority wrongly included section B and the pedestrian area in RP II in the site area calculation.  As such, counsel said, the calculation is contrary to Regulation 23(2)(a) of the BPR which prescribes that no account shall be taken of any part of any street in determining the site area for the purposes of regulations 20, 21 and 22.

57.  The Applicant said by reason of the continuous use of Section B and the pedestrian area as a passage way to gain access to the then Waterfront Park and the current Lai Chi Kok Park since 1978, the Stage 8 residents have acquired a right of way by the doctrine of lost modern grant in respect of those areas.  Thus, the areas should be regarded as “street” and should be excluded from the calculation of the site area.

58.  There has been previous litigation in respect of Section B.  In Building Authority v Appeal Tribunal HCAL 147 of 2002, 25 July 2003 [“the Estoree litigation”] Hartmann J held that Section B was not a street because of the absence of third party rights over that area.  Mr Lam, counsel for the Building Authority, contended that the Building Authority was entitled to rely on that decision.  However, as submitted by Mr Chang, neither the Applicant nor any Stage 8 residents were parties to the Estoree litigation.  And the absence of third party rights was conceded by counsel for the Building Authority in the Estoree litigation, see paras. 15 and 16 of the judgment.  I agree that the Estoree judgment does not bind the Applicant and cannot bar her from advancing the present challenge.  In any event, that judgment does not deal with the pedestrian area.

59.  Mr Lam further contended that whether Section B and the pedestrian area should be regarded as “street” is a question of fact.  To succeed in a challenge based on error of facts in a judicial review, the alleged fact must be “unquestionably true”: Nguyen Ho v Director of Immigration [1991] 1 HKLR 576 at 583D; R v Director of Immigration and Refugee Status Review Board, ex p Do Giau [1992] 1 HKLR 287 at p. 301-2.  The law can be taken from the judgment of Mortimer J (as he then was) in the latter case at p. 302,

“If it is demonstrated that a decision-maker made a material and decisive error of fact, which although not actually known to him or available in his department but was then easily available, generally known and unquestionably true, so that by inference it must be assumed to have been within the knowledge of the department, then if the other conditions are satisfied, this may be sufficient to show that the decision was flawed. But much depends upon the facts of the case. I would just add this that usually a material or decisive fact will be one which is a condition precedent to jurisdiction; or one which is the only or the primary basis for the decision, or a fact which the tribunal had to take into account in order to reach its decision.”

60.  Mr Lam submitted that the alleged right of way is highly contentious between the Stage 8 owners and Billion Star and the evidence of the Applicant does not meet the test laid down in ex p Do Giau.

61.  Counsel drew attention to a letter dated 7 October 2010 written by Messrs.  So, Lung & Associates on behalf of the Concerned Group to the District Lands Office, copied to the Director of Building.  In that letter, it was asserted that part of the Billion Star site has continuously and uninterruptedly been used by all residents since 1978 for purposes of walkway and leisure and therefore subject to their “right of easement”.  However, no further details or evidence was supplied to the Building Authority. 

62.  Mr Yu summarized the evidence placed before the court by the Applicant to support her claim of right of way at para. 34.1.2 of his skeleton submissions,

(a)   Extremely blurry aerial photos which show open space around the former gas plant;

(b)   Sales brochure of the Mei Foo Sun Chuen which shows there was open space around the gas plant and people could walk there;

(c)   The judgment of Hartmann J referring to Section B having the physical appearance of a street and public having free access.

63.  Counsel submitted that such evidence does not prove that the residents have been using the area continuously as of right.  The fact that there was open space around the gas plant was not disputed.  Nor was the fact that people had free access.  However, to sustain a claim for right of way based on the doctrine of lost modern grant (Mr Yu argued) the evidence must show that the user was as of right.

64.  In China Field v Appeal Tribunal (No.2) (2009) 12 HKCFAR 342 at para. 71, Lord Millett NPJ said,

“Such user must be as of right, that is to say not by force, stealth or licence of the owner of the dominant tenement, and must have continued without interruption for at least 20 years.”

65.  Though I agree that that the evidence of the Applicant on the alleged right of way is not strong, I do not think this court should reach a conclusion on whether she could make out a case of easement in a private action between her and Billion Star.  It may depend on the outcome of an investigation into the history as to the user of the areas and the line between causal tolerance and acquiescence to persistent user as a matter of entitlement can be a fine one, see Gray & Gray, Elements of Land Law 4^th Edn paras. 8.186 and 8.187. 

66.  Yet the present case is not a private law action between the Applicant and Billion Star.  It is an application for leave to apply for judicial review against the decision of the Building Authority.  In judicial review, the court exercises its supervisory function and it only intervenes when it can be shown that the Building Authority acted unlawfully, unfairly or irrationally.  In the light of the outcome of the Estoree litigation, it was clear to the Building Authority that any claim of easement (and the consequent claim that Section B and the pedestrian area should be regarded as street for the purposes of BPR) would be strenuously contested by Billion Star.  The material furnished on behalf of the Concerned Group to the Director of Building through the solicitor’s letter of 7 October 2010 did not provide the Building Authority with concrete evidence as to the existence of right of way.  There was no attempt to delineate the street by reference to the pedestrian area in that letter.

67.  The existence of open space, even with unrestricted access thereto, does not unquestionably or indisputably lead one to the conclusion that the area is a street.  The residents of Stage 8 were aware of the outcome of the Estoree litigation and, though at one stage an action fund was collected, they did not proceed to bring a claim of right of way to the court. 

68.  It has to be borne in mind that Building Authority was obliged to make a decision on whether to approve the building plans within a relatively short timeframe.  As contemplated by the statutory scheme, the process is meant to be a paper exercise.  If the Building Authority refuses to give approval, the grounds for such refusal have to be set out and the Building Authority must have the necessary material and evidence to justify such grounds when the refusal is being challenged.  As illustrated by the Estoree litigation, in the absence of concrete evidence as to the existence of right of way over Section B and the pedestrian area, the Building Authority was not in a position to defend a case that such areas should be excluded on the basis that they were streets.

69.  In my judgment, it is not intended by the legislature that the Building Authority should, in considering whether to approve a set of building plans, take an active investigative role in ascertaining whether an open space is subject to any private right of way.  The Building Authority exercises a public function and the administrative decision to approve building plan should be performed by reference to public interest. 

70.  Moreover, as provided by Section 14(2) of the BO, an approval of the building plan does not confer title to land, does not act as waiver of any term in any lease or licence and, perhaps more importantly in the present context, does not grant any exemption from nor permit any contravention of the BO or any other enactments.  Thus, if there were any contravention of the BPR which the Building Authority was not in a position to substantiate at the time when the plan was approved, it does not mean that no action can be taken in the future.  In Building Authority v Appeal Tribunal (Buildings) [2010] 3 HKC 368, it was held that the effect of the BPR would not be spent after the plans were approved.

71.  The decision of the Building Authority is appealable under Section 44 of the BO.  Any person aggrieved may appeal.  As presently advised, I see no reason why the Applicant or another Stage 8 owner could not come within the definition of a person aggrieved.  Upon such appeal, further evidence, both oral and documentary, can be adduced and the Appeal Tribunal would then be able to decide the matter with the benefit of such evidence, including the evidence put forward by the Applicant or the Concerned Group.  However, the Applicant did not avail herself of such avenue.

72.  In such circumstances, I agree with the submission of Mr Lam that the court should not entertain a challenge to the approval of the plans by the Building Authority on this ground.

73.  Further, Mr Yu submitted even assuming Section B and the pedestrian area constituted streets for the purposes of the BPR it would not affect the approval of the Billion Star plans.  Because of the Cinat factor, 590 odd square metres were deducted from the site area and, as demonstrated by the evidence of Mr Howes, that deduction was larger than the total area of Section B and the pedestrian area.  Thus, in effect, counsel said, Section B and the pedestrian area were excluded from the calculation of the site area.

74.  This submission premised on the proposition that area deducted by reason of the Cinat factor can be taken from area excluded as street under Regulation 23(2)(a).  As counsel have not addressed the court on this proposition, I prefer to rest my decision on the reasons set out in the earlier paragraphs.

75.  I therefore conclude that there is no reasonably arguable merit under Ground 3.

The proposed amendments

76.  The proposed new grounds raised issues as to the effect of the assignment in 1983 by which MFIL assigned RP II back to Mobil Oil.  These are plainly issues that should be litigated in a private action between Billion Star and the Stage 8 owners.  For the reasons already given, I cannot see how the Building Authority in the performance of his public function in approving plans under Section 14 of the BO can arrogate to himself the role of a court of law to determine such private disputes.

77.  Mr Chang said he applied to add these new grounds in the light of the judgment of the Court of Appeal in HCMP 1042 of 2011.  With respect, the context in which the Court of Appeal considered the matter is entirely different.  In that case, the Court of Appeal dealt with a private law action between Billion Star and some residents of Stage 8 who took part in some protests in opposition to the commencement of construction works.  There was no discussion by the Court of Appeal as to the decision of the Building Authority, not to mention the prospect or arguability of these grounds as a challenge to the approval of the plans in the context of judicial review. 

78.  I have no hesitation in rejecting these new grounds as they have no prospect of success in the present proceedings. 

Delay and extension of time

79.  Since I have come to the conclusion that the Applicant’s case does not meet the threshold for leave to be granted, the application for extension of time should be dismissed in any event.  However, for the sake of completeness, I will deal briefly with the question of delay and extension of time.

80.  Though the Applicant made the present application in her own name, it is not disputed that she acted in concert with the Concerned Group in the opposition to the proposed development of the Billion Star site.  There are references in the Form 86 to steps taken by the Concerned Group in accounting for the lapse of time.  Further, in the Form 86, the Applicant proposed to join the Concerned Group as one of the interested parties.  Though the Applicant has personal interest in the matter, it is equally clear to me that the present set of proceedings was brought with a view to provide the Concerned Group a platform to canvass their challenge to the approval of the Billion Star building plans by the Building Authority.  As Mr Chang candidly told the court, the Concerned Group is not eligible for legal aid and those involved are concerned about their costs exposure.  Therefore, the application was not made until the Applicant has obtained legal aid.  With such background, the question of delay should be examined on the basis that the Applicant acted in concert with the Concerned Group in making preparation for the present proceedings.   

81.  The decision of the Building Authority was made on 11 October 2010.  As mentioned above, even before the decision was made, the Concerned Group had engaged solicitors to write letters to the District Lands Office and copied to the Director of Land lobbying against what they perceived to be encroachment of their rights in respect of plot ratios and right of way.  On 14 October 2010, the convenor of the Concerned Group was informed by the Building Department over the phone that approval had been given to a 20-storey building on the site with 2,500 square feet on each floor. 

82.  On the next day, viz. 15 October 2010, the Concerned Group issued a press release rallying for opposition to the proposed development.  An action plan was set out in the press release.  The intended actions included application for legal aid based on the right of way, lobbying the Legislative Council to investigate whether Billion Star has utilized their residual plot ratio and other steps. 

83.  There were communications between the Concerned Group and the Building Authority after 15 October in respect of the approval of the Billion Star plans.  Apart from a meeting on 18 October, the Building Authority wrote to the representatives of the Concerned Group on 22 and 29 October respectively.  In the letter of 29 October, the Building Authority gave the information regarding the proposed building including that it is a 20-storey building with a total gross floor area of 4,788.4 square metres.   

84.  In addition, the Concerned Group and the residents of Stage 8 also had meetings with the representatives of Billion Star.  Shamshuipo District Council as well as some Legislative Councillors were also involved.  In a letter dated 21 December 2010 from the Development Bureau to the chairman of the Shamshuipo District Council, the calculation of the plot ratio based on which approval of the Billion Star building plans was given was set out.  The total site area was stated to be 1,354.655 square metres.  Similar information were set out in a letter dated 17 December 2010 from the Development Bureau to the Legislative Council.

85.  I do not intend to recite all the steps taken by the Concerned Group after the approval of the plans.  They are summarized in Mr Yu’s chronology and Mr Chang had commented on it. 

86.  On the evidence, it is obvious that the Concerned Group comprised of resourceful people and they are well organized in their efforts to oppose the development of the Billion Star site.  Lawyers had been engaged even before the Building Authority made the decision.  They also responded with concrete plan as to steps to be taken immediately after they learnt of the approval.  Given that one of the steps set out in the press release of 15 October was to apply for legal aid, albeit basing on the right of way, it can be inferred that litigation was very much in the mind of those planning the opposition strategy.  This inference is reinforced by the fact that lawyers had already been engaged (and presumably some preliminary legal advice had been sought and given before the letters were written on 30 September and 7 October to the District Lands Officer).  Furthermore, it can also be inferred that the Concerned Group had already taken account of the risk as to costs exposure in any litigation and concluded that legal aid would be the solution.  Thus, instead of referring to taking action right away, the first item in the list of actions was the application for legal aid.

87.  In this connection, though the press release only referred to application for legal aid on the basis of right of way, it is unbelievable that the Applicant would not refer to the issue about plot ratio to the lawyer taking up the case (including those in the Legal Aid Department processing application for legal aid). 

88.  But the Applicant did not make an application for legal aid until 24 February 2011.  By then the three months period prescribed by Order 53 rule 4 has expired for more than one month.    

89.  What is her explanation for her belated application for legal aid?  Two reasons were given on her behalf by Mr Chang in his skeleton submissions.  First, it is said she needed more information.  At paras. 128 to 130 of the Form 86, the Applicant said she only obtained a copy of the Billion Star building plan on 22 May 2011 and until then she could not accurately assess the basis and lawfulness of the decision of the Building Authority.  She said it was only after that the Applicant and the Concerned Group decided to commence the present legal proceedings.

90.  I do not accept this explanation.  One must not confuse the precise formulation of the grounds for applying for judicial review with the initial application for legal aid.  The former is the job of the lawyer and it may well be that for the purpose of proper drafting the lawyer will need some details which were not immediately available to the Applicant or the Concerned Group in October 2010.  However, such details would not be essential for the Applicant to decide whether to make an application for legal aid.  In the press release of 15 October 2010, the Concerned Group had indicated that they would apply for legal aid.  The basic concern on their part was formulated in the two letters from their lawyers to the District Lands Office.  By 29 October 2010, they had a letter from the Building Authority containing the necessary information as to the proposed development, including its gross floor area.  As submitted by Mr Yu and Mr Lam, on any view, such gross floor area would, according to the arguments now advanced on behalf of the Applicant, exceed what can be permissible.  That should be sufficient to start the process of application for legal aid. 

91.  In so saying, I must not be taken as suggesting that an applicant should not have the benefit of legal advice before making a final decision as to whether he or she has sufficient grounds to apply for judicial review.  An application for legal aid does not irreversibly commit an applicant to engage in litigation.  An intended litigant is entitled to revise his or her course of action after obtaining legal advice with the benefit of legal aid.  However, when an applicant said she could not even apply for legal aid until she had certain information and relied on this as the reason to explain her delay for over three months despite the time limit under Order 53 rule 4, the court is entitled to examine whether the further information was essential to her application for legal aid. This is particularly so in the present context when the Applicant, through the Concerned Group, has had the benefit of legal advice and representation in the past.   

92.  By the time when they got the letters of 17 and 21 December 2010, they had the calculation of the Building Authority with regard to plot ratio.  The site area was also given. All the relevant information was there in relation to the challenge based on plot ratio.  Even though the Concerned Group or their representatives are not the recipients of these letters, the Applicant has copies of the same.  She did not state in her evidence as to how and when she obtained these letters.  However, bearing in mind the lobbying efforts of the Concerned Group and the contacts with the District Councillor and the Legislative Councillors, it can be inferred that copies of these letters came to the attention of the Concerned Group by the end of December.

93.  In his reply, Mr Chang highlighted the point that the information given in the letter of 29 October 2010 did not tell the Applicant and the Concerned Group  whether Section B was included in the site.  However, by the time when the Concerned Group presented their complaints to the Legislative Councillors on 18 November 2010, one of their complaints was inclusion of Section B in the Billion Star building plans, see Para. 103 of the Form 86 and response to that complaint in the letter from the Legislative Council to the Concerned Group of 16 March 2011. 

94.  In any event, as I said, the lack of full information should not be an excuse for the Applicant not making an application for legal aid until 24 February 2011 which is more than 4 months after the decision.  As a matter of fact, the Applicant had not waited until she obtained the building plan in mid May 2011 before she made her application for legal aid.    

95.  The second reason given by Mr Chang for the delay in the Applicant’s application for legal aid was that the Concerned Group was engaging in other alternatives to resolve the matter.  The alternatives included liaison with Billion Star, complaints to the Shamshuipo District Council and the Legislative Councillors, writing letters to the Chief Executive and the Executive Council and complaints to the Ombudsman.

96.  Whilst I whole-heartedly agree with the sentiment expressed in the authorities cited by Mr Chang at paras. 29 and 30 of his skeleton[5], I do not think they assist the Applicant in respect of her delay in applying for legal aid.  As explained, there is a difference between making an application for legal aid and the actual commencement of proceedings for judicial review.  The exploration of alternative means to resolve a dispute did not prevent the Applicant from applying for legal aid at the same time.  As a matter of fact, in the press release, there was no suggestion that application for legal aid would not be considered until other attempts to resolve the matter failed. 

97.  Further, the nature of the alternative dispute resolution attempts by the applicants in the English authorities is different from the actions of the Concerned Group in the present case.  In Macklen, Brooke J was referring to letter before action addressed to the decision maker.  In Eurotunnel, the court actually set aside the leave to apply for judicial review on the ground that there was no good reason for extending time.  In respect of alternative attempts, according to the digest of the judgment which counsel relied upon, the pertinent part of the judgment was as follows,

“an attempt to resolve one’s problems by extra-judicial activity may amount to sensible and reasonable behaviour and give grounds for extending the period, although this would not always be so and depended on the facts of the individual case.”

98.  I agree with Mr Lam that it is difficult to regard some of the actions relied upon by Mr Chang as reasonable and sensible attempts to resolve the problems.  The complaints to the Chief Executive and the Executive Council were more in the nature of voicing the Concerned Group’s objections to the development of the Billion Star site.  As regards the complaints to the Legislative Councillors, Mr Chang said in his written reply para. 26 that the Applicant’s case was that she wanted to seek more information through the intervention of the Legislative Council Secretariat and as a result more information was obtained.  However, as explained earlier, that does not give the Applicant good justification for not applying for legal aid until 24 February 2011.

99.  As observed by the court in Eurotunnel, the engagement in extra-judicial activity would not always give rise to a good reason to extend time and much depends on the facts of the case.  In my view, the nature of the dispute is an important consideration.  And it is necessary to examine to what extent the activity in question has a real prospect in resolving the dispute.

100.  In the present case, the dispute focused on the utilization of development potential and private right of way.  It is unlikely that these issues can be resolved by lobbying the District Council or the Legislative Councillors.  Nor do I see any prospect in having such dispute resolved by complaining to the Chief Executive or the Executive Council or the Ombudsman. 

101.  I accept that negotiation with Billion Star could be a way to resolve the dispute.  However, given the entrenched position adopted by the Applicant and the Concerned Group that there could not be any development at the Billion Star site as demonstrated by their response to the concession of Billion Star to reduce the gross floor area of the development from 100,000 to 50,000 square feet, such negotiation has little prospect of success. 

102.  There is no reason why the Applicant could not apply for legal aid even when the Concerned Group was negotiating with Billion Star.  As a matter of fact, the Applicant did not wait until the final letter of 11 March 2011 from Billion Star before she applied for legal aid.  I do not believe there is any casual connection between her delay in application for legal aid and the negotiation with Billion Star.

103.  On the evidence, I am not satisfied that the Applicant had a good reason for her delay in her application for legal aid. 

104.  As for the time lapse after she had made her legal aid application, Mr Lam and Mr Yu commented about the lack of evidence as to the diligent prosecution of her application.  The only details given in the Form 86 and the evidence is that the Applicant made her application on 24 February, application was refused on 31 May; and upon appeal before a master on 7 June, legal aid was granted on the basis of an advice from Mr Chang.  Legal aid certificate was issued on 21 June with the assignment of solicitors and counsel was assigned on 23 June.

105.  Counsel also urged the court to take into account of the resource of the Concerned Group in considering whether there is good reason for extending time.  Mr Yu submitted that the real reason for the delay was that members of the Concerned Group are unwilling to put their money where their mouths are and wish to be protected by legal aid from costs exposure associated with the intended litigation.

106.  Mr Chang did not shy away from the suggestion that members of the Concerned Group were concerned about their costs exposure.  Counsel said this is a legitimate concern and in the light of the potential amount of legal costs to be incurred (not only costs incurred by the Applicant, but also costs of the putative respondent and Billion Star) these people should not be criticized for taking such a course.

107.  For my part, I would not hold against the Applicant simply because the Applicant applied for legal aid when other members of the Concerned Group should have sufficient means to pursue the litigation without legal aid.  However, she still had a duty to apply promptly. 

108.  As regards the lack of account as to the diligent prosecution of the application for legal aid, I think one should consider the length of the time taken between her application and the refusal of the Director on the one hand and the complexity of the case on the other.  The time lapse was slightly over three months whilst the ordinary legal aid stay is 42 days.  Though the present case is not a straight forward one, neither is it unduly complicated.  The burden is on the Applicant to demonstrate that she had exercised due diligence in her application for legal aid amongst the parties to these proceedings, and she was the only person who knew about such details.  In the absence of specific evidence as to steps taken by her promptly in the process of her legal aid application, I am not satisfied that she was entirely blameless for this lapse of time. 

109.  I accept that the Applicant cannot be blamed for the lapse of time between the refusal by the Director and the subsequent reversal of that decision.  I also accept the time taken for the preparation of the proceedings after assignment of counsel to be reasonable.

110.  Taking everything into consideration, on the whole, I am not satisfied that the Applicant had a good reason for the whole period of delay though she could be exonerated for some of the time taken up by legal aid processing and the initial gathering of information.   

111.  Mr Chang also asked the court to consider the general importance of the issues raised and the merits of the Applicant’s case and the consequences of the decision even if I am not satisfied that there is good reason for the delay.  There are no doubt cases where the court may still extend time even if an applicant cannot give good reason for the delay.  However, in the light of my conclusion as to the merits and my analysis as to the effect of a Section 14 approval and the role of the Building Authority, I do not think this is a proper case for such exercise of discretion.

Result

112.  Thus, I will refuse leave to apply for judicial review and dismiss the application for extension of time.  I also make a costs order nisi that the Applicant shall pay the costs of the putative Respondent and Billion Star, such costs to be taxed if not agreed.   

(M H Lam) Judge of the Court of First Instance High Court

Mr Denis Chang, SC and Mr Hectar Pun, instructed by Messrs Ho, Tse, Wai & Partners, for the Applicant

Mr Godfrey Lam, SC, instructed by Department of Justice, for the Respondent

Mr Benjamin Yu, SC, Ms Eva Y W Sit and Mr Elliot Fung, instructed by Messrs Kao, Lee & Yip, for the Interested Party