HKSAR v. LIEM HUNG AND OTHERS

HCMA 554/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. HCMA 554 OF 1999

(ON APPEAL FROM WSS 24124 OF 1998)

-------------

-------------

-------------------

JUDGMENT

-------------------

1. The nine Appellants are co-owners of Lot Number 734 in Demarcation District 1, Lamma Island ("the said lot"), on which a house, No. 110, Tai Peng Village, Lamma Island, stands. Each of them was charged by way of summons that he or she between 13 September 1997 and 26 November 1997 in Hong Kong did without reasonable excuse fail to comply with an order No. DH29/NT/97/C served on him or her on 12 May 1997 under section 27A(1) of the Buildings Ordinance, Cap. 123, contrary to section 40(1B)(b) of the Ordinance.

2. House No. 110, Tai Peng Village, Lamma Island is a 3-storey dwelling house standing on the said lot. Adjoining the said lot is a wall, feature No. 14NE-B/R22 ("the wall") situated on unallocated government land. The wall was erected when the 3-storey building was built. It is not disputed that the lessees of the said lot have an obligation to maintain the wall according to the Government Lease of the said lot. The Geotechnical Engineering Office ("GEO") of the Civil Engineering Department of the HKSAR commissioned Ove Arup and Partners Hong Kong Limited ("Ove Arup") to study certain slopes and retaining walls including the wall. Ove Arup was instructed by the GEO to prepare a report based on guidelines laid down in certain GEO circulars. Ove Arup submitted a report on the wall in November 1995 which was adopted by the GEO. The GEO communicated to the Buildings Department the recommendation of Ove Arup that the Building Authority ("BA") should serve an order under section 27A of the Buildings Ordinance on the co-owners ordering them to carry out further investigation of the wall. Based on the report and the recommendations of the GEO, the BA served a section 27A order ("the 1st Order") of 14 June 1996 on the nine Appellants.

3. The 1st Order stated that the BA was of the opinion that the earth-retaining structure with feature No. 14NE-B/R22 at and adjoining House No. 110, Tai Peng Village, Lamma Island on the said lot had been rendered so dangerous that it would collapse or likely to collapse, either totally or partially, and thereby would cause a risk of injury to person or damage to property. The BA by the 1st Order also declared that the wall, an earth-retaining structure, was dangerous and ordered that the Appellants as the co-owners of the land and/or structure and/or persons who under the terms of Government Lease were under an obligation to maintain the land and/or structure to carry out within a specified period the following works :

"Investigate, analyse, report on the above .... earth-retaining structure and submit remedial proposal such that investigation on site is commenced on or before 14 August 1996 and a report with any necessary design for remedial works is submitted to the Building Authority on or before 14 October 1996 for approval."

4. The 1st Order was served under cover of a letter of 14 June 1996 in which the BA informed the Appellants that they were required to appoint on or before 14 July 1996 an authorized person to supervise the work required by the order. It also contained an advice that the work specified in the order should be carried out to such standard acceptable to the BA and in compliance with regulations, referring to section 27A(2C) of the Buildings Ordinance. The letter also advised that the Appellants had a right to appeal against the order within 21 days of the date of the letter, detailing the procedures to be followed.

5. After the receipt of the 1st Order, the Appellants appointed Mr B W Choy of Bing Choy and Associates as the authorized person to deal with the 1st Order. Mr Choy, who gave evidence as DW2 at the trial before the Magistrate Miss D'Almada Remedios, initiated his work by sending a letter of 2 August 1996 to require the BA to provide him with a copy of Ove Arup's report.

6. By a letter dated 5 September 1996, Mr Choy informed the BA he was in the course of obtaining a copy of Ove Arup's report. He also pointed out that he had made a site inspection and did not see any sign of distress on the wall said to be built some 16 years ago. By another letter dated 4 October 1996, Mr Choy informed the BA that he had studied the report and advised the BA that it had been misled by the consulting engineer "because there is in fact no sign of distresses on site as observed by the undersigned (ie Mr Choy) and because the wall has existed for almost 20 years without any previous instability record confirmed by the Government Consulting Engineers in the report. It can be safely concluded that the wall is safe and does not pose risk to life to the occupants nearby." Mr Choy also set out his reasons for his findings, describing the BA's opinion of the wall being dangerous as speculative, pointing out "errors in the engineering approach" and talking about "fictitious assumption taken in the preparation of calculations in the report".

7. Despite subsequent communications between the BA and Ove Arup of the one part, and Mr Choy of the other, the parties appeared not to be able to reach an agreement. While the BA insisted that the 1st Order had to be complied with, Mr Choy was of the view that the order was unlawful and the wall was safe.

8. Eventually, by an order dated 12 May 1997 ("the 2nd Order"), which was to supersede the 1st Order, the BA informed the Appellants that the wall, being an earth-retaining structure, was liable to become dangerous, in place of the term used in the 1st Order, "rendered so dangerous". The rest of the 2nd Order is the same as the 1st Order save that the period for compliance was ordered to be not later than 12 July 1997 and expiring on 12 September 1997. The works required to be done under the 2nd Order were identical to those in the 1st Order :

"investigate, analyse, report on the above earth retaining structure and submit remedial proposal such that investigation on site is commenced on or before 12 July 1997 and a report with any necessary design for remedial works is submitted to the Building Authority on or before 12 September 1997 for approval."

9. The response from Mr Choy was contained in a letter dated 15 May 1997 (with a copy to the Appellants) stating,

"I can only reiterate and reaffirm that your order has been issued improperly, unfortunately, out of bad faith and without sense.

If you insist on your wrongful acts, the harmed citizen will hold you fully liable for all legal consequences."

10. By a letter dated 4 September 1997, about a week before the expiration of the time within which works were required to be done under the 2nd Order, the BA wrote to the Appellants stating as follows:

"I have advised your Authorised Person on 21 January 97 that his investigation/inspection statements for the captioned retaining wall are not acceptable and there is insufficient grounds to support his request to withdraw the captioned order.

As I still have not received any further information from your Authorised Person regarding the investigation/analysis works for the captioned retaining wall, may I request you to instruct your AP to carry out the works as required by the order and to submit the investigation/remedial proposal for my approval before the order expiry date."

11. The letter was concluded by a warning to the Appellants that the BA might carry out or cause to be carried out the works required under the order and recover the costs thereof from the Appellants and might take appropriate prosecution actions under section 40(1B) of the Buildings Ordinance against the Appellants. The letter was copied to Mr Choy. By a letter of 11 September 1997, Mr Choy replied to the BA saying that his former letter of 15 May 1997 was the proper answer given. This 11 September 1997 letter was copied to the Appellants.

12. The prosecution against the Appellants was brought in the above circumstances, charging the Appellants for failing to comply with the 2nd Order.

13. After a trial lasting several days before Miss D'Almada Remedios, the Magistrate found the Appellants guilty as charged and sentenced each of the Appellants to pay a fine of $9,166.66.

14. The Appellants now appeal against both conviction and sentence. A number of grounds of appeal were set out in the Perfected Grounds of Appeal. At the hearing before me, Mr Yip on behalf of the Appellants abandoned a number of grounds, resulting in only the following grounds being argued:

(1) The 2nd Order was invalid in that :

(a) it did not relate to an earth-retaining structure; and

(b) the issue of the 2nd Order was not in compliance with section 27A of the Buildings Ordinance.

(2) Even if the 2nd Order was valid, there was full compliance with it by the Appellants.

(3) Even if the 2nd Order was valid, there was reasonable excuse for the Appellants not to have complied with it.

(4) If the appeal against conviction fails, the partial compliance with the 2nd Order and the acts on the part of the Appellants, albeit failing to constitute reasonable excuse, amount to mitigation in sentence, in the light of which, the sentence imposed by the Magistrate is excessive.

15. The 2nd Order was issued pursuance to section 27A of the Buildings Ordinance. Section 27A provides as follows:

"(1) Where in the opinion of the Building Authority any natural, formed or man-made land, or any earth-retaining structure, has due to any cause been rendered so dangerous or liable to become so dangerous that it will collapse, or be likely to collapse, either totally or partially, and thereby will cause, or will be likely to cause, a risk of injury to any person or damage to any property, the Building Authority may by order in writing served on the owner of the land or structure, or on the person who under the terms of a Government lease is under an obligation to maintain the land or structure, declare the land or structure to be dangerous or liable to become dangerous.

(2) An order under subsection (1) may require the owner or person referred to in subsection (1) -

(a) to do such work as may be specified in the order;

(b) to carry out such investigation in relation to the land or structure as may be so specified; and

(c) to submit for approval by the Building Authority proposals for work to be done to make the land or structure safe based on the findings of the investigation,

within such time or times as may be specified in the order."

16. Despite the fact that the letter dated 12 May 1997 under cover of which the 2nd Order was served contained an advice that there could be an appeal against it within 21 days of 12 May 1997 detailing the procedures of appeal, there is no provision in the Buildings Ordinance requiring any dissatisfaction with such an order or any challenge as to its validity must be pursued by way of appeal as provided by Part IV of the Buildings Ordinance. Although it appears to me that an appeal against the 2nd Order challenging its validity pursuant to section 44 of the Buildings Ordinance is a better avenue to pursue as the appeal tribunal may be better equipped to deal with the technical aspects of such cases, I do not see any reason why any challenge to the validity of the order for its issue not having been in full compliance with the requirement of section 27A cannot be raised in criminal proceedings brought for non-compliance with the order (see Director of Public Prosecutions v Head [1959] AC 83), especially when a number of requirements for the issue of the order are prescribed in section 27A itself, for example, that it must relate to land or any earth-retaining structure and other requirements.

17. As to the argument that the wall was not an earth-retaining structure, I pointed out to Mr Yip that the point was not raised before the Magistrate, and that was presumably caused by the fact that the point was not open in the light of the formal admissions made by the prosecution and the defence under section 65C of the Criminal Procedures Ordinance Cap 221. In view of my comment, the point was not seriously pursued by Mr Yip; regardless, however, I think it has no merit.

18. Mr Yip's second challenge to the validity of the 2nd Order is that, according to him, there was no cause that had rendered the wall dangerous or liable to become dangerous as required by section 27A.

19. On this matter, in her Statement of Findings, the Magistrate said :

"The words "due to any cause..."appearing in section 27A is consistent with the intention of the legislature that whatever may have been the cause or reason resulting in the Building Authority forming the opinion which he did, he is entitled to make an order under that section. There is nothing in the section that imposes on him an obligation to state the reason for arriving at the opinion which he did. In my view the maxim Omnia Praesununtur Rite Esse Acta applies and the Building Authority is entitled to require the defendants to comply with the order which he has specified."

20. That was the only passage where the Magistrate dealt with the cause relied on by the BA in the issue of the 2nd Order, and nowhere in the Statement of Findings was the cause identified. This is one of the main complains of the Appellants. Mr Yip submitted that the validity of an order issued under section 27A depended on whether the "opinion" of the BA was based on any "cause" which "rendered" the "structure" in issue "liable to become dangerous". I agree. The word "cause" is different from the word "reason" in the context of the section. Where there is cause, it is related to an effect, and vice versa. Any cause that has rendered the structure liable to become dangerous can be a reason for the BA's opinion under section 27A, but without such a cause, there would have been no reason for the BA to form the opinion. So in the context, it is not necessarily that for any reason the BA can form an opinion under section 27A; there must be a cause that has rendered the structure liable to become dangerous for a lawful and proper opinion to be formed under the section.

21. Mr Yip referred me to the report of Ove Arup based on which the opinion of the BA was formed to issue the 1st Order and subsequently the 2nd Order under section 27A. In the conclusion and the recommendation section of the report, the consultant pointed out that "the analysis suggested that the wall did not possess adequate factors of safety on its stability as required by the current standard" and they considered the wall liable to become dangerous. Mr Yip argued that the analysis carried out by the consultant was based on the standards of walls mentioned in the GEO circulars. The conclusion of the wall being considered liable to become dangerous was based on the view that the wall did not possess adequate factors of safety as compared with those standards. Inadequate factors of safety of the wall's stability, argued Mr Yip, were not a cause within the ambit of section 27A, because they were not and could not be a cause that had rendered the wall liable to become dangerous. The cause, according to Mr Yip, should properly be analogous, if not equal, to those mentioned in section 26 of the Buildings Ordinance relating to dangerous buildings, namely, "fire, wind, rain, dilapidation, use, ... or any other cause". Although I do not accept that the "cause" under section 27A must be one of those mentioned in section 26, I am persuaded that the cause under section 27A must be one which has occurred after the structure had been built, and cannot just be a mere state of affairs such as a matter of design of the wall. By that, I mean the cause must be something which has happened such as fire, wind or rain, or must have developed by the passage of time such as dilapidation, use or lack of repair. It, however, cannot cover a situation which has remained unchanged or stagnant such as the design of the wall. Otherwise, the provision "has due to any cause been rendered dangerous" would have to be disregarded or would have to be read as "has for any reason become dangerous". Notwithstanding, in Ove Arup's report, there was mention of signs of deterioration of the mortar pointing between rubble stones of the wall. Although Mr Yip relied on the observation expressed in the report that the wall was considered to be in a fair condition, this would not exclude the fact that the signs of deterioration of the wall together with its inadequate factors of safety on its stability, making the wall liable to become dangerous, did amount to a proper cause based on which the BA could form a legitimate opinion under section 27A. I therefore hold that the ground of appeal attacking the validity of the 2nd Order fails.

22. Mr Yip argued that the 2nd Order had been complied with by the Appellants engaging Mr Choy as the authorised person, as advised by the cover letter of 12 May 1997 issued by the BA together with the 2nd Order. He argued that without an authorised person appointed by the Appellants, they could not possibly, as layman to the engineering profession, know what "investigation, analysis and report" as required by the order meant. As the Appellants had followed the advice given by the BA to engage an authorised person, ie Mr Choy, and they continued to listen to the advice of Mr Choy, they had fully complied with the order. Although I agree with Mr Yip that the engagement of an authorised person was the most proper first step to take, as advised by the BA, such an engagement did not constitute a full compliance with the order. I accept that after the appointment of the authorised person, his advice would most likely be followed by the Appellants. However, blindly following the advice of the authorised person, without taking into account other matters that were relevant, cannot properly be considered as full compliance with the order. When the 2nd Order was issued, it was expressly said to supersede the 1st Order, and the cover letter of 12 May 1997 advised the Appellants to appeal against the 2nd Order if they wished to. That avenue was not pursued. When Mr Choy challenged the findings of the BA by his letter of 15 May 1997, with a copy to the Appellants, the Appellants could reasonably wait for the BA's response. By the response of the BA dated 4 September 1997, the Appellants were advised that Mr Choy's views or findings were not acceptable and there were insufficient grounds to support Mr Choy's request for the BA to withdraw the order. The Appellants were also requested by the BA to instruct Mr Choy to carry out the works as required by the order. This was a very clear statement that the order had not been complied with to the satisfaction of BA. In this context, it is important to note that in section 27A(2C) of the Ordinance, attention of the Appellants to which was drawn by the BA in the cover letter, it is provided that

"all works and investigation specified in an order under this section shall be carried out to such standard acceptable to the Building Authority and in compliance with regulations."

23. Clearly, whatever followed after this letter of 4 September 1997, which was a week prior to the expiry of the time in which the works were required to be completed, the Order was not complied with by the Appellants. The Magistrate's finding that there was no compliance with the order cannot be faulted.

24. Indeed, the investigation and anslysis required of the Appellants by the order were set out in the report of Ove Arup which Mr Choy, as the authorised person, knew when studying the report. The investigation was "to confirm the wall geometry, to assess the soil strength parameters, the ground water conditions and the overall stability of the wall and to check the conditions of the water pipe running along the berm of the wall."

25. In her Statement of Findings, the Magistrate also found that according to the evidence of PW1, an expert witness, what was required in an investigation under the order, contained the following :-

"(i) the geometry, ie, the thickness of the wall;

(ii) ground conditions, ie know what material was behind the wall, the strength of the soil and the ground water level;

(iii) the condition of the water pipes; and

(iv) the surcharge, ie the pressure of the load of the 3-storey building on the wall."

26. The Magistrate also found as follows:-

"In fact Mr Choy conceded that if the order is to be complied with it would be necessary for him to carry out an investigation, analysis and report, from which I take it to mean he does not disagree with the evidence of PW1."

27. She also found that there was no evidence before her that Mr Choy had conducted any investigation on the wall other than making a visual inspection. She found that it was implicit from Mr Choy's evidence that none of steps which he was expected to take as described by PW1 was performed. In the circumstances, there was a failure to comply with the order as found by the Magistrate, and that finding cannot justifiably be disturbed.

28. Mr Yip also argued that at least there was reasonable excuse for the Appellants not to comply with the order, in that they had already engaged Mr Choy as the authorised person, in accordance with the advice given them by the BA. Mr Yip had very fairly directed my attention to R v Chu Kam To and Another [1994]1 HKC 775 to shed light on what should not be treated as reasonable excuse under the Road Traffic (Registration and Licensing of Vehicles) Regulations, where it was held by Penlington JA that the fact that it was difficult to test whether a vehicle was overweight was not a reasonable excuse for driving a overladen vehicle. Although it might be argued that the Appellants had initially complied properly with the order by appointing Mr Choy as the authorised person to carry out the works required by the order, upon their being informed by the BA by the letter of 4 September 1997 that the order had not been complied with and that the BA requested them to instruct the authorised person to comply with the order, not doing anything to accede to the request of the BA, cannot, in the circumstances, be justified.

29. In view of the letter of 4 September 1997, I am of the view that the Appellants should have done the following :

(a) consult with the authorised person Mr Choy as to what they should do; and/or

(b) consult with the BA what they should do; and/or

(c) consult another authorised person.

30. The Appellants had apparently consulted with Mr Choy as to what they should do and they were apparently advised to ignore the order. That was a dangerous thing to do, if I may say so. The Magistrate rightly described that as taking a gamble. A gamble that they might succeed in challenging the validity of the order as advised by the authorised person, or they might be found guilty that they had failed to comply with a lawful order. That was especially so in the light of the warning in the letter of 4 September 1997 that they might be prosecuted or that the required works might be carried out by the BA which would seek reimbursement from them. Without taking any of the steps described in (b) or (c) above, the Appellants had not done anything close to their best in the circumstances; they could and should have done more. I am of the opinion, therefore, that they had not established on the balance of probabilities a reasonable excuse for not complying with the order. Nevertheless, I am sympathetic that they were stuck in the opinion tussle of the professionals in the form of a dogmatic authorised person and a persistent BA.

31. For the above reasons, the appeal against conviction is dismissed.

32. Now I turn to sentence. I was informed by Miss Ko, Counsel for the HKSAR, that this was the first case of this kind before the courts and there was no sentencing guideline for the Magistrate to follow. In the reason for sentence, the Magistrate referred to section 40(1B)(b) for the maximum fine of $50,000 and the imprisonment of one year and the daily fine $5,000 for each day during which the failure to comply with the order had continued. She took one-tenth of the maximum fine as the appropriate sentence to be imposed on each of the nine Appellants. For the daily continuation of the offence, she also took one-tenth of the maximum of the penalty, namely, $500 per day, for a period of 75 days (the time set out in the charges) as the proper penalty. However, what she did was to divide the daily fine of $500 per day for 75 days totaling $37,500 by nine because there were nine defendants before her. As a result, each defendant was sentenced to pay $5,000 for the substantive offence and $4,166.66 for the continuing offence. However, no reason was given by the Magistrate as to why for the substantive offence the fine of $5,000 was not divided by nine to be shared among the nine Appellants.

33. I am of the view that since the Appellants are first offenders, and they must have incurred expenses in engaging the authorised person, taking initial steps to comply with the order, one-tenth of the maximum penalty is proper and appropriate. They were jointly served as co-owners of the land with the order but on the other hand, they were separately charged. While they were separately charged, each should be responsible for his/her own liability for the charge but of course, the compliance with the order would require their co-operation with each other. Another reason for my holding that one-tenth of the penalty is proper and appropriate is that the wall concerned was not a dangerous structure as such but one liable to become dangerous and so the offence was not the most serious of its kind under section 27A of the Buildings Ordinance. Moreover, I consider that since they were jointly served with the order, their failure to comply with the order should be punished together. Therefore while I agree with the Magistrate that the daily fine should be split amongst the Appellants, I differ from her on the fine for the substantive offence. The $5,000 should be an appropriate penalty for the substantive offence and it should similarly be divided amongst the nine Appellants. In the result, each of the Appellants should be fined one-ninth of the sum of $5,000 and $37,500, resulting in a figure of $4,722 for each of the Appellants. The balance of the fine already paid in excess of $4,722, namely, $4,444.66, should be returned to the Appellants. It is to this extent that the appeal against sentence is allowed.