HUI SIN HANG v. CHIEF EXECUTIVE IN COUNCIL

HCAL 99, 102 & 104/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 99 OF 2015

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 102 OF 2015

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_______________

AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 104 OF 2015

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(Heard together)

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D E C I S I O N

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INTRODUCTION

1.  In these 3 applications for leave to apply for judicial review, the applicants seek to challenge the legality of:-

(1)  the Airport Authority Hong Kong (“AAHK”)’s financing arrangement for the proposed three-runway system (“the 3RS”), in particular the proposed Airport Construction Fee (“the ACF”) payable by passengers departing from, or transferring or transiting at or through, the Hong Kong International Airport (“HKIA”); and

(2)  the PRD Region Air Traffic Management Planning and Implementation Plan (Version 2.0) (“PRD Airspace Plan”), in particular the principle of “shared use of airspace” under that plan.

BACKGROUND FACTS

2.  For the purpose of these applications, the following brief background facts relating to the ACF and PRD Airspace Plan should suffice.

(i)    The ACF

3.  HKIA is operated and maintained by AAHK, a statutory body whose functions, powers and duties are governed by the provisions of the Airport Authority Ordinance, Cap 483 (“the Ordinance”).

4.  For the purpose of assessing and planning for HKIA’s long‑term needs, AAHK has been preparing 20-year Master Plans, reviewed and updated every five years.  Since 2000, AAHK has published Master Plan 2020, Master Plan 2025 and Master Plan 2030.

5.  At the time of its commissioning in 1998, HKIA had a single runway.  In 1999, it was expanded into 2 runways.

6.  In Master Plan 2030, which was published on 2 June 2011 for public consultation, AAHK put forward two options for expansion of HKIA’s runway system.  The first involved expanding the existing 2-runway system (“2RS”), and the second involved the construction of a third runway (ie, the 3RS).  According to the assessment of AAHK’s financial consultant (HSBC), both options would involve significant financial investment, with the latter costing more, but delivering double the throughput of the former.

7.  Apparently, the feedback that AAHK received during the public consultation which took place between June and September 2011 indicated a clear majority (73% of the respondents) in favour of the 3RS.  Accordingly, in its submission to the Government on 29 December 2011, AAHK recommended the Government to pursue the 3RS.

8.  On 20 March 2012, the Chief Executive in Council (“the CEIC”) made the following decision (“the March 2012 Decision”), as recorded in a Legislative Council Brief entitled “Hong Kong International Airport Master Plan 2030” prepared by the Transport and Housing Branch dated 20 March 2012:

“At the meeting of the Executive Council on 20 March 2012, the Council ADVISED and the Chief Executive ORDERED that –

(a) approval, in-principle, should be given to AAHK’s recommendation to adopt the option of expanding into a three-runway system as the future development option for HKIA for planning purpose;

(b) AAHK should be asked to proceed with the planning related to the development of the three-runway system, which include specifically the statutory environmental impact assessment (EIA), the associated design details, and the financial arrangements; and

(c)  AAHK should be asked to report to the Government after completion of the planning work at (b) above.  A final decision on whether to proceed with the implementation of the three-runway system will be made when the relevant inputs are available.”

9.  Subsequent to and as a result of the March 2010 Decision, AAHK deliberated on and put together a proposed financing arrangement for the 3RS.  The construction cost of the 3RS was estimated to be around HK$84.5 billion (in 2010 dollars), or HK$141.5 billion (at money-of-the-day prices).  AAHK’s consultant envisaged that there would be a funding shortfall of about HK$102 billion (at money‑of‑the‑day prices) which it was proposed would be met by:-

(1)  retaining all distributable profits earned from 2014/15 onward until the full commissioning of the 3RS in 2023/24 by not declaring any dividend;

(2)  implementing robust approach in maximizing revenue under the “joint contribution” principle; and

(3)  raising funds or borrowing from the market to bridge any funding gap after exhausting (a) and (b) above.

10.  In relation to the “joint contribution” principle referred to in (2) above, AAHK proposed that users of HKIA including passengers, airlines and operators at HKIA should contribute to the project costs.  In so far as passengers were concerned, AAHK proposed the introduction of the ACF at the rate of HK$180 per departing passengers (excluding transit passengers) from 2016/17 to 2030/31.

11.  In January 2015, after completion of the tasks referred to in the March 2012 Decision, AAHK made a further submission to the Government in accordance with paragraph (c) of that decision.

12.  On 17 March 2015, the CEIC made the following decision (“the March 2015 Decision”), as recorded in a Legislative Council Brief entitled “Hong Kong International Airport Three-Runway System” prepared by the Transport and Housing Branch dated 20 March 2015 (“the March 2015 Legco Brief”):

“At the meeting of the Executive Council on 17 March 2015, the Council ADVISED and the Chief Executive ORDERED that –

(a) the need for the three-runway system (3RS) for maintaining Hong Kong’s competitiveness as a global and regional aviation hub, and for catering to our long-term economic and development needs was affirmed; and

(b)  [AAHK] should be invited to actively explore, in consultation with the Government, ways to facilitate the early implementation of the 3RS.”

13.  In relation to the financing arrangement proposed by AAHK, the Government suggested that AAHK should explore options for lowering the ACF with a view to minimizing the burden on passengers (see paragraph 19 of the March 2015 Legco Brief).

14.  In the meantime, AAHK began to implement its financing arrangement for the construction of the 3RS by resolving not to declare any dividend for the year 2014/15 at its board meeting on 26 May 2015.

15.  Pursuant to the Government’s suggestion referred to in paragraph 13 above, AAHK reviewed the charging level of the ACF.  Having consulted stakeholders including home-based carriers and the travel industry and conducted a survey on transfer and transit passengers, in September 2015 AAHK proposed a revised ACF regime with differential charging levels which distinguished:-

(1)  short haul passengers from long haul passengers;

(2)  premium class passengers from economy class passengers; and

(3)  origin/destination (OD) passengers from transfer/transit (TT) passengers.

16.  The revised ACF regime proposed by AAHK is as follows:-

ACF (HK$ per departing passenger)	OD	Premium	Economy
	Long	$180	$160
	Short	$160	$90
	TT	Premium	Economy
	Long	$180	$160
	Short	$160	$70

See Legislative Council Brief entitled “Hong Kong International Airport, Three-Runway System: Airport Construction Fee” prepared by the Transport and Housing Branch dated 29 September 2015.

(ii)   The PRD Airspace Plan

17.  The background of the PRD Airspace Plan, as set out in the March 2015 Legco Brief, is as follows:-

“22. There has been phenomenal growth in the volume of air traffic serving the five airports in the PRD region (namely, Guangzhou Baiyun Airport, Hong Kong International Airport, Macau International Airport, Shenzhen Baoan Airport and Zhuhai Airport). Since 2004, the Civil Aviation Administration of China (CAAC), the Civil Aviation Department (CAD) of Hong Kong and the Civil Aviation Authority of Macao (CAAM) have set up a Tripartite Working Group (TWG) to formulate measures to improve the airspace structure and air traffic control arrangements in the PRD region to optimise the use of airspace and enhance safety. In 2007, the TWG drew up and agreed to the ‘PRD Region Air Traffic Management Planning and Implementation Plan (Version 2.0)’ (the PRD Airspace Plan), which clearly stipulated the short, medium and long term optimization targets and measures to be achieved and implemented before 2020.

23. The ultimate target of the Plan is to achieve joint airspace planning, use of common standards and harmonized flight procedure design for air traffic in the region, thereby ensuring safe and efficient use of the airspace in the PRD region. The Plan has already taken into account the operational need of our 3RS, as well as the planned development of other key airports in the PRD (including three runways in Shenzhen and an eventual five-runway system in Guangzhou). The implementation of the Plan, which was agreed by all parties concerned, is the basis for achieving the target maximum capacity of 102 ATMs[1] per hour under the 3RS operation at HKIA.

24. The TWG has been meeting since 2007 to review progress. Some short-term measures have been implemented, such as the addition of entry points between Hong Kong and the Mainland airspace.”

18.  In a statement made by the Civil Aviation Department (“the CAD”) to media reports on the PRD airspace dated 10 March 2015, the following information relating to the PRD Airspace Plan was given:-

“The Plan, which clearly stipulated the short, medium and long term optimization targets and measures to be achieved and implemented before 2020, has taken into consideration the needs for additional runways, associated flight procedures and airspace design of all the airports in the region, which included the Three Runway System (3RS) at Hong Kong International Airport (HKIA) and its compatibility with the development plan of neighbouring airports. The three sides had also agreed to optimize the use of airspace resources in PRD region through share use of airspace and adoption of common units of measurement in a mutually beneficial manner… Under the principle of shared use of airspace, although the flight procedures of both sides (the Mainland and Hong Kong) will make use of a small portion of each other’s airspace, both sides will utilize different flight attitude layers to facilitate air traffic control. Therefore, the ownership of the concerned airspace still belong to the original air traffic control unit and there is no intention for Hong Kong to expand its airspace up to Guangzhou or manage military flights.”

19.  In relation to the principle of “shared use of airspace”, Mr Cheng Po Keung, Chief Air Traffic Control Officer of the CAD, further explains that it refers to the act of permitting the delineation of airspace lying across boundaries to facilitate the provision of air traffic services (“ATCs”) by another authority, and involved “delegating a portion of airspace under jurisdiction” (see paragraph 20 of his affidavit dated 12 February 2016).  At paragraph 23 of that affidavit, Mr Cheng further states that in order to facilitate ATC, the flight paths of authorities concerned may make use of a small portion of each other’s airspace but both sides will utilize different flight altitude layers, subject to a mutually agreed arrangement.

HCAL 99 OF 2015

20.  In the Amended Form 86 in HCAL 99/2015, the applicant (“Hui”) seeks to challenge:-

(1)  the alleged decision of the CEIC made on 17 March 2015 –

(a)  to approve the 3RS;

(b)  to approve the financing scheme of AAHK in relation to the 3RS;

(2)  the financing arrangement for developing the 3Rs by AAHK on 29 September 2015; and

(3)  the PRD Airspace Plan.

(i)    The financing arrangement

21.  In respect of both (1) and (2) above, Hui’s challenge is based on the argument that AAHK has no power to impose the ACF.  This is because, according to Mr Hectar Pun SC (for Hui) (i) the charging of the ACF violates the “no levy without authority” principle, and/or (ii) the ACF is a form of taxation which has not been approved by the Legislative Council and therefore violates Article 73(3) of the Basic Law, which states as follows:-

“The Legislative Council of the Hong Kong Special Administrative Region shall exercise the following powers and functions:

…

(3) To approve taxation and public expenditure”.

22.  The “no levy without authority” principle is well established, and is to the effect that the Government (or a public body) has no power to impose any charge upon the subject unless the power to charge has been given by the legislature by express words or by necessary implication: see Attorney General v Wilts United Diaries Ltd (1921) 37 TLR 884, at 886 per Atkin LJ and at 885 per Scrutton LJ; McCarthy & Stone (Developments) Ltd v Richmond upon Thames LBC [1992] 2 AC 48, at 70-71 per Lord Lowry; Harness Racing New Zealand v Kotzikas [2005] NZAR 268, at paragraph 93; and PCCW-HKT Telephone Ltd v Secretary for Commerce and Economic Development [2015] 4 HKLRD 415, at paragraphs 31 to 39 per Ng J.

23.  In my view, the simple answer to Hui’s complaint of violation of the “no levy without authority” principle is that the legislature has expressly empowered AAHK to charge the ACF.  For this purpose, the following provisions of the Ordinance are relevant.

24.  The object of the Ordinance, as set out in its long title, is –

“to enable [AAHK] to provide, operate, develop and maintain an airport for civil aviation in the vicinity of Chek Lap Kok and otherwise to define its functions, to make provision for the safe, secure and efficient operation of such airport and for connected purposes.”

25.  Section 5(1)(a) of the Ordinance, relating to the purposes of AAHK, provides as follows:-

“The Authority shall, in accordance with this Ordinance and also in accordance with the objective of maintaining Hong Kong’s status as a centre of international and regional aviation, provide, operate (in accordance with any law in that regard which is for the time being in force), develop and maintain, at and in the vicinity of Chek Lap Kok, an airport for civil aviation.”

26.  Section 7(1) of the Ordinance provides that AAHK shall have power:-

“to do anything which is requisite or expedient for, or is calculated to facilitate, or is conducive or incidental to, the performance of any of its functions”.

27.  Section 7(2)(i) further provides that, without affecting the generality of subsection (1), AAHK may –

“subject to section 34 where applicable[2], determine the amount of charges and fees.”

28.  It is, in my view, clear from the above provisions of the Ordinance and on the facts of the present case that:-

(1)  a principal or substantive function of AAHK is to “develop” HKIA;

(2)  the construction of the 3RS falls within AAHK’s function to develop HKIA;

(3)  AAHK has the power to do anything which is requisite or expedient for the performance of its functions, including the

determination of the amount of charges and fees; and

(4)  the imposition of the ACF is requisite or expedient for the performance by AAHK of its function to develop HKIA, and also falls squarely within AAHK’s power under section 7(2)(i) of the Ordinance.

29.  In this regard, the present case is distinguishable from McCarthy & Stone.  That case concerned the power of a local planning council to levy a charge on developers for giving planning advice in the context of inquiries relating to speculative development or redevelopment proposals.  By virtue of section 111(1) of the Local Government Act 1972, the local planning council has power to “do any thing … which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions”. It was held by the House of Lords that the giving of pre-application planning advice facilitated or was conducive or incidental to the council’s planning functions but was not itself a function of the council, and thus the council had no power to impose the charge.  In the words of Lord Lowry (with whom the other members of the House of Lords agreed), “To charge for the exercise of that power is, at best, incidental to the incidental and not incidental to the discharge of the functions” (at 75A-B). On the other hand, the present case concerns the imposition of a charge to enable or facilitate AAHK to develop HKIA which, as earlier mentioned, is a principal function of AAHK.

30.  The above conclusion that AAHK has express power under the Ordinance to impose the ACF also answers Hui’s complaint of violation of Article 73(3) of the Basic Law, even if the ACF can be regarded as a form of tax.

31.  In all, I am of the view that Hui’s intended judicial review of AAHK’s financing arrangement for developing the 3RS is not reasonably arguable.

32.  In passing, I should mention that Mr Benjamin Yu SC (for the CEIC) has raised a number of other objections to Hui’s intended judicial review of AAHK’s financing arrangement for developing the 3RS, namely:-

(1)  no “decision” was made by the CEIC on 17 March 2015, when the CEIC merely affirmed the need for the 3RS;

(2)  the approval-in-principle given by the CEIC on the 3RS on 20 March 2012 was for the purpose of planning for associated public works; in any event even if the March 2012 Decision had been a decision to approve the construction of the 3RS, any challenge against it is out of time; and

(3)  even if the there are reasonable grounds to challenge AAHK’s financing arrangement for developing the 3RS, there is no basis whatsoever for impugning the decision to develop the 3RS.

33.  Mr Pun has sought to meet some of these objections by proposing some amendments to the Amended Form 86.  Those proposed amendments cannot, however, overcome the fundamental point that AAHK has express power under the Ordinance to impose the ACF.  For this reason, I do not consider it necessary to deal with the aforesaid objections raised by Mr Yu on behalf of CEIC.  Neither would I grant leave to Hui to re-amend the Form 86.

(ii)   PRD Airspace Plan

34.  Mr Pun argues that under the principle of shared use of airspace pursuant to the PRD Airspace Plan, the Civil Aviation Administration of China (“CAAC”) will be responsible for the provision of air traffic services in a small portion of airspace within the flight information region of the HKSAR. This, it is said, would be inconsistent with Article 130 of the Basic Law, which provides as follows:-

“The Hong Kong Special Administrative Region shall be responsible on its own for matters of routine business and technical management of civil aviation, including the management of airports, the provision of air traffic services within the flight information region of the Hong Kong Special Administrative Region, and the discharge of other responsibilities allocated to it under the regional air navigation procedures of the International Civil Aviation Organization.”

35.  In support of his argument, Mr Pun relies on, amongst other matters, paragraph 20 of the affidavit of Mr Cheng which refers to “delegating a portion of airspace under own jurisdiction” in implementing the principle of the shared use of airspace, and also the following explanation of the principle of “shared use of airspace” appearing at paragraph 2.1.1 of Chapter 2 of Annex 11 to the Chicago Convention on International Civil Aviation, 13^th Edition (July 2001) (referred to by Mr Cheng in his affidavit):-

“Contracting States shall determine, in accordance with the provisions of this Annex and for the territories over which they have jurisdiction, those portions of the airspace and those aerodromes where air traffic services will be provided. They shall thereafter arrange for such services to be established and provided in accordance with the provisions of this Annex, except that, by mutual agreement, a State may delegate to another State the responsibility for establishing and providing air traffic services in flight information regions, control areas or control zones extending over the territories of the former.”

36.  As I understand from the public statement made by the CAD dated 10 March 2015, under the principle of shared use of airspace, the CAD would permit the CAAC to make use of a small portion of the HKSAR’s airspace to facilitate their air traffic control, and vice versa.  The use by the CAAC, pursuant to permission granted by the CAD, of a small portion of the HKSAR’s airspace does not mean, in my view, that the HKSAR is no longer responsible on its own to manage the provision of air traffic services within the flight information region of the HKSAR.  As mentioned in that statement, the ownership of the concerned airspace still belongs to the original civil aviation authority.

37.  In respect of the above quoted paragraph in Chapter 2 of Annex 11 to the Chicago Convention, it is significant that, immediately after that paragraph, the following note appears:-

“If one State delegates to another State the responsibility for the provision of air traffic services over its territory, it does so without derogation of its national sovereignty. Similarly, the providing State’s responsibility is limited to technical and operational considerations and does not extend beyond those pertaining to the safety and expedition of aircraft using the concerned airspace. Furthermore, the providing State in providing air traffic services within the territory of the delegating State will do so in accordance with the requirements of the latter which is expected to establish such facilities and services for the use of the providing State as are jointly agreed to be necessary. It is further expected that the delegating State would not withdraw or modify such facilities and services without prior consultation with the providing State. Both the delegating and providing States may terminate the agreement between them at any time.”

38.  The use of the word “delegate” (or different forms of that word) in the Chapter 2 of Annex 11 to the Chicago Convention, and also in Mr Cheng’s affidavit, does not denote, to my understanding, a complete relinquishment of control or responsibility by the original civil aviation authority over the “delegated” airspace concerned.

39.  In all, the complaint that implementation of the principle of shared use of airspace under PRD Airspace Plan would breach Article 130 of the Basic Law is, in my view, not reasonably arguable.

40.  In passing, I should mention that Mr Yu has raised two other subsidiary objections to Hui’s challenge against the PRD Airspace Plan, namely:-

(1)  there has been undue delay in this challenge; and

(2)  the CEIC made no decision in respect of the PRD Airspace Plan.

41.  In view of the conclusion that I have reached on the substance of this challenge, it is not necessary for me to deal with the subsidiary objections raised on behalf of the CEIC.

HCAL 102 OF 2015

42.  Before I deal substantively with this application for leave to apply for judicial review, I shall first dispose of an application made by the applicant (“Wong”) orally at the hearing on 1 March 2016 to adjourn the present leave application for one month on the ground that he is currently appealing against the Director of Legal Aid’s refusal to provide legal aid to him in relation to the present application.  Wong also informed the court that his legal aid appeal was pending the provision of further information or submissions by the Director of Legal Aid.  Both Mr Yu for the CEIC and Mr Russell Coleman SC for AAHK objected to the application for adjournment on (inter alia) the ground that the leave application was wholly unarguable.

43.  As I informed Wong at the hearing, in view of the fact that one of the grounds of objection to his adjournment application related to the merits (or lack of merits) of his leave application, I would deal with the adjournment application together the leave application in my decision.  I also invited Wong to make submissions in support of his leave application, and expressly told him to do so as if the adjournment application had been refused.  In the event, Wong did not make any substantive submissions in support of his leave application, but repeated his grounds for seeking an adjournment of the hearing.

44.  I now turn to the substance of the leave application.  In the Form 86, Wong challenges:-

(1)  the decision of AAHK to expand HKIA by the construction of the 3RS (at the estimated costs of HK$141 billion); and

(2)  the decision of the CEIC to “direct” the construction of the 3RS.

45.  The particular grounds relied upon by Wong are as follows:-

(1)  AAHK’s decision to construct the 3RS would lead to substantial borrowings by AAHK, contrary to the requirement imposed by section 6(1) of the Ordinance that it shall “conduct its business according to prudent commercial principles and shall, as far as practicable, ensure that, taking one year with another, its revenue is at least sufficient to meet its expenditure”.

(2)  The Government’s intention to waive, or not to receive, dividends from AAHK for over 10 years means that the cost of construction of the 3RS has become, in substance, an unauthorized public expenditure in violation of Article 64 of the Basic Law, which provides that the Government shall, inter alia “obtain approval from the [Legislative] Council for taxation and public expenditure”.

(3)  When the Government applied to the LegCo Finance Committee for funding for the Provisional Airport Authority on 14 July 1995, the Government disclosed a “Financial Support Agreement” which provided that the Government would receive dividends from AAHK no later than 30 September 2001.   The LegCo Finance Committee’s legitimate expectation that the Government would receive dividend income from AAHK would be defeated by AAHK’s proposal not to declare dividends for over 10 years.

(4)  The financial burden on the Government arising from the construction of the 3RS would be in breach of the “Memorandum of Understanding concerning the Construction of the New Airport in Hong Kong and Related Questions” (“the Airport MOU”) between the PRC and British Governments dated 3 September 1991.

46.  In respect of (1), the evidence of Lo Chi Chung William, Executive Director, Finance of AAHK, shows that:-

(1)  In the financial planning for the construction of the 3RS, AAHK assessed its borrowing capacity with the advice of its financial consultant (HSBC) to ensure that reasonable investment grade credit rating could probably be maintained.  HSBC considered that the proposed incremental debt of HK$69 billion would still comply with a reasonable interpretation of the principles of financial prudence and management standards set out in the Ordinance.

(2)  In exercising its discretion and judgment, AAHK took into account its commercial and financial position and assessed that its proposal to fund the construction of the 3RS by a combination of sources, including the retention of profits, imposition of the ACF, and external borrowings, was technically feasible and in compliance with commercial prudence.

47.  As submitted by Mr Coleman, which I accept, whether some plan or cause of action is in compliance with “prudent commercial principles”, particularly in the specialized context of airport operation and development, is a matter which the court ought to accord a wide discretionary area of judgment to AAHK.  This is not to say that the court has no power to intervene in such matter, but it must be in wholly exceptional circumstances that the court will feel able to override the commercial decision of AAHK who has all along been advised by professional financial consultant in relation to the financing arrangement for the 3RS.

48.  In relation to AAHK’s obligation under section 6(1) of the Ordinance to ensure that, taking one year with another, its revenue is at least sufficient to meet its expenditure, such obligation is not absolute, but only “as far as practicable”.  The construction of the 3RS is a one-off, large scale capital intensive project.  It would not be reasonable to construe section 6(1) of the Ordinance to mean that even for such a project, AAHK cannot resort to external borrowings but can only look to its operating revenue to finance the project and moreover must ensure that its operating revenue is sufficient to meet the capital expenditure required.

49.  Wong has, in my view, wholly failed to raise any reasonably arguable case that AAHK would breach the commercial prudence requirement imposed by section 6(1) of the Ordinance in relation to its financing arrangement for the 3RS.

50.  In respect of (2), it is plainly incorrect to suggest that the Government intends to waive, nor not to receive, dividends from AAHK for over 10 years.  Whether to declare any dividend is a decision to be made by the board of AAHK, not the Government. Although the Financial Secretary may, in specified circumstances, direct AAHK to declare and pay dividend under section 26 of the Ordinance, it is not suggested that the Financial Secretary has exercised such power.  In any event, I am unable to see how AAHK’s proposal not to distribute any dividends to the Government from 2014/15 until the full commissioning of the 3RS in 2023/24 can turn the cost of construction of the 3RS into a “public expenditure” such that it has to be authorized by the Legislative Council under Article 64 of the Basic Law.

51.   In respect of (3), it is clear, from the Legislative Council Brief (FCR(95-96)45) entitled “Capital Investment Fund, Head 969‑Provisional Airport Authority, New Head ‘Airport Authority’” prepared by the Finance Branch dated July 1995 that the Financial Support Agreement was an agreement to be entered into between the Hong Kong Government and the Airport Authority in connection with the “Airport Project” which was defined to mean HKIA with the 1^st runway, and has no relevance to the proposed 3RS.  In any event, clause 5.1 of that agreement states that “[i]n accordance with the financial projection set out in Part II of the Second Schedule the Authority confirms that subject to the assumptions upon which that financial projection is based remaining valid it is the Authority’s intention that its finances are to be planned with the objective of paying a dividend to the Government no later than 30^th September 2001, and retiring all Project Borrowings from its accounts by 2001.”  In my view, that clause cannot reasonably be read as meaning that AAHK would be committed to pay dividends to the Government as from 30 September 2001, whatever the circumstances.

52.  Lastly, in respect of (4), it is also clear that the Airport MOU entered into between the PRC and British Governments was with reference to the “Airport Core Programme” which was defined to mean HKIA with the 1^st runway, and it has no relevance to the proposed 3RS.

53.  In all, none of the proposed grounds of challenge raised in the Form 86 in this application is reasonably arguable.  There clearly being no merit in the application, I refuse to grant the adjournment of the hearing of the present leave application sought by Wong.

HCAL 104 OF 2015

54.  The applicant (“Koo”) was absent from the hearing of the leave application on 1 March 2016.  In his Form 86, he seeks to challenge the same decisions as in HCAL 102/2015.  His grounds of challenge are also similar to those raised by Wong, namely:-

(1) AAHK fails to act in accordance with “prudent commercial principles”;

(2) the proposed financing arrangement for the 3RS is inconsistent with the “Financial Support Agreement”;

(3) breach of the Airport MOU; and

(4) failure to meet the legitimate expectation that the Government would receive dividend income from AAHK as from 2001.

55.  I have already dealt with these grounds of challenge above and shall not repeat my analysis here. As in relation to HCAL 102/2015, none of the proposed grounds of challenge raised by Koo in his Form 86 is reasonably arguable.

DISPOSITION

56.  For the forgoing reasons, I refuse to grant leave to the applicants to apply for judicial review in these three applications, and dismiss the same.  I also make an order nisi that there be no order as to costs.

57.  Lastly, it remains for me to thank counsel for their helpful assistance to the court.