THE INCORPORATED OWNERS OF WAH KAI INDUSTRIAL CENTRE, TEXACO ROAD AND OTHERS v. SECRETARY FOR JUSTICE AND OTHERS

HCAL120/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 120 OF 1999

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J U D G M E N T

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THE APPLICATION

1. This is an application for judicial review by the incorporated owners and some of the individual owners of the Wah Kai Industrial Centre, Texaco Road ("the Buildings") to quash the decision of the Deputy Director of Lands ("the Director") made on 30 June 1999 to resume the Buildings under the provisions of the Railway Ordinance ("the Ordinance"), Cap.519.

THE RAILWAY DEVELOPMENT STRATEGY

2. In December 1994, the Transport Branch of the Hong Kong Government published the Railway Development Strategy ("the Strategy") which provided a framework for planning the future expansion of the Hong Kong railway system. Different railway lines were planned for various different parts of Hong Kong. These include the Western Corridor which was proposed for completion by 2001. This would provide a new arterial link from the urban area of Hong Kong to the border. The whole railway would run from the border through Yuen Long, Kam Tin, Tsuen Wan, Kwai Chung to West Kowloon. This would accommodate three services : a long distance freight service, a cross-border passenger service and a sub-regional passenger link between the North West New Territories and the urban area.

3. The Strategy was based on the findings of the Government commissioned Railway Development Study ("RDS") in late 1991.

THE RAILWAY ORDINANCE

4. On 11 July 1997, the Ordinance came into effect. Its long title reads "An Ordinance to provide for the resumption of land, creation of easements or rights and the exercise of other powers by the Government for the construction of railways and to provide for compensation for losses caused by the exercise of the powers."

Section 4 : The Scheme

5. Section 4 provides, inter alia, that :

" If the Secretary for Transport proposes that a railway is to be constructed ... in a way which the Secretary considers is not minor, he is to prepare or cause to be prepared a scheme for the railway that :

(a) sets out the general nature and effects of the railway;

(b) includes a plan delineating the boundaries of the scheme showing

(i) the land that the Government may resume under this Ordinance for or incidental to the railway ..."

Section 7 : Amendments

6. Section 7 provides that the Secretary for Transport may amend the scheme. The amended scheme is subject to the same requirements under the Ordinance.

Section 10 : Objection

7. Section 10 provides that a person may, not later than 60 days after the publication of the relevant notice under section 6, object to the scheme.

Section 11 : Authorisation of the Scheme

8. Section 11 provides that the Secretary shall, not later than nine months after the expiration of the period for lodging objection, submit to the Chief Executive in Council for consideration the scheme and any objections lodged and not withdrawn. Under section 11(4), the Chief Executive in Council may either authorise or decline to authorise the scheme.

Section 12 : Reconsidering the Scheme

9. The Chief Executive in Council may reconsider the scheme and authorize it. He may also amend a scheme already considered and authorize the amended scheme.

Section 16 : Resumption Order

10. Section 16 provides that the Chief Executive may order that any land proposed to be resumed in a scheme that has been authorized under section 11 be resumed for the purposes of or incidental to the scheme.

HISTORY OF THE MATTER

The Scheme

11. On 3 October 1997, the Secretary for Transport gazetted under the Ordinance the scheme on the Urban and Western Sections of the Kowloon-Canton Railway Corporation ("KCRC") West Rail (Phase 1) ("the Scheme"). Phase 1 provides about 30.5 km long electrified double track railway system connecting West Kowloon near Yan Chau Street with Tuen Mun in North West New Territories, via Mei Foo, Tsuen Wan, Kam Tin, Yuen Long and Tin Shui Wai. There are nine passenger stations for the provision of domestic passenger service. Phase 1 was to be gazetted in two stages : the first stage was gazetted on 25 July 1997, the second stage which concerns the urban and western sections is gazetted by the notice of 3rd October 1997. This section involves the construction of, among other things, an approximately 1.3 km long cut and cover tunnel system and 2.8 km long underground tunnel system between the proposed West Rail Stations at Mei Foo and Tsuen Wan West. The resumption plan (GIRE-1-2002) in the Scheme showed that the Buildings and the adjacent Paul Y Industrial Building, fell within the land proposed to be resumed. The current timetable for the completion of the West Rail is 2003.

The objection

12. The 1st applicant lodged an objection dated 2 December 1997 after the publication of the Scheme. Among the objections raised by the 1st applicant is a suggestion that the tunnel system between Mei Foo and the south end of Tai Tam Tunnel section should be realigned such that the section with Tsuen Wan district could be constructed along the seafront of the Riviera Garden without passing through the Buildings. In its supplemental objection dated 15 April 1998, the 1st applicant was seeking a longer period of notice of resumption, more compensation, home purchase allowance, ex-gratia payments and provisional payments.

13. Meetings were organized by the Transport Bureau between the 1st applicant and its consultant and representatives of KCRC, the Lands Department, Highways Department, Planning Department and the Tsuen Wan District Office. KCRC explained at one of the meetings on 2 January 1998 that the proposed alignment was designed after many studies and that the constraints included the gradient and curvature that a train unit could tolerate, location of the proposed Tsuen Wan West Station and the rock anchor foundations of the Buildings. The matter was recorded in the letter dated 6 March 1998 from the Transport Bureau to the 1st applicant. The letter further stated that it was not feasible to shift the alignment towards Tsuen Wan Bypass, due to existing foundation of the elevated structure.

14. The Transport Bureau also arranged for a hearing by a panel of independent persons. The panel's terms of reference were to consider whether the Government had properly reviewed the Scheme with regard to objections. The panel expressed the view that the Government, together with KCRC, had thoroughly reviewed the Scheme boundaries and alignment, having regard to objectors' concerns and noted that Government and KCRC had made considerable efforts in revising the original Scheme after listening to objectors' views.

15. The relevant part of the panel's report was supplied by the Transport Bureau to the 1st applicant for comment. The comment was to be forwarded to the Chief Executive in Council. The 1st applicant did not make any comment. The applicant also wrote to the Chief Executive on the period of notice of resumption and compensation.

Authorisation of the Scheme

16. On 15 September 1998, the Chief Executive in Council, having considered the 1st applicant's objection, authorized the Scheme under section 11(4)(a) of the Ordinance. The authorization was gazetted on 25 September 1998.

Resumption Order

17. On 3 October 1998, the Chief Executive delegated his power to the Deputy Director of Lands to order resumption of any land proposed to be resumed in a railway scheme under section 16 of the Ordinance. On 11 June 1999, the Deputy Director of Lands made an order directing that the Buildings be resumed.

THE CHALLENGE

18. On 29 October 1999, the applicants lodged the present proceedings. The challenge to the resumption order is now based on three grounds :

1. The resumption was no longer required for railway purpose when the resumption order was made.

2. In deciding on the alignment for the Scheme, an irrelevant matter, namely benefit from redevelopment of the resumed land, had been taken into consideration.

3. Because of the change to the method in constructing the tunnels, the applicants should be given the opportunity of making representations prior to the resumption.

19. I will now consider each of these grounds in turn.

RESUMPTION NO LONGER NECESSARY

The two alignments

20. The tunnel system under the Scheme was the result of a series of studies commissioned by KCRC. The Government also appointed Mouchel Asia Limited ("Mouchel") as its independent vetting consultant to assess the proposals submitted by KCRC.

21. Without going into details, two alignments were considered : first, the Easterly Alignment which passed under the Buildings and required the demolition of the Buildings and second, the Westerly Alignment. These two alignments were compared in terms of impact on existing structures, traffic congestion, noise and disruption caused by construction, costs and length of construction programme. The Easterly Alignment was chosen. The reason why the Buildings were required to be demolished was because it was intended to construct a single bore tunnel with twin tracks under the Buildings. The construction method would be by drill and blasting. This may affect the ground anchors of the Buildings.

Report of 22 October 1997

22. Notwithstanding the gazette of the Scheme, KCRC commissioned a report (Report by Atkins China Ltd ("Atkins") of 22 October 1997) to see if the West Rail could be constructed without demolishing the Buildings. This is referred to as the Initial Report. It was commissioned because KCRC was concerned with the problems of the clearance of the Buildings which may delay the West Rail project. The Buildings have two separate blocks, namely Blocks A and B, with about 800 units of factories. Atkins was the consultant appointed for the project. This report, which proceeded on the basis on the single bore tunnel, considered three options :

1. realignment of the tunnel to a safe distance from the Buildings and anchorage zone, i.e. to a distance which would avoid damage;

2. reprovisioning of the anchors/anchorage zone; and

3. strengthening of the Buildings to overcome the loss of anchors.

23. The Initial Report noted that two problems affected all three options, namely, the current condition of the Buildings and the effect of blasting. It stated that the only option that may solve the problem is to move the tunnel to an alignment to the side. However "this option is not considered to be viable without considerable further study and even then, it may not provide a workable solution". KCRC decided not to carry out further studies to find out whether the recommended option was indeed viable.

24. The Initial Report concluded that whatever option is adopted, retention of the Buildings presents a severe problem of co-operation with the owners : they have no incentive save to pass the burden to KCRC. The owners are at present, not maintaining the Buildings and as a result of which it presents a real safety risk to users.

Report of 8 March 1999

25. The contract for the construction of the tunnel system is a design and build contract. The contractor that was awarded with the contract commissioned another report by Atkins on the method of construction of the tunnel. The report is dated 8 March 1999 and is referred to as the Subsequent Report.

26. Instead of constructing a single tunnel with twin tracks beneath the Buildings, the Subsequent Report recommended the construction of two smaller tunnels beneath the Buildings. The first tunnel was to be constructed under Block A before its demolition. The purpose, as gleaned by the Subsequent Report, is to speed up the construction programme. The construction would be by a tunnel boring machine ("TBM") on a revised alignment below the deepest anchor of the structures. The second tunnel would also be constructed by the TBM while the cross passages between the two tunnels would be excavated by drill and blast method.

27. The Subsequent Report stated that it is still the intention that the Buildings will have been demolished prior to the second tunnel. It concluded that the driving of a single bore tunnel beneath the anchorage zone should not result in movements of a magnitude to cause structural distress to Block A. The differential settlement (tilt) for Block A due to the excavation of the first tunnel is well below the generally acceptable limit. However, the sum of the effects of twin tunnel construction and of cross passage construction would result in unacceptable conditions for Block B foundations.

Dr Mellors' reports

28. The applicants have instructed Dr Mellors to review the reports prepared by KCRC and its contractor. He was of the view that the lowering of the tunnel alignment and the construction of two smaller tunnels have provided the means of ensuring that both tunnels will not destroy the lower part of any of the anchors to the Buildings. This arrangement, together with the use of TBM for excavation of the two tunnels rather than drill and blast "have obviated those risks identified which gave rise to the need for demolition of the (Buildings) and hence the order for resumption".

The applicants' argument

29. The applicants' argument proceeded on the basis that as the Buildings or at least Block B, are not required to be demolished, the order for resumption was based on a factual mistake. The applicants argued that the order for resumption is not automatic. Under section 16 of the Ordinance, the relevant time to consider the lawfulness of the resumption is the date of the resumption. Before the Chief Executive (or his delegate) resumed the land, he must be satisfied that the land is to be resumed "for the purposes of or incidental to the scheme". This approach is supported by Silver Mountain Investment Limited v. AG of Hong Kong [1994] 1 WLR 925 at 936 in which the Privy Council held that :

"When the Governor in Council exercises a discretion under section 3 of the Crown Lands Resumption Ordinance, the merits of the scheme plan (under section 13 of the Land Development Corporation Ordinance) are no longer in issue and the only matter which the Governor in Council has to consider is whether resumption of land within the area of the scheme plan is required in order to enable the plan to be carried out."

Mistake of facts in judicial review

30. The applicants relied on Wade on Administrative Law 7th Ed., pages 316 to 317 which stated that "Mere factual mistake has become a ground of judicial review, described as 'misunderstanding or ignorance of an established and relevant fact' or acting 'upon an incorrect basis of fact'."

31. Mr Tang SC, Counsel for the applicants submitted that although the powers of the Directors of Land are wide, he has no power to say black is white. The case of Webb v. Minister of Housing and Local Government [1965] 1 WLR 755 was relied upon as an illustration. In that case the authority had proposed compulsorily to acquire a large piece of land for a paved accessway which was not required for the purpose of the Coast Protection Act 1949. The court held that the order was made ultra virus and was quashed.

32. Simplex G.E. (Holdings) & another v. Secretary of State for the Environment and the City and District of St. Albans District Council Court of Appeal Civil Division, 6 May 1988, is an example where an authority had proceeded on mistaken facts in that the Minister had wrongly thought that a piece of land to be covered by a town planning plan is to be regarded as a green belt. The Court of Appeal quashed the decision on the basis that the factual error had been taken into account in reaching the decision which is not "insubstantial or insignificant".

33. Mr Yu questioned the correctness of the Simplex decision. In R. v. Independent Television Commission, ex p. TSW Broadcasting Ltd [1996] JR 185 Lord Templeman at p.192 stated that :

"Judicial review does not issue merely because a decision maker has made a mistake and it is not permissible to probe the advice received by the decision maker or to require particulars or administer interrogatories or, .... to cross-examine, in order to discover the existence of a mistake by the decision maker or the advisers of the decision makers. An applicant for judicial review must show more than a mistake on the part of the decision maker or his advisers. Where a decision is made in good faith following a proper procedure and as a result of conscientious consideration, an applicant for judicial review is not entitled to relief save on the grounds established by Lord Greene M.R. in Associated Provincial Picturehouses Limited v Wednesbury Corporation [1948] 1 K.B. 223, 229 :" (emphasis added)

Mr Yu submitted that Simplex is a case where it was "common ground" that the Minister had made an error (see p.14). Webb is a case where the purpose of the resumption was clearly ultra virus. The enquiry and the report expressly concluded that the compulsory acquisition was not necessary for the purposes of the scheme (see p.767f, 778a to f, 778h to 779a). In Nguyen Ho v. Director of Immigration [1991] 1 HKLR 575 at p.583a to d, Cons V-P stated that the court would only act where the decision-maker was "plainly wrong".

The proper approach

34. The starting point is that the jurisdiction exercised by the court in judicial review is a supervisory, as opposed to appellate jurisdiction and the court should not substitute its own view on the merits. However, I do not think when the courts refer to errors of facts, they are necessarily usurping the roles of the decision-makers. As Lord Wilberforce said in Secretary of State for Education and Science v. Tameside MBC [1977] AC 1014 at 1047 :

"If a judgment requires, before it can be made, the existence of some facts, then, although the evaluation of those facts is for the Secretary of State alone, the court must inquire whether those facts exist, and have been taken into account, whether the judgment has been upon a proper self-direction as to those facts, whether the judgment has not been made upon other facts which ought not to have been taken into account. If those requirements are not met, then the exercise of judgment, however bona fide it may be, becomes capable of challenge."

He further approved a remark by Lord Denning that the court could intervene if a Minister "plainly misdirects himself in fact or in law".

35. In my view, the proper approach on this topic is stated in de Smith on Judicial Review of Administrative Action 5th Ed. at para.5-094 :

" In general it is right that courts do leave the assessment of fact to bodies which are primarily suited to gathering and assessing the evidence. Review must not become appeal. On the other hand it should be presumed that Parliament intended inferior bodies rationally to relate the evidence and their reasoning to the decision with which they are charged with making. The taking into account of a mistaken fact can just as easily be absorbed into a traditional legal ground of review by referring to the taking into account of an irrelevant consideration, or the failure to provide reasons that are adequate or intelligible, or the failure to base the decision upon any evidence. In this limited context material error of fact has always been a recognised ground for judicial intervention."

Overview

36. To deal with this issue, it is necessary to take an overview of the matter. What is clear from the arguments is that the applicants are not contending that the change in methodology of the construction of the tunnel system constitutes an amendment to the authorized Scheme which would require further gazettal and allowing objections to take place as required under section 7.

37. In this case, a tunnel system has to be constructed underneath the Buildings which are twenty years old and have multiple occupancy. This is a major task. Resumption is required because the Buildings have to be demolished. Demolition is required because the method of construction, namely the drill and blast method of the tunnel may affect the anchors of the Buildings. The railway line cannot be constructed at too deep a level because this may affect the construction of the station. This is the situation before the new method of construction was considered in the Subsequent Report. Under the new method, because of a number of changes : the height of the first new tunnel will be shorter, the level of the alignment of this tunnel will also be lower (but still within the permissible level) and by reason of the use of the TBM, the anchors of Block A will not be affected by the construction.

38. The question to be asked is whether the Subsequent Report goes so far as to suggest that demolition is not required, and hence the need for resumption is also not required. The answers to these two questions must be "no". As apparent from the Subsequent Report, its purpose is not to ascertain whether trains can run in the two tunnels under the Buildings with the two blocks of building intact. The purpose is merely to deal with a method of construction of one of the tunnels before one of the blocks is demolished. In fact, the Subsequent Report proceeded on the basis that the Buildings will be demolished in due course. This is understandable in view of the conclusions reached in the Initial Report that the retention of the Buildings present a severe problem in terms of real safety risks to users. Because the Subsequent Report proceeded on this basis, it naturally had not dealt with the risks that may be involved if the Buildings are to be retained. This being the case, what is said in the Subsequent Report cannot be treated as a fundamental departure from the requirement of demolishing the Buildings.

Mr Courtier

39. Mr Courtier who is the author of the Initial Report and who had studied the Subsequent Report, is of the view that the effect of having two tunnels underneath the Buildings would clearly aggravate the stress of the anchors and increase the indeterminable risks which had been identified. Risks are indeterminable because in the absence of detailed or accurate stressing records, it is difficult to determine the exact "influence zone of the anchors" in the areas around which the ends of the anchors were affixed to the rocks beneath the Buildings. While the new method may avoid direct conflict with the ends of the anchors, it is nonetheless very difficult to determine whether the zones of influence of the tunnels will affect the influence zone of the anchors. It would be impossible for any person to say with any certainty that with either of the tunnels beneath the Buildings, there would be no disturbance whatsoever to the anchors, hence changes in the ground conditions on long term basis. He emphasized that unlike other elements of the Building structures, the risks associated with disturbing these anchors could not be pre-evaluated before the commencement of the tunnelling works. It can only be observed after the works have commenced. Hence any demolition or remedial or rectification works could only be undertaken when a problem arose. If any unforeseen behaviour of the rock mass occurred, it might then be necessary for the Buildings to be immediately cleared and demolished or if possible, recertified.

40. During the construction of the first tunnel, if the TBM is unable to function, then the drill and blast method will have to be used again. The problem concerning the anchors will still remain. The Subsequent Report has clearly recognised the problems concerning the construction of the second tunnel. One would have thought that, as a matter of common sense, the same consequences referred to by Mr Courtier will apply if problems are encountered during the excavation of either the first or second tunnel.

41. Further Dr Mellors himself does not accept that the new method will not affect the anchors. He was of the view that the assertion in the Subsequent Report that the excavation of the first tunnel will not unduly affect the ground anchors, and that their safety factors are acceptable is something that is unproven and unsubstantiated. This being the case, how can the applicants now assert that the need for demolition of the Buildings is no longer necessary?

42. Dr Mellors also stated that the assertion in the subsequent report that the safety factors of the anchors after the first tunnel cannot justify completion of the second tunnel and cross passages to be unproven and unsubstantiated. He also criticized the need to use the drill and blast method for the excavation of the cross passages between the two tunnels. It is clear that Dr Mellors did not carry out an independent study of the safety factors involved in the construction of the two tunnels. His task was merely to comment on the inadequacies of the technical studies conducted by Atkins. The burden of proof in establishing that the demolition of the Building is not required clearly lies with the applicants. What Dr Mellors said falls short of fulfilling this task.

43. As Mr Courtier stated "the experienced engineer would know by inspection that conditions with two tunnels could not be better than with one". Dr Mellors acknowledged this in his comment. Mr Courtier's view is that to retain the Buildings, with their multiple occupancies or, for that matter, even a single occupancy, with such significant risks and uncertainties as to its safety, one is, essentially, tempting fate. I agree with this view.

Mr Corrigall

44. On the issue of the change in tunnelling methods, Mr Corrigall, the Deputy Director of Lands has stated on affidavit that in October 1998 Mr Harding, the Assistant Director of the Lands Department informed him the proposed change in the tunnelling method suggested by KCRC's contractor. He was aware at that time that KCRC had been exploring the possibility to avoid demolishing these Buildings. He was subsequently told by Mr Harding that KCRC had informed Government on the basis of their consultants' advice that the proposed change in tunnelling method did not remove the need to demolish the Buildings because the risks of leaving the Buildings remaining were unacceptable.

45. Mr Corrigall stated that in view of KCRC's position that resumption was still required, the possibility of avoiding resumption was no longer an issue and the change of tunnelling method was no longer a matter of concern by the time he received the papers requesting resumption in June 1999. The resumption paper referred to the authorized Scheme in which the Buildings were included for land resumption to make way for the construction of the railway alignment by way of an underground tunnel through the property. He further stated that revision of the railway alignment is confirmed to be not feasible.

46. In my view, nothing said in the Subsequent Report changed the position at all. It simply has not been demonstrated that when the decision to resume the land was made in June 1999, the Deputy Director of Lands had proceeded on facts which are plainly mistaken.

Inadmissible evidence

47. Mr Yu had argued that the reports of Dr Mellors, which was admitted de bene esse, should not be admitted as evidence because they do not fulfill the conditions imposed in R. v. Secretary of State for the Environment, Ex.p. Powis [1981] 1 WLR 584 at p.595G and applied in Hong Kong in Nguyen Ho. Fresh evidence, i.e. evidence not available to the decision-maker is admissible for the following purposes only :

1. to show what material was before the decision-maker;

2. where the jurisdiction of the decision-maker depends on a question of fact or where the question is whether essential procedural requirements were observed, the court may receive and consider additional evidence to determine the jurisdictional fact or procedural error; and

3. where the proceedings are tainted by misconduct on the part of the decision-maker or the parties before it.

It is no longer necessary for me to rule on this matter now in view of my decision on this point.

Wednesbury unreasonable

48. The applicants also relied on the fact that the decision to resume the Buildings was Wednesbury unreasonable. Unless the applicants can show that the need for resumption no longer exists, then reliance on Wednesbury unreasonableness cannot get off the ground.

Discovery

49. In the course of the hearing, a number of new affidavits were filed. The parties agreed that in order to ensure that the hearings will proceed without delay, the new evidence would be admitted on a de bene esse basis. The same applies to the proposed amendment by the applicants on their application to reflect the grounds they now rely upon. This is a sensible approach.

50. As a result of the filing of the affidavit of Mr Corrigall, the applicants applied for discovery of materials provided by KCRC to Mr Harding on the change in the tunnelling methods. Discovery was said to be required in order to determine whether the Deputy Director had asked himself the right question and take reasonable steps to acquaint himself with the relevant information in order to enable him to answer it correctly. Further the discovery was required to see if there is no evidence to support the decision, or the evidence is inconsistent with and contradictory to the determination or that the true and only reasonable conclusion contradicts the determination. The applicant referred to O'Reilly v. Mackman [1983] 2 AC 237 in which the House of Lord referred to the availability of discovery in judicial review proceedings and R. v. Lancashire County Council Ex. p. Huddleston [1986] 2 All ER 941 in which the Court of Appeal said that the decision making process is one "which falls to be conducted with all the cards face upwards on the table" and also Secretary of State for Education and Science v. Tameside [1977] AC 1014 at 1064 to 1065 and Edwards v. Bairstow [1956] AC 36.

51. I had refused the application. It is not necessary for me to refer to the numerous cases cited by the parties, a reference to the general principles are sufficient. In judicial review proceedings, discovery is not automatic. It would only be ordered if it can be shown that it is necessary for disposing fairly of the matter or for saving costs : R. v. Secretary of State for Home Affairs Ex-parte Harrison [1997] JR 113 at 119 and Supreme Court Practice 1999 para. 24/3/4. An applicant is not entitled to go behind a respondent's affirmation for the purpose of ascertaining whether the affirmation is correct or not unless there is material available outside the affirmation to suggest that it is inaccurate, Ex. p. Harrison at 120.

52. In the present case, there is no challenge to the accuracy of Mr Corrigall's affidavit, it is sufficient on this basis to dispose of the matter. In any event the applicants had not made out a case for discovery. Considering all the evidence that is now before the court which shows that both at the time of the resumption and now, the risk of retention of the Buildings is unacceptable and that the resumption order was and remains necessary for the purpose of implementing the authorized Scheme, there really is nothing to show that the decision of the Director would be made differently. To adopt a phrase used in R. v. Deputy Chief Constable of Tames Valley Police Ex. p. Cotton [1989] COD 249 to 344, there is no real, sensible, substantial chance of any further evidence or observation from the applicants which could have altered the decision to resume by the Director.

IRRELEVANT CONSIDERATION

Redevelopment of the Buildings

53. The applicants further argued that land can only be resumed for a railway purpose. In this case, when the Government resumed the land, it had also taken into account the redevelopment potential of the property. This is not permissible. The fact that irrelevant consideration had been taken into account can be gathered from the following documents :

54. In the Tsuen Wan West Alignment Alternatives submitted by KCRC on 17 April 1996, it is stated that the Easterly Alignment is preferred because, among other things, it offers more potential for redevelopment.

55. In Working Paper No.WCR1 dated 21 June 1996 issued by Mouchel, it is stated that the redevelopment opportunities favour the Easterly Alignment but this is subject to satisfactory economic evaluation. However, the report also stated that whether the Easterly Alignment is the most cost-effective solution for the Government is yet to be determined since significant mitigation measures could be purchased for the cost difference between the two options.

56. In Working Paper No.97/1 presented to the Western Corridor Railway Projects Steering Committee, it is stated that the Easterly Alignment would require the acquisition of two factory buildings, namely Paul-Y Industrial Building ("Paul-Y") and the Buildings whereas the Westerly Alignment would require the acquisition of Wing Shing Industrial Building. It is stated that if the Paul-Y and the Buildings are resumed, these two sites would be combined to form a large CDA site and the development potential would be much enhanced. Land premium generated from the enhanced development potential is anticipated to exceed the land requisition cost. On the other hand, the Wing Shing Building is isolated and offers little redevelopment potential.

57. In the minute of the Steering Committee meeting held on 19 March 1997, one of its members, Mr P.C. Chan referred to the comprehensive development potential of the site, and another member, Mr Francis Ng stated that subject to agreement between the owners of the two buildings, joint development of the sites could be considered.

58. Mr Mak Chai Kwong of the Highways Department, who was the head of the Railway Development Office, stated in his affirmation that in determining the land resumption plan, the basis was to resume the minimum amount of private land required for the implementation of the West Rail Scheme. Land resumption is a consequence of the Scheme. It was not the first or main intention of the Government to have development in that area.

59. The applicants submitted that these show that the Government did consider the redevelopment of the site. They submitted that the Director of Lands was not entitled to take into account extra redevelopment profits that may be made when a choice is made between two routes. The applicants referred to the following situations :

1. Where there are two routes and there is nothing to choose between them on railway grounds, one route cannot be chosen because of its redevelopment potential.

2. Route A is better than route B for railway purposes, Route B cannot be chosen because of its redevelopment potential.

3. Route A requires resumption but route B does not. They are substantially or equally good. Route A cannot be chosen because of the redevelopment potential.

60. The applicants argued that the answer to these questions stems from the fundamental and basic principle that a subject can only be deprived of his property for railway purpose only. The subject is entitled to a decision which is arrived at solely on railway considerations. Any decision which is tainted by a conflict of interest, i.e. profit generated from redevelopment, is bad. The approach adopted by the court in dealing with purchases by trustees and fiduciaries as illustrated in cases such as Regal (Hastings) Limited v. Gulliver [1967] 2 AC 134 is relied upon.

The tests

61. If a power granted for one purpose is exercised for a different purpose, that power has not been validly exercised : de Smith para.6-509. Where the actor has sought to achieve unauthorized as well as authorized purposes, six separate tests had been applied to determine the validity of the act : de Smith, para.6-077.

1. What was the true purpose for which the power was exercised? If the actor has in truth used his power for the purpose for which it was conferred, it is immaterial that he achieved as well a subsidiary object. Thus if a power to construct an underground public convenience is exercised in such a way as to provide a subway leading to the convenience that can also be used by pedestrians who do not wish to take advantage of its facilities, the power has been validly exercised : Westminster Corporation v. London and North Western Railway [1905] AC 426 and also R. v. Brighton Corporation, Ex.p. Shoosmith [1907] 96 LT 762.

2. What was the dominant purpose for which the power was exercised? If the actor pursues two or more purposes where only one is expressly or impliedly permitted, the legality of the act is determined by reference to the dominant purpose.

3. Would the power still have been exercised if the actor had not desired concurrently to achieve an unauthorised purpose?

4. Was any of the purposes pursued an authorised purpose? If so, the presence of concurrent illicit purposes does not affect the validity of the act.

5. Were any of the purposes pursued an unauthorised purpose? If so, and if the unauthorised purpose has materially influenced the actor's conduct, the power has been invalidly exercised because irrelevant considerations have been taken into account. This test conflicts with the 4th test. de Smith stated that the question was considered in a case where the validity of a compulsory purchase order was impugned ― the court preferred the test of irrelevancy : had the making of the order been significantly or substantially influenced by irrelevant considerations? : Hanks v. Minister of Housing and Local Government [1996] 1 QB 991, 1018-1020, per Megaw J.

Recent cases have affirmed this approach. When irrelevant considerations have been taken into account, the courts have invalidated the decision if those considerations have had a "substantial" or "material" influence upon the decision : R. v. Inner London Education Authority, Ex.p. Westminster City Council [1986] 1 WLR 28.

6. Would the decision-maker have reached the same decision if regard had only been had to the relevant considerations or to the authorised purposes?

Legal porcupine does not need to be touched

62. The question of plurality of purposes has been described as a legal porcupine which bristles with difficulties as soon as it is touched. It is, however, clear on the facts that I do not need to undergo such a venture. The resumption under the Ordinance involves basically two stages. First, the authorization of the Scheme by the Chief Executive in Council and the implementation of the Scheme by the order for resumption by the Chief Executive. It has not been shown in either of these stages the decision-makers had taken irrelevant consideration such as the redevelopment potential of the Buildings.

63. The burden clearly relies upon the applicants to show that the decision-makers, although professing to exercise its powers for the statutory purpose, are in fact employing them in furtherance of some ulterior object : Municipal Council of Sydney v. Campbell [1925] AC 339 at 343. This they have failed to do so. What the applicants have shown is that at most at some stage prior to the authorisation of the Scheme, there were discussions on the redevelopment potential of the Easterly Alignment. However, there is no evidence that such matters were considered by the Chief Executive in Council when the Scheme was authorised. Further the applicants have not challenged the decision of the Chief Executive in Council in authorising the Scheme.

64. Mr Corrigall further stated that when he made the decision to resume in June 1999, the sole question in his mind was whether the resumption was necessary in order to implement the construction of the railway. He certainly did not have in mind any potential profits for Government. This must be the complete answer to the challenge now lodged by the applicants on the issue of irrelevant consideration.

Same decision would have been made

65. It is clear from the facts of this case, that the same decision would have been reached without the consideration of the redevelopment potential in view of the matter relating to engineering and nuisance caused to the community if the alternative alignment is adopted. As pointed out in the paper presented to the Steering Committee, the Easterly Alignment is cheaper and easier to construct and offers a better railway alignment in terms of maintenance and railway operation than the Westerly Alignment option. The Westerly Alignment would run along a street which is the major access to two large private residential estates, the construction of the Westerly Alignment would unavoidably cause major traffic disruption and noise impact to about 20,000 residents living there.

66. In this case, both alignments would require the resumption of properties along its route. When the Government's consultant Mouchel advised that the Easterly Alignment was significantly better than the Westerly Alignment in terms of cost and engineering factor, its recommendation showed no weight was given to the profit factor.

67. It is clearly pointed out in R. v. Broadcasting Complaints Commission Ex.p. Owen [1985] 1 QB 1153 at 1177 that where the court is satisfied that even though one reason may be bad in law, nevertheless the statutory body would have reached precisely the same decision on other valid grounds, then the court would not interfere by way of judicial review.

Loss rather than profit

68. Further, as pointed out by Mr Davison of the KCRC, the total amount of compensation payable to the owners or the Buildings is approximately HK$1.1 billion, but the profits generated from the development of the site after the Buildings are demolished is estimated to be only HK$0.09 billion. The overall loss is estimated to be HK$1.01 billion. The huge profit figures referred to newspaper reports are in respect of all the developments along the West Rail.

Cost to the community

69. Mr Yu also submitted that it is not ultra virus for the Government to have regard to the cost of the community when considering alternative alignments. In Sovmots Investment Limited v. Secretary of State for the Environment [1977] QB 411 at 425, the court held that it is impossible to say that cost can never be a relevant consideration either in a planning matter or in a compulsory purchase matter. This approach is followed in R. v. Westminster City Council Ex.p. Monahan [1990] 1 QB 87, a case involving the Royal Opera House in Convent Garden. The Court of Appeal held that financial considerations which fairly and reasonably related to the development were capable of being material considerations. They could be taken into account in reaching determination on planning development. See also R. v. Gloucestershire County Council, Ex.p. Barry [1997] AC 585 and R. v. East Sussex County Council, Ex.p. Tandy [1998] AC 714.

70. Although I agree that financial consideration may be a relevant factor, it is not necessary for me to reach a concluded view on this matter in the light of my decision on this issue.

RIGHT TO MAKE REPRESENTATION

Change of methodology requires further representations?

71. The applicants argued that the information provided to them before the Scheme was authorised was on the basis of the construction of a single tunnel underneath the Buildings. The objections that had been raised by them was on that basis. Now that the methodology has been changed, the applicants should be given an opportunity to make representations. Fok Lai Ying v. Governor in Council & Others [1997] HKLRD 8110 was relied upon. In that case the Privy Council was of the opinion that :

"They are not willing to reject the conclusion that s.3 of the Resumption Ordinance should now be construed, at least when the compulsory acquisition of a home or part of a home is at stake, to require a fair procedure including a reasonable opportunity of objection."

The Privy Council followed the decision of R. v. Secretary of State for the Home Department, Ex.p. Doody [1994] 1 AC 531 which stated, among other things, :

"since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer."

The real issue

72. There had been extensive arguments that the applicants were more interested in the compensation than on the technical aspect of the construction, and if they were really interested on the technical details, they should have instructed an engineer instead of a surveyor to assist them in their objections to the Government. It is not necessary for me to go into this because the real issue is whether the applicants are entitled to make representations to the Chief Executive at all when an objection procedure is already in place under the Ordinance.

The resumption is already in the Scheme

73. As submitted by Mr Chang, SC, counsel for KCRC, the power of resumption under section 16 of the Ordinance is consequent upon and is exercisable in implementation of a scheme which has already been authorised by the Chief Executive in Council. Under the Scheme, the Buildings had already been proposed for resumption in a gazetted resumption plan. The objection procedure under section 10 is to cater for objections to the Scheme including the proposed resumption. There is no mechanism for objection after the Scheme had been authorised and before the Chief Executive (or his delegate) to make the order for resumption. The Chief Executive or his delegate has no power to amend the Scheme. That power is given to the Secretary for Transport under section 7. The amendments are subject to the section 10 objection procedure and have to be referred to the Chief Executive in Council. The Chief Executive in Council has power to reconsider the Scheme so long as notice is given to any persons affected by any amendments.

74. The Scheme was authorised on 15 September 1998 and gazetted on 25 September 1998 after the objection procedure. There is no challenge by the applicants on the decision of the Chief Executive in Council in authorising the Scheme. If the Scheme is intact, so is the proposed resumption which forms part of the Scheme authorised by the Chief Executive in Council. The applicants are not saying that the change in methodology involves an amendment to the Scheme. The applicants just do not have any valid basis for saying that the order for resumption should be set aside so that they could make further representations.

75. This is in line with the approach of Silver Mountains. In that case, the applicants' properties were included in the area of a development scheme plan approved by the Town Planning Board after objections, and by the Governor in Council. It was held that during the process of resumption, there was neither statutory nor any other duty on the part of the Land Development Corporation, the Secretary for Planning, Environment and Lands or the Governor to reconsider merits of the Scheme or possible alternatives to resumption which had not been canvassed by the applicants. The only matter which the Governor in Council had to consider is whether resumption of land within the area of the Scheme is required in order to enable the plan to be carried out.

Further right to representation should not be carved out

76. Unlike the Crown Lands Resumption Ordinance which does not provide for an objection procedure prior to the resumption, the Ordinance provides for a process in which interested parties can lodge objections to the scheme. In my view what the Privy Council held in Fok Lai Ying regarding the right to be heard under the Crown Lands Resumption Ordinance cannot be applied with the same rigour to a section 16 resumption. Although there is no statutory procedure dealing with possible objections to the Chief Executive, such a system should not be carved out by the court exercising its supervisory function when express provisions relating to the challenge of the proposed resumption are already in place in the Ordinance itself.

77. If indeed the Chief Executive had made an order resuming the Buildings when in fact they are no longer required for railway purpose, then the remedy is to quash the decision. The right to make representation does not fit into the statutory scheme which has already provided for the objection procedure. I hold therefore that the right to make further representations is not available to the applicants.

DELAY

78. Mr Yu had objected to the application by the applicants on the ground that they had delay in bringing the application. Again, in view of my decision on the matter, it is not necessary for me to consider further this issue of delay.

DISCRETION

79. Mr Chang further submitted that discretion should not be exercised in favour of the applicants. In Nichol & Others v. Gateshead Metropolitan Borough Council, 13 May 1988, the Court of Appeal held that in considering how the discretion should be exercised, the court is entitled to have regard to the following :

1. The nature and importance of the flaw in the challenged decision;

2. The conduct of the applicant;

3. The effect on administration of granting relief.

In R. v. Brent London Borough Council, Ex.p. O'Malley & Ors, 31 July 1997, the court held that the factors to be considered in the discretion are the nature of the illegality of the decision and its consequences.

80. KCRC had set out the consequences if the decision on resumption is quashed. This can be broadly described as delay to the West Rail which is designated as a high priority project, prejudice to third party interest, for example, contractors who had been awarded contracts for construction of the rail and the injurious effect on the other owners of the Buildings. As I have already found that the applicants are not successful in their challenge, it is not necessary for me to consider the question of discretion.

MALA FIDES OF THE APPLICATION

81. The 3rd respondents are two owners of the Buildings. They joined (on their own application) as parties to the proceedings and objected to the applicants' application. Their case is that the application is not made bona fide and is instituted solely to delay the resumption in order to pressure the Government to provide more compensation. In my view, the 3rd respondents have failed to establish their case in the absence of any cross-examination of the applicants which may cast doubt on the bona fides of their application. I accept that the applicants are genuinely concerned with finding alternative suitable factories, some of which may have difficulties in fulfilling the more stringent statutory requirements for their particular work.

CONCLUSION

82. Accordingly, the application is dismissed.

COSTS

83. The order nisi is that the applicants are to bear the costs of the Government and KCRC in these proceedings. There is no order as to costs between the applicants and the 3rd respondents save that the 3rd respondents are to bear the costs of the other parties (including the applicants) in respect of their application to join as a party.