ANDERSON ASPHALT LTD AND OTHERS v. TOWN PLANNING BOARD AND ANOTHER

CACV 155/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 155 OF 2006

(ON APPEAL FROM HCAL No. 61 OF 2003)

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REASONS   FOR   JUDGMENT

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Hon Ma CJHC :

1.  After hearing submissions from counsel, we indicated that the appeal should be allowed and it was ordered that the relevant decision of Town Planning Board (the 1st Respondent) be quashed by order of certiorari.  It was also ordered that the costs here and below should be paid by the 1st Respondent to the Applicants, such costs to be taxed if not agreed.  No order was made regarding the 2nd Respondent’s costs.  The reasons for judgment were to be handed down in due course.

2.  I agree with the reasons for allowing the appeal contained in the judgment of Lam J and would only add a few words by way of emphasis.

3.  The planning intention for much of the land in the New Territories remains agricultural.  However, it is right to point out that in spite of this, approvals are commonly given by the Town Planning Board to permit land that is zoned agricultural to be used temporarily for another purpose, often even industrial.  The present judicial review proceedings involve just such a situation.  As will become clear, the relevant land lay within an area which is zoned agricultural under the relevant OZP.  However, the OZP did allow planning permission to be granted for a period not exceeding 3 years in respect of a user not provided for in the Plan.

4.  Where such user is applied for (in the present case, this application was made by the 2nd Respondent), it is incumbent on the Town Planning Board to bear in mind the basic planning intention of the relevant OZP.  In the present case, it had to bear in mind that the basic planning intention for the land was agricultural notwithstanding the fact that it may have been used for quite sometime for some other (albeit approved) purpose.  The planning intention remained agricultural according to the OZP.  Thus, in considering an application for a temporary user that is not agricultural (in the present case, the application was for 3 years), the Board had to consider whether this was actually the limit of the period of non-agricultural use or whether the applicant might, if circumstances permitted, ask for an extension so that the period of non-agricultural use might in practice be extended beyond the 3-year period.  It was the failure of the 1st Respondent to consider this possibility (which, as will be demonstrated, was a real one) that has led to our decision to make an order of certiorari.

Hon Suffiad J :

5.  I had the advantage of reading in draft the reasons for allowing this appeal contained in the judgment of Lam J and also what was said by the Chief Judge of the High Court by way of emphasis.  I agree with all that have been said by both of them and have nothing to add.

Hon Lam J. :

6.  The Applicants are asphalt producers and operators in Hong Kong.  They sought to challenge the decision of the Rural and New Town Planning Committee of the Town Planning Board [“the Board”] on 4 April 2003 [“the Permission”] in approving an application by Man Fai Tai Enterprises Ltd [“MFT”] trading as Man Wah Company for permission to use a piece of land at Man Kam To Road, Sha Ling for an asphalt production plant [“the Plant”] on a temporary basis.

7.  At the material time, the land was subject to the Approved Fu Tei Au and Sha Ling OZP No. S/NE-FTA/5.  It lies within an area zoned “agriculture”.  The Notes to the plan under paragraph (vi)(b) provided that the Board may grant planning permission for temporary use or development of any land or building for a period not exceeding three years notwithstanding that the use or development is not provided for in the plan.

8.  Although under the Government Lease, the land was demised as agricultural or garden ground, short term waivers had been granted since 1988.  By a short term waiver of 6 August 2002, part of the land could be used as asphalt plant.  

9.  Before the subject application to the Board, the land had already been granted approval for use as concrete brick casting factory on 11 July 1991 without any time limit.

10.  The Permission was granted pursuant to Section 16 of the Town Planning Ordinance.  It was for a period of three years and it expired on 4 April 2006.

11.  The Plant was actually demolished pursuant to a demolition order made by the Building Authority on 30 December 2002 after an appeal against that order was withdrawn on 11 August 2003.  The plant and equipment on the land were sold to the 2^nd named Applicant.  However, prior to 4 April 2006, with the Permission, the land could still be used for the same purpose.  This is no longer possible.

12.  The judicial review application brought by the Applicants failed before Chung J on 22 March 2006.  This is the Applicants’ appeal from that judgment of Chung J.

13.  At the beginning of his submissions, Mr Yu explained to this court how in addition to the question of costs, the appeal also has practical significance in terms of the guidance that the judgment could provide to the Board in dealing with future applications.  We were told that MFT made another application of similar nature in November 2006 to the Board and the matter is still pending.

14.  In the circumstances, applying the principles set out in Chit Fai Motors v Commissioner for Transport [2004] 1 HKC 465 Para. 20, we are satisfied that we should deal with the appeal notwithstanding the expiration of the Permission.

15.  Mr Yu SC identified two main issues raised in the appeal.  The first issue was framed by Mr Yu as follows in his written submissions,

“Whether the Board can lawfully grant permission for temporary use without first having considered and having been satisfied that the intended use was of a temporary nature.”

16.  “Temporary” in the present context means use of a duration of not more than three years.  Under paragraph (vi)(b) in the Notes to the plan, the Board only has the power to grant permission for use for a period not more than three years.

17.  The consideration of this issue can be reduced into the following sub-issues,

(a)     Whether it is a relevant consideration for the Board to ask if MFT intended to use the land for asphalt production for more than three years;

(b)    If it is relevant, whether there was sufficient material before the Board to warrant that question to be taken into account;

(c)     If there was sufficient material, whether the Board failed to take that into account.

Intention as to the duration of use --- is it relevant?

18.  At the court below, it had been common ground that MFT’s true intention as to the duration of use is relevant, see paragraph 23 of the judgment of Chung J.

19.  In the appeal, Mr Westbrook SC submitted that the subjective intention of MFT could not be relevant because the intention could be changed over the years and at the time of the application, MFT might not have a definite intention as regards the future.  Since the Permission was only valid for a period of three years, there was no need for the Board to enquire into the intention of MFT regarding what were to happen in three years’ time.

20.  Mr Yu submitted that since the Board only has the power to grant a temporary permission for a period of not more than three years, it must be relevant to examine whether MFT intended to persist in the use after three years.  If the real intention were to apply for successive permissions of three years each, that would defeat the planning intention embodied in the plan.

21.  We are of the view that the point has to be considered against the background that the Board has a practice of entertaining renewal applications for permissions granted under paragraph (vi)(b).  At the appeal, Mr Westbrook placed before this court a document issued by the Board as guidelines on such renewal applications.

22.  If each successive application could be considered afresh in the sense that no regard is placed upon the use in the past three years based on the old permission, Mr Westbrook’s submission on the irrelevance of future intention may have greater force.  However, as we see it, it would be impossible to achieve that.  Once a use had been put in place by virtue of a paragraph (vi)(b) permission, it would affect the planning dynamics in the locality.  In a renewal application, an applicant armed with an existing use can legitimately submit to the Board that experience in the past three years demonstrates that there is no planning objection to such a use.  Short of any material change of circumstances, the Board is bound to take this into account in processing the renewal application.  In other words, the slate can never be wiped clean for the purpose of a renewal application.

23.  The guidelines issued by the Board reinforced that conclusion.  Although the guidelines shown to us are the latest version and no guidelines had been published prior to 2005, we were informed by Mr Westbrook that the practice had been very much the same even before 2005.  Paragraph 2 of the guidelines provides that an applicant may apply to the Board for a renewal if the temporary use is to be continued.  The caveat is that “should there be new planning circumstances governing the application, the Board is under no obligation to renew the temporary approval.”  This would mean that in the absence of any new planning circumstances, an applicant could expect to have his renewal granted almost as of right.

24.  There is therefore a streamlined approach in dealing with renewal applications.  There is no need to undertake new technical assessments to support the application so long as there is no major change in planning circumstances, see Para. 3.2 of the guidelines.  The criteria for assessing a renewal application set out in Para. 4.1 of the guidelines are as follows,

(a)     whether there has been any material change in planning circumstances since the previous temporary approval was granted;

(b)    whether there are any adverse planning implications arising from the renewal of the planning approval such as pre-emption of planned permanent development;

(c)     whether the planning conditions under previous approval have been complied with;

(d)    whether the approval period sought is reasonable; and

(e)     any other relevant considerations.

25.  Hence, in the absence of any material change in planning circumstances or any adverse planning implications, a renewal in favour of an applicant who has complied with planning conditions under an earlier approval is a real possibility.    

26.  The Notes to the plan provided under paragraph (vi)(c) that temporary use exceeding 3 years requires permission of the Board in accordance with the terms of the plan.  In other words, in respect of an application for permission exceeding 3 years, the uses that may be permitted are confined to those set out under Column 2 of the Notes under the heading ‘Agriculture’.  Asphalt production plant does not come within any of the uses prescribed thereunder.

27.  Hence, if successive applications for three years’ temporary uses under paragraph (vi)(b) were granted too readily, the planning intention under paragraph (vi)(c) could be frustrated.  We believe this is the point made by the Appeal Board in the case of Wah Yuen Metal Godown Ltd Town Planning Appeal No. 16 of 1996 at paragraph 10.

28.  We are aware that the Board was not dealing with such a situation in 2003.  The Permission was granted in respect of a first application by MFT.  However, the same point could be made if there is material before the Board suggesting that application for renewal was a real possibility.

29.  Equally, it would be an abuse to grant permission under paragraph (vi)(b) when the avowed intention of an applicant is to procure a long term arrangement by means of annual renewal.  That was what happened in the case of Ms Lee and Ms Tang Town Planning Appeal No. 4 of 1997.

30.  Based on the judgment of Slynn J (as he then was) in Tidswell v Secretary of State for the Environment (1976) 34 P &CR 152, Mr Yu submitted that the Board should have drawn a distinction between what is the beginning of a permanent user and a general temporary user.  Counsel submitted that permission should not be granted in the former case.

31.  Tidswell was a decision on the validity of an enforcement notice.  The appellant relied on the temporary exemption under the Town and Country Planning General Development Order 1973 to challenge the enforcement notice issued against him.  The court found that there was ample evidence to show that the appellant was not making a temporary use and therefore rejected his challenge.  In essence, the court found that the appellant was abusing the concession for temporary use.

32.  In our judgment, the crucial issue is whether the application might have had the effect of frustrating the planning intention embodied in the Plan.

33.  We are of the view that when there is material suggesting that the applicant may apply for a renewal, it is relevant to consider the applicant’s real intention regarding the duration of use.

34.  In so holding, we are not saying that no permission could be granted under paragraph (vi)(b) if the Board finds that an applicant has an intention to apply for a renewal.  But that is something the Board must take into account in assessing the overall compatibility of such application with the planning intention embodied in the Plan.  The Board may also consider imposing restrictions on renewal applications as a condition for the grant of a first permission in order to preserve the long-term integrity of planning intention under the Plan.

35.  In this connection, we note that in the explanatory statement to the Plan, the general planning intention is to promote and conserve the rural character of the area (Para. 8.2).  As regards manufacturing activities in the area, the general intention is to discontinue those polluting and non-conforming uses (Para. 8.1).

Was there material before the Board calling for a consideration of the true intention of MFT?

36.  Was there sufficient material before the Board raising an issue regarding the true intention of MFT on the duration of use? This was the main focus in the court below.

37.  In the application filed on behalf of MFT on 24 January 2003, the use applied for was stated as “temporary asphalt production plant for a period of 3 years”.  This was reiterated again in the surveyor’s report attached to the application.

38.  Solicitors for the Applicants had filed an objection to the application with the Board.  For present purposes, the relevant paragraphs are paragraphs 56 and 57 under the heading “The asphalt production plant is not temporary”.  It was said that the Plant was designed and constructed to be a permanent installation at considerable cost and the grant of permission would encourage a long-term use of the land as an asphalt production plant.

39.  Photographs and plans of the asphalt production plant were included in the submissions of the Applicant and those of MFT.  Those photographs speak for themselves as regards the permanent character of the plant.

40.  Reference was made to a passage in Halsbury’s Laws of Hong Kong V ol. 25 Para. 385.182 at footnote 6.

“Permission will be refused where permitting the temporary use is likely to encourage a long term use of the land for the purpose.”

41.  We do not think the cases cited go that far.  Whilst we agree that permission should not be granted if the application is a disguise to frustrate the planning intention embodied in the plan and as such an abuse of the concession for temporary use, we would not adopt a test based on the likelihood of encouragement for long-term use.  There could be different forms of encouragement and it is always a matter of degree.

42.  The Board had decided the application on the basis that it was for temporary use for three years.  The judge below held that there was no ground for the court to intervene, see Paras. 23 to 28 of the judgment below.

43.  We are of the view that one must have regard to the materials supplied by the Applicants as well as those put forward by MFT and a common sense approach should be adopted in the assessment of intention of MFT regarding the duration of use.

44.  Further, it has to be borne in mind that the Board is making an administrative decision as opposed to a judicial decision.  Hence, the following observations of Lord Greene MR in B Johnson & Co (Builders)Ltd v Minister of Health [1947] 2 All ER 395 at p. 399C are apposite,

“… it is not to be based purely on the view that he forms of the objections … but is to be guided by his view as to the policy which in the circumstances he ought to pursue.”

Further down at p. 399D to F,

“The consideration of the objections, in that sense, does not arise out of a lis at all.  What is described here as a lis --- the raising of the objections to the order, the consideration of the matters so raised and the representations of the local authority and the objectors --- is merely a stage in the process of arriving at an administrative decision.  It is a stage which the courts have always said requires a certain method of approach and method of conduct, but it is not a lis inter partes, and for the simple reason that the local authority and the objectors are not parties to anything that resembles litigation.  A moment’s thought will show that any such conception of the relationship must be fallacious, because on the substantive matter, … there is a third party who is not present, viz. the public, and it is the function of the Minister to consider the rights and the interest of the public.  That by itself shows that it is completely wrong to treat the controversy between objector and local authority as a controversy which covers the whole of the ground.  It is in respect of the public interest that the discretion that Parliament has given to the Minister comes into operation.” 

45.  The same point was made by Lord Denning MR in Prest & Straker v Secretary of State [1983] RVR 10 at p. 13 and more recently in the context of planning permission inquiry in Laing Homes Ltd v Secretary of State [2003] 1 P & CR 217 at p. 294-6.

46.  The Board could not have been mistaken as to the arguments advanced by the Applicants in their objection.  The Planning Department summarized it succinctly in the paper submitted to the Board at para. 7.1.10(b)(i),

“The asphalt production plant was not temporary but was designed and constructed to be a permanent installation.  The intention of asphalt production plant under application was for long-term use.  The grant of temporary permission would frustrate the planning intention and such a misuse of the Board’s power conferred under paragraph (vi)(b) of the Notes to the OZP.”

47.  MFT filed a surveyor’s report in support of its application before the Board.  Section 6 of the report dealt with planning justifications.  In Paras. 6.1.1 and 6.1.2, the surveyor referred to the use of the site as a concrete batching plant for over 15 years and the proposed asphalt production plant as “a minor amendment to the existing concrete batching plant use”.  Similarities with existing use were emphasized at Para. 6.1.4.

48.  Mr Yu submitted that this reflected an intention on the part of MFT to switch from one long-term use (concrete batching plant) to another one.

49.  We ask rhetorically: once a switch to asphalt production is approved, short of unforeseen circumstances, is there not a real possibility that MFT would continue with that use after 3 years?  Common sense tells us that there must be a real possibility that MFT might seek to renew.

50.  We do not think it is a case of mere assertion on the part of the Applicants.  The judge below focused only on the material in the Applicants’ objection.  With respect, that approach is too narrow.  

51.  Taking into account of the application as a whole, we think there was sufficient material before the Board to require the question of long-term intention to be addressed.  

Did the board consider the question of the intention?

52.  The minute of the meeting of the Board did not record any discussion by members as regards the possibility of MFT intending to make a long-term use of the site for asphalt production and whether a permission granted in such circumstances would frustrate the planning intention.

53.  The omission is not conclusive as the court should not read a minute as if it was a reasoned judgment handed down by a judge.  On the other hand, we respectfully agree with the observations of Stock JA as regards the need for clarity and sufficiency of reasons for an administrative decision in Capital Rich Development Ltd v Town Planning Board, CACV 386 of 2005, 18 Jan 2007 at Paras. 97 and 98.  In particular, we think it is worthwhile to highlight the following,

“Reasoning must be examined with reality and contextual common sense.  That said, where real issue arises as to whether an allegedly material issue was or was not taken into account, or what was at the end of the day made of that issue by the decision-maker, the courts are entitled to expect the answer to be sufficiently clear from the evidence before it without having to resort to guesswork.”

54.  The minute is not the only piece of evidence on the reasons for the Board’s decision.  The Secretary of the Board filed an affidavit on behalf of the Board on 4 September 2003 to resist the application for judicial review.  In response to the challenge that the asphalt production plant is not temporary and it is commercially not viable to have it operate for only three years, the secretary said this at paragraph 40,

“Whether the proposed development is a genuine temporary use according to the subjective intentions of [MFT] is immaterial as the permission granted … is on a temporary basis for a period of three years only.”

55.  The Board had the opportunity to supplement what had been set out in the minute as regards the matters actually considered at the meeting.  The Secretary of the Board said in her affidavit that the intention of MFT is immaterial.  The inescapable inference is that the Board did not consider the issue because it was thought to be irrelevant.

56.  For the reasons given above, the Board was wrong as regards the relevance of the issue of intention.

57.  Hence, it is a clear case of the Board failing to take into account a relevant consideration when the Permission was granted.  From the discussion above, it is also clear that this is not a case where this court can safely conclude that even if the Board had considered the matter properly, the result would not be different.  It follows that the Permission had to be quashed.

Locus standi

58.  The second main issue identified by Mr Yu is the question of locus.

59.  Although the judge also held against the Applicants on locus standi, neither Mr Westbrook SC nor Mr Chan argued rigorously on the lack of interest on the part of the Applicants.  It is common ground that since leave had been granted to the Applicants to move for judicial review, the court is more concerned about merits at the substantive hearing and the standing of an applicant is only one of the factors to be weighed in the balance (see R v Monopolies Commission, ex parte Argyll [1968] 1 WLR 763 at p. 773; R v Secretary of State for Foreign and Commonwealth Affairs, ex parte World Movement Ltd [1995] 1 WLR 386 at p. 395).  Hence, understandably counsel focused their submissions on the substantive merits.

60.  Since Chung J’s decision on standing is premised on a finding against the Applicants on the substantive merits, this court should consider the question afresh as we have reached a different conclusion on the merits.

61.  Whilst it is correct that the Applicants did not own any land in the vicinity of the site and their only interest in the matter is to curb what they regarded as unfair competition from MFT or whoever might use the site for asphalt production, we are of the view that the Applicants did have sufficient interest to move for judicial review in the present instance.

62.  For present purposes, the law can be taken from Reg v Inland Revenue Commissioners, Ex p National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617.  Schiemann J derived several propositions from that case in Reg v Secretary of State for the Environment, ex p Rose Theatre Trust [1990] 1 QB 504 at p. 520.  Two propositions are of particular relevance here,

“4.     However, a direct financial or legal interest is not required.

5.      Where one is examining an alleged failure to perform a duty imposed by statute it is useful to look at the statute and see whether it gives an applicant a right enabling him to have that duty performed.”

63.  In addition, Sedley J analysed the position with great clarity in R v Somerset County Council ex parte Dixon (1998) 75 P & CR 175 at p. 183-4,

“Public law is not at base about rights, even though abuses of power may and often do invade private rights; it is about wrongs --- that is to say misuses of public power; and the courts have always been alive to the fact that a person or organization with no particular stake in the issue or the outcome may, without in any sense being a mere meddler, wish and be well placed to call the attention of the court to any apparent misuse of public power.  If an arguable case of such misuse can be made out on an application for leave, the court’s only concern is to ensure that it is not being done for an ill motive.  It is if, on a substantive hearing, the abuse of power is made out that everything relevant to the applicant’s standing will be weighed up, whether with regard to the grant or simply to the form of relief.” 

64.  The exercise of the power of the Board in granting the Permission is governed by Section 16 of the Town Planning Ordinance Cap. 131.  There were amendments to that section in 2004.  In the current version, Section 16(2F) explicitly provides for comment on an application by “any person”.  Such right of comment is reinforced in Section 16(2K)(c) if the Board receives further information from the applicant.  The Board is obliged to take into account of such comment in considering the application, see Section 16(3A).

65.  Before the amendments in 2004, these provisions were absent.  However, we were told by Mr Westbrook that as a matter of practice, the Board did consider comments from any person without any screening as regards their interest in the matter.  This is reflected in the minute for the decision of the Board in granting the Permission.

66.  We think that must be the correct approach.  In the context of decisions on planning permission, it was well recognized in England that a person whose real interest in the matter is commercial and economic should be allowed to raise objection, see R v St Edmundsbury Borough Council ex parte Investors in Industry Commercial Properties [1985] 1 WLR 1168; R v Ogwr Borough Council ex parte Carter Commercial Developments [1989] 2 PLR 54; R v Canterbury City Council ex parte Springimage Ltd (1993) 68 P & CR 171.

67.  This was what happened in Capital Rich Development Ltd v Town Planning Board CACV 386 of 2005, 18 January 2007.

68.  The interests of the Applicants in the present case were more remote than the applicants in those cases as the former did not have any interest in any land in the vicinity of the subject site.  Nonetheless, they had a real commercial and economic interest in seeing that MFT or whoever might eventually use the site for asphalt production should not be able to gain an economic advantage over them by a saving in costs in tendering for an appropriate site for its plant.  They are not busybodies.  After all, their views were taken into consideration by the Board in arriving at its decision.  It seems harsh to deny them the right to complain by way of judicial review if this was otherwise a valid exercise.

69.  We think it is legitimate for the Applicants to bring the matter to the attention of the court and to seek redress by way of judicial review.  It is certainly not an abuse of process.  Having regard to our conclusion on the substantive merits and the importance of the substantive question from a public point of view, we do not consider it right for the court to exercise its discretion against the grant of relief on the basis of lack of standing on the part of the Applicants.

Outcome of the appeal

70.  For these reasons, we have allowed the appeal and quashed the Permission at the hearing on 28 February 2007.