Department of Justice v. Hung Wan Construction Co. Ltd.

IN THE HIGH COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.524 OF 1997

(On Appeal from Fanling Magistracy Case
No. FLS8586 of 1996)

^{______________________}

^{______________________}

^{_____________________}

J U D G M E N T

^{_____________________}

1. This is an appeal by way of case stated by the Secretary of Justice.

2. The Defendant Company is the registered owner of the plot of land known as Lot Nos. 1312 RP and 1925 in Demarcation District 39. Since June 1995 the Company had used the site as a storage for construction equipment and material. On 19 January 1996 an Enforcement Notice was issued by the Director of Planning pursuant to section 23(1) of theTown Planning Ordinance, Cap 131. It is common ground that no planning permission had been granted under section 16 of the Ordinance for the site to be used as open storage.

3. The Defendant relied on the statutory defence under section 23(9)(b) that it had used the land in question in the manner alleged prior to 12 October 1990, the date of the notification in the Government Gazette designating the area as an "interim development permission area". At the conclusion of the hearing the learned magistrate found that the Defendant Company had failed to establish the statutory defence on a balance of probabilities and the company was convicted on 11 January 1997.

4. Two days later on 13 January the High Court judgment in R v. Tai Tong Lychee Valley Co Ltd [1997] 2 HKC 64 became available and the learned magistrate, on his own initiative, reviewed his decision. The Defendant Company also applied for a review. The Tai Tong case decided that a notice served under sections 23(1) of the Town Planning Ordinance must set out the alternatives provided by sections 23(1)(b)(i) and (ii) and the failure of which would render the notice a nullity. There being no dispute that the notice in question did not include the alternative contained in section 23(1)(b)(ii), the learned magistrate considered himself to be bound by the Tai Tong case and acquitted the Defendant Company. The section in question provides:

"23(1) Where there is or was unauthorized development, the Authority may, in a notice served on one or more of a land owner, an occupier or a person who is responsible for the unauthorized development-

(a) specify the matters that constitute or constituted the unauthorized development; and

(b) specify a date by which if the unauthorized development has not been discontinued, the Authority requires-

(i) it to be discontinued; or

(ii) permission for the development to be obtained under section 16."

5. The prosecution contends that the Tai Tong case was wrongly decided and now appeals by way of case stated. The questions for this court to decide, as posed by the learned magistrate, are:

"1. Whether R v. Tai Tong Lychee Valley Co. Ltd M.A.775/1996 was correctly decided in that a notice issued under section 23(1) of the Town Planning Ordinance (Cap. 131) must set out the alternatives provided by sections 23(1)(b)(i) and (ii),

2. Whether I erred in acquitting the respondent in the circumstances."

6. The prosecution submitted that the Director of Planning has a choice of requiring the remedies provided either under section 23(1)(b)(i) or (ii). It does not require that the Director of Planning must set out those two alternatives in every notice. If the Town Planning Board has already refused to grant permission for the development, there will be no need to set out the alternative in section 23(1)(b)(ii). To include the alternative when the permission had already been refused would only confuse the recipient of the notice. The example advanced was in the case of the filling up of a fish pond : if the pond had already been filled, it will be absurd to require the person to "discontinue" it. Based on this argument Mr Cheung submitted that if the Tai Tong case is followed, it may, in some situation, lead to absurdity. When invited by the Court, the prosecution was unable to categorize the type of situation, apart from the example given, where inclusion of s.23(1)(b)(ii) would render the notice an absurdity.

7. The prosecution relied on the English case of Holmes v. Bradfield R.D.C. [1949] 2 K.B. 1 in which the Court of Appeal was involved with the interpretation of the Town and Country Planning (Interim Development) Act, 1943 and Finnemore J. said in obiter at page 7:

"Of course the mere fact that the results of applying a statue may be unjust or even absurd does not entitle this court to refuse to put in into operation. It is, however, common practice that if there are two reasonable interpretations, so far as the grammar is concerned, of the words in an Act, the courts adopt that which is just, reasonable and sensible rather than one which is, or appears to them to be, none of those things."

I do not think this passage assists the prosecution's case as the present appeal turns not on the grammar or the wording of the section but on the validity of the section 23 Notice if a particular limb of the provision is not included in the document.

8. The prosecution contends that in any event, even if the alternative under section 23(1)(b)(ii) is not included in the Notice, the Defendant will not be prejudiced because section 23(9)(d) provides that it is a defence if the defendant proves that permission for the development was granted under section 16. This submission in fact begs the question whether the Notice was a nullity. Non-compliance with the notice creates a criminal offence which attracts a maximum fine, on first conviction, of $500,000 and a daily fine of $50,000 if the offence is proved to have continued. The maximum penalty and daily fines are doubled for subsequent offenders.

9. Counsel for the Respondent relied on the English Court of Appeal case of Agricultural, Horticultural and Forestry Industry Training Board v. Kent [1970] 2 Q.B. 19. The Court in that case was concerned with the validity of notices served under the Industrial Training Act 1964. Section 4 of the Act provides that the recipient of the assessment notice of levy has a right of appeal against the assessment. It was further provided under article 4 of the Industrial Training Levy (Agricultural, Horticultural and Forestry) Order that an assessment notice shall state the address for service of a notice of appeal or for an application for an extension of time for appealing. The judge in the first instance held that notices of assessment served on the defendants were bad because they did not contain the address for service of the appeal. On appeal by the Board it was held that the assessment notices should state the address for service of a notice of appeal. The provisions of article 4 was mandatory and not directory and since the notices served on the defendants did not comply with that requirement, they were bad and the board's appeal was dismissed.

10. Notices served pursuant to section 23 invariably specifies a date which the unauthorized development had to be discontinued or that permission for the development be approved by the Town Planning Board. If in the body of the notice, the recipient is not made aware of his right of applying for planning permission under section 23(9)(d), he would be deprived of the right to pursue a statutory defence available to him in the first available opportunity. I think it is essential that a recipient of the notice must be made aware of his rights at the time when he receives the document as failure to meet the date specified therein would render him liable to criminal prosecution. With the necessary information placed before him, it would then be up to the recipient to decide the proper course of action. Withholding vital information from the recipient about a possible defence opened to him could only be construed as a curtailment of his statutory rights. The Director of Planning, in not setting out the provision of section 23(1)(b)(ii), whether it be by choice or by inadvertence, is something which must be looked upon as repugnant to the concept of fairness. I am therefore of the view that the Notice is a nullity.

11. For the reasons given above, the first question posed by the learned magistrate is answered in the affirmative and the second questioned is answered in the negative.