INTERNATIONAL TRADER LTD v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 38/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 38 OF 2007

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J U D G M E N T

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I. INTRODUCTION

1.  These proceedings involve the Mid-Levels site (2,132.8 sq. m.) which was the subject of my Judgment in HCAL 161 of 2005.  A plan of the site was appended to the Judgment.

2.  Part of the site (764.4 sq. m.) is zoned Residential (Group C) 7 (R(C)7) in the Approved Mid-Levels West Outline Zone Plan No.S/H11/13 (the OZP).  The remaining part (1,368.4 sq. m) is zoned Residential (Group A) (R(A)) in the OZP.

3.  Insofar as relevant to these proceedings, the R(C)7 classification means that a building on the part so zoned must not have a plot ratio exceeding 5. 

4.  In contrast, the R(A) classification imposes no particular plot ratio restriction on a building within the part so zoned.  This means that the maximum plot ratio allowed by the Building (Planning) Regulations (Cap.123 sub leg) (BPR) applies to the R(A) part of the site.  For the proposed buildings which are the subject of this judicial review, the maximum plot ratio for the R(A) part of the site would accordingly be 9 (the site being Class B).

5.  I have to decide whether ITL can erect a single building with a plot ratio of 7.56 on the entire site.

II. BACKGROUND

6.  Previously, ITL contended that it could erect a single building with a plot ratio of 9 on the entire site. 

7.  It proposed a development having a Gross Floor Area (GFA) of 19,195.128 sq. m.  This was just under what ITL contended was the permitted GFA of 19,195.20 sq. m. (that is, 2,132.8 sq. m. x maximum plot ratio of 9) for a development on the entire site.  ITL claimed that this entitlement was regardless of the fact that the R(C)7 part of the site only allowed a plot ratio of 5.

8.  In my earlier Judgment, I rejected ITL’s contention.  I upheld the Tribunal’s rejection of ITL’s proposed development with a plot ratio of 9. 

9.  ITL (by its counsel Mr. Y. C. Mok) now accepts that it had been “too greedy” in proposing a building with a plot ratio of 9 for the entire site.  This time around, ITL submits that it can erect a single building on the entire site with a plot ratio of 7.56.

10.  More particularly, this judicial review concerns 2 submissions which ITL made to the Building Authority.  One submission (the May 2005 plan) concerns a building with a GFA of 16,137.60 sq m.  The other submission (the July 2005) concerns a building with a GFA of 16,137.170 sq m.  Both the May and July 2005 plans involve developments with a plot ratio of 7.56. 

11.  ITL argues that the May and July 2005 plans do not offend against the OZP, including the R(C)7 zoning of part of the site. 

12.  According to ITL, the maximum GFA for the entire site is the sum of the GFAs permitted on the R(A) and R(C)7 parts of the site.  Thus, on this footing, the maximum GFA for the R(A) part would be 12,315.6 sq. m. (that is, 1,368.4 sq. m. times a plot ratio of 9).  The maximum GFA for the R(C)7 part would be 3,822 sq. m.  (that is, 764.4 sq. m. times a plot ratio of 5) The maximum total permitted GFA for the entire site would then simply be (ITL contends) 16,137.600 sq. m. (that is, 12,315.6 sq. m. plus 3,822 sq. m).  Obviously, neither of the buildings proposed by the May or July 2005 plans exceed that combined GFA.

13.  ITL further maintains that the May and July 2005 plans are consistent with my earlier Judgment.

14.  According to ITL, by my Judgment, I held that the more liberal plot ratio of 9 allowed to the R(A) part of the site could not “spill over” to the benefit of the R(C)7 part.  The corollary to this must be (ITL submits) that the more restricted plot ratio of 5 allowed to the R(C)7 part should not “spill over” and “burden” the R(A) part.  Consequently, in an amalgamated site comprising parts having different plot ratios, the overall GFA of a building (ITL reasons) should merely be the sum of the maximum GFAs permitted for each part.

15.  The July 2005 plan is an amendment of a development plan which ITL submitted in 2003.  The building proposed by the July 2005 plan differs in only minor respects from the development proposed by the 2003 plan. 

16.  The 2003 plan was actually approved by the Building Authority in November 2003.  This was because the Building Authority’s then long-standing approach was to treat the maximum permitted GFA of an amalgamated site as equivalent to the sum of the GFAs permitted on each part of such site.

17.  However, by the time of the May and July 2005 plans the Building Authority had abandoned its former long-standing approach as wrong in law.  The Building Authority consequently rejected both the May and July 2005 plans on the basis that the plot ratios of 7.56 of the proposed buildings exceeded the plot ratio restriction of 5 on the R(C)7 part.

18.  ITL appealed to the Tribunal against the Building Authority’s disapprovals.  The Tribunal dismissed ITL’s appeals and upheld the Building Authority’s new approach as the correct one.  Among other things, the Tribunal believed that the rejection of the May and July 2005 plans was the logical implication of my earlier Judgment.

19.  By these proceedings ITL seeks judicial review of the Tribunal’s rejection of the May and July 2005 plans.

20.  ITL criticises the Tribunal in 2 ways. 

21.  First, ITL says that the Tribunal wrongly applied the law. It is argued that the Tribunal should have followed the Building Authority’s previous long-standing approach.  This (ITL says) was and remains the correct way of proceeding in an amalgamated site situation.

22.  Second, ITL says that, even if the long-standing approach was wrong in law, the Tribunal should have approved the May and July 2005 plans as a matter of discretion.  The plans should have been approved (according to ITL) because they were clearly superior to any permissible 2 building development on the site (that is, any scheme involving 1 building of plot ratio 9 on the R(A) part and 1 building of plot ratio 5 on the R(C)7 part).

III. DISCUSSION

A. ITL’s 1st criticism: The plot ratio of the amalgamated site

23.  In the OZP the “Remarks” to the R(C)7 classification state:-

“	(1)	Except as otherwise provided herein, on land designated ‘Residential (Group C) 7’, no new development or addition, alteration and/or modification to the existing building(s) shall result in the total plot ratio for the building(s) upon development or redevelopment being in excess of 5 or the plot ratio of the existing building(s) whichever is the greater, and a building height being in excess of 12 storeys or the height of the existing building(s) whichever is the greater.
	(2)	....
	(3)	Relaxation of the plot ratio and building height restrictions in paragraph (1), based on the merits of individual development o redevelopment proposals, may be considered by the Town Planning Board on application under section 16 of the Town Planning Ordinance.”

24.  The “Notes” to the OZP further explain in relation to the R(C)7 classification imposed on part of the site:-

“	7.4.4	The ‘R(C)7’ sub-area covers sites in Castle Steps, Castle Lane, Prince’s Terrace, Rednaxela Terrace, Shelley Street and Leung Fai Terrace with no direct vehicular access.  Hence, loading and unloading activities, including those related to refuse collection and emergency can only take place at a rather distant location.  As such, more intensive developments on the sites would bring about inconvenience to more people.
	7.4.5	Due to the inadequate access for servicing and fire fighting, development/ redevelopment in the ‘R(C)7’ sub-area will be restricted to residential use only with a maximum plot ratio of 5 or the plot ration of the existing building, whichever is the greater and a maximum building height of 12 storeys or the height of the existing building, whichever is the greater.
	7.4.6	In the ‘R(C)7’ sub-area, the Fire Services Department at present has no statutory authority to require the provision of emergency vehicular access to reach sites abutting stepped street nor to restrict the development intensity.  Only additional provision to enhance the fire fighting installations within the building would be required.  However, it is desirable to have emergency access to the principal face of a building.  The inaccessibility of fire engines to the sites concerned would pose a potential safety risk (apart from inconvenience) in case of emergency.
	7.4.7	Notwithstanding the above restrictions, comprehensive development/ redevelopment of the ‘R(C)7’ sub-area can still be pursued with amalgamation of sites. Upon submission of comprehensive development/ redevelopment proposals, favourable consideration may be given to relaxation of the development restrictions and each proposal will be considered on its own merits.”

25.  The plot ratio which “results” (the word used in paragraph (1) of the “Remarks”) from a particular building is calculated by reference to BPR reg.21(3).  That provides:-

“	For the purposes of this regulation and of regulation 19, 20 and 22, the plot ratio of a building shall be obtained by dividing the gross floor area of the building by the area of the site on which the building is erected.”

26.  Both the May and July 2005 plans propose to put up single building developments on the entire site.  Therefore, under both plans, the area of “[the] site on which the building is [to be] erected” is 2,132.8 sq. m.

27.  If one divides the GFA of the respective buildings under each plan by 2,132.8 sq. m. as required by BPR reg.21(3), one arrives in each case at a plot ratio of 7.56. This is the single plot ratio applicable to the proposed developments on the entire site. 

28.  Since this single plot ratio of 7.56 exceeds that of 5 permitted under the OZP for the R(C)7 part of the site, the developments under the May and July 2005 plans contravene the OZP.

29.  But that is not the end of the story.

30.  The planners behind the OZP plainly contemplated the possibility of relaxing the plot ratio of 5 where (as here) a development is proposed on an amalgamated site, only part of which has been zoned R(C)7.  That the planners were so conscious is apparent from paragraph (3) of the “Remarks” and paragraph 7.4.7 of the “Notes”.

31.  Although the single plot ratio of 7.56 violates the OZP, the site being an amalgamated one, it is open to ITL to apply to the Town Planning Board for the plot ratio restriction of 5 on part of the site to be relaxed. 

32.  For whatever reason, ITL has not so applied to the Town Planning Board in relation to May and July 2005 plans.  This is despite the OZP observing that any such application will be given “favourable consideration” and evaluated “on its own merits”.

33.  Mr. Y. C. Mok suggests that the approach which I have just sketched (which was that followed by the Tribunal) throws up a “ridiculous result”.  The result is ridiculous (Mr. Y. C. Mok submits) for 2 reasons. 

34.  First, Mr. Y. C. Mok suggests that the developments advanced under the May and July 2005 plans resolve the access problems referred to in paragraphs 7.4.4 to 7.4.6 of the “Notes” to the OZP.  There will no longer be a problem of access since fire-fighting and other services can gain access to the R(C)7 part of the site through Castle Road or Seymour Road which abut the R(A) part.  Access will no longer be limited to the stepped street (Castle Steps) abutting the R(C)7 part.

35.  ITL’s proposed developments are plainly superior (Mr. Y. C. Mok asserts) to having a building with a plot ratio of 9 in the R(A) part and an unconnected building with a plot ratio of 5 in the R(C)7 part.  This latter 2 building scenario, although literally within the terms of the OZP and thus permissible, perpetuates the access problem identified by the planners.  There would only be limited access to the R(C)7 building via a stepped street.

36.  Second, the Tribunal’s approach (Mr. Y. C. Mok argues) means in effect that the plot ratio of 5 of the R(C)7 part of the site “blights” the R(A) part, even though the OZP imposes no such restriction on the R(A) part.  This is contrary (Mr. Y. C. Mok says) to my earlier judgment.

37.  I do not agree with Mr. Y. C. Mok.

38.  The Tribunal’s approach is merely the result of applying the clear words of BPR reg.21(3).  Nothing in the text of BPR reg.21(3) justifies the previous long-standing approach advocated by ITL of adding up permissible GFAs for each part of an amalgamated site to come up with a GFA and plot ratio for the entire of an amalgamated site.

39.  In any event, there is no absurdity in the result.  The OZP expressly recognises the possibility of relaxing the rigours of the R(C)7 classification where it is sought to develop an amalgamated site.  To this end, the OZP has expressly conferred a discretion on the Town Planning Board to override the plot ratio restriction of 5 on the R(C)7 part of the site.  Indeed, not content with simply giving a discretion to the Town Planning Board, the OZP goes out of its way to observe that meritorious applications will be favourably considered.

40.  If ITL’s proposals are so obviously superior to a scheme involving two buildings situated on different parts of the site and having different plot ratios, no doubt the plans will be sympathetically assessed by the Town Planning Board.  Such outcome can hardly be described as “ridiculous”.

41.  In coming to this conclusion, I do not believe that there is any inconsistency with my previous judgment.  Given that the Town Planning Board is prepared to consider schemes for an amalgamated site favourably despite a plot ratio in excess of 5, there is no “blighting” of the R(A) part of the site as Mr. Y. C. Mok suggests.

42.  Strictly, the suggestion that in my previous Judgment I held that the “burden” of the R(C)7 portion should not be visited on the R(A) part of the site is Mr. Y. C. Mok’s gloss of the Judgment.  In that Judgment, I simply applied BPR reg.21(3) to the development plans which were the subject matter of the proceeding.  Using the formula in BPR reg.21(3), I found the result to be in excess of that which was permitted under the OZP. I expressly left open for future argument whether or not the 2003 approval and the long-standing approach were or were not valid.

43.  Finally, on this 1st criticism, Mr. Y. C. Mok draws a distinction between “land” and a “building” built on the land.  He submits that, by the R(C)7 classification, the OZP only attributes a plot ratio of 5 to “land” so zoned.  One must be careful (the argument runs) of attaching such plot ratio to any “building” on the land as the OZP concerns the zoning of the “land”. 

44.  What truly happens under the OZP (Mr. Y. C. Mok says) is that the R(C)7 part contributes its permissible GFA (calculated by multiplying the area of the R(C)7 part by the plot ratio of 5 attributed to the “land”) to the maximum total GFA allowed for the entire amalgamated site.  This way of looking at the OZP (Mr. Y. C. Mok submits) would be consistent with the previous long-standing approach of the Building Authority.

45.  However, I see nothing in the Building Ordinance (Cap.123), the BPR or OZP to warrant Mr. Y. C. Mok’s reading of the OZP, which strikes me as strained and untenable.

46.  First, Mr. Y. C. Mok’s reading is inconsistent with ordinary principles of land law which draw no distinction between “land” and a building erected on land.

47.  Second, I agree with the submission of Mr. Johnny Mok SC (for the Building Authority) that the words “shall result in the total plot ratio for the building(s) upon development or redevelopment being in excess of 5” in the OZP “Remarks” must refer to the plot ratio that would “result” from the application of BPR reg.21(3).  Nothing in reg.21(3) sanctions the distinction between “land” and “building” which Mr. Y. C. Mok makes.  On the contrary, reg.21(3) explicitly refers to “the plot ratio of a building” being obtained through the use of a specific formula.

48.  It follows from all the above that, as the Tribunal concluded, the May and July 2005 plans both contravened the OZP. It also follows that, at the time of its approval, the 2003 plan (which is similar in specification to the July 2005 plan) was wrongly believed by the Building Authority to conform with the OZP.

B. ITL’s 2nd criticism: The use of the residual discretion

49.  All parties accept that the Building Authority and the Tribunal had a residual discretion to approve the May and July 2005 plans despite contravention of the OZP.

50.  Invited to use its discretion in ITL’s favour, the Tribunal declined.  It said instead:-

“	30.	We accept, however, that of course, we do have a residual discretion to consider matters but in our view, having regard to the history, background and circumstances of this case and having regard to the decision of Reyes J. and the various decisions of the previous Tribunal, it will not be right for us to exercise our discretion in these appeals.
	31.	In our view, it is quite clear that such discretion is limited and in turn, again, we are of the view that we are bound by Reyes J’s decision.  In any event, we have also had the opportunity to take onboard the fact that the determination by the Tribunal and Reyes J shows that the method of calculation with regard to the 2003 Approval was wrong.”

51.  The consequence was that ITL was left to apply to the Town Planning Board (if ITL wished) for a relaxation of the restrictions in the OZP.

52.  Mr. Y. C. Mok says that the Tribunal ought to have approved the plans straightaway, despite contravention, because of the superior merits of the plans in resolving the access problems identified in the “Notes” to the OZP.  He asks me to approve the plans for that reason as part of this judicial review.

53.  I shall assume that I retain a discretion to approve the plans as Mr. Y. C. Mok contends.  Nonetheless, I would not accept Mr. Y. C. Mok’s invitation to exercise such discretion in favour of ITL.

54.  This is because I do not believe that the Court is qualified to say that the May and July 2005 plans are so obviously superior from the access point-of-view that the plans should be accepted without more.  As far as I can see, there is nothing obvious here.  I do not think that the step of consulting the Town Planning Board can be bypassed.

55.  As evidence that the proposed developments under the May and July 2005 plans were so much better, Mr. Y. C. Mok pointed me to the comments of the Assistant Commissioner for Transport (Urban) of the Transport Department in relation to the plans.  The latter took the view that “[t]he proposed vehicular access arrangement [was] acceptable”.

56.  But (as I pointed out to Mr. Y. C. Mok in the course of submission) the Chief Highways Engineer (Hong Kong) of the Highways Department was more equivocal.  He commented in relation to the proposed vehicular access arrangements that they were acceptable subject to certain conditions.

57.  Mr. Y. C. Mok suggested that the conditions enumerated by the Chief Highways Engineer were only trivial and did not detract from the thrust of ITL’s submission on discretion.

58.  Mr. Y. C. Mok may possibly be right.  But I do not think that the Court in a judicial review is an appropriate forum in which to decide what is or is not only a minor aspect in relation to vehicular access arrangements. 

59.  This is not just a consequence of the fact that neither party has adduced expert evidence before me. 

60.  The Court’s function in a judicial review is limited to ensuring that proper administrative procedures have been followed and jurisdictions have not been over-reached.  The Court is ill-equipped to make its own administrative decisions, however tempting (or not) such a course may be.  Whenever invited to substitute its discretion for that of an administrator or administrative tribunal, the Court should proceed cautiously.

61.  I should add that, in any event, I find nothing unreasonable in the Tribunal refusing to exercise its discretion on the facts of this case.

62.  The OZP expressly imbues the Town Planning Board with the discretion to relax the rigours of the R(C)7 zoning.  The Tribunal believed that the approval of the Building Authority to the earlier 2003 plans was given erroneously.  In these circumstances, the Tribunal must have been justified in directing ITL to seek a relaxation of the applicable restriction from the Town Planning Board.

63.  Mr. Y. C. Mok has drawn my attention to the Building Department’s Practice Note for Authorised Persons No. 272 (PNAP 272) entitled “Re-engineering the Building Approval Process”.  This states:-

“	26.	Generally speaking plans once approved by the Building Authority (BA) remain approved.  However, when an application for consent to commence works is made, section 16(3) of the [Building Ordinance] does provide the [Building Authority] with the opportunity to review any approved plans that are more than 2 years old quoted in the consent application.
	27.	The [Building Authority] will only invoke [Building Ordinance] s.16(3)(d) with respect to amendments made to or elaboration o matters arising from the [Building Ordinance] but not to enforce approved or draft plans introduced under the Town Planning Ordinance.”

64.  Mr. Y. C. Mok says that, consistently with PNAP 272, the Tribunal should at least have approved the July 2005 plans which only make minor amendments to the already approved 2003 plans.

65.  I am not persuaded by this submission.

66.  I stress the words “[g]enerally speaking” in paragraph 26 of PNAP 272.  The words indicate that PNAP 272 is non-binding and will not apply across the board in all cases. 

67.  Thus, I do not think that PNAP 272 binds the Building Authority (or Tribunal) to approve amendments to a plan which was previously approved under a significant mistake as to the law.

68.  The 2003 plans were approved because they were wrongly believed to comply with the law under the long-standing approach followed at the time.  Under the present approach, the 2003 plans would be regarded as contravening the OZP.  If presented today, the 2003 may not be approved by reason of such contravention and ITL would be left to make submissions on the 2003 plans to the Town Planning Board.

69.  In that specific context, I do not think that PNAP 272, a practice note which is only applicable “generally speaking”, can be treated as somehow obliging the Building Authority or the Tribunal to approve the July 2005 plans just because the 2003 plans were approved. 

70.  Mr. Y. C. Mok characterises the mistake of law which led to the earlier approval of the 2003 plans as purely “technical”.  But I do not think that such description is apposite.

71.  For the foregoing reasons, I do not believe that the Tribunal can be faulted for refusing to exercise its residual discretion in ITL’s favour.

IV. CONCLUSION

72.  ITL’s judicial review application fails.  The application is dismissed.  There will be a Costs Order Nisi that ITL is to pay the Building Authority’s costs, such costs to be taxed if not agreed.