BUILDING AUTHORITY v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 856/2021

[2022] HKCFI 3054

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 856 OF 2021

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JUDGMENT[1]

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A. Introduction

1.  This is the substantive hearing of the application by the Building Authority (“BA”), pursuant to leave granted by Coleman J on 23 June 2021[2], for judicial review of the orders of the Appeal Tribunal (Buildings)  (the “Appeal Tribunal”)  dated 12 March 2021 (the “Decision”, and the written determination of the same date, the “Determination”)  setting aside 6 Building Orders (the “6 Building Orders”).  The application turns on a narrow issue – whether the Appeal Tribunal is correct on public law grounds when it concludes that BA, when exercising its discretion to issue the 6 Building Orders, had failed to take into account certain matters which are said to be relevant.  

2.  Ms Teresa Wu appeared by BA.  The Appeal Tribunal (Building)  does not seek to be heard.  The Interested Parties all act in person.

B.  Background facts

3.  May Sun Building is situated at Nos.1-15 Smithfield, 55-57 Catchick Street & 7-9 New Praya, Kennedy Town, Hong Kong (the “Building”). The Occupation Permit was issued on 28 May 1964.  The Deed of Mutual Covenant also bears that same date.  

4.  There are 6 groups of Interested Parties before the Court (“IP/1” to “IP/6”)[3], each being the register owner(s)  of a flat of the 12 flats on the 7^th floor of the Building (respectively Flats C, E, F, G, H and J, collectively the “Flats”).

5.  To ensure public safety, the Buildings Department (“BD”)  has stepped up enforcement actions against unauthorized building works in Hong Kong in recent years.  In 2012, BD designated the Building to be a target building for enforcement actions against unauthorized building works to be undertaken in a large-scale operation.

6.  By separate letters of 7 June 2012, BD informed the owners/occupants of the Building that CBRE HK Limited had been appointed as the contract consultant to investigate, amongst other things, the existence of unauthorized building works at the Building.  Various alleged unauthorized building works have subsequently been identified.

7.  On 5 December 2016, BD issued the 6 Building Orders, one against each Flat.  They were issued under section 24(1)  of the Buildings Ordinance Cap 123. They are in similar terms.  Each refers to “A structure on and over the balcony facing Smithfield Street”[4] (the “Subject Building Works”), and demands demolition and reinstatement. 

8.  The alleged unauthorized nature of the Subject Building Works goes to the angle which certain windows of the Flats facing Smithfield tilt off the vertical plane.  According to the 1964 approved plans (the “Approved 1964 Plans”), they should be tilted inwards.  They have been found to be vertical instead. They are therefore regarded as unauthorized building works by BD.  They are described at §14 of the Form 86 as being “slabs protruding from the external walls and the windows underneath, which were vertical and not tilted, on and over the balconies of the [Flats]”.  The Appeal Tribunal itself gives the following descriptions at §17 of the Determination:

“From the Section C-C Plan of the 1964 Plans, it can be seen for those flats on the 7^th to 9^th Floors whose windows at the enclosed balconies face Smithfield, they should be tilted and should not project through a line drawn at 76 degree with the horizontal line of this street. Given the location where the cross section Section C-C Plan was prepared, the Tribunal takes the view that it applied to the [Flats]. The subject windows should be tilted. The tilted window requirement was to comply with Part III of the Building (Planning)  Regulations 1956. They are found not to be and thus not in compliance with such requirement. The Building Authority further stated other flats on 7^th Floor as well as on 8^th and 9^th Floors with enclosed balconies facing Smithfield also have structures similar to UBW and have thus been served with statutory demolition orders similar to the [6 Building Orders].”[5]

9.  There were other building orders issued against the registered owners of some other flats on the 7^th, 8^th and 9^th floor.  Those owners are not before this Court.

10.  The Interested Parties appealed against the 6 Building Orders.  The appeals were heard over 4 days in July 2020.  By its Determination, the Appeal Tribunal ruled in favour of the Interested Parties and set aside all 6 Building Orders.

C.  The Reasoning of the Appeal Tribunal

11.  The Appeal Tribunal sets out BA’s submissions at §6 of the Determination:

“Building Authority submitted that the UBW:-

(i)  consisted of a slab protruding from the external wall and the window underneath which was vertical and not tilted;

(ii)  fell within the definition of building works under Section 2 of the Ordinance;

(iii)  was not shown on the last [Approved 1964 Plans];

(iv)  did not have the prior written approval to the building plans nor consent for the commencement of building works as required under Section 14(1)  of the Ordinance;

(v)  was not minor works where Section 24(1A)  of the Ordinance could apply;

(vi)  was not a signboard nor works prescribed in Minor Works Regulations where Sections 39C of the Ordinance could apply; and

(vii)  was not regarded as exempted works under Section 41(3), 41(3B)  and 41(3C)  of the Ordinance.”

12.  The Appeal Tribunal sets out the position of the Interested Parties at §11 of its Determination:

“All Appellants asserted they never erected the UBW. Some asserted they were first purchasers. As regards the Order/UBW itself, the Appellants took the view that:-

(i)  what constituted unauthorised building works had not been clearly set out in the [6 Building Orders] with no measurements;

(ii)  the 1964 Plans were mere draft/design plans and for No.7/8 New Praya Kennedy Town. Building Authority did not provide approved plans for Nos 1-15 Smithfield;

(iii)  the Government would have granted the requisite approval for the UBW before the individual purchasers were able to buy the flats from the developer;

(iv)  it was questionable whether tilted windows could practically exist in the 1960s given (I)  the available material and technology at that time; and (II)  falling objects from the floors above could easily cause injury to the occupiers of the flats below;

(v)  as the Building Authority had approved a plan for the Building on 24 March 2000 (‘the 2000 Plan’)  which included the 7^th Floor and 8^th Floor and it was shown thereon that their balconies had similar dimensions, UBW could not be considered unauthorised building works;

(vi)  it would be impossible to reinstate the flats to as per the 1964 Plans as approval would unlikely be granted. Furthermore, reinstatement works may render the Building dangerous;

(vii)  as over the years, the Building had complied with all repair and maintenance requirements imposed by the Government, passed relevant authorities’ assessment, inspection and had been granted letters of compliance. There was therefore no reason why a statutory order on terms of the Order would be issued more than 50 years later;

(viii)  the change by Building Authority in its submission that UBW was categorised as Item 2.1 instead of Item 1.2 in the List under COURSE rendered the Order invalid;

(ix)  even if the UBW fell within Item 2.1 of List under COURSE, the UBW was a non-actionable structure and hence did not contravene Section 24 of the Ordinance or they were building works where Section 24(1A)  applied;

(x)  it was common sense, logic that floor and ceiling measurement would be consistent. The fact that 8^th Floor balcony floor measurement was 4’6” bore no relevance to the 7^th Floor balcony floor which was 6’4” the latter of which followed the flats on 1^st to 6^th Floors layout and not the 8^th Floor layout;

(xi)  Section 39C of the Ordinance applied;

(xii)  the Orders have not been gazetted;

(xiii)  Building Authority did not really exercise its discretion when assessing whether to issue order under Section 24 of the Ordinance and the Order was issued without or without sufficient evidence in support, exceeded the powers of the Building Authority, was illegal, procedurally improper, irrational and illegal; and

(xiv)  Building Authority should provide the internal manuals regarding how the discretion is exercised together with an explanation of Associate Director of the Buildings Authority.”

13.  The Appeal Tribunal accepts all of BA’s submissions.  Except possibly point (xiii)  (though in very different terms), the Appeal Tribunal rejects all of the Interested Parties’ submissions.

14.  Despite acceptance of BA’s submissions and rejection of those of the Interest Parties’, the Appeal Tribunal set aside the 6 Building Orders.  The basis of that decision is that BA had failed to take into account certain matters when exercising its discretion to issue the 6 Building Orders.  The Appeal Tribunal sets out its reasons at §§30 and 31 of the Determination, in full as follows (with emphasis added):

“30. From the 1964 Plans, it can be seen that the subject window was designed to be tilted so that it would not cross a line drawn on these plans at a 76 degrees angle. This was to comply with Regulation 17 of the Building (Planning)  Regulation 1956 whose purpose was to ensure a building would be designed in such a way so that sufficient sunlight and ventilation could still reach the street below despite its existence. This regulation has now been repealed.

31.  The Building Authority confirmed that similar demolition orders have been issued to other flat owners on the 7^th to 9^th Floors of the Building whose enclosed balconies facing Smithfield also have structures similar to the UBW.  Given the existence of so many such structures, the Tribunal takes the view it can reasonably be inferred the UBW at the relevant flat was more likely to have been erected by the developer and may have either existed at or soon after the Occupation Permit Date.  Given the repealed regulation, regularising the UBW now which would involve time and expense, would have no other constructive effect apart from fulfilling the procedural requirement of Section 14 of the Ordinance that the UBW would be removed given it is not on the approved plans.  There is no evidence the UBW is structurally unsound and/or causing any obvious hazard or imminent danger to life or property.  As such, the Tribunal takes the view that the Building Authority should have taken all these into account and exercised its discretion not to issue the Order in the circumstance.  Hence it should be set aside.”

D.  BA’s grounds for judicial review

15.  BA has set out its grounds for judicial review in its Form 86.  They have been adopted and elaborated upon by Ms Wu.  They are as follows:

(a)  The Decision is itself irrational or Wednesbury unreasonable, in that no tribunal, having accepted BA’s submissions and rejected the Interested Parties’ defences and assertions, would have exercised the discretion under section 50(2)  of the Buildings Ordinance to allow the appeals;

(b)  Failure to consider relevant materials or consideration of irrelevant materials;

(c)  Error of law; and

(d)  Procedural impropriety or unfairness and breach of natural justice.

The BA seeks an order that the Decision be quashed or declared null and void, and the appeals be remitted back to a differently constituted Appeal Tribunal for re-consideration with reference to the matters set out in the Form 86 and the decision of this Court.

E.  Interested Parties’ positions

16.  IP/2 have filed 2 responses in opposition.  They do not accept that the Subject Building Works are unauthorized building works.  They hence do not agree to the Appeal Tribunal’s reasons for setting aside.  They seek to rely on the doctrine of legitimate expectation instead.  They rely on Lo Yin Ming v Appeal Tribunal (Buildings) [2011] 3 HKLRD 586.

17.  The other Interested Parties have not filed any affirmation in response.

18.  None of the Interested Parties has filed any written submission, or made any oral submissions during the hearing.

F.  Relevant sections of the Buildings Ordinance

19.  “Building works” are defined by section 2 of the Buildings Ordinance as including “any kind of building construction, site formation works, ground investigation in the scheduled areas, foundation works, repairs, demolition, alteration, addition and every kind of building operation, and includes drainage works”.

20.  Section 14 provides as follows:

“14. Approval and consent required for commencement of building works, etc.

(1)  Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority—

(a)  his approval in writing of documents submitted to him in accordance with the regulations; and

(b)  his consent in writing for the commencement of the building works or street works shown in the approved plan.

(2)  Subject to section 28B(4), neither the approval of any plans nor the consent to the commencement of any building works or street works shall be deemed—

(a)  to confer any title to land;

(b)  to act as a waiver of any term in any lease or licence; or

(c)  to grant any exemption from or to permit any contravention of any of the provisions of this Ordinance or of any other enactment.

21.  Section 24(1)  stipulates that:

“24. Order for demolition, removal, or alteration of building, building works (other than minor works commenced under simplified requirements)  or street works

(1)  Where any building has been erected, or where any building works or street works have been or are being carried out in contravention of any of the provisions of this Ordinance the Building Authority may by order in writing require—

(a)  the demolition of the building, building works, or street works; or

(b)  (Repealed 43 of 1993 s. 6)

(c)  such alteration of the building, building works or street works as may be necessary to cause the same to comply with the provisions of this Ordinance, or otherwise to put an end to the contraventions thereof,

and in every case specify the time within which the demolition, alteration or work required by such order shall be commenced and the time within which the same shall be completed.”

22.  The wording of section 24(1)  suggests the existence of a discretion on BA’s part when deciding whether to issue a building order.  That is also what the Court of Appeal in Quebostock Limited v The Building Authority [1986] HKLR 467 has held.  However, that discretion has been described as a “limited” and “circumscribed” one:

 (a)  As explained by Recorder Edward Chan SC in Link Harvest Ltd & Another v Wayhang Development Ltd [2001] 2 HKC 652 at 679 (with emphasis added):

“The true meaning and effect of the word ‘may’ in Section 24 of the Buildings Ordinance were considered by the Court of Appeal in Quebostock Ltd v Building Authority [1986] HKLR 467 where the Court of Appeal held that the power given by Section 24 was discretionary. In coming to this decision Silke JA adopted the views of Lord Reid in Padfield v Minister of Agriculture, Fisheries and Food & others [1968] AC 997 that the question was not one of black or white in the sense that it was either a case where the Building Authority would have a complete discretion or none at all. Rather, it was a case where the discretion would exist and that the discretion was limited so that it must not be exercised in such a way as to frustrate the purpose of the legislation.”

(b)  In the words of Anthony Chan J in Ronald Wilson, Li Do Wai & Tang So Ha & Others v Appeal Tribunal (Buildings) [2013] 5 HKLRD 158 at §66 (with emphasis added):

“… the discretion given to BA under s.24 is circumscribed. It cannot be exercised to defeat the purpose of the Ordinance. Under the Ordinance, BA has the duty, inter alia, to protect the public from unsafe building works. If the exercise of discretion means that UBW are retained, the decision must be justifiable.”

I respectfully agree with those observations.

23.  There are exceptions (for example section 24(1A)  in relation to minor works)  and exemptions (see section 41)  to or from the above regime.  In those regards, it should be noted that BA’s exercise powers of exemption is governed and regulated by section 42.  In particular, whilst BA may upon application and payment of the prescribed fee “permit by notice in writing modifications of the provisions” of the Buildings Ordinance (section 42(1)), that entire section “shall not apply to section 14” (section 42(5)). As explained by Chow J (as he then was)  in Magic Key Ltd & Ors v Appeal Tribunal (Buildings)  & Anor [2020] 6 HKC 678 at §31, it “is trite that the BA has no power to grant retrospective approval under s 14”.

G.  Discussions

24.  I come back to §31 of the Determination.  It may be broken down into 3 considerations, which the Appeal Tribunal is of the view that BA had failed to take into account:

 (a)  “Given the existence of so many such structures, the Tribunal takes the view it can reasonably be inferred the UBW at the relevant flat was more likely to have been erected by the developer and may have either existed at or soon after the Occupation Permit Date” (“Consideration #1”);

(b)  “Given the repealed regulation, regularising the UBW now which would involve time and expense, would have no other constructive effect apart from fulfilling the procedural requirement of Section 14 of the Ordinance that the UBW would be removed given it is not on the approved plans” (“Consideration #2”); and

(c)  “There is no evidence the UBW is structurally unsound and/or causing any obvious hazard or imminent danger to life or property” (“Consideration #3”, and together the “3 Considerations”).

G.1.   Consideration #1

25.  I address Consideration #1 first.

26.  Ms Wu submits that Consideration #1:

(a)  even if it were factually sustainable, is legally irrelevant; and

(b)  is in any event not factually sustainable.

27.  I accept Ms Wu’s submission that Consideration #1, even if it were factually supported by the evidence (so that the Appeal Tribunal were correct in inferring that “the UBW at the relevant flat was more likely to have been erected by the developer and may have either existed at or soon after the Occupation Permit Date” (the “Factual Premise”)), it remains legally irrelevant.  My reasons are as follows:

(a)  The Appeal Tribunal has not explained in what way the Factual Premise is relevant to BA’s exercise of discretion under section 24;

(b)  The Subject Building Works are “building works”.  They are not on the Approved 1964 Plans.  They are therefore subject to BA’s enforcement action under section 24 of the Buildings Ordinance.  Whether they were constructed by the Interested Parties is not relevant in this regard, so long as the Interested Parties were the registered owners of the Flat in which the Subject Building Works were found.  As Chow J has observed in Magic Key Ltd at §34:

“…being the owners of the relevant units in or at which the unauthorized buildings works were found, it was correct for the BA to issue the Buildings Orders to the Applicants (HKSAR v Yu Ching [2006] HKCLRT 311, at §33 per Deputy Judge Barnes (as she then was); Lee Hoi Ching v Lok Fuk Ding [2008] 5 HKLRD 809, at §§48-50 per Recorder Ambrose Ho SC).”

(c)  Nor could BA be regarded as having approved the Subject Building Works by conduct (for example by the issue of Occupation Permit):

(i)  The Appeal Tribunal has referred to Lo Yin Ming.  It observes (at §24 of the Determination)  that Lo Yin Ming can be distinguished “given the legislation application for that case was different to the legislation, which is more stringent, applicable to the Building”.  The Appeal Tribunal however has not gone on to explain in what way the legislative regime applicable to Lo Yin Ming is different from the present one;

(ii)  That difference has been explained by Chow J in Magic Key Ltd at §33, that:

“In other words, under the 1955 Ordinance, it was possible for the BA to give his relevant consent or approval to the commencement of building works by conduct which, depending on the evidence, might be evidenced by the issue of an occupation permit. However, this was no longer possible under the 1959 Ordinance, which prescribed that the relevant consent or approval could only be given through the approval of plans. The same position applies under the current Buildings Ordinance.”

(iii)  Hence, if the Appeal Tribunal had based its view on the relevance of the Factual Premise upon the possibility of consent by conduct by BA, that would have been an error of law;

(d)  Nor could the Factual Premise be relevant to the operation of the doctrine of legitimate expectation.  As explained also by Chow J in Magic Key Ltd at §38:

“In relation to the Applicants’ argument based on legitimate expectation, it is well established that an expectation, to be legitimate, must be both lawful, in the sense that the benefit must be something that can be legally accorded, and reasonable (Ng Siu Tung v Director of Immigration (2002)  5 HKCFAR 1, at §§101 and 112). The Applicants’ expectation (if any)  that they would be permitted to retain and use the UBWs is neither lawful nor reasonable.

(1)  It is not lawful because the BA has no power of dispensation from the statutory requirements under s 14 of the Ordinance that no building works shall be commenced or carried out without first having obtained the requisite approval and consent in writing from the BA,

(2)  It is not reasonable because, as has repeatedly been held by the court, the BA’s policy regarding unauthorized building works is an ‘enforcement’ policy, not a ‘tolerance’ policy (Sky Wide Development Ltd v Building Authority, HCAL 116/2008 (24 October 2008), at §10; Technic Investment Co Ltd v Appeal Tribunal (Buildings) [2012] 3 HKLRD 245, at §27). The fact that the BA has not taken action against an unauthorized structure for a long period of time does not mean that no action can, or will, be taken against it (Wong Tin Chor v The Appeal Tribunal (Buildings Ordinance) [2020] HKCFI 562, at §20(1)).

In short, no owner of premises in or at which unauthorized building works are found has any right or legitimate expectation to retain them (see Sky Wide Development Ltd, ante, at §18).  In the present case, there is also no relevant representation or promise made by the BA which the Applicants can point to in support of the alleged legitimate expectation.”

(e)  I add that the above also dispose of IP/2’s responses based on Lo Yin Ming and the doctrine of legitimate expectation;

(f)  On the other hand, the Subject Building Works are within the enforcement policy[6];

(g)  For the above reasons, I do not accept the Appeal Tribunal’s view on the relevance of the Factual Premise.  On the contrary, I am of the view that it is legally an irrelevant consideration.

28.  I further accept Ms Wu’s submissions that the Factual Premise is not supported by the evidence before the Appeal Tribunal:

(a)  The Appeal Tribunal has itself commented at §26 of the Determination on the limited probative value of the evidence adduced by the Interested Parties;

(b)  Despite those comments at 26, the Appeal Tribunal says that the enclosed balconies facing Smithfield Street on the 7^th to 9^th Floors “also have structures similar to the UBW”.  The photographs produced[7] however show material differences between the building works on those several floors.  The Appeal Tribunal’s observations are also not consistent with the oral evidence of Mr Cheung Hiu Wai[8].

29.  In my view, one main reason for the lack of evidence in the above regard is that parties have never focused their mind on the position in relation to those floors above 7^th.  The issue has not been properly raised, and BA has not been afforded any appropriate opportunity to address it.  BA has in my view justified cause for feeling aggrieved.

G.2.   Considerations #2 and #3

30.  I agree with Ms Wu’s submissions that viewing the statutory requirements under section 14 of the Buildings Ordinance as “procedural” is an error in law.  Far from being procedural, it is a substantive part of a statutory regime of approval and consent system regulated through the approval of documents (including importantly plans)  that are required to be submitted in accordance with the regulations.  Section 14 demands approval prior to commencement of works.  There are good reasons for that timing.  It is to ensure that, prior to commencement of works, the prevailing structural requirements, fire safety and health standards have been complied with, and that the building works have been under proper supervision of appropriate professionals (Authorized Persons, Registered Structural Engineer, and Registered General Building Contractor).  That is the statutory way of ensuring general and public safety.  Without the prior submission of documents, BD and BA would have no means of knowing whether those requirements and standards have been satisfied. 

31.  One notes importantly, as I have observed above, that there is no power on the part of BA to grant retrospective approval under section 14, and that section 42 has no application to section 14.

32.  To treat the statutory requirements under section 14 as being procedural, with respect, undermines the operation of the entire regime.

33.  The fact that Regulation 17 of the Building (Planning)  Regulation 1956 had subsequently been repealed is in my view irrelevant.  The subsequent repealing of a regulation cannot have the effect of retrospectively rectifying any prior related breach of section 14.  The view of the Appeal Tribunal would, with respect, have that erroneous effect. 

34.  For those same reasons:

 (a)  it is in my view an error of law to suggest that enforcing section 14 on the facts of the present case “would have no other constructive effect”. The clear constructive effect would be to ensure compliance of section 14, and to rectify building works which integrity is, as a result of the absence of prior submission of plans, questionable; and

(b)  the situation is erroneously turned on its head by suggesting that “there is no evidence the UBW is structurally unsound and/or causing any obvious hazard or imminent danger to life or property” (i.e. Consideration #3). The regime demands prior approval being obtained.  The burden is not on BA to justify subsequent enforcement by adducing evidence of unsafety, hazard or danger.

H.  Conclusions

35.  I repeat the limited and circumscribed scope of BA’s discretion under section 14.  There is in my view no justified legal basis to suggest that BA should have taken into account the 3 Considerations when exercising its discretion.  In my view, and to the contrary, for BA to have done so and to exercise its discretion against the issue of any building order would have frustrated the purpose of the legislation.

36.  For the above reasons, in relation to the Appeal Tribunal’s finding that BA has failed to take into account the 3 Considerations when exercising its discretion, I am of the view that all the grounds relied upon by BA have been made out.

I.  Disposition

37.  For the above reasons, I:

 (a)  grant an Order of Certiorari to bring up and quash the Decision; and

(b)  grant an Order of Mandamus that the appeals be remitted back to a differently constituted Appeal Tribunal and that that Appeal Tribunal considers the appeals in accordance with this Judgment.

38.  I note that interim Stay of the Decision has been granted.  But as the interim relief is only up to the determination of the judicial review, it lapses upon the handing down of this Judgment.  I make no further order in that regard.

J.  Costs

39.  I have considered Ms Wu’s submissions on the question of costs.  I have in particular considered her submissions to the effect that the Interested Parties have lodged the appeals and made various submissions which partly led to the Decision. 

40.  I have set out above the Appeal Tribunal’s summary of the Interested Parties’ submissions.  It is not unfair to say that ultimately, and with respect, the errors which have led to this judicial review are not the brainchild of the Interested Parties.  I have considered the authorities which Ms Wu has submitted to me.  In the end, I form the view that a fair order is no order as to costs in respect of this judicial review application (including those on BA’s application for leave).  I so order.