ANDERSON ASPHALT LTD AND OTHERS v. THE SECRETARY FOR JUSTICE

HCAL 28/2006 and
HCAL 98/2007
(Consolidated)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NOS 28 OF 2006 AND 98 OF 2007

(CONSOLIDATED)

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J U D G M E N T

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Introduction

1.  The applicants in these consolidated judicial review proceedings are asphalt producers and operators in Hong Kong and are all members of the Asphalt Association.  Suitable locations for asphalt production in Hong Kong are extremely limited and are therefore expensive to acquire.  Naturally, this affects the costs of production and ultimately the prices of asphalt sold by the producers and operators.

2.  That single commercial consideration explains the applications for judicial review made by the applicants in these proceedings against the decision of the Director of Lands of 24 November 2005 to grant short-term waivers in relation to various pieces of agricultural land, known as Lots 51, 53, 54 Section A, 56, 58 Section B, and portions of Lots 62, 63, 68, 70 and 72 in Demarcation District 134 at Lung Kwu Tan, Tuen Mun, the effect of which are to allow the landowners of those lots (or their tenants or licensees) to erect and operate an asphalt production plant on the lots.  Whilst the short-term waivers are granted in consideration for waivers’ fees payable by the landowners (asphalt producer/operator) to the Government, the amounts involved are nowhere near what an asphalt producer and operator would otherwise have to pay in order to acquire on a permanent basis a proper piece of land for the erection and operation of a production plant.  This challenge forms the subject matter of HCAL 28/2006.

3.  The second challenge, namely, HCAL 98/2007, relates to a refusal, or supposed refusal, on the part of the Director, to terminate, or to consider terminating, the short-term waivers after the expiration of their initial terms of one year, as communicated to the applicants by a letter dated 15 June 2007.

4.  As at the time of the substantive hearing, the asphalt operator was still operating its plant for the production of asphalt at the lots.  It had been notified of the applications which of course affected its interest but had decided not to participate in these proceedings.

Land use control

5.  The lots in question are demised under a Block Government lease, which prohibits the erection of buildings on the demised land or the use of it for any purpose other than as agricultural or garden land without the consent of the Government lessor.

6.  So far as town planning is concerned, the lots are not covered by any draft or approved statutory plans prepared by the Town Planning Board under its powers contained in the Town Planning Ordinance (Cap 131).  

7.  Rather, the lots are covered by two non-statutory administrative plans prepared by Government departments.  In the ‘Tuen Mun New Town Western Extension Area – Planning Guide’ (1985 version), first prepared by the Planning Department in 1982, the lots are situated within an area designated ‘Government, institution and community’ and annotated for ‘recreation-orientated development’.  An area to the west, along the beach, is designated as ‘beach recreation area’.  Other areas in the vicinity of the lots are designated as ‘district open space – non-intensive use’, ‘area to be afforested, outdoor camping sites, picnic areas, etc, to be identified’ and ‘area to be afforested, hiking/walking trails, camp sites, picnic areas etc to be identified’.

8.  The Planning Guide was prepared in 1982, at a scale of 1:10,000, and was approved by the Development Progress Committee on 14 March 1985.  Notes 1 and 3 of the Planning Guide read:

“1.  The zoning shown on the face of this plan has no statutory effect.  It will, however generally be followed in land transactions where Government is in a position to determine the user of land by way of lease modification or sales of Gov’t land.  Where this zoning conflicts with the use permitted under existing lease conditions, then the zoning on the plan cannot be used other than as a guide to the development or redevelopment which Government wishes to encourage.

...

3.  The size and location of the various major community facilities listed above to be determined in the light of detailed studies.”

9.  The Planning Guide is stamped with the words ‘subject to alteration without notice’.

10.  The lots are also covered in the ‘North Western New Territories Sub-region Land Use Plan’ prepared by the Town Planning Office of the then Buildings and Lands Department.  The Sub-region Plan is a small-scale plan covering a wide area which includes the districts of Yuen Long and Tuen Mun.  It provides an overall context for the planning and development of the area.  It was prepared in December 1986, approved by the Development Progress Committee on 7 May 1987 and signed by the then Secretary for Lands and Works on 17 July 1987.  It was revised in October 1989.  The lots are included within a ‘countryside conservation area’ zone.

11.  The designations in the administrative plans must not give a false impression about the actual position on the ground.  There are, in fact, various permanent developments including power stations, ash lagoons and landfills in the vicinity of Lung Kwu Tan Road and Nim Wan Road.  Besides, the rural area of Lung Kwu Tan with small house development is at villages which are about 1,500 metres away from the subject site. 

Applications for short-term waivers

12.  Sometime in 2005 or before, the Government received applications for the grant of short-term waivers in respect of the lots so as to allow the Government lessees (or their tenants etc) to erect and operate an asphalt production plant on the lots.  The applications were eventually dealt with by the Director of Lands through the District Lands Conference.  The District Lands Conference is a meeting under the purview of the Director, delegated to an Assistant Director (also known as Government Land Agent), the terms of reference of which is to consider, inter alia, the terms and conditions for the disposal of land, both permanent and temporary.  Included in the core membership of the conference is the District Planning Officer of the Planning Department and other interested departments, and other departments such as the Department of Environmental Protection may be invited to participate.  The Director typically would take into account the views of the Planning Department on planning issues, in much of the same way as the conference takes into account expert professional advice from, say, the Transport Department, in reaching a view on a particular case and ultimately making a decision on the disposal of the land under consideration.

13.  The Government has a policy on the grant of short-term waivers, whereby the Government’s right of re-entry is waived for a limited period during which time the lessee may construct a building on the land for use other than its stipulated use (normally, agricultural use).  In most cases, short-term waivers are for one year certain and they are renewed automatically thereafter until terminated by either side giving three months’ notice.  Occasionally, they might be granted up to a maximum of three years subject to extension on expiry if the site is not required for development.  It is important to note that ‘in practice’, a short-term waiver is renewed upon expiry, subject to any review of the waiver fee and the deposit (as appropriate) and to the owner/occupier observing the conditions of the short-term waiver.  Waiver fees are generally revised every three years.  Short-term waivers can be cancelled in two ways, namely, first, if the site is to be resumed or if the landowner does not agree to the proposed new fee following review; secondly, for breach of conditions.

14.  Importantly, whilst the issue of a short-term waiver is ‘purely a lands administration office matter’, it should ‘not prejudice in any way permanent development or long-term use in connection with the zoning shown on a statutory town plan, or a sub-regional land use plan [ie a non-statutory administrative plan]’.

15.  According to the Government’s internal ‘instruction’, local consultation is conducted and any objection received will be properly dealt with before a waiver application is approved.  Very often, these applications are dealt with by low level or middle ranking officers, but occasionally, as we have seen in relation to the present case, an application can go as high up as the District Lands Conference.

Applicants’ objections, Director’s decision and 1^st challenge

16.  In 2005, the applicants got wind of the applications and through solicitors (JSM) objected to them, essentially on the grounds that the proposed use would go contrary to and indeed frustrate the planning intention in the Planning Guide and Sub-region Plan in that the lots should be conserved and remain non-industrial, and that to allow the proposed use would unfairly prejudice the position of all asphalt operators in Hong Kong who had to acquire land use rights at much higher costs.  Apart from the applicants, however, no objection, whether local or environmental, was received from anybody regarding the applications.

17.  At a meeting held on 24 November 2005, the District Lands Conference/Tuen Mun resolved to grant the short-term waivers.  It is important to note that according to the conference ‘notes’, the Planning Department specifically considered that the proposed asphalt production plant ‘would not frustrate the long-term use of the area’, regard having had to the Planning Guide and the Sub-region Plan.  The Planning Department therefore expressed no objection to the proposed waivers despite JSM’s objection, subject to there being no adverse comments from other departments concerned and that local concern would be addressed properly (there were no adverse comments or local objections).  The objection by the applicants was overruled.  According to the minutes of the conference meeting:

“However, an objection letter was received from Asphalt and Macadam Association of Hong Kong and their grounds of objection are described in paragraph 2.5(i), (ii) and (iii) of the notes.  Members noted that the grant of a waiver was of temporary nature and it would neither indicate a permanent land use nor frustrate the long term planning intention of land use of the area concerned.  Members were also not aware of any agreement or legal precedent which prohibited Government from granting a licence/waiver for temporary land use on private lots for which Government had granted licenses/waivers to other parties before.  Moreover, the proposed waivers would be charged at FMR [fair market rentals] as indicated in the recommendation.  Conference did not find the objection acceptable.”

18.  The decision was communicated to JSM by a letter dated 7 December 2005.  On 24 February 2006, the applicants filed a Form 86A in HCAL 28/2006, seeking leave to challenge the Director’s decision to grant the short-term waivers.

Sha Ling proceedings, leave application and appeal

19.  Matters took a twist when Chung J handed down a judgment in another set of judicial review proceedings, HCAL 61/2003, refusing the same applicants’ application for judicial review in relation to another proposed asphalt plant to be erected on a piece of land in Sha Ling: Anderson Asphalt v Town Planning Board [2006] 4 HKC 50.  The Sha Ling site was covered by an approved outline zoning plan prepared by the Town Planning Board.  The intended asphalt operator had obtained a three-year permission from the Town Planning Board pursuant to s 16 of the Town Planning Ordinance to erect and operate the asphalt plant on the land.  The applicants, relying on their commercial and economic interests (and nothing else) in the matter, sought to challenge the Board’s decision to grant the three-year permission, which they said was incompatible with the long-term planning intention embodied in the statutory plan.  Chung J refused the application for judicial review, both on merits as well as on standing.

20.  Although related to a different piece of land and directed against a different competitor, the Sha Ling proceedings, particularly Chung J’s decision on standing, had obvious implications for the applicants in the present HCAL 28/2006.  When the application for leave was heard before Reyes J on 21 April 2006, Chung J’s judgment presented a difficult obstacle for the applicants to surmount.  His Lordship duly refused the application for leave by a judgment handed down on 25 April 2006, in which the judge decided against the applicants both on standing and on merits: [2006] 4 HKLRD 14.

21.  Three days later, the applicants filed their Notice of Appeal (CACV 155/2006), on appeal from Chung J’s judgment in the Sha Ling proceedings.  Hearing of the appeal was fixed for 27 February 2007.

22.  On 4 May 2006, the applicants also filed a notice of appeal (CACV 163/2006), on appeal from Reyes J’s refusal of leave in the present HCAL 28/2006.

23.  Given the common or apparently common question relating to standing, the applicants, understandably, thought it advisable to await the outcome of the Sha Ling appeal, before proceeding with the appeal from Reyes J’s refusal of leave in the current proceedings.  On 29 May 2006, JSM wrote to the Registrar of Civil Appeals, requesting that the appeal be fixed for hearing after the Sha Ling appeal.  The Registrar replied by telling the applicants to file an application to fix a date for the hearing of the appeal when they were ready to proceed.

24.  In the meantime, construction of an asphalt plant on the subject lots had apparently started and this prompted the applicants to have a second thought on whether to proceed with their appeal in the present proceedings immediately.  Apparently with a view to avoiding being landed with a fait accompli, the applicants wrote to warn the intended operator of the asphalt plant of the judicial review proceedings as well as to the Registrar of Civil Appeals asking for an expedited hearing of the appeal in light of the construction work on the lots.  In those circumstances, a hearing date was fixed for 29 November 2006, after the diary of the applicants’ counsel had been consulted.

25.  However, time was not on the side of the applicants.  Construction of the asphalt plant on the subject lots was completed in around August or September 2006, and production of asphalt began soon thereafter.  Ten days before the scheduled hearing of the appeal (against Reyes J’s refusal of leave), the applicants had yet another change of mind after receiving advice from counsel in conference.  They decided to apply for the vacating of the hearing date fixed for the appeal and to seek further discovery of documents from the Director, particularly, copies of the ‘notes’ referred to in the extract of the District Lands Conference minutes (which set out the reasons for rejecting JSM’s objection) which had been previously supplied to the applicants, the full conference minutes and the short-term waivers.

26.  The application to vacate the appeal hearing date was acceded to.  But the request for documents from the Director was not as successful.  Apart from a copy extract of the ‘notes’, the Director was not prepared to disclose anything else.

Sha Ling appeal, eventual grant of leave and 2^nd challenge

27.  The Court of Appeal (Ma CJHC, Suffiad and Lam JJ) allowed the Sha Ling appeal on 28 February 2007 at the end of a two-day hearing.  Reasons for judgment were handed down on 30 March 2007: [2007] 3 HKLRD 18.  The Court of Appeal held that the applicants’ purely commercial and economic interests gave them sufficient standing to mount the challenge, and that the Town Planning Board had failed to take into account a relevant consideration when deciding to grant the three-year permission.  In short, the Board had treated as irrelevant the subjective intention of the intending asphalt operator, as was manifested in the materials before the Board, to apply for a renewal after the initial three-year period.  Given the Board’s own practice to renew a permission, once granted, in the absence of any material change of circumstances, the grant of the initial permission could have the effect of permitting an indefinite and even long-term use of the land, contrary to the planning intention embodied in the relevant outline zoning plan, thereby frustrating it.  The failure to consider all this was therefore a material irregularity in the decision-making process.

28.  The outcome of the Sha Ling appeal was, quite plainly, of great significance not only to the applicants’ opposition to the proposed Sha Ling plant, but also to their opposition to the plant on the subject lots.  The applicants, however, did not immediately apply to set down the appeal from Reyes J’s refusal of leave for hearing, but continued to engage the Director in correspondence for disclosure of documents.  Furthermore, in a letter dated 16 May 2007, the applicants requested that the short-term waivers, which they correctly assumed to be for an initial period of one year, be terminated after the expiration of the initial terms.  This letter, together with another letter bearing the same date, were replied to by the Director in a short letter dated 15 June 2007.  In this letter, the Director noted the applicants’ contentions in relation the several matters they had raised in their two letters, ‘on none of which, [the letter of reply tersely stated, the Director found herself] in agreement’.

29.  This was taken by the applicants to mean that the Director refused to terminate the short-term waivers, or even to consider terminating the same, as was set out in JSM’s letter to the Director dated 29 August 2007.  The Director never replied to this interpretation of her earlier letter or otherwise denied the interpretation.

30.  On 30 August 2007, a new application for leave to apply for judicial review was taken out (HCAL 98/2007).  It was directed against the Director’s refusal, or supposed refusal, to terminate the short-term waivers despite the request of the applicants, or even to consider terminating the same.

31.  On 24 October 2007, after a short hearing, Hartmann J (as he then was) granted leave in HCAL 98/2007. 

32.  In the meantime, on 21 June 2007, in light of the Director’s refusal or supposed refusal to terminate the short-term waivers, JSM applied to the Registrar of Civil Appeals to list the appeal (against Reyes J’s decision) for hearing.  Again, after consultation with their counsel’s diary, the hearing was fixed for 19 February 2008.

33.  It was in those circumstances that the appeal was heard ex parte before the Court of Appeal (Rogers VP and Le Pichon JA), almost 22 months after Reyes J’s refusal of leave.  In a judgment handed down on 27 February 2008, the Court dismissed the appeal.  The Court agreed with Reyes J both in relation to the merits of the case and to standing.  It also decided the appeal against the applicants on the ground of delay.  The earlier Court of Appeal decision in the Sha Ling appeal was distinguished.

34.  The applicants took the matter to the Court of Final Appeal (FACV 19/2008), and successfully obtained, first, leave to appeal and then an order from the highest court at a substantive hearing on 19 November 2008 that the appeal be allowed, and leave be granted to move for judicial review.

35.  The Court of Final Appeal said in a short judgment that the Court was satisfied that the applicants had satisfied the threshold of sufficient interest at the leave stage and the reasonably arguable test for leave on the merits.  The Court also said that whether there was any delay in prosecuting the appeal against the initial refusal of leave and if so its legal relevance and effect on relief (if any) might have to be explored at the substantive hearing, but leave should not be refused on that basis.

36.  Given the common issues involved, the two sets of judicial review proceedings were consolidated by an order made by this Court on 25 November 2008, and early dates were given for the hearing of the consolidated proceedings.

37.  This rather lengthy chronology of events is required not only to introduce the factual matters and legal arguments before the Court that this judgment will have to deal with, but is also necessary for the purposes of understanding and, where required, dealing with the issues of standing and delay.

Amenability to judicial review – the case law

38.  Before one turns to the substantive issues, there is an important preliminary issue, namely, the amenability of the decisions of the Director to judicial review, that one must first resolve.

39.  It is basic that not every decision of a Government official is amenable to judicial review.  The distinction between private and public law (first authoritatively drawn in O’Reilly v Mackman [1983] 2 AC 237) is essential, although the distinction has been said to be ‘something of a headache’: Fordham, Judicial Review Handbook (4^th ed) 562, where the relevant cases are digested (at p 562 et seq).  It is important to look at the functions which the official was performing in making the decision sought to be challenged, rather than focusing only on the source of his power to make the decision, in order to determine whether the decision is reviewable.  It is the nature of the functions, rather than the nature of the source of power, that is determinative.  R v Take-over Panel, ex parte Datafin [1987] 1 QB 815.

40.  As a broad observation, it may be said that the Government exists for the benefit of the public, and all discretions and powers of the Government should be and are expected to be exercised in the public interest and for the public’s benefit: Rank Profit Industries Ltd v Director of Lands [2007] 2 HKC 168, 187, para 76; Ying Ho Co Ltd v Secretary for Justice (2004) 7 HKCFAR 333, 374, para 102.  Yet this does not invalidate the distinction between a Government official performing a public function and the same official performing in his official capacity an essentially private, purely commercial one, in a role that is no different in substance from that of an ordinary citizen.  Speaking generally, the law is such that only in the former case, but not in the latter, that his decision is reviewable under public law.  The same is true with the decisions of public authorities and statutory bodies.

41.  Thus in Matteograssi SpA v The Airport Authority [1998] 2 HKLRD 213 and Ngo Kee Construction Co Ltd v Hong Kong Housing Authority [2001] 1 HKC 493, the Courts recognised that what were being challenged were in reality commercial decisions made by the statutory authorities concerned, which were no different from commercial ones made by private citizens, and, in the absence of fraud, corruption, bad faith or breach of law, were not amenable to judicial review.  Likewise, in Lee Shing Yue Construction Co Ltd v Director of Agricultural Services [2001] 1 HKLRD 715, which involved the suspension of a construction company from tendering for new public works for a period of six months for poor performance record, it was held that the decision was not amenable to judicial review.  The monitoring system put in place by the Director, which resulted in the suspension under challenge, was a purely commercial function, to secure the efficient discharge of contractors’ obligations under existing commercial agreements.

42.  By way of contrast, in Wong Yui Hin James v Hong Kong Arts Development Council, HCAL 57/2003 (9 September 2004), this Court held that the Hong Kong Arts Development Council’s decisions made in an open competition for a sponsored curatorship of an exhibition representing Hong Kong in an international visual arts exhibition were amenable to judicial review.  In making the decisions, the Council was not performing a purely commercial function, or functions that were merely incidental or ancillary to its main or substantive statutory functions.  Rather, it was making decisions that went to the main or substantive statutory functions of the Council, namely, the promotion and support of the broad development of the arts by means of grants and participation in international arts events.

43.  In the context of the present case, it is important to ask what functions the Director was performing when deciding to grant the short-term waivers, and when deciding not to terminate the same (or to consider terminating the same) – assuming that the latter decision had also been made.

44.  It has long been recognised, ever since the Privy Council decision in Hang Wah Chong Investment Co Ltd v Attorney General [1981] HKLR 336, that in land matters Government officials such as the Director of Public Works (in the old days) and the Director of Lands may wear different hats in making different decisions.  In making a particular type of decisions in relation to Government leases or conditions of sale the official may be acting purely as the Government’s land agent, taking care of the interests, economic and otherwise, of the Government as a landlord, in which case his decisions are within the realm of private law (law of contract), and are not amenable to judicial review.  On the other hand, the Privy Council also recognised that the Director, in relation to some other decisions which he may be required to make even in relation to the same Government leases or conditions of sale, may be performing the role of protector of the public interest, and his decisions are therefore within the public law domain and amenable to judicial review.  See p 341G-J of the report.  On the facts of Hang Wah Chong, which arose out of the Government lessee’s intention to erect buildings that were subject to the approval of the Director of Public Works which the Director withheld unless a huge premium was paid, the Privy Council had no difficulty in concluding that in demanding the premium as a condition for giving approval, the Director was merely acting as the Government’s land agent, looking after the Government’s economic and other interests as a landlord.  As such, the decision was not amenable to judicial review. 

45.  Hang Wah Chong, as expected, was followed in a number of local cases, which all involved the Government acting in its capacity as a landlord, looking after its own economic and other interests.  Thus in Canadian Overseas Development Co Ltd v Attorney General [1991] 1 HKC 288, the Court of Appeal followed Hang Wah Chong and held that the lease conditions involved in that case which gave the Government a right to block the developer’s development proposal under a new master layout plan were ones which related directly to the Government’s interests, economic and otherwise, as a landlord.  The Government’s demand for a substantial modification premium in exchange for the approval of the new master layout plan was therefore held to be unassailable in public law.  At pp 294H/I to 295A, Bokhary J (as he then was), giving the leading judgment of the Court of Appeal, said:

“In my judgment, it is clear beyond argument that, where land is held of the Crown, and the Crown lease or other document under which the land is so held prohibits development, save in accordance with a master layout plan approved by the Crown, the Crown’s right to approve or refuse the approval of a master layout plan submitted to it for its approval is governed by the law of contract and is not susceptible to judicial review.”

46.  Likewise, in Polorace Investments Ltd v Director of Lands [1997] 1 HKC 373, the Court of Appeal applied Hang Wah Chong to reject a developer’s argument, based on legitimate expectation, against the Director of Lands’ refusal to approve a development without payment of a premium for the necessary lease modification.  The Director was acting as the Government’s land agent in its capacity of a private landlord, the Court held (p 380B/C).

47.  After the resumption of the exercise of sovereignty in 1997, the Hang Wah Chong principle, as it has become known, has received endorsements by the Court of Final Appeal on no less than three occasions: Raider Ltd v Secretary for Justice (2000) 3 HKCFAR 309, 313J to 314A; Director of Lands v Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1, 14, para 19 and Ying Ho, supra, at p 349, para 15.  It is true that these cases did not really involve arguments over the principle, which was shortly stated by Bokhary PJ in Ying Ho in these terms:

“... that qua landlord the Government is as free as a private landlord to refuse to modify a lease condition or to name its price for such modification.”

48.  However, it should be noted that in Yin Shuen, which concerned the proper interpretation of s 12(c) of the Lands Resumption Ordinance (Cap 124), whether the Government’s right to demand a premium for a lease modification was absolute and unchallengeable was an essential albeit undisputed plank in the Court’s reasoning that led to its conclusion on the proper interpretation of the sub-section.  As such, the Court’s endorsement of the Hang Wah Chong principle cannot be said to be merely obiter.

49.  This whole line of cases must be distinguished from another line of cases, comprising Hong Kong and China Gas Co Ltd v Director of Lands [1997] 3 HKC 502 (Keith J), affirmed on appeal on the merits only: CACV 10/1998, 22 May 1998 and Kam Lan Koon v Secretary for Justice [1999] 3 HKC 591.  At issue in each case was the Government’s refusal to renew a lease for special purposes beyond 1997.  In Hong Kong and China Gas, the lease was originally granted in 1963 for the special purposes of storing and supplying liquid petroleum gas.  In Kam Lan Koon, the lease was granted for the erection and maintenance of an ancestral temple.  At issue was whether in refusing to renew the lease in the particular case, the Government was acting contrary to a policy statement published in 1987 in relation to the renewal of leases in the New Territories, including leases for special purposes, as a step towards implementation of the terms of paragraph 2 of Annex IIIto the Sino-British Joint Declaration on the Question of Hong Kong and as an explanation on how the then New Territories Leases (Extension) Bill 1987 (since passed into law as Cap 150) was to work in practice in renewing leases in the New Territories beyond 1997, which legislation, however, was not to cover leases for special purposes.  In each case, the Court had no difficulty in holding that in exercising his discretion not to renew the lease since the lessee had since the original grant used the land for a purpose other than its original purpose, a situation which exempted the land from renewal according to the Government’s published policy, the Director of Lands was not merely acting as the Government’s land agent, taking care of the economic and other interests of the Government as a landlord.  Rather he was discharging a public function.  Thus Keith J, as he then was, recognised the Hang Wah Chong principle but held that the principle had no application to the facts in Hong Kong and China Gas (at pp 526E/F to 527D):

“What these cases show is that it is the nature of the function which is being performed which is all-important.  The mere fact that the decision challenged relates to a Crown lease which is governed by the law of contract is not decisive.  The true question is whether the making of the particular decision in question relating to a Crown lease amounts to the performance of a function within the public domain.  Some decisions, such as those which the Director of Public Works and the Secretary for the New Territories had to make in the Hang Wah Chong and Canadian Overseas cases, did not amount to the performance of a function within the public domain. Other decisions, as the Privy Council in the Hang Wah Chong case recognised, may ‘almost certainly’ amount to the performance of a function within the public domain. That is entirely in accordance with the decision in R. v Panel on Take-overs and Mergers ex p Datafin Plc [1987] 2 WLR 699, namely that the true demarcation line between public and private law involves focusing on whether the decision-making body took the decision challenged in the course of its public functions.

... A private developer need only have regard to its own economic interests.  However, in deciding whether to extend the company’s lease, the Director of Lands had to have regard to a host of competing interests.  Essentially, he had to balance the interests of the community at large in having an emergency and maintenance gas depot in Tsuen Wan, against the disadvantage of the current site being unavailable to other potential lessees at a significant premium in the event of the lease being extended.  Ultimately, what the Director of Lands had to decide, therefore, was whether these considerations justified a departure from the ‘general’ policy in the policy statement which would "normally" be applied to public utility companies (upon the assumption that the site was still being used for the purpose for which the lease was originally granted).  In view of the competing interests which the Director of Lands had to balance in the context of the application of an important policy statement relating to the extension of large numbers of Crown leases in the New Territories, I have concluded that his decision whether or not to extend the company’s lease was made by him in the exercise of his public functions, and is therefore amenable to judicial review.”

50.  In the subsequent case of Kam Lan Koon, Godfrey JA (as he then was) specifically endorsed the views of Keith J expressed in Hong Kong and China Gas and likewise held that a decision taken by the Director to extend, or not to extend a lease for special purposes, whatever the reasons for that decision, was a decision taken in the exercise of his public functions as Director of Lands.  That being the case, the decision was one taken in the sphere of public law, in the exercise of a public function, and there was a public and not merely a private element involved in the decision.  The decision was therefore judicially reviewable (see p 598D/E to F/G).  Rogers JA was of the same view in his concurring judgment (at p 600E-G).

51.  These two cases, in my view, provide good illustrations to what has been said by Lord Edmund-Davies in Hang Wah Chong itself (at p 341H/I), in the context of the facts in that case, namely, that ‘as regards some of the Conditions [in the Conditions of Sale], the Director’s role may, almost certainly, be that of protector of the public interest’ and his decisions are therefore amenable to judicial review.

52.  Viewed in that light, it is not difficult to see on which side of the line the decision under challenge in Rank Profit Industries Ltd v Director of Lands, supra (Hartmann J) and [2009] 1 HKLRD 177 (CA) should fall.  In Rank Profit, a developer negotiated with the Government for modification of a lease condition which required the developer to build a multi-storey car park in a lot which had been originally zoned an ‘industrial’ area.  Following the rezoning of the area to ‘business’, which did not require, from a town planning point of view, yet another multi-storey car park in the area, the modification application was made.  However, the Director of Land refused to modify the condition save for payment of a very substantial premium.  The developer challenged the Director’s decision to demand the premium, arguing, amongst other things, that his decision was amenable to judicial review.  A main plank of the argument of the developer was that the original conditions of lease were dictated by planning considerations, and so were the modifications.  The decision of the Director was affected not merely by the economic and other interests of the Government as a landlord, but by town planning considerations as well.  That being the case, there was a sufficient public element in the decision, rendering it susceptible to judicial review. 

53.  That argument was rejected by Hartmann J at first instance (at p 187):

“75.  In my judgment, nothing is advanced by saying that in the present case the original conditions of lease were dictated by planning considerations and the modifications too.  In Canadian Overseas Development (cited in para 52), it was contended that the Government, as landlord, in deciding whether or not to approve a master layout plan, was in reality exercising a public function.  Clearly, the original terms of the lease requiring approval in terms of a master layout plan would have been inserted on the basis of planning considerations and equally any modification of the terms would have been influenced by planning considerations.  Yet the Court of Appeal rejected the contention that the Director in that case was exercising a public function.”

54.  In the Court of Appeal, Tang VP, who delivered the leading judgment, expressly endorsed Hartmann J’s application of the Hang Wah Chong principle to lease modification cases for the sake of certainty of the law (at p 187, para 38), distinguished Hong Kong and China Gas as well as Kam Lan Koon as decisions turning on the renewal of leases for special purposes and not about modification of leases (at p 187, para 37), and dismissed the argument that a public element was present by reason of the planning considerations (at pp 189 to 190):

“47.  It is true that modification would be granted only after the relevant government departments have been consulted and indicated their consent to the application.  But, even in the absence of binding authorities, I would not agree that this is sufficient, when taken with all other relevant circumstances, to make modification of leases reviewable.  As Ribeiro PJ pointed out in Ying Ho, the government, when it acts in the capacity of a landlord, is entitled to exercise its powers for the public’s benefit.  Performance pledges and open and accountable decision making process are conducive to greater efficiency, and serve the public interest.  The consultation of the relevant government departments is consistent with the exercise of its powers as landlord for the public’s benefit.  Indeed, I would go further and suggest that an enlightened landlord would not overlook the long term interests of its estate in the pursuit of short term benefits.  Thus one would expect him e.g. to lay out his estate properly, ensure that there is proper transportation to supply the needs of estate.  That being the case, I can see no reason why a private landlord might not grant leases to serve particular purposes, including, e.g. leases for public car parks.

48.  So, even if the applicant’s application for modification was prompted by the government and granted because there was no longer any planning need for a public car park, I cannot see how that should make the modification process reviewable.”

55.  Equally importantly, his Lordship refused to follow and indeed distinguished a first instance decision of Elias J (as he then was) in R (on the application of Molinaro) v Royal Borough of Kensington and Chelsea [2001] EWHC Admin 896 where the local authority, the landlord, refused consent to change the purpose for which the subject premises could be used.  Elias J, in holding that the local authority’s decision was amenable to judicial review, had said:

“[63]  In my judgment, this argument is wholly unsustainable, at least in respect of the first two claims.  Manifestly, the Council was not simply acting as a private body when it sought to give effect to its planning policy through the contract.  Again, the decision not to permit a change of use, albeit one involving the exercise of discretion under a contract, was taken for the purpose of giving effect to its planning objectives.

[64]  In my judgment, these factors themselves injected a sufficient public element into the decisions to justify their being subject to public law principles.  In any event, I would, with great respect, differ from some of the wider observations of Keene LJ in the Bolsover case, although for reasons I return to below, not the decision itself.

[65]  In my view, the fact that a local authority is exercising a statutory function ought to be sufficient to justify the decision itself being subject in principle to judicial review if it is alleged that the power has been abused.  Nor do I see any logical reason why an abuse of power made pursuant to some policy should be treated differently to one made on a specific occasion.

[66]  Of course, in many circumstances the nature of the complaint is one that identifies no public law principle.  In such cases the fact that the defendant is acting pursuant to statute is irrelevant.  For example, if the Council sues for the rent due from a tenant, no public law issue arises.  Indeed, in general questions of construction of the contract or breach will attract no special public law principles, and judicial review is not an appropriate procedure to resolve such disputes.  The fact that a public body is a party to the proceedings is, in such cases, irrelevant to the action formulated or to the relief granted.  There is no justification then for treating the local authority in any different way to private bodies.

[67]  But public bodies are different to private bodies in a major respect.  Their powers are given to them to be exercised in the public interest, and the public has an interest in ensuring that the powers are not abused.  I see no reason in logic or principle why the power to contract should be treated differently to any other power.  It is one that increasingly enables a public body very significantly to affect the lives of individuals, commercial organisations and their employees.

[68]  Moreover, there are a host of important cases where decisions relating to contracts have been subjected to the principles of judicial review to prevent the power being unlawfully exercised. ...

[69]   In my opinion, the important question in these cases is the nature of the alleged complaint.  If the allegation is of abuse of power the courts should, in general, hear the complaint.  Public law bodies should not be free to abuse their power by invoking the principle that private individuals can act unfairly or abusively without legal redress.  But sometimes the application of public law principles will cut across the private law relationship and, in these circumstances, the court may hold that the public law complaint cannot be advanced because it would undermine the applicable private law principles.

[70]  I would respectfully suggest that the Bolsover case can be justified on that basis.  As the learned judge pointed out, it would have undermined the operation of the public law of contract, and would have put public bodies at a significant disadvantage, if the doctrine of legitimate expectation could be used to defeat the right of public bodies to withdraw from a proposed contract whilst leaving the other party free to do so.

[71]  However, in other cases, including some I have cited, public law principles have been superimposed upon the private law relationships.  The two are not necessarily incompatible.  The facts of each case will need to be carefully considered to determine whether they can properly co-exist.”

56.  Tang VP was prepared to distinguish Elias J’s decision on the narrow basis that the local authority in Molinaro was exercising ‘statutory functions’, and the decision was ‘very much one of fact and degree’ (at p 192, para 55).

Principles summarised

57.  Having thus reviewed the relevant case law, it appears to me that:

(i)  Only a decision made in the public law domain is amenable to judicial review.

(ii)  Whilst the nature of the source of power or discretion is by no means irrelevant, it is the nature of the functions that the decision-maker was performing when making the decision under challenge that is of crucial importance.

(iii)  In the absence of fraud, corruption, bad faith and breach of law, a purely commercial decision, or a decision made in the performance of a purely commercial function, is most likely a private law decision, not amenable to judicial review.

(iv)  Put another way, the presence of a public element(s) of sufficient significance in the decision-making process could turn an otherwise commercial decision into a public law decision, amenable to judicial review.

(v)  What is sufficient is a matter of fact and degree, depending very much on individual cases.  No hard and fast rule can be laid down.  It is, in a borderline case, very much a matter of overall impression and one of degree: R v Legal Aid Board, ex p Donn & Co [1996] 3 All ER 1, 11h, cited with approval by Mortimer VP in Matteograssi, supra, at p 219C-D.

(vi)  In relation to decisions made in land transactions, the same legal principles apply.  A complete statement of the Hang Wah Chong principle does not merely state that in lease modification cases, the Government’s decisions on whether to grant a modification and on the amount of premium to be extracted (if any) are in the nature of private commercial or economic decisions of a private landlord, and therefore not susceptible to judicial review.  A complete statement of the principle also says that where the Government official, in making the decision, acts in his role as protector of the public interest, his decision is almost certainly liable to judicial review.

(vii)  Thus understood, the so-called Hang Wah Chong principle is no more than a special application of the general principles on the distinction of public/private law to land matters in Hong Kong.

(viii)  In land matters, invariably, there are restrictive user covenants in the relevant leases or grants.  Plainly, they serve the commercial and economic interests of the Government as landlord.  But, equally plainly, they serve, to some extent, a purpose of town planning, which, no doubt, any responsible government must be responsible for, whether directly or indirectly.

(ix)  Therefore, there is always a built-in town planning element in land grants and the system of land-holding in Hong Kong, leaving aside any specific town planning legislation.

(x)  That, however, is not sufficient in itself to turn a decision made by the Director in relation to modifying a restrictive user covenant in a grant or demanding a premium for the modification into a public law decision, amenable to judicial review, according to the decided cases.

(xi)  This illustrates that the mere presence of some public element (namely, town planning consideration) may not be sufficient to render the decision a public law decision.  The crucial question is whether some additional public element(s) of sufficient weight is/are present in the decision-making process to render the decision made a public one, amenable to judicial review.  Put another way, the crucial question is whether the role played or function performed by the Government official is sufficiently public to render the decision a public one, susceptible to judicial review.

(xii)  Again it depends on the facts, and in a borderline case, it is really a matter of overall impression and degree.

Amenability in the present case

58.  In the present case, Mr John Litton, for the applicants, argues that the Director does not merely play the role of the Government’s land agent in approving a short-term waiver.  In relation to land not covered by any draft or approved statutory plan prepared by the Town Planning Board, the Director assumes, counsel submits, a quasi,albeit non-statutory, role of a town planning authority, insofar as promoting and implementing, and not frustrating and going against the planning intentions evinced in the non-statutory administrative plans are concerned.  In other words, the Director plays the dual role of a land agent and a quasi town planning authority.  Thus she takes into account not only the commercial, economic and other interests of the Government as landlord in considering an application for a short-term waiver or its renewal, she also takes into account the planning intentions of the Planning Department which have been systematically and publicly expressed in the published administrative plans.

59.  Although Mr Litton has not expressed his argument in the following way, I believe his argument involves contending that since these administrative plans have no statutory force in themselves, the only way the Government can seek to enforce and give effect to the planning intentions embodied in them, leaving aside any ‘encouragement’ it may give to landowners when they seek to develop or re-develop their land (note 1 to the Planning Guide), is through control exercised by the Director of Lands in land sales, lease modifications and importantly for our purposes, short-term waivers.  The Director’s powers in relation to these land transactions give the administrative plans the teeth, as note 1 to the Planning Guide has expressly made clear.

60.  Put another way, the Director wears more hats than one.  Amongst them, the Director wears the hat of the enforcer of the Government’s planning intentions, when dealing with a short-term waiver application.

61.  It is understandable that Mr Litton places great emphasis on Elias J’s judgment in Molinaro, in support of his argument.

62.  As I have analysed, the mere presence of an element of planning control in the decision-making process is not in itself sufficient to turn a decision on lease modification into a public law one, amenable to judicial review, according to the authorities discussed above – many of which are directly binding on this Court.  And as has been pointed out in most if not all of these lease modification cases, the user restriction in question must have been inserted into the relevant title document not only for a commercial or economic interest, but also for planning considerations.  Hartmann J expressly recognised this self-evident reality in Rank Profit, supra, at p 187 (para 75).

63.  Does the presence of some administrative planning guides or large scale Sub-region plans, which systematically set out the Government’s planning intentions, and which are published and available to the public for inspection, make any difference?  Here, I note that land in the New Territories, at least in the old days, was granted in lots under Block Crown leases, which typically covered many lots within a demarcation district.  So to that extent, one could actually view the user restriction covenants in a Block Crown lease as expressing the planning intentions of the Government in relation to the demarcation district covered by the Block Crown lease.  And of course, the Block Crown lease is registered in the Land Registry and is available to the public for inspection.  On the authorities binding on me, that alone is not sufficient to bring a lease modification case in relation to a Block Crown lease restriction within the public law domain, attracting judicial review by way of remedy.

64.  Furthermore, as a matter of history, the modern day town planning regime did not come into being, as a matter of gradual changes, until after the landmark decision of the Court of Appeal in Attorney General v Melhado Investment Ltd [1983] HKLR 327, which hastened a significant breakdown of the Government’s planning control regime in the New Territories administered through the enforcement of restrictive user covenants in Block Crown leases.  To deal with the ensuing problems, new town planning legislation was introduced and development permission areas were designated, which were in due course replaced by statutory outline zoning plans prepared systematically in relation to many parts of the New Territories (as well as elsewhere) under the revamped Town Planning Ordinance.  See generally Cruden, Land Compensation and Valuation Law in Hong Kong (2^nd ed), Chap 20.  On the other hand, on the evidence, the Planning Guide has been in existence since the early 1980s and it cannot be seriously disputed that similar administrative plans with no statutory force have been prepared by the Government for a long time.  Yet all this did not prevent the Privy Council and the local courts from concluding that in lease modification cases, the role played by the Director of Lands was merely that of a Government land agent.  It is, in my view, too late to turn back the clock to say that just because, as a matter of fact, the Director, in making a lease modification decision, bears in mind planning considerations, he is playing a public function and his decision is amenable to judicial review.

65.  None of the cases mentioned drew any distinction between land that was included in a non-statutory administrative plan and land covered by an outline zoning plan.  Mr Litton submits that in relation to a piece of land covered by an outline zoning plan, the Government’s role in planning control has been taken over by the Town Planning Board in terms of its relevant outline zoning plan, and therefore the Government, in making a relevant lease modification or short-term waiver decision, is merely performing the role of a private land owner.  He points out that in Rank Profit, the land in question was covered by an outline zoning plan.

66.  No such distinction can be found in the decided cases.  Moreover, even in the case of land covered by an approved statutory plan, it is not disputed that the Government would not even entertain, let alone grant, a lease modification application unless the intended development is in accordance with the use envisaged in the approved plan, or a s 16 permission has first been obtained.  This policy or practice of the Government can only be explained by the Government’s ‘public’ role in ensuring that the relevant statutory town planning control is respected and complied with by developers.  Put another way, if the Government had really been a private land owner, looking after its own commercial and other interests as a landlord only, the Government could have granted the lease modification application and pocketed the premium required (or at least a part of it) first, leaving it to the applicant/developer to take his chance before the Town Planning board for the necessary planning permission.  The Government’s refusal to even entertain any such modification request unless the statutory town planning control regime has been satisfied reflects its ‘public’ role in ensuring that the statutory town planning control is fully respected, which, it would seem, goes quite beyond the requirement of s 13 of the Town Planning Ordinance. 

67.  Yet, notwithstanding all that, the cases have uniformly held that the Government’s decision in a lease modification case, regardless of whether the land in question is covered by a statutory plan, is not amenable to judicial review.

68.  It is too late to argue, and at any rate, not at this level of the court system, that some distinction along the line submitted by Mr Litton should have been drawn, that the previous cases were wrong to that extent (ie to the extent that the land concerned was included in an administrative plan) or, still further, that in fact the previous cases were all wrongly decided, even where the land was covered by a statutory plan, because the Government’s role was, after all, much more than private.

69.  In this discussion, it is also necessary to bear in mind the nature and status of the administrative plans.  They have no statutory underpinning and do not have any statutory force.  They are prepared by the Planning Department of the Government.  In their preparation, although various internal consultation exercises were conducted, no public consultation took place.  Whilst they are published and therefore available for general inspection, they are liable to change without further notice, as the stamp on the Planning Guide in the present case clearly says.  It is true that there is an established procedure for making changes to the administrative plans, but again, no public consultation is required, and no prior notice would be given to the public of the change.  There is simply no comparison to the draft or approved plans prepared by the Town Planning Board.

70.  Indeed, when compared with the restrictive user covenants in Block Crown leases, the designations in the administrative plans are much less certain and are definitely without binding force.  If the restrictive user covenants in a Block Crown lease are not in themselves sufficient to make any decisions to modify the same a public law decision, attracting the remedy of judicial review, it is difficult to see how the much less certain, vague and temporary designations in the administrative plans which have no legal force in themselves, can have such an effect on the decision of the Director on whether to follow them or to depart from them, in terms of the decision’s amenability to judicial review.

71.  The applicants’ argument has wide implications.  It cannot be restricted to a decision on the grant or refusal of a short-term waiver.  It must, by definition, spill over to decisions over lease modifications.  Take the present case as an example.  What if the Government lessees were to ask the Director for a lease modification regarding the lots so as to allow them to erect and operate permanently an asphalt plant on the lots?  According to the applicants’ argument, any decision by the Director would be liable to judicial review, it being a decision made within the public law sphere, by reason of the quasi town planning authority role played by the Director to give effect to the planning intention evinced in the administrative plans.  This would, however, constitute a serious inroad to that part of the Hang Wah Chong principle as has been repeatedly reaffirmed by the Court of Final Appeal and the Court of Appeal, particularly in the latest Rank Profit case, regarding the Government’s absolute discretion in making such lease modification and premium decisions, free from interference of the public law.

72.  The ultimate question, in my view, is what exactly the Director is doing in making a decision to grant a short-term wavier.  Is he performing a public function or is he performing essentially a private function?  In a difficult or borderline case, it is a matter of overall impression and degree.  To be very frank, some public interest or benefit is certainly present here.  The Director takes into account the views of many other departments – traffic, police, and amongst others, planning.  In a significant sense, the Director must be performing his task for the public benefit when taking these views into account.  That in fact is a sign of good government.  However, the case law has very firmly established that that element of public benefit or interest is in itself insufficient to bring the case within the domain of public law.  In my view, indeed the presence or absence of a published administrative plan does not, in substance, make any difference.  Whether the Planning Department, in rendering its advice to the Director, is relying on a published administrative plan covering a large area, or whether it is relying on some ad hoc planning considerations, does not alter the nature of the consultation that the Director conducts, before making his decision.  It is still an internal consultation, as a responsible Government official or department is expected to do in a matter of the present type.

73.  Finally, as regards the point that the administrative plans have no teeth of their own, and promotion, implementation and enforcement of the planning intentions embodied in them must rest with the Director of Lands in land transactions, I do not think the argument takes the discussion any further.  The argument assumes that whenever some planning consideration is present, a sufficient public element is there to render the decision process amenable to judicial review.  As Hartmann J has pointed out in Rank Profit at first instance (at p 187, para 75), that argument cannot survive the Court of Appeal’s decision in Canadian Overseas Development, supra.  Clearly, the original terms of the lease requiring approval in terms of a master layout plan in that latter case and equally any modification of those terms would have been influenced by planning considerations.  Yet the Court of Appeal rejected the contention that the Director in that case was exercising a public function.

74.  Likewise, in Polorace, the Court of Appeal held that no judicial review attached even though the Government had a known land administration policy of not charging premium for granting approval under a so-called ‘DD and H’ (design, disposition and height restriction) clause.

75.  As explained, Hong Kong and China Gas and Kam Lan Koon both concerned renewal of leases granted for specific purposes under most unique circumstances during the run-up to 1997.  Quite plainly, a host of public considerations were involved.  In those circumstances, sufficient public elements were present to render the resulting decisions amenable to judicial review. 

76.  Molinaro has been specifically distinguished by the Court of Appeal in Rank Profit, which is of course binding on this Court.  In any event, it is not an authority for saying that whenever a decision is motivated by some planning considerations, it must be a public law decision amenable to judicial review.  That sort of proposition has no currency in Hong Kong based on the authorities already described.

77.  Molinaro was distinguished by Tang VP in Rank Profit on the ground that what was involved in the English case was the exercise of statutory powers to perform statutory functions, whereas in a typical lease modification case, no statutory power would be involved.  Mr Litton has criticised the distinction drawn by the learned judge as unsustainable.  However, it should be noted that in Molinaro itself (in paras 74 and 75), Elias J himself distinguished an earlier English case, R v The Lord Chancellor, ex parte Hibbit and Saunders [1993] COD 326 (concerning an unsuccessful complaint against a Government tendering process) by pointing out that the power to contract there was not conferred by statute and the Lord Chancellor’s Department was exercising a common law power.  The judge observed that the courts had traditionally shown greater caution towards reviewing the common law powers of the Crown compared with statutory powers.

78.  Free from authority, again, the fallacy of the argument lies in assuming that whenever some element of public interest or benefit or some published public policy is involved, the decision in question must be a public law one.  No, the true question is whether some public element(s) of sufficient weight is/are present in a particular case so as to render the function performed a public one, and the decision made a public law decision amenable to judicial review.

79.  Looking at the role played by the Director in granting a short-term waiver, the Director’s role and function are essentially private in nature.  In my view, both on authorities (most if not all of which are binding on this Court) and on principle, the resulting decision is not amenable to judicial review.

80.  That the subject matter in question is not a lease modification but rather, a short-term waiver, which is nothing but a temporary modification in substance (although in form, it comprises a breach plus waiver), does not assist the applicants at all.  If anything, it makes the position worse for the applicants.  If a decision on a permanent lease modification does not attract judicial review by way of remedy, it is difficult to see how a decision on the grant or refusal of a temporary, non-permanent, short-term waiver should be amenable to judicial review.  Almost by definition, the Director’s function, in making the relevant decision, is to obtain the best or a reasonable return from the land for the time being, by allowing the lessee to use the land in a particular way he desires.  In the nature of things, save in exceptional circumstances, planning considerations do not really come into play given that the arrangement is a temporary one, no permanent lease modification is involved, and the waiver can be brought to an end at a short notice.  By comparison, town planning considerations would, in a typical case, assume a greater significance when a lease modification application is involved.  Yet, as has been pointed out repeatedly, the authorities have said that the role of the Government in a lease modification case is that of a private land owner.  That being the case, the case of a short-term waiver must be an a fortiori one.   

81.  If the applicants’ argument is correct, as I said, not only will the grant or refusal of short-term waivers be susceptible to judicial review, lease modification cases will likewise be susceptible to judicial review, at least so far as the land in question is covered by an administrative plan.  Furthermore, not only will the immediate party to the relevant application be able to resort to judicial review to challenge the Government’s decision, many other parties and persons, like the applicants in the present case whose interests are only commercial and economical, may apply to challenge the grant or refusal of lease modification applications (assuming, for the time being, that the applicants’ argument on standing is sound).  And, it must be pointed out, these implications do not stop there, for the applicants’ argument in fact carries over to the sale of land.  For it must be remembered that according to the Planning Guide, note 1 and the applicants’ argument, the planning intentions will be implemented via land sales as well.  So, the sale of land and the terms of sale will likewise be susceptible to judicial review, so long as the land in question is covered by an administrative plan.  And again, many persons, other than the intending purchaser, will have standing to make such applications for judicial review.

82.  Borrowing the words of Bokhary J in Canadian Overseas Development, supra, at p 294H, ‘I am unable to view so uncertain a state of affairs, or so serious an inroad into the freedom of contract enjoyed by the [Government] and those dealing with it, as desirable or – I am happy to say – the product of our law’.

83.  This, in itself, is fatal to the judicial review applications.

84.  For the sake of completeness, I would set out my views on the substantive challenges, and then come back to the issue of standing, which is, under the modern approach, merit-dependent to a significant extent.

1^st application – grounds of challenge

85.  In relation to the first decision challenged in HCAL 28/2006, ie the grant of the short-term waivers, the applicants’ case is that the Director has failed to consider three relevant matters.  First, the planning intention for the area as evidenced in the Planning Guide and/or Sub-region Plan.  Secondly, that the proposed asphalt plant was not intended to be temporary.  Thirdly, the environmental impact of the asphalt plant.

86.  It is also contended against the Director that she took into account irrelevant matters, including that the short-term waivers were for a short-term and that there was no prohibition on the Government granting short-term waivers for the use of private land.

87.  Finally, the Director is said to have failed to give any adequate or intelligible reasons for granting the short-term waivers.

Failing to consider

88.  In relation to the first argument, ie failing to take relevant matters into account, I have no difficulty at all in rejecting it.  On the particular facts of the present case, all the substantive arguments that the applicants rely on have been raised by way of objections with the Director at the material time.  It is plain that the objections were considered by the Director.  The real complaint of the applicants, it seems to me, is that they do not agree with the resulting decision of the Director.  In other words, the real complaint of the applicants is that the resulting decision was Wednesbury unreasonable.  But then that is a different matter and it has not been raised as such. 

89.  Put at the level of failing-to-consider, as I said, according to the facts, as I have outlined at the beginning of this judgment, it is simply a non-starter.  JSM’s argument based on planning intentions was duly summarised in paragraph 2.5 of the District Lands Conference ‘notes’ prepared for the purposes of the relevant conference meeting.  Paragraph 2.5(ii) specifically outlined the objection in question.  It is plain from the minutes of the conference meeting that the objection based on planning intentions was noted at the meeting (the minutes specifically referred to paragraph 2.5 of the ‘notes’).  Furthermore, it is also plain that the answer to the objection, members of the conference felt, lied in the fact that the waivers were of a temporary nature and they would neither indicate a permanent land use nor frustrate the long-term planning intention of land use of the area concerned.

90.  Leaving aside whether one agrees with that reasoning, the complaint based on the lack of consideration must fail.

91.  Likewise, the complaint that the Director failed to consider that the proposed asphalt plant was not intended to be temporary must be rejected.  It is plain from the conference minutes that the members felt that the waivers to be granted, and therefore whatever asphalt plant to be erected on the lots, were of a temporary nature and would not therefore indicate a permanent land use nor frustrate the long-term planning intention of the area.  Again, regardless of whether one agrees with the reasoning, so far as the alleged failure to consider relevant considerations is concerned, the complaint must be rejected.

92.  It has been debated between counsel as to whether note 1 to the Planning Guide applies to short-term waivers.  Note 1 refers to lease modification or land sales only.  Strictly speaking, it does not apply to short-term waivers.  But there is no dispute that to the extent that the Planning Guide evinces the Government’s long-term planning intentions, and to the extent that the grant of a short-term waiver might or could affect the long-term planning intentions, the Government does take the planning intentions into account.  I do not think that is disputed by the Government.  But on my analysis, this has no real bearing on my conclusion.

93.  As regards environmental impact, quite plainly, according to both the notes and the minutes, environmental matters had been taken into account by the Director.  The Department of Environmental Protection had been consulted.  It had no particular comment on the proposal from an environmental planning point of view, after having studied the further information provided by the applicants.  A ‘decontamination clause’ was inserted into the draft waiver letters.  Operation of the proposed asphalt production plant on the lots would be subject to statutory control under s 20 of the Water Pollution Control Ordinance (Cap 358) and the Air Pollution Control (Specified Processes) Regulations (Cap 311F).  Furthermore, it must be remembered that the Director was the Director of Lands, not the Director of Environmental Protection.  She was quite entitled to rely on the expert advice of the Department of Environmental Protection on the possible environmental impact of the proposed land use.  The Director certainly took into account the expert advice presented before the conference by the environmental expert.  This also disposes of another point belatedly made by the applicants, namely, that the Director failed to take into account the impact of the proposed plant on a nearby butterfly conservation area.  This was not raised by JSM in their objection letters.  Nor was it mentioned specifically by the experts from the Environmental Protection Department.  At any rate, the proposed asphalt plant would be approximately 2.4 kilometres from the butterfly conservation area, and there is and was no basis nor evidence to suggest that the asphalt production plant would adversely affect the conservation area.  This is a non-point.

Considering irrelevant matters

94.  As regards the complaint that the Director has taken (allegedly) irrelevant matters into account, I disagree with the argument that the consideration that the short-term waivers were only for a short-term was an irrelevant consideration.  To start with, that was never a fair way of putting the consideration that the Director had taken into account.  What the Director actually took into account, according to the minutes, was that ‘the grant of a waiver was of temporary nature and it would neither indicate a permanent land use nor frustrate the long-term planning intention of land use of the area concerned.’  Far from it being an irrelevant consideration, I agree with Mr Godfrey Lam SC (Mr Alexander Stock with him) when he submitted that this was a most material consideration.  The ability of the Government to terminate the short-term waivers by a three-month notice (after the initial period) was of paramount importance in the consideration of the Director.  That ability would enable the Director to revert the user of land to its original intended purpose at a short notice.  There is no legal constraint on the exercise of the Director’s power.

95.  As a matter of law, which I have gone into in great detail in the preceding session, a decision to terminate a short-term waiver by notice is a decision that cannot be challenged by judicial review.  It is purely a matter of contract.  The present case is wholly distinguishable from the Sha Ling proceedings, where, so it was found by the Court of Appeal, the Town Planning Board had a policy, by way of guidelines, the effect of which was that:

“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.

...

in the absence of any new planning circumstances, an applicant could expect to have his renewal granted almost as of right”  (at p 25, paras 22 and 23)

96.  Mr Litton argues that according to the internal instruction of the Government relating to short-term waivers, ‘in practice, STW [short-term waivers] are renewed upon expiry and subject to any review of the fee and the deposit (as appropriate), and the owner/occupier observing the conditions of the STW’ (para 10.1(A)(v)).  Therefore, counsel submits, the position is indistinguishable from that of a permittee under s 16 of the Town Planning Ordinance.

97.  With respect, the argument is fallacious.  First, it conveniently ignores the fact, as I have held to be the case, that whereas a Town Planning Board decision on the grant or refusal of a permission or renewal application is amenable to judicial review for being a public law decision, a decision by the Director of Lands to grant or refuse a short-term waiver or the renewal thereof is a private law matter, not susceptible to judicial review.  That being the case, there is simply nothing to prevent the Director from refusing to renew a short-term waiver and terminating it by giving the appropriate short notice.  Put another way, there is no accrued or quasi accrued right to renewal, in contradistinction to the case of a s 16 permission.  Moreover, as the evidence filed on behalf of the Director has emphasised, the instruction contains only practice guidelines, rather than inflexible rules.  Whilst guided by the guidelines in the instruction, the Director is not constrained by the procedures or considerations listed therein.  In appropriate circumstances, senior officials in the Lands Department including the Director will consider termination of a short-term waiver on a case-by-case basis.  There is always room to depart from the guidelines in the instruction in an appropriate case.

98.  In other words, in the context of the present discussion, the fact that the Director may always, as a matter of law, terminate the short-term waivers at a short notice was, indeed, a highly-material consideration to be taken into account.  The Director cannot be criticised for taking that into account.

99.  Secondly, even if, for the sake of argument, one were to assume that the Director’s decision to grant or refuse an application for a short-term waiver or the renewal thereof is amenable to judicial review, the present case is still very much different from the situation faced by the Court of Appeal in the Sha Ling appeal.  The crucial difference is that in that case, there were published guidelines to the effect already described.  Given the statutory town planning regime and the Board’s own practice, which effectively gives a successful applicant for a s 16 permission some accrued right, in the absence of any new planning circumstances, to renewal, the subjective intention of the applicant to actually ask for a renewal is understandably of importance to the Board’s consideration in deciding whether to grant the initial permission in the first place.  Here, the practice relied on by the applicants is only found in an internal instruction.  The published pamphlet on short-term waivers does not make any representation about the chances of renewal, whether as a matter of law or as a matter of practice.  And as I say, the instruction as such is not a published document.  No public law question of legitimate expectation or the like is involved.

100.  The short-term waivers, following the standard form, were all for an initial term of one year commencing from 1 May 2006.  The term so granted is automatically renewed quarterly subject to three months’ notice of termination by either side.  Moreover, condition (x) specifically reserves to the Government the right to revoke/terminate the waiver at any time on giving three months’ notice in the event of reasonable complaint made by owners/occupiers of adjacent properties against the use of the lots for asphalt production/storage.  It is plain, upon a proper reading of the terms of each of these short-term waivers, that the right given to the Government to terminate in condition (x) is in addition to the general right to terminate upon giving three months’ notice.  The additional right does not qualify the general right about renewal or termination by three months’ notice.  Indeed the additional right is exercisable even within the initial term of one year and is exercisable in the middle of a renewed term.  Mr Litton’s argument that condition (x) qualifies the general right to terminate by three months’ notice is therefore rejected.  In other words, the short-term waivers themselves do not fetter the Government’s right not to renew but to terminate the short-term waivers, if it so wishes, by giving a short notice of three months.

101.  As regards the complaint that the Director has treated as relevant the fact that there was no prohibition on the Government to grant the short-term waivers for the use of private land, in my view, on a proper reading of the minutes in their context, the minutes were saying no more than that the Government, as a landlord, was free to grant waivers of potential breaches.  Apart from highlighting the fact that in the matter under consideration, the Government was really acting as though it were a private landlord, I do not see any significance of this part of the minutes.  Certainly, it did not amount to an irrelevant consideration that could not be taken into account.

Reasons

102.  Finally, it is said that the Director has failed to give adequate or intelligible reasons.  Mr Godfrey Lam has refused to accept that there was any duty on the part of the Director to give reasons.  I believe his stance was well taken.  But, the law is such that if reasons are indeed given even though there is no duty to give any, the reasons must be adequate and intelligible: South Bucks District Council v Porter (No 2) [2004] 1 WLR 1953, 1964, para 36; Capital Rich Development Ltd v Town Planning Board [2007] 2 HKLRD 155, 186, paras 97 and 98.  

103.  A common sense approach is required in respect of reasons.  Reasoning must be examined with reality and contextual common sense: Capital Rich, supra, at para 98.  For the reasons explained, I believe the reasons given, albeit short, were both adequate and intelligible – whether one agrees with them is a wholly separate matter.  It must be emphasised that the minutes, adopted as reasons supplied by the Director to JSM, were minutes of a District Lands Conference meeting.  It must be viewed in context and must not be read as if it were taken from a statute.  Both the writer and the readers were people who were well familiar with the issues in question; so were JSM and the applicants.

104.  In my view, the crucial reason adequately and intelligibly given in the minutes, was that the short-term waivers could be terminated at a short notice, and were therefore to be of a temporary nature; they would neither indicate a permanent land use nor frustrate the long-term planning intention of land use of the area in question.

105.  In any event, given the nature of the disputes in question, I do not think that any failure to give adequate and sufficient reasons in the present context would in itself entitle the applicants to any substantive relief, which is in any event discretionary in general and particularly so in a case where the only breach (hypothetically) was a failure to give reasons at the time.

106.  As I have observed, there is no challenge directly against the resulting decision to grant the short-term waivers on Wednesbury unreasonableness or irrationality ground, although, in substance, it very much underlies the applicants’ specific complaints.  Strictly and technically speaking, I therefore need not deal with it as such.  However, again for the sake of completeness, I would say this: the resulting decision to grant the short-term waivers was one falling within the discretionary area of judgment of the Director (assuming, for the sake of argument, that the decision is amenable to judicial review).  It was a decision falling within the expertise of the members of the District Lands Conference and one involving the allocation of limited resources in the society.  It concerned matters that the courts do not lightly intrude into, by reason of their own constitutional and institutional constraints.  R v Director of Public Prosecutions, ex parte Kebilene [2000] 2 AC 326, 380E-381E; Woolf, Jowell & Le Sueur, de Smith’s Judicial Review (6^th ed) paras 1-030 to 1-036.  

107.  The Director was fully entitled to bear in mind the fact that the Planning Guide and Sub-region Plan were non-statutory, not final, and subject to change without notice, in giving whatever weight she might want to give to the planning intentions evinced therein.  The Director was also fully entitled to take into account the fact that the Planning Department itself, the author of the administrative plans and the very department which would be well conversant with the planning intentions concerned – whether past, present or future, did not raise any objection to the proposed short-term waivers.

108.  In those circumstances, even assuming, for the purposes of argument, that the Director’s decision is amenable to judicial review, I do not believe that the Court should interfere with her decision.  This is a case for a ‘light-touch’ or ‘soft’ review, if it ever is reviewable at all.  It is for the Government, not the Court, to decide how land, as always a scarce resource in Hong Kong, should best be put to use.  Art 7 of the Basic Law specifically tasks the Government of the HKSAR, not the courts, with the management, use and development of the land and natural resources within the HKSAR and for their lease or grant for use or development.

Conclusion on merits of 1^st application

109.  In short, the first application under HCAL 28/2006 fails also on the merits.

2^nd application – grounds of challenge

110.  As regards the second application, it is said that the Director, in refusing to terminate or consider terminating the short-term waivers, has failed to take into account relevant matters, in particular:

(a)  the Lands Department’s own policy that waivers are intended to be for a temporary period;

(b)  the planning intention for the area;

(c)  whether the plant operator intended to use the lots for asphalt production for longer than any short-term or temporary use;

(d)  that allowing the continued use of the lots would frustrate the Government’s intended use of the lots and/or the wider area and encourage the long-term use of the lots for asphalt production; and

(e)  environmental matters including the impact of allowing the plant to continue operating on the butterfly conservation area.

111.  It is also said that the Director has failed to give any or any proper reasons why it was appropriate not to terminate the short-term waivers and/or to continue to allow the lots to be used for asphalt production. 

112.  Further, it is contended that if the Director concluded that the continued use of the lots for asphalt production was temporary and/or such use was consistent with the planning intention for the area, that conclusion was irrational.

No decision made

113.  The primary answer of the Director to the challenge is that she has made no relevant decision at the material time.  I will not repeat the relevant chronology of events leading to this dispute.

114.  Having read the correspondence in its entirety, and having borne in mind the affidavit evidence filed on behalf of the Director, I have come to the conclusion that the Director has made no relevant decision at the material point of time in question.  The letter, written on behalf of the Director, simply conveyed the Director’s disagreement with the contentions of the applicants, who urged the Director to terminate the short-term waivers, and put forward arguments to refute, on a selective basis, the points made in JSM’s two letters of 16 May 2007.  Not agreeing with a request for termination is, as a matter of logic, not equivalent to making a positive decision there and then not to terminate.  But more importantly, the question is not about the proper construction of the letter written on behalf of the Director.  It is not a matter of construction.  It is a matter of fact.  That is to say, whether as a matter of fact, the Director has made a decision not to terminate the short-term waivers after receiving and considering the contentions and requests of the applicants at the material time, or not even to consider terminating the short-term waivers.  The question is not about the proper construction of the letter written on behalf of the Director in reply to JSM’s letter.

115.  And in relation to this factual issue, I have the sworn evidence from an Assistant Director of the Lands Department maintaining that ‘there were strictly no refusals as claimed’ (para 21 of his affirmation filed on 9 January 2008) – which is a factual assertion.  I note that the Assistant Director made his affirmation partly from his own knowledge and partly from information which he had derived from perusal of files and records for the case kept in the Department of Lands (para 1).

116.  I do not find his explanation of the position, as set out in his affirmation, incapable of belief, Mr Litton’s specific criticisms of the evidence filed and his point that the Director never wrote further to clarify her position notwithstanding.

117.  On the materials before me, I am unable to make a finding that the Director did make a decision of refusal at the particular point in time, which was communicated – and indeed intended to be communicated – to the applicants by the letter of reply.

118.  Again, on the basis of the evidence contained in the affirmation, I do not believe, and I am unable to find, that the Director has reached the decision, at the particular point in time, not to consider JSM’s request that the short-term waivers be terminated.  Indeed according to the evidence, ‘the matter however did receive specific consideration as a result of the applicants’ solicitors’ letters of 16 May 2007 ... requesting the Director to terminate the STW’ (para 17 of the affirmation).  Whether one agrees with the eventual decision – plainly some decision(s) must have been made because the short-term waivers have indeed been renewed automatically, and not terminated, even up to the time of hearing – is quite a separate question.

119.  Strictly speaking, this is more than sufficient to dispose of the second challenge.

Merits

120.  However, in deference to counsel’s argument, I would deal with the substantive complaints nonetheless.

121.  Insofar as the substantive complaints overlap with the complaints already made in the first application and dealt with above, I will not repeat myself.

122.  It is worth emphasising that the second decision was allegedly made shortly before the first anniversary of the short-term waivers.  Whilst a lapse of time itself might, arguably, constitute a material change of circumstances, calling for a reconsideration of the short-term waivers, I do not consider the lapse of one year a change of circumstances of such materiality that not to terminate the short-term waivers there and then would amount to an irrational or Wednesbury unreasonable decision.  In this regard, I will not repeat my point above regarding the Court’s approach when it comes to dealing with a decision falling within the discretionary area of judgment of the Government.  Coupled with the absolute right on the part of the Director, both under private law as well as public law (for reasons already explained) to terminate the short-term waivers at a short notice, I do not find the refusal to terminate the short-term waivers in mid-2007 irrational or Wednesbury unreasonable.

123.  In my view, the case does not really turn on the subjective intention of the asphalt plant operator to remain on the land and operate his plant for as long as possible.  In fact, that intention must have been plain for everyone to see.  Nobody would have been prepared to expend $8 million on a piece of agricultural land, the amount said to have been incurred by the plant operator in question, to erect a plant to produce asphalt, if he did not hope or expect that he would be allowed to continue with his operation for a period of time substantially longer than one year.  The point under discussion is simply the mirror image of JSM’s objection that the short-term waivers, once granted, would create a state of affairs that would be more than temporary.  I believe the Director was fully conversant with that fact whether at the stage of initial application or at the subsequent stage when she was urged to terminate the short-term waivers.

124.  The true question is whether she was right in thinking that she had an absolute right to terminate the short-term waivers at a short notice if and when she wished to do so, never mind the subjective hope and expectation of the asphalt plant operator.  I have already answered it with a ‘yes’.

125.  Equally significant is the fact that there is nothing in the material to suggest that in mid-2007, when JSM urged the Director to terminate the short-term waivers, the Planning Department had advised or requested the Director to terminate the short-term waivers for planning considerations.  As I said, the Director was the Director of Lands, not the Director of Planning.  She was entitled to rely on the advice of the Planning Department.  She was entitled to depend on the Planning Department performing its own responsibility of monitoring actual land use on the ground in light of its planning intentions.  There is simply no suggestion that in 2007, the advice from the Planning Department had changed from that given one year earlier.  The same may be said of the position of the Department of Environmental Protection.

126.  It is said that allowing the short-term waivers to continue indefinitely is itself a breach of the short-term waiver policy.  In my view, this argument misunderstands the nature of the policy.  The short-term waiver policy expressly envisages that a short-term waiver, once granted, may be continued indefinitely, according to the internal instruction.  Repeated renewals per se do not amount to infringing the policy.  One must not be misled by the term ‘short-term’.  Upon a proper understanding of the policy, the term refers to the tenure enjoyed by the lessee under the waiver as being a short-term one, namely three months in a normal case, after the initial period of one year (or three years).  It does not mean that when all renewed terms are added up, the total term of the wavier (as renewed) must be a short one.

127.  As to whether in a prolonged situation, which was not the case in relation to the second application as it only related to one year’s waiver and a possible renewal for another three months at the time when the application was taken out, the long-term planning intention would be frustrated, it is a different matter which does not call for a decision in the present case.  But I would imagine that even in such a case, the very indefinite and fluid nature of the administrative plans must be firmly borne in mind, particularly the fact that they may be changed without notice.  And of course, the attitude of the Planning Department, which is responsible for preparing the administrative plans as well as their revisions and changes, must also be highly relevant in deciding whether a decision to further renew a waiver is justifiable or challengeable.

128.  As I say, none of this calls for a decision in the present case so far as the second application, which relates to a supposed decision not to terminate made sometime in May or June 2007, shortly before the first anniversary of the short-term waivers, is concerned.

129.  As regards the alleged failure to give reasons, given my conclusion that no decision was made at the particular point in time, no question of a failure to give reasons for the (non-existent) decision can arise. 

130.  In any event, even if a decision had been made, no question of the adequacy of reasons could have arisen unless there was a duty to give reasons or unless reasons were in fact given.  In my view, there simply was no duty to give reasons.  In this regard, I take into account the test elaborated by Hartmann J in So Chung v Commissioner of Correctional Services, HCAL 2438/2000, 31 January 2001, p 6 et seq.  I have come to the conclusion that there was no duty to give reasons after considering the requirements of fairness, which really underlies the requirement to give reasons in some cases (but not in others), the character of the decision-making body, the kind of decision being made, the framework in which the Director operated, the capacity in which the Director made her decision (namely, as landlord to grant or renew a short-term waiver), the standing and interest of the applicants in the matter and their entitlement to be heard as a matter of law and in practice, the absence of any appeal mechanism and the fact that Director had previously disclosed reasons (on a voluntary basis) in relation to the initial grant of the short-term waivers.  In short, in my view, fairness does not require the Director to give reasons in relation to the supposed 2007 decision.

Conclusion on merits of 2^nd application

131.  In conclusion, the second application under HCAL 98/2007 also fails on the merits.

Standing

132.  This being the case, the issues of standing as well as delay lose much if not all of their significance.

133.  Again, for the sake of completeness, I would indicate that given the lack of substantive merits of the challenges, even assuming that the decisions in question are amenable to judicial review, I would hold that the applicants do not have sufficient standing (at the full-hearing stage) to mount the challenges.  See generally de Smith, op cit, para 2-020 et seq on this entire topic.  I am particularly influenced by the following matters.  First, the lack of merits of the challenge, which is an important though by no means determinative consideration.  Secondly, the very indirect and remote interests that the applicants rely on, namely, pure commercial and economic interests as competitors in the same trade.  The applicants do not have any propriety interest, whether short-term or long-term, in any land in or around Lung Kwu Tan.  Nor do they have any connection, commercial, economic or otherwise, within the area.

134.  Challenges based on genuine concerns about planning intentions and environmental protection can be made by environmental concern groups, and none has been brought.

135.  The argument of the applicants that granting the short-term waivers enables the asphalt plant operator to compete in the trade unfairly is without merit, and cannot be relied on to give the applicants standing.  The short answer to the applicants’ complaint is that they may also acquire agricultural land in the New Territories and make a similar application for a short-term waiver.  If successful, they will also enjoy the relatively cheap use of land and be able to produce their asphalt less expensively but, be subjected to the same risk of the waiver being terminated at a short notice, with the loss of the capital investment concerned.

136.  I bear in mind the implications of according standing to persons like the applicants in challenges of the present type.  If the applicants have standing, what about the customers or consumers of asphalt in Hong Kong?  Do they not have an interest also in obtaining supply of cheaper asphalt?  And if they also have standing, what about workers working in the asphalt production trade (or a concerned labour organisation), when decisions on the grant or refusal of the short-term waivers or their renewal would affect job opportunities, particularly when the economy is bad?

137.  Similar and even more difficult and serious implications will arise because the same argument would apply to many other trades and businesses in Hong Kong, and be not limited to asphalt production, given the hard fact that land is a scarce and exceptionally costly resource in Hong Kong, not only for the trade of asphalt production, but for many other trades and businesses as well.  And in every trade or business, there are bound to be many many people ‘interested’ in a commercial or economic way, whether horizontally (such as competitors) or up or down the production or consumption chain (such as suppliers, workers and customers or consumers). 

138.  The present case is wholly distinguishable from the Sha Ling proceedings.  In relation to town planning matters before the Town Planning Board, by reason of the statutory provisions under s 16 of the Town Planning Ordinance, as well as the Board’s own practice of hearing anybody who may be bothered to make a submission to the Board in relation to a particular s 16 permission, it was not surprising that the Court of Appeal would conclude that the applicants had sufficient standing in that case (see pp 31-32, paras 64-68).  Moreover, the merits were on their side.

139.  None of these applies to the present case.  The mere fact that the applicants have written letters of objection to the Director and have received replies from the Director is not in itself sufficient to give them standing.  In R v Secretary of State for the Environment, Ex parte Rose Theatre Trust Co [1990] 1 QB 504, 521G-H, Schiemann J (as he then was) pointedly observed:

“Clearly a person cannot obtain a sufficient interest by writing a letter to the Secretary of State.  I approach with reluctance the submission that because the Secretary of State sent a considered reply, that gives the recipient an interest which he would not have had if no reply had been sent beyond a formal acknowledgement.  If the court were to sanction such an argument it might cause the decision makers to be less helpful to the general public.  Further, what about the man who appears in the decision maker’s office, the man who telephones the decision maker and so on?”

140.  In conclusion, I would hold that the applicants’ applications also fail for want of standing.

Delay

141.  Finally, as regards delay, as I said, it has lost its significance entirely in the present proceedings.  As the applications fail, no question of relief arises, to which the issue of delay, at this stage, is relevant. 

142.  All I wish to say is that, first, I reject Mr Litton’s argument that as a matter of principle or law, s 21K(6) of the High Court Ordinance (Cap 4), which debars relief in the case of undue delay ‘in making an application for judicial review’, does not apply to undue delay in the prosecution of an appeal against the refusal of leave at first instance. 

143.  In the leading case of R v Dairy Produce Quota Tribunal for England and Wales, Ex p Caswell [1990] 2 AC 738, Lord Goff, giving the lead judgment of the House of Lords, construed s 31(6) and (7) of the Supreme Court Act 1981, the equivalent provisions in UK, ‘as referring, where appropriate, to an application for leave to apply for judicial review’: at p 746G/H.  In other words, leave may be refused if one delays in making an application for leave: Casewell.  And relief may also be refused, counsel accepts, if one delays in making a substantive application for judicial review after leave has been granted: s 21K(6).  Yet, counsel contends, delay cannot be taken into account if one fails to get leave at first instance and has to appeal, but fails to prosecute the appeal without undue delay. 

144.  With respect, this would be a wholly unattractive result which I do not think the provisions require the Court to reach.  In my view, the underlying rationale for denying leave or relief for undue delay applies to each and every step in the judicial review procedure.  The construction placed by Lord Goff on the relevant provisions to cover an application for leave illustrates the flexible scope of the phrase ‘an application for judicial review’.  It includes ‘where appropriate’, each and every step, starting from an application for leave to apply for judicial review before a first instance judge up to and including the last step in the prosecution of a substantive application for judicial review to its logical conclusion in the Court of First Instance.  It includes any interlocutory appeals.  In fact, in my view, it extends and applies to the prosecution of any appeals from the refusal of relief after a substantive hearing for judicial review. 

145.  Another way of looking at matters is that ‘an application for leave’ includes any appeal from a refusal of leave at first instance.

146.  The second point, a point of warning, which I would like to make is this.  Whenever an applicant contemplates asking for an adjournment of a hearing in judicial review proceedings (including any appeals), he must always consider seriously whether it would result in undue delay in the prosecution of his case.  That an adjournment is granted by the court is in itself no guarantee that the resulting delay cannot be criticised as being ‘undue’ subsequently.  Insisting on fixing an unnecessarily late date for hearing so as to suit counsel’s busy diary is always dangerous.  Whilst in the present case, I have little difficulty in understanding the applicants’ reasons for wanting, on more occasions than one, an adjournment of the hearing of the appeal and the accommodation of their counsel’s diary when fixing the hearing date, the resulting delay may not necessarily be found by a subsequent court, viewing the matter with the benefit of hindsight, to be justifiable or excusable.

147.  On the facts of the present case and given my conclusions, it is academic to make any final pronouncement on the effect of delay, if any, on the question of relief.  It should be added that the question of delay would only affect the first application under HCAL 28/2006.  If the applicants had been held to be right in both applications, given the nature of the relief sought in the two applications and their inter-relationship, it would well have been academic to decide whether the question of delay should prevent the Court from granting relief under the first application.  The simple reason is that given that, ex hypothesi, the applicants were also right in the second application, which would not be affected by any question of delay, the relief to be granted under the second application would probably have been sufficient for all practical purposes for the applicants.

Outcome

148.  In conclusion, the two applications are dismissed.  I make an order nisi that the costs of the two applications, including all costs previously reserved, be paid by the applicants to the respondent, to be taxed if not agreed.  I certify for two counsel.

149.  I thank counsel for their assistance.