ASHLEY 121 LTD v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 49/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 49 OF 2010

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J U D G M E N T

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I. INTRODUCTION

1.  Ashley (formerly Best Concord) owns a Triangular Lot. 

2.  In Case 436 Ashley applied to the Authority for the approval of plans for Alterations and Additions (A & A) works to Carson Mansion (situated on the Carson Lot adjoining the northwest boundary of the Triangular Lot).  Ashley’s plans involved the use of development potential of 650 sq. ft. which Ashley claimed was available to the Triangular Lot.

3.  In Case 539 Ashley applied to the Authority for approval of plans involving the building of a shop and auxiliary facilities on the Triangular Lot.  These plans involved the use of the development potential of 650 sq. ft. said by Ashley to be available to the Triangular Lot.    

4.  The Authority rejected the 436 and 539 plans. Ashley appealed to the Tribunal against the rejections.  The Tribunal dismissed Ashley’s appeal.  Ashley now seeks judicial review of the Tribunal’s Decision. 

5.  At one time, the Triangular Lot, the Carson Lot and a Strip Land (abutting on the northwest boundary of the Carson Lot) formed part of a single property (the Mai Lee Property) owned by Mai Lee.  The Carson Lot is essentially sandwiched between the Strip Land and the Triangular Lot. The Strip Land of about 650 sq. ft. (the precise area being 59.2 sq. m. or 637.55 sq. ft.) was subsequently surrendered to Government by Mai Lee to allow Electric Road to be widened. 

6.  It is Ashley’s claim that, in light of the development history of the Mai Lee Property, the benefit of the development potential of about 650 sq. ft. once attributable to the Strip Land now inures to the Triangular Lot.  Ashley argues that, in dismissing its appeals in relation to the 436 and 539 plans, the Tribunal wrongly rejected that claim.

II.      BACKGROUND

7.  In 1970 the Government reserved the Triangular Lot for use as an MTR station.

8.  Mai Lee acquired the Mai Lee Property in 1976. Mai Lee then began negotiating with Government for the construction of Carson Mansion on the Carson Lot.

9.  By letter dated 29 May 1976 Elton Chow (Mai Lee’s Authorised Person) offered to surrender the Triangular Lot for use as an MTR station and the Strip Land for the widening of Electric Road.  The offer was for the Triangular Lot and Strip Land to be surrendered free of charge, but subject to those 2 Lots being treated as part of the Carson Lot for the purposes of the site coverage and plot ratio available to Carson Mansion.

10.  By letter dated 13 December 1976 the Authority informed Mai Lee that, provided no buildings were erected on the Triangular Lot, the development potential of the latter could be used to support a building on the Carson Lot.  The Authority added that the “usual concessions” would be granted in connection with the surrender of the Strip Land for the widening of Electric Road.  This meant that the development potential of the Strip Land could also be used in support of a building on the Carson Lot.

11.  In March 1977 the Authority approved building plans submitted by Elton Chow for building Carson Mansion on the Carson Lot. That Approved Plan made use of the additional development potential mentioned in the Authority’s letter of December 1976.

12.  In September 1977 Mai Lee agreed to surrender the Strip Land for the purposes of widening Electric Road.

13.  In August 1978 the Authority approved amended building plans for Carson Mansion submitted by Elton Chow. 

14.  The Approved Amended Plans referred to a net site area of 27,825.49 sq. ft., calculated by subtracting 650 sq. ft. from a gross area of 28,475.49 sq. ft.  The figure of 650 sq. ft. was described as “Deducted area surrendered for RD widening” (Description A).  A diagram forming part of the Approved Amended Plan also contained the following description (Description B): “(1) 650.00 sq. ft. AREA TO BE SURRENDERED FOR ROAD WIDENING”.

15.  The gross area of 28,475.49 sq. ft. in the Approved Amended Plan included certain plot ratio concessions or bonuses, including one of 5:1 arising in respect of the Strip Land agreed to be surrendered for the widening of Electric Road.

16.  Mai Lee constructed Carson Mansion in accordance with the Approved Amended Plan.  An Occupation Permit for Carson Mansion was issued in June 1979.  Since then the units of Carson Mansion have been

sold to different persons and Carson Lot is accordingly now in multiple ownership.

17.  Mai Lee surrendered the Strip Land in April 1980.

18.  In 1988 Mai Lee assigned the Triangular Lot to Cinat.

19.  Cinat put forward 2 sets of building plans in respect of the Triangular Lot.  The Authority rejected the plans.

20.  Cinat sought judicial review of the Authority’s rejections.  Cinat lost at first instance and on appeal to the Court of Appeal and Privy Council.  See Cinat [1993] 2 HKC 280 (CA) and [1995] 1 HKLR 128 (PC).

21.  Cinat essentially wished to erect a commercial building on the Triangular Lot.  According to the Affidavit of Clive Anthony Viney dated 4 August 1992 filed by the Authority in the Cinat proceedings, after taking account of Carson Mansion, the development potential attributable to the Triangular Lot was 19 sq. ft. affordable roofed-over area.  Cinat wished to put up a building which was well outside that limit.  That (Mr. Viney deposed) was not possible as apart from a residue of 19 sq. ft. “the development potential of the [Triangular Lot] site has been used up or exhausted.”

22.  In 2004 Ashley acquired the Triangular Lot.

23.  On 15 February 2007 Ashley submitted the 436 plans to the Authority.  The plans provide for a non-domestic use building to be erected on the Triangular Lot by way of A & A works to Carson Mansion. The gross floor area of the resultant building would be 9,600 sq. ft.

24.  By letter dated 13 April 2007 the Authority rejected the 436 plans on the following grounds:-

(1) Ashley had not shown that it owned, or had a realistic prospect of exercising control over, the Carson Lot.

(2) Ashley had wrongly made use of the development potential of the Strip Land in its plans.   

25.  On 3 April 2007 Ashley submitted the 539 plans to the Authority.  The plans provide for a shop and auxiliary facilities with a gross floor area of 3.359 sq. m. or 36.16 sq. ft. to be erected on the Triangular Lot.

26.  By letter dated 3 May 2007 the Authority rejected the 539 plans on the following grounds:-

(1) Ashley had not specified how the notional site area of 624 sq. ft. in the building plans had been calculated.

(2) Ashley had not provided sufficient justification of the sizes of proposed switch room shown on the 539 plans.

27.  Ashley appealed to the Tribunal in April and May 2007.  The appeals were heard in March and May 2009.  In February 2010 the Tribunal handed down its Decision upholding the Authority’s rejection of the 436 and 539 plans.  The Tribunal found in Ashley’s favour in relation to the sizes of proposed switch room, but not on the notional area of 624 sq. ft.  The Authority does not appeal against the Tribunal’s finding on the switch room.

28.  The Government eventually decided not to use the Triangular Lot for the MTR.  The Triangular Lot has never been built on.

III.     DISCUSSION

29.  Ashley makes the following complaints about the Tribunal’s decision:-

(1) The Tribunal misunderstood Description A in the Approved Amended Plan.

(2) The Tribunal wrongly held that, by reason of Building (Planning) Regulations (BPR) r.23(2)(a), the development potential of the Strip Land could not be taken into account in the 436 or 539 plans.

(3) The Tribunal made errors in the calculation of development potential in annex B to its Decision.

(4) The Tribunal wrongly held that the remaining development potential arising from the Strip Land was not available for the benefit of the Triangular Lot.

(5) The Tribunal wrongly held that the Authority could require Ashley to demonstrate ownership or a realistic prospect of control over the Carson Lot for the purposes of the 436 plans.

(6) The Tribunal wrongly required Ashley to justify the notional figure of 624 sq. ft. used in the 539 plans.

(7) The Tribunal wrongly rejected Ashley’s argument that, in refusing the 436 and 539 plans, the Authority had acted inconsistently with its past practice.

A. Complaint (1): Description A

30.  A Rectangle of about 650 sq. ft. abutting on the Mai Lee Property (inclusive of the Strip Land) had been surrendered to the Government in 1955 for an earlier widening of Electric Road.  That Rectangle had belonged to Shell.

31.  Ashley’s case before the Tribunal was that Description A in the Approved Amended Plan referred to the Rectangle surrendered in 1955.  That (according to Ashley) was why Description A expressly refers to land which had been “surrendered”. 

32.  In contrast, Description B in the Approved Amended Plan referred (Ashley argued) to the Strip Land which (at the time when the Approved Amended Plan was prepared) had yet to be surrendered.  For this reason, Description B refers to land “to be surrendered”.

33.  It was wrong (Ashley reasoned) to deduct the 650 sq. ft. representing the Rectangle from the gross floor area of the Approved Amended Plan site as Description A purported to do.  This is because, as appears from other plans, the gross floor area figure of 28,475.49 sq. ft. in the Approved Amended Plan was already net of the 650 sq. ft. represented by the Rectangle. 

34.  The result (Ashley submitted) was that Elton Chow’s calculation of the development potential available to the Carson Mansion could also have taken (but did not take) account of the 650 sq. ft. wrongly deducted.  This unused development potential of 650 sq. ft. (Ashley contended) would not have disappeared over time, but must remain available for use even today.

35.  Having examined the evidence on the matter, the Tribunal came to a different conclusion.  The Tribunal held that, in all likelihood, Descriptions A and B both referred to the Strip Land which Mai Lee was intending to surrender to Government. 

36.  But the Tribunal also concluded that, in the Approved Amended Plan, the 650 sq. ft. of the Strip Land had been wrongly deducted from the gross floor area of the site for Carson Mansion.  The deduction was wrong not for the reason given by Ashley, but because the Government had previously conceded that (despite surrender for the widening of Electric Road) the development potential of the 650 sq. ft. of the Strip Land could be treated as available for use by Carson Mansion.

37.  Mr. Anthony Ismail (appearing for Ashley) argues that the Tribunal misunderstood the evidence and erred in its understanding of Descriptions A and B.  However, I am not persuaded that the Tribunal was unreasonable in its evaluation of the evidence or reached a conclusion that no rational tribunal properly advised could ever reach.  I accordingly do not think that I can interfere with the Tribunal’s findings in relation to Descriptions A and B.

B. Complaint (2): BPR r.23(2)(a)

38.  The provision states:-

“In determining for the purposes of regulation 20, 21 or 22 the area of the site on which a building is erected:--

(a) no account shall be taken of any part of any street or service lane...”

39.  The Tribunal reasoned that, by the time of Ashley’s applications to the Authority, the 650 sq. ft. of development potential attributable to the Strip Land was no longer available for use by anyone.  This is because the Strip Land had by then been surrendered and become part of a street (Electric Road).  By r.23(2)(a), in such case no account could be taken of the Strip Land in calculating the area of the site on which Ashley wished to build.

40.  Mr. Ismail suggests that the Tribunal’s reading of r.23(2)(a) was wrong in law.  The provision (Mr. Ismail submitted) could not have been meant to exclude land (such as the Strip Land) which the Government had previously conceded could be included in the computation of development potential.

41.  In my view, Mr. Ismail’s argument is untenable. The provision is clear.  There are no words within the provision which suggest or support the construction for which Mr. Ismail contends.  It would contravene r.23(2)(a) if the development potential of the Strip Land were now to be taken into account.

42.  But that is not the end of the story.  Under Buildings Ordinance (BO) s.16(1)(d), the Authority still retains a discretion whether or not to approve plans.  The Authority may, but need not necessarily, disapprove of plans where an enactment such as r.23(2)(a) may be contravened. It therefore does not follow, merely because r.23(2)(a) will be contravened by treating the unused development potential of 650 sq. ft. as available for use, that a plan should be refused by the Authority.  The Authority must still consider whether to exercise the discretion to approve the plans despite a possible contravention.  In an appeal from the Authority, that discretion becomes exercisable by the Tribunal.

43.  I shall deal further with the exercise of discretion in Section III.D below.

C. Complaint (3): Error in calculation of development potential

44.  Mr. Abraham Chan (appearing for the Authority) fairly accepts that the Tribunal made an error in its calculations in Annex B of the Decision. 

45.  The error arises because the Tribunal used a bonus plot ratio of 0.3085 in its calculation, instead of 0.4226.  If the correct ratio is used and if it is assumed that the 650 sq. ft. wrongly deducted is added back, then the unused development potential would be 5,230.95 sq. ft. (domestic) and 9,806.96 sq. ft. (non-domestic).  The latter figure would be more than the 9,802 sq. ft. suggested by Ashley in its 436 plan.

46.  However, the foregoing is predicated on the addition back of the 650 sq. ft. which the Tribunal found had been wrongly deducted.  The crux of the dispute among the parties in these proceedings is whether the Tribunal rightly held that the 650 sq. ft. could not be added back, being no longer available or attributable to the Triangular Lot.

D. Complaint (4): Availability of development potential of 650 sq. ft. 

47.  The Tribunal held that the development potential arising out of the 650 sq. ft. (which was wrongly deducted in Approved Amended Plan) was not available to Ashley.

48.  In Decision para.38, the Tribunal initially appears to have accepted that a residual development potential arising out of the 650 sq. ft. was available.  The paragraph stated:-

“If one were to do the same exercise all over again as per the Carson Mansion development Plan, except to correct the error in the site area by adding back the 650 sq. ft. to it as shown in Annex B attached hereto, the maximum permissible domestic gross floor area (GFA) would become 197,890.41 s.f. instead of 195,930.40 s.f. The ‘unused’ development potential in terms of the plot ratio of 0.0696 could yield a further 1981 s.f. of domestic GFA, or 3,716 s.f. of non-domestic GFA. On the basis of these calculations, we are prepared to conclude that there was some development potential left as a result of the arithmetical error. The resulting difference between the maximum accountable GFA that the correct plot ratio would have allowed and the accountable GFA of the development represents the extent of the residual development potential.”

49.  Ignore the Tribunal’s figures in Annex B (now accepted to be in error).  The point remains that, in the passage just quoted, the Tribunal acknowledges that there is a residual development potential of some quantum arising from the adding back of the 650 sq. ft. wrongly deducted.

50.  But the Tribunal then apparently backtracks from this position. It stated:-

“41. We do not find that the incorrect deduction of 650 s.f. from the site area warrants a recovery exercise which involves the series of artificial calculations put forward by [Ashley]. The fact of the matter is that the development potential of the 650 s.f. was in fact used at least in part, as the bonus plot ratio attributed to the area was in fact applied and used in the formula to increase the plot ration for the domestic part of the development. Further, as seen in Annex A [to the Decision], the incorrect deduction leading to the decreased site area also had the effect of yielding a bonus plot ratio greater than what it ought to have been (0.4324 instead of 0.3085) and ultimately inflated the available domestic plot ratio by 0.919 (7.0414 instead of 6.9495). The inflated domestic plot ratio contributed towards supporting

42. As demonstrated above, the error was in the calculations as a whole.  As part of the entire site area to assist in supporting the plot ratio needed for the Carson Mansion development, the development potential of the 650 s.f. cannot be said to have been left untouched and therefore available for utilisation afresh in the manner proposed.  The development potential of the 650 s.f. came as a packaged deal between Mai Lee and Government in 1976, in that, inter alia, the area was to count towards part of the site area and would attract additional floor area for the purpose of calculating plot ratio.  In so far as any part of the deal was referable to the 650 s.f., benefit had at least partially been taken.  Conceptually, any unused development potential could hardly be referable to the particular surrendered area as if it had been completely left out of the formula for the purpose of contributing towards supporting the development.”

51.  I find paras. 38, 41 and 42 of the Decision to be confusing. 

52.  On the one hand, the Tribunal accepted that 650 sq. ft. had been wrongly left out of Elton Chow’s site area calculations. 

53.  On the other hand, the Tribunal has inferred from Elton Chow’s calculations that “at least in part” the 650 sq. ft. was in fact used.  The Tribunal is vague on precisely how much of the 650 sq. ft. was actually used.  But, even if (for whatever reason) some part (large or small?) of the 650 sq. ft. was used despite the 650 sq. ft. having been wrongly deducted in full from the site area, it would still mean that some residue remained unused. 

54.  It might be thought that a logical step would be to determine the quantum of that residue and to decide whether that quantum can be attributed to the Triangular Lot.  If a quantum can be so attributed, then one would need to see whether Ashley’s plans are within or outside of the development potential arising from such quantum.

55.  The Tribunal, however, asserts that as a matter of principle none of the residue can be referable to “the particular surrendered area” (by which is presumably meant the Strip Land).  Reading Decision para.42, I do not understand why the residue is not referable in this particular case.

56.  Mr. Chan explains that under the BPR a developer submits a plan for the erection of a building on “a site”.  The site may, as here, comprise many lots.  Mr. Chan submitted that what the Tribunal meant in para.42 was that it is impossible to attribute development potential (in the sense of permissible site coverage and plot ratio for a building) to any particular portion or lot comprising a site.  This is because the development potential of a site is worked out by reference to that site’s area as a whole, regardless of the lots which comprise it.  If the entire of the development potential available to a site is not used, then the unused part cannot be said to “remain” with one or more of the component lots.

57.  I have sympathy with Mr. Chan’s argument in the general situation.  The argument may apply to most development sites.  But it is unnecessary for me to decide that matter conclusively for the purposes of this case.  That is because I do not think that the argument can apply here in light of the unique history of the Mai Lee Property.

58.  The reality is that, historically, Government proceeded on the basis that it was possible to attribute a residue of development potential to the Triangular Lot. 

59.  This is apparent (for example) from Mr. Viney’s Affidavit which specifically refers to a residual development potential of 19 sq. ft.  Mr. Viney could not have arrived at a residue of 19 sq. ft. unless he was carrying out the exercise which Mr. Chan submits is impossible. Mr. Viney must have been calculating how much of the Triangular Lot’s development potential was used up by Mai Lee to build Carson Mansion on the Carson Lot.

60.  At the time when Mr. Viney swore his Affidavit, the mistaken deduction of 650 sq. ft. in the Approved Amended Plan for Carson Mansion had not been discovered.  It was not until Ashley carried out research into the plans submitted by Elton Chow that the error surfaced.  What Ashley seeks is essentially for Mr. Viney’s calculation of 19 sq. ft. to be revised in light of the mistaken deduction of 650 sq. ft.  Given the erroneous deduction, the available development potential (Ashley contends) must be greater than what Mr. Viney had supposed.

61.  My difficulty is that nowhere in the Decision does the Tribunal grapple with the implications of Government’s previous public representation (as evidenced (say) by Mr. Viney’s Affidavit and the Cinat judgments) that there was a residual development potential in the Triangular Lot.

62.  Here, in my judgment, the Tribunal ought to have considered, given the history of the Mai Lee Property (including Government’s previous approach in relation to residual development potential of the Triangular Lot), whether any apparently unused development potential arising from the 650 sq. ft. of the Strip Land may properly be referable to the Triangular Lot.      

63.  Ashley argued before the Tribunal that the residue arising out of the Strip Land should be so attributed as a matter of fairness to the Triangular Lot.  Ashley bolstered this submission with what has been called the “sequence argument”.

64.  The gist of Ashley’s sequence argument may be summarised as follows:-

(1) The development potential of the Carson Lot was insufficient to support the building of Carson Mansion as proposed by Mai Lee. 

(2) It was therefore necessary for Carson Mansion to use some of the development potential of the additional land also held by Mai Lee at the time (namely, the Strip Land and the Triangular Lot). 

(3) Elton Chow’s erroneous deduction of the 650 sq. ft. of the Strip Land from the gross site area meant that most (or at least some) of the development potential associated with that 650 sq. ft. was not used to support the building of Carson Mansion. 

(4) Instead, the development potential of the Triangular Lot was used to support Carson Mansion.

(5) This meant that more of the development potential of the Triangular Lot was deemed to have been used up for Carson Mansion than actually had to be the case.  This result was the natural consequence of the development potential of the 650 sq. ft. of the Strip Land being wrongly deducted.

65.  Ashley continues: Now that the mistaken deduction of the 650 sq. ft. has been discovered, it is only fair to re-attribute to the Triangular Lot the excess of its development potential that was used.  Ashley’s case is that a re-attribution would be reasonable in all the circumstances on at least 2 grounds.

66.  First, in view of the then imminent surrender of the Strip Land for widening purposes, Mai Lee would have preferred initially using up the development potential of the Strip Land before the latter became part of a street.  Once a street, any unused or residual development potential of the Strip Land could be forever lost by reason of BPR r.23(2)(a).

67.  Second, unless there is re-attribution to the Triangular Lot of the excess development potential contributed to Carson Mansion, it will be practically impossible to build anything on the Triangular Lot.  In the event of no re-attribution, the Triangular Lot must be regarded as having practically exhausted its development potential.  The Triangular Lot would in effect be taken out of general commerce and have to be left idle. That would be an undesirable waste of land resources.

68.  The Tribunal rejected Ashley’s case for attributing the development potential of the Strip Land to the Triangular Lot. But it did so obliquely.  It did not deal with the substance of Ashley’s premises and instead reasoned that no issue of fairness could really arise.  It stated (at Decision para.50):-

“The difficulty of this argument is that it requires the Tribunal to treat the two parcels of land as being separately owned by parties each with its own interest to look after at the time when the Carson Mansion development scheme was proposed, approved and implemented. In reality, the opposite was true: they were owned by the same owner at the time, and no question of fairness between the left and the right hand of relation to the terms on which the Triangular Lot was subsequently acquired from Mai Lee, and eventually resold to [Ashley]. [Ashley] has not put forward any evidence of that nature, and the Tribunal is not in a position to enquire into fairness as between the owner(s) of the Carson Mansion Lot and [Ashley] as the owner of the Triangular Lot.”

69.  The Tribunal’s reasoning does not answer Ashley’s case.  The difficulty is again that the Tribunal does not squarely deal with the implications of the Government’s stance in the Cinat judicial review. 

70.  Mr. Viney’s Affidavit filed on behalf of the Authority in effect treated the lots comprising the Mai Lee Lot as “separately owned” and with each having “its own interest to look at”.  Otherwise, it would not have been possible for Mr. Viney to attribute some development potential (however minimal) as remaining in the Triangular Lot. 

71.  As a matter of consistency, Government should as much as possible deal in the same way now with the Triangular Lot.  I do not think that Government can, without good reason, notionally treat a certain domestic potential as residing in a lot at one time and at the next moment reject such treatment as untenable.  The Tribunal did not identify any good reason for departing from the approach previously adopted by Government (as evidenced by Mr. Viney’s affidavit) in the Cinat litigation.  In those premises, the Tribunal should have adopted a similar approach for the sake of consistency.

72.  Mr. Chan argues that the Viney approach was wrong in law and so could simply not be followed here. 

73.  But I do not see what was so wrong about applying Mr. Viney’s approach in the circumstances of the present case. That is especially the case where from the outset, in dealing with Mai Lee, Government accepted that both the Triangular Lot and Strip Land could be treated as notionally contributing to the development potential available for the Carson Mansion development on the Carson Lot.  This was agreed with Mai Lee even though it was envisaged that the Triangular Lot might be surrendered to the MTR and it was accepted that the Strip Land would be surrendered for widening Electric Road.  Unless one does what Mr. Chan submits is wrong (namely, notionally attributing development potential among lots), I do not see how the arrangement agreed by Government in respect of Carson Mansion could work in practice. 

74.  Accordingly, the Tribunal in my view should have determined how much domestic potential of the Strip Land was unused and how much of that potential (if any) was attributable to the Triangular Lot.  That would require addressing the substance of the sequence argument, including the reasonableness of its assumptions. 

75.  I do not think that the Tribunal could simply brush off the sequence argument as based on an assumption of there being more than one owner.  In the Cinat litigation, there was more than one owner, the Triangular Lot having been sold to Cinat by Mai Lee.  But that fact did not prevent the attribution by Mr. Viney of a residue of development potential to the Triangular Lot.

76.  Let me now return to the Tribunal’s discretion under BO s.16(1)(d) notwithstanding a potential contravention of BPR r.23(2)(a). 

77.  It seems to me that the same point can be made. I think that a proper exercise of the discretion in relation to the consequences of a possible contravention of BPR r.23(2)(a) also required the Tribunal to deal with the substance of the sequence argument. 

78.  It is true that, at first blush, the development potential arising from the Strip Land might be said to have been extinguished as a result of the Strip Land becoming a street.  But that is not the only way of analysing the facts.  There is still the question whether (as envisaged by the sequence argument) the development potential should more properly be attributed to the Triangular Lot, instead of the Strip Land, for historical reasons.

79.  I conclude that the Tribunal’s reasoning in relation to this complaint was flawed.  It did not sufficiently consider, whether in light of the development history of the Mai Lee Property, a residual development potential was available and if so whether the residue should be notionally treated as attributable to the Triangular Lot.  By the same token, the Tribunal did not adequately exercise its discretion whether to approve Ashley’s plans despite a prima facie contravention of BPR r.23(2)(a).

E. Complaint (5): Need to demonstrate ownership or prospect of control

80.  This complaint only concerns the 436 plans which covered both the Carson and Triangular Lots.  Ashley does not own the Carson Lot and did not adduce evidence that it had any reasonable prospect of controlling the same in the future.  The 539 plans cover only the Triangular Lot which Ashley owns.

81.  Mr. Ismail points out that, at the time of submitting plans for the Authority’s approval, neither the BO nor the BPR requires a developer to own the whole site which one proposes to develop.  That may be right.  But in AG v. Cheng Yick Chi [1983] 1 AC 14 (PC) Lord Fraser stated (at 19I - 20A):-

“Their Lordships are of the opinion that the land which forms a ‘site’ for the purposes of the [BPR] must be ascertained as a question of fact in the case of each development. It means, in addition to the land on which it is proposed to erect buildings, any land which the developer bona fide proposes to include in the development. It can only include land which he owns or which he has a realistic prospect of controlling. The additional land must be at least sufficient to enable the proposed building to comply with the [BPR] and it must, of course, not have been taken into account and, so to speak, used up in enabling some other existing building to comply with the [BPR].” [Emphasis supplied.]

82.  That dictum (including the underscored words) was cited with approval by the Court of Appeal and the Privy Council in Cinat (see [1993] 2 HKC 280 (at 288I-289A (Bokhary JA) and 293C (Mortimer JA) and [1995] 1 HKLR 128 (at 130 (Lord Keith)).  Thus, Lord Fraser’s dictum requiring a developer to show ownership or a realistic prospect of control over a site must be regarded as well-settled.  I am bound by it.

83.  The rationale behind Lord Fraser’s dictum is compelling.  A developer establishes that a development proposal is bona fide by showing that what is proposed involves land which the developer owns or has a realistic proposal of controlling.  Otherwise, the Authority may be vexed by a flood of hypothetical proposals for the development of land which would-be developers have no realistic prospect of achieving.  Such proposals would needlessly waste the Authority’s time and resources.  The requirement of bona fides serves to restrict the applications to the Authority to manageable proportions.

84.  Mr. Ismail submitted that the present situation was distinguishable because the 436 plans involved A & A works.  But I do not see why that fact should lead to a different conclusion.  The rationale for the dictum would equally apply.  

85.  Thus, regardless of the position on Complaint (4), the Tribunal rightly rejected Ashley’s 436 plans and dismissed its appeal on this ground.

F. Complaint (6): Notional site area of 624 sq. ft.

86.  This complaint only concerns the 539 plans. Those plans were based on the Triangular Lot enjoying development potential arising from an area of 624 sq. ft. 

87.  The complaint has been overtaken by events.  The Tribunal found that approximately 650 sq. ft. had been wrongly deducted from the gross site area available to Carson Mansion.  If about 650 sq. ft. worth of development potential is treated as available and if the same is attributable to the Triangular Lot, the notional 624 sq. ft. proposed by Ashley would be within the area so added back.     

88.  Thus, it is unnecessary to consider this complaint further.

G. Complaint (7): Inconsistent treatment

89.  Ashley alleged that in the past the Authority had treated the development potential of a triangular piece of land as capable of supporting the building of Alexandra House.  This (Ashley suggested) was despite the triangular piece having been dedicated as a public right-of-way and (as a result of the dedication) having become a “street” as defined by the BPR.  The Tribunal rejected Ashley’s argument on the basis that the triangular piece was not a street.

90.  I do not think that this complaint is valid. 

91.  Either the triangular piece was a street or it was not.  If it was not a street, then the situation is not analogous to the one here where the Strip Land has become a street. 

92.  On the other hand, if the triangular piece had become a street through dedication, then the Authority may have made a mistake in allowing the triangular piece’s development potential to be used by Alexandra House.  The mistake in that case could not create a precedent binding upon the Authority for the sake of consistency alone.      

IV. CONCLUSION

93.  The Tribunal’s decision in relation to the 436 plans is upheld.  Ashley having failed to demonstrate ownership of the Carson Lot or a reasonable prospect of controlling the same, the 436 plans were rightly rejected by the Authority and Tribunal.  The judicial review of the Tribunal’s decision in relation to the 436 plans is dismissed.

94.  The Tribunal’s decision in relation to the 539 plans is quashed.  The matter is to be remitted to the Tribunal for reconsideration.  By way of helpful guidance only and without intending to constrain the Tribunal in any way, I note that in my view the Tribunal would at least have to reconsider the following matters in relation to the 539 plans:-

(1) Precisely how much of the development potential of the 650 sq. ft. associated with the Strip Land remains available in light of the mistaken deduction.

(2) Whether such development potential is properly attributable to the Triangular Lot by reason of the sequence argument and the development history of the Mai Lee Property.

(3) Whether any development potential attributable to the Triangular Lot is sufficient to support the 539 plans.

95.  There will be a Costs Order Nisi that Ashley pay the Authority’s costs of the Case 436 judicial review and the Authority pay Ashley’s costs of the Case 539 judicial review.  Costs are to be taxed if not agreed.  There will be no Order in respect of the Tribunal’s costs of these proceedings.

96.  There will be liberty to apply.