ANDERSON ASPHALT LTD AND OTHERS v. THE SECRETARY FOR JUSTICE

CACV 122/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 122 OF 2009

(ON APPEAL FROM HCAL 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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Hon Yuen JA:

1. This is an appeal from a judgment of Hon. Andrew Cheung J dismissing an application for judicial review.  The main issue is the amenability of a decision of the Director of Lands to judicial review where she has granted a short term waiver of a term in a Government lease.  

The Relevant Lots

2.  The proceedings concern 9 lots held by various lessees under a Block Crown Lease and demised for agricultural use (“the Relevant Lots”). 

3.  The Relevant Lots are all situated in Lung Kwu Sheung Tan, Tuen Mun.  Down the coast nearby is the Castle Peak Power Station which was commissioned in the early 1980's and finished 20 years ago.  Land in the vicinity has been used for the production and storage of medical gases and for concrete batching for the past 8 and 12 years respectively. 

Lessees’ applications for Short Term Waivers

4.  In 2005, the lessees of the Relevant Lots applied to the Director of Lands for Short Term Waivers to enable them to be used for an asphalt plant.

5.  A Short Term Waiver (“STW”) is normally issued for a period of 1 year and is thereafter renewed on expiry, unless terminated by either party giving 3 months notice.  A review of fees is undertaken every 3 years.

6.  Upon receiving the lessees’ applications for STWs, notices of the applications were posted by the Director of Lands. 

Objections from the Applicants

7.  The only objections received were from the Applicants.  The Applicants are companies involved in asphalt production in Hong Kong.  They consider that the grant of STWs for rival operations would lead to unfair competition for them.  The Applicants’ objection was based on what they call “planning grounds”.

8.  In fact the Relevant Lots have not been included within any statutory plans (Outline Zoning Plans or Development Permission Area Plans).  They have been included in some administrative plans (“the Plans”).

The Plans

9.  To be precise, the Relevant Lots are included in the Tuen Mun New Town West Extension Area Planning Guide (“the Planning Guide”) and the North West New Territories Sub-regional Land Use Plan (“the Sub-regional Plan”).  Both were prepared more than 2 decades ago. 

-      The Planning Guide was prepared by the Planning Department between 1982 and 1985 on a scale of 1:10,000.  The Relevant Lots can be found within an area indicating use for “Government, Institution and community”.  The annotation indicated “recreation-orientated development”.

-      The Sub-regional Plan was prepared by the Town Planning Office of the then Buildings and Lands Department in 1986 and revised in 1989.  Here the Relevant Lots can be found within an area indicating “countryside conservation area”.

These plans were prepared without prior public consultation and are not within the purview of the Town Planning Board (“TPB”) but they have been made available for inspection by the public.

10.  The Planning Guide contains notes which say:

“ (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 Government 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”.

The Planning Guide is stamped with the words “subject to alteration without notice”. The Plans have not been revised.

11.  It is important to note that although the Plans show the Relevant Lots within an area indicating what may be called “aspirations” for “Government, Institution and community” use and “countryside conservation area”, no steps have been taken to resume them for those purposes.  The Relevant Lots remain privately held, and the lessees are not obliged to turn their properties to “Government, Institution and community” use or into a “countryside conservation area”.      

Melhado use

12.  Further it is significant that the effect of the Melhado judgment (A-G v Melhado Investment Ltd [1983] HKLR 327) is that lots demised for agricultural use can be employed for open storage of containers, vehicle and scrap yards, etc. 

Control of land use by STWs

13.  As noted by the Land Administration Office in its Instruction, Section M-10,

“following the Melhado case, ... lots contained within the Block Lease and described as agricultural land are virtually unrestricted with regard to uses so long as development does not include any buildings. Such uncontrolled Melhado uses, including open scrap-yards and car-repairing yards, have produced undesirable problems in terms of land use control and serious environmental and drainage problems”. (Emphasis added).

The Instruction provides for the use of STWs to ensure that private lots (which may be put to Melhado use anyway) can be used for other approved purposes in a properly regulated way.  Apart from the imposition of desired conditions and gaining financial benefits for the Government as landlord, the main benefit of granting STWs is the fact that, unlike modifications of the lease, they are not permanent and may be terminated on 3 months notice.  STWs provided Government “with greater control” over previous Modification of Tenancy Permits.  In the same Instruction, it is stated that:

“One of the reasons for issuing a STW rather than a MOT Permit is that Government can impose by way of the STW, additional covenants/conditions upon the land user that are not contained within the original land grant conditions. In this way, the user is not only obliged to comply with the original grant covenants (excluding those waived) but also additional conditions required, for example, by Fire Services Department or the Environmental Protection Department....”

(Emphasis added).

Decision of Director of Lands

14.  Returning now to the Applicants’ objections, they were expressly considered by the Director of Lands’ delegate (also known as the Government Land Agent) at the District Lands Conference on 24 November 2005.

15.  After the Government Land Agent consulted, amongst others, the Planning Department, which confirmed that the STWs would not frustrate the long-term intention for user of the Relevant Lots, it was decided that STWs should be granted for the Lots on various conditions, including those suggested by the Environmental Protection Department.

The 1^st JR case

16.  On 7 December 2005 the Director of Lands informed the Applicants of the decision at the District Lands Conference.  On 23 January 2006 an extract of the minutes was provided to the Applicants.  The STWs were to be granted with effect from 1 May 2006.

17.  On 24 February 2006, the Applicants issued HCAL28/2006, the first judicial review proceedings concerning the Relevant Lots (“the 1^st JR case”).  Reyes J refused leave on 4 May 2006.  

The Sha Ling proceedings

18.  It is convenient at this stage to mention another set of judicial review proceedings instituted by these Applicants also aimed at thwarting another rival operator’s plans to set up an asphalt plant, in that instance on a site in Sha Ling.  I shall refer to those proceedings as “the Sha Ling proceedings”. 

19.  It is important to note that those proceedings concerned land within an approved outline zoning plan.  The TPB had given permission to the rival operator to produce asphalt on a temporary basis at a site designated as agricultural in an approved outline zoning plan.  

20.  The Applicants issued proceedings there against the TPB.  At first Chung J rejected the application for judicial review, but on appeal this court (Ma HCCJ, and Suffiad and Lam JJ) remitted the matter to the TPB for reconsideration, on the ground that when the TPB treated the operator’s operations as temporary, it had on its own admission failed to take into account the operator’s long term intentions.

21.  The chronologies of the present proceedings and the Sha Ling proceedings can be found in detail in paras. 16 - 35 of the learned judge’s judgment.  They are pertinent to an issue of delay in the prosecution of the 1^st JR case after Reyes J refused leave to issue judicial review.

The 2^nd JR case

22.  The 2^nd JR case concerning the Relevant Lots was issued by the Applicants on 30 August 2007. They relate to what the Applicants perceive as the Director of Lands’ refusal to terminate the STWs at the end of the first year in May 2007.  There the particular issue is whether the Director of Lands actually had made a decision on whether to renew the STWs.                    

Judgment

23.  Andrew Cheung J held that the Director of Lands’ decision was not amenable to judicial review, that the Applicants had no locus standi, that the decision was in any event not challengeable on the merits, and that the Director had not made a decision whether or not to terminate the STWs when the Applicants issued the 2^nd JR proceedings.  As far as delay was concerned, the learned judge considered it an academic issue.                

Main issues

24.  The main issue in this appeal is whether the Director of Lands’ decision to grant STWs is amenable to judicial review at all, the issue being whether the grant was an act within the public domain, or was an act of the Government Land Agent acting for Government as a private landlord.  The second issue, which is closely connected to the first, is whether the Applicants have locus standi to apply for judicial review.

Grant of STWs acts in the public domain or as private landlord?

Hang Wah Chong

25.  Any consideration of the issue whether the Director of Lands’ acts are within the public domain must start with the landmark case of Hang Wah Chong Investment Co Ltd v Attorney General of Hong Kong [1981] 1 WLR 1141. 

26.  There, the Special Conditions of sale of a piece of land provided that the lessee shall not erect any buildings other than detached or semi-detached houses or such other buildings as the Director of Public Works (“DPW”) may approve (SC6), and that the design height and disposition of the buildings to be erected shall be subject to the approval of the DPW (SC7). 

27.  The Crown lessee wished to erect a block of flats on the land.  The DPW as the building authority approved the Crown lessee’s plans but made this conditional upon the payment of premium which he imposed as he was also the Crown’s land agent. 

28.  The Crown lessee sought a declaration that the Crown was not entitled to charge a premium for the approval.  One of the questions in the case was whether the Director was “operating in the public domain” when he gave the approval to erect flats subject to the payment of premium (p.1145). 

29.  The Judicial Committee of the Privy Council held that “no difference relevant to the present appeal can be drawn between a lease granted by a public body, or indeed the Crown, and a private lease” (p.1145).  The Judicial Committee noted the conclusion of Huggins JA that the DPW “can bind himself in his capacity as the building authority without binding himself in his capacity as land agent and vice versa” (p.1145).  Lord Edmund-Davies held (pp.1145-6):

“The various Conditions of Sale well illustrate the wide range of roles played by the Director in exercising his discretion. As regards some of the Conditions, the Director’s role may, almost certainly, be that of protector of the public interest. The vital question is whether for the purposes of Special Conditions 6 and 7 he can properly be regarded as being entitled to act in his capacity of land agent for the Crown. It is not open to serious doubt that those conditions relate directly to the landlord’s interests, economic and otherwise ...”. (Emphasis added).

- Application of Hang Wah Chong by the CFA

30.  Since 1997 the Privy Council’s holding in Hang Wah Chong, that ‘modification of user’ conditions related directly to the interests of the Crown qua landlord and was not an act within the public domain, has been applied by the Court of Final Appeal in Director of Lands v Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1, Ying Ho Co Ltd v Secretary for Justice (2004) 7 HKCFAR 333 and by the Appellate Committee in Rank Profit Industries Ltd v Director of Lands FAMV No. 7 of 2009, 25 June 2009, unrep.

- Applicants’ attempt to distinguish Hang Wah Chong

31.  The Applicants are not challenging the authority of Hang Wah Chong,which is binding on this court. However Mr Yu SC for the Applicants sought to distinguish Hang Wah Chong, and other cases on modification of leases, by suggesting that the zoning of the lots in question in those cases was governed by statutory zoning plans (and not by the Government’s own plans, as in this case). 

32.  However, Town Planning Board statutory plans came into force in piecemeal fashion in Hong Kong and assumptions of fact such as that suggested cannot be made.  It is certainly not apparent from the reports of all of these cases that the lots involved were located in areas where there were in fact statutory zoning plans.  This was confirmed by a post-hearing written submission from the Applicants. 

33.  Further, since Government’s contractual powers of modification are not reduced by statutory plans binding in law, it would be invidious for the same contractual powers to be reduced by its own plans which it was at liberty to alter.  As was observed by Deputy Judge Cruden in Mexx Consolidated (Far East) Ltd v Attorney General [1987] HKLR 1210 in an obiter passage (at p.1213), “no matter what approval the Town Planning Board may have given under its statutory powers, that would not have ... reduced the Crown’s contractual powers under the Crown lease.  They are two quite distinct concepts”.  If the Applicants are right, one would have the anomalous situation where Government could demand a premium for modification (however large) or refuse consent (however unreasonable - see Yin Shuen para. 19), even though the land use is regulated by statutory zoning plans binding on all as a matter of law, and yet find its hands tied by plans which it had itself made and which it could alter at any time.  That would be illogical.   

Applicants’ “gatekeeper” argument

34.  The Applicants then argued that the Privy Council in Hang Wah Chong recognized (at the passage italicized in paragraph 29) that when the Director of Lands deals with conditions in Government leases, his actions are capable of being within the public domain, and as such, his decisions would be amenable to judicial review.  And they argue that where land is not governed by statutory plans, Government acts as the “gatekeeper” for town planning matters, at least when deciding uses for land where there have been guidelines such as those in the Planning Guide.   Accordingly, so they argue, decisions of the Director of Lands affecting the planning intentions shown in the Planning Guide, such as decisions granting STWs, are acts within the public domain and therefore are subject to judicial review.

- Advantages of acting as private landlord

35.  Before discussing those submissions, it may be helpful to refer to a passage in a judgment of Hunter J after Hang Wah Chong in which the eminent judge discussed the advantages over statutory planning that the Government enjoys as landlord from the use of modifications.  In Shun Shing Hing Investment Co Ltd v Attorney General [1983] HKLR 432, a Crown lessee delayed development of two lots, preferring to pay premiums for extensions of time.  It did so as it was aware of a Government policy of no re-entry and a scale set by Government in 1975 of premiums for extensions of time.  When the Government demanded an increased premium, the lessee sued for a declaration that it was entitled to an extension on the 1975 scale, by reason of the propounding of policy by the Government.

36.  In rejecting the lessee’s claim, Hunter J noted (p.434):

“A peculiar, if not unique, feature of life in Hong Kong is that the government is the sole ground landlord. It is the provider of land and can combine the functions of landlord and planning authority. Thus Hong Kong government can do what many planning officers in the U.K. would give their eye-teeth to be able to do. They can charge developers a premium for the benefit of the permission they are giving them”.

Hunter J noted that there were four features behind this particular policy: in summary, the financial benefit of charging premiums, the ability of Government as landlord to dictate the pace of development, its ability to dictate the quality of the development, and finally, the enforcement of its terms via the proviso of forfeiture.

37.  In light of these advantages, it seems to me that one should examine the evidence carefully to see if the Applicants have made out their case that Government has decided to abdicate its traditional role of private landlord and has taken upon itself the role of a non-statutory planning authority, thereby laying itself open to challenge by way of judicial review, and thus spurning substantial financial benefits it hitherto has received from premiums and waiver fees.

38.  I revert now to the Applicants’ contention that the Director of Lands is the “gatekeeper” for town planning matters and as such the decision of the Director of Lands granting STWs affect the planning intentions shown in the Planning Guide and are acts within the public domain.

- Element of planning not determinative

39.  In my view, the fact that there may well be an element of planning in a general sense in Government’s decisions as landlord regarding the use of land does not turn the acts of the Director of Lands in granting STWs from those of a private landlord into ones within the public domain.  As Tang VP noted in Rank Profit, an enlightened landlord would incorporate an element of planning into leases in order to preserve the value of his estate.  All the more so where the landlord is the Government and therefore acting ultimately in the public interest (it being well-established that that ultimate purpose does not turn all of Government’s acts, including private contracts, into acts within the public domain: Ying Ho, para. 102).

- Plans in context of contractual acts

40.  The Planning Guide clearly provides that it is only setting out the plans of the Government as landlord of the land in question.  This is shown by the notes which refer to acts (such as the grant of modifications and sales) which are acts of a landlord, not of a planner.  Thus, the plan is to 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 Government land”.  It went on to say that where the zoning on the plan 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 wished to encourage.  These notes clearly place the Plans in a contractual context, and not in a public planning context. 

41.  Accordingly in my view, on the authority of Hang Wah Chong, public domain considerations are not engaged.  The Applicants’ proceedings here are precisely the type of proceedings considered and rejected in Canadian Overseas Development Co Ltd v Attorney General [1991] 1 HKC 288, 294.  Indeed since public domain considerations are not engaged for modifications of leases,all the more so for decisions of less permanent duration and less significant effect, such as the grant of STWs.

- Special Purpose Lease cases

42.  The Applicants have referred to two decisions in Hong Kong and to some UK judgments to support their argument that the decisions of the Director of Lands may nevertheless be in the public domain.  

- ­Hong Kong and China Gas

43.  The first Hong Kong case is Hong Kong and China Gas Co Ltd v Director of Lands [1997] 3 HKC 520. A lease had been granted to the applicant in 1963 for land for the storage and supply of LPG to the Tsuen Wan area.  This was within the type of lease commonly referred to as “special purpose leases”.  In the ensuing decade, ‘Towngas’ replaced LPG but the land continued to be used for the applicant’s commercial activities.

44.  In 1987, in preparation for the transfer of sovereignty in 1997, the Government issued a policy statement in relation to the renewal of leases.  It included a statement that special purpose leases would be extended for 50 years unless the land was no longer used for the purpose for which the lease was granted.  In 1996 the applicant was told the lease would not be extended.  It applied for judicial review. 

45.  Keith J held that notwithstanding that the decision challenged related to a Crown lease governed by the law of contract, it would still be amenable to judicial review if the making of the particular decision in question amounted to the performance of a function within the public domain.  He considered that when the Director of Lands decided whether to extend this particular lease, he had to have regard to a host of competing public interests, including the interests of the community at large in having an emergency and maintenance gas depot in Tsuen Wan.  He concluded that the decision whether or not to extend this particular lease was made in the exercise of his public functions, and was therefore amenable to judicial review (p.527).  However he held that the application for judicial review failed for other reasons.

46.  The Court of Appeal (Nazareth VP, and Godfrey and Rogers JJA) assumed, without discussion, that the decision was amenable to judicial review, and dismissed the appeal on the basis that on any view the applicant’s situation did not fall within the terms of the policy statement. 

- Kam Lan Koon

47.                Kam Lan Koon v Secretary for Justice [1999] 3 HKC 591 was another case on special leases.  The land had been leased for the construction of a “chi tong” (a family ancestral temple). Instead in 1967 a Tao’ist temple was built.  In 1992 the Director of Lands complained about the breach and demanded rectification, but nothing was done.  When the lease expired on 30 June 1997, the Director of Lands refused to extend it notwithstanding the policy statement referred to earlier in para.44.  One (but not all) of the original grantees, together with an unincorporated association and a limited company, issued judicial review proceedings.

48.  Yeung J held first, that the applicants did not have sufficient locus standi; second, the erection of a Taoist temple did not comply with the terms of the lease and hence did not fall within the terms of the extension policy; and third, the decision of the Director of Lands not to extend the lease was not amenable to judicial review.  He accordingly dismissed the application for judicial review.

49.  The Court of Appeal (Mortimer VP, and Godfrey and Rogers JJA) dismissed the appeal from Yeung J’s judgment.  However in their judgment, they held that although the Government was exercising the same powers as an ordinary landlord, and its decisions in most cases were not judicial reviewable, yet when dealing with special purpose leases, its policy statement expressed the government’s policy, and to this extent, the decision whether to extend special purposes leases was taken as part of the Director of Lands’ public function (pp.598, 600).

- Distinguishing the Special Purpose Lease cases

50.  In my view, these Special Purpose Lease cases are clearly distinguishable.  As noted in Kam Lan Koon, the policy statement on the extension of leases, with specific reference to special purpose leases, was made pursuant to Minute No. 10 of the Sino-British Land Commission which was formed to deal with land matters consequent upon the transfer of sovereignty.  One can therefore more readily understand the reference in those cases to the “public” element of the Director of Lands’ function when considering whether to extend those particular leases (although of course it is not only that function, but also the source and the nature of his power, which should be considered).  As the instant case does not involve Special Purpose Leases, nor a policy statement made by the Government pursuant to the anticipated transfer of sovereignty, there is no such “public” element. 

- Comment on these cases in Rank Profit

51.  The unique class into which these two cases fall was also noted in Rank Profit, in which Ribeiro PJ said:

“11. We do not consider it necessary to express a view in these Reasons as to whether those two cases were or were not correctly decided. It is however important to note that they were both cases involving special purpose leases, that is, leases granted by the government for defined special purposes subject to a permanent prohibition against assignment. Both cases arose out of the passage of the New Territories Leases (Extension) Ordinance and the government’s stated policy of considering extensions of such special purpose leases on a case-by-case basis, with the decision whether to extend being dependent on investigations into whether the land was no longer being used for its original purpose or unlikely to be so used for the full period or whether the land was required for a different public purpose. The decisions relating to the grant and extension of special purpose leases in the aforesaid context were therefore strongly coloured by public purposes”.

- The English cases

52.  The Applicants also relied on two English cases concerning leases granted by local councils. In The Queen on the Application of Molinaro v The Royal Borough of Kensington and Chelsea [2001] EWHC Admin 896, the local authority was the landlord of shop premises. The permitted use was for a retail delicatessen but the lease provided that the premises could be used for other trades or businesses approved by the landlord, such approval not to be unreasonably withheld.  The Local Government Act provided that local councils should demand the best consideration that could be reasonably demanded for premises it leased out. 

53.  The leaseholder started operating a restaurant on the premises.  Planning permission was obtained. However the local council refused to change the terms of the lease relating to user, even though it could demand higher rent for use as a restaurant.  The leaseholder applied for judicial review.

54.  Elias J held that the council was not simply acting as a private body as “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”, where “the 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” (paras.65, 67).  He held that the council’s decision refusing to change the user, notwithstanding the higher rent thus obtainable, was judicially reviewable. 

55.  In my view that decision cannot be applied to, and is not analogous with, the situation with the Director of Lands’ decision to grant STWs.  It has not been suggested that his functions are exercised pursuant to any legislation similar to the Local Government Act.  Even if his functions were defined by statute, it would still be necessary to consider whether the source and nature of his power were statutory.  And in the case of Government leases in Hong Kong, they clearly are not.  

56.  In R (Beer (trading as Hammer Trout Farm) ) v Hampshire Farmers Market Ltd [2004] 1 WLR 233, the county council had established farmers’ markets under powers given under the Local Government and Housing Act 1989.  The claimant was a stallholder.  Later the council decided to hand over the running of the market to the stallholders, setting up a company (HFML) to do so, providing finance and some facilities. HFML refused to grant the claimant a licence.  The claimant applied for judicial review.

57.  The Court of Appeal upheld the judge’s decision that HFML was acting as a “public authority” within the meaning of the Human Rights Act 1998, so that the company’s decision was amenable to judicial review.  Dyson LJ held that unlessthe source of the power clearly provided the answer, then the nature of the power and the function being exercised had to be carefully considered to see if the decision had a sufficient public element, flavour or character to bring it within the purview of public law (para. 16).  In that case, it was conceded that if the decision had been made by the council before the incorporation of HFML, the decision would have been amenable to judicial review.  Dyson LJ held that the concession was correct, not so much because the decision then would have been made by a public body, but because the power was being exercised to control the right of access to a public market, and that had “a public element or flavour”.  In para. 33, Dyson LJ found “their essential feature is that they are markets held on publicly owned land to which the public have access”.  And not only that, but that HFML owed its very existence to the council (para. 36), had stepped into its shoes (para. 37), and had been assisted by it (para. 38).

- Source of power, nature of power and function exercised

58.  When considering the source of the power to grant STWs, it is abundantly clear that it stems from the rights of the lessor derived from the Crown Lease – undoubtedly, on the authority of Hang Wah Chong, a private instrument. 

59.  The nature of the power to grant STWs is a means of control over the use of land leased under that instrument.  As we have seen, under the Lease the Relevant Lots are held by lessees who are entitled to use them for all lawful purposes (including Melhado use), and Government as landlord has no right to insist that they use the land for “recreation” or “conservation”.  It can only seek to regulate the use of the land by means of STWs. 

60.  The function exercised by the Director of Lands in granting the STWs was as land agent for the Government as the landlord.  To place her decisions under the scrutiny of judicial review would be to place the Government at a disadvantage over players in the private sector who are able to react to demands for land with far greater speed and flexibility.

61.  In my judgment, it follows from the foregoing that the grant of STWs was not amenable to judicial review.                               

No locus standi

62.  The second issue, which is closely connected to the first, is whether the Applicants have locus standi to apply for judicial review.

63.  Once it is recognized that the decision of the Director of Lands to grant STWs was a private contractual act, it follows that the Applicants have no locus standi to apply for judicial review.  Their position in the Sha Ling proceedings was clearly different.  There the respondent was the Town Planning Board, a statutory body.  The powers of the Board were derived from statute, which now explicitly provides that “any person” may comment on an application for permission (para. 64).  Even before the amendments which so provide, the Board considered comments from any person as a matter of practice (para. 65).  The court considered that that was the correct approach because, in England, it was recognized that persons whose real interest in the matter was commercial or economic should be allowed to raise objections (para. 66).

Other issues

64.  In light of my determination that the decision to grant STWs was not amenable to judicial review, the other main issues – the merits of the challenge, whether there was delay in prosecuting the appeal and whether there has been a decision to extend the waiver – fall by the wayside.

65.  As a matter of completeness, however, I briefly set out my views on these ancillary matters.  I am in complete agreement with the learned judge’s findings that the evidence discloses that the Director of Lands had taken all relevant considerations into account.  Particularly pertinent were the views of the Planning Department and the Environment Protection Department, both of which indicated no objection to the grant of waivers, subject to the lessees’ compliance with specific requirements. 

66.  I do not agree with the Applicants that the Director of Lands had departed from the Government’s policy for no cogent reason.  The Instruction I have referred to in para.13 is clear about the grant of STWs.  A refusal to consider applications for properly regulated STWs would mean leaving the land for Melhado use only, notwithstanding the latter’s undesirable effects on the environment.  It cannot be said that the only rational course open to the Director of Lands was to “freeze” the use of the Relevant Lots at Melhado use, thereby to reject properly regulated uses and to neglect the benefits of receiving a good return for the land at fair market rent.  Of course if the Government has certain intentions for the use of private land, such as GIC, then it would have to respect the lessees’ property rights and resume the land at market price.  

67.  As to whether the waiver was temporary or permanent in nature, given the explicit terms of the STWs, it is not disputed that the Government would be able to terminate them on giving 3 months notice if the long-term planning intention for the area thereby is frustrated.  It may well be that the operators of the plant intend to stay for a substantial period, but their intentions could only be for as long as they are permitted to stay.  The Applicants do not suggest that the Director of Lands is bound to allow the continuation of the waiver if there is no change in circumstances (in contradistinction to the Town Planning Board’s position in the Sha Ling proceedings). Indeed the Applicants’ demand that the Director refuse to extend the waivers (the subject matter of the 2^nd JR proceedings) amply demonstrates the point.  

68.  I am also in agreement with the learned judge on the issue whether there has been a decision to extend the waiver.  The Director of Lands had asserted as a fact through Mr Mills’ affidavit that no decision had been made (cf the Government’s decision in the probate case, Ho Sum Keung v Director of Lands [2009] 1 HKLRD 220 that there would be no further consideration of the matter).  There was no application to cross-examine.  Instead the Applicants issued the 2^nd judicial review proceedings asking the court to construe cursory statements in correspondence passing between their solicitors and staff of the Director, which correspondence does not in any event assert unequivocally that a decision has been made.  In my view, those proceedings were premature.     

69.  Finally, on the matter of delay, I consider this a barren issue.  If the Applicants had substantive merits in their application, I would not have thought that the delay – in the context of this hard-fought piece of litigation – would have tipped the balance against them. As it is however, the issue is one of no consequence, and I would agree with the learned judge that the issue is academic.

Order

70.  I would dismiss the appeal with an order that costs be paid by the Applicants to the Respondent.

Hon Hartmann JA:

71.  I agree.

Hon Stone J:

72.  I agree with the judgment of Yuen J.A., and have nothing to add.