Re an application by LO CHAI WAN

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(MISCELLANEOUS PROCEEDINGS NO.3357 OF 1994)

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J U D G M E N T

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The Application

1. This is an application for judicial review of a majority decision of the Town Planning Appeal Board given on 26 August 1994 granting planning permission to the Respondent, Henderson, for the development of Sunnyville Estate in Nam Sang Wai. Under the Town Planning Ordinance ("TPO"), Cap.131, a decision of the Appeal Board on appeal from the Town Planning Board is the decision of the Town Planning Board ("TPB") (TPO s.17B(8)(b)) and is final (TPO s.17B(9)). The Court is empowered to intervene by way of judicial review only by enquiry into the legality of the decision-making process. The Court does not rehear or reconsider the merits or otherwise of the decision under review.

2. The grounds of the present application to review the Appeal Board's decision can be summarised under three grounds, namely:-

(1) The Appeal Board "misinterpreted" various publications of the TPB (Grounds for Relief Items 1-3 and 5)

(2) The Appeal Board wrongly construed TPO s.20(6A) so as to exclude from the consideration of the draft Nam Sang Wai Outline Zoning Plan No.S/YL-NSW1 ("OZP") (Grounds for Relief Item 4)

(3) Various conditions attached to the planning consent were "unlawful, irrational, unworkable, uncertain and/or ultra vires" (Grounds for Relief Items 6-10).

The Nam Sang Wai Development and Lut Chau Nature Reserve as Described by the Appeal Board

"12. The application site consists of 21.9 ha at Lut Chau and 115 ha at Nam Sang Wai. The Nam Sang Wai Development will occupy an area of approximately 98.3 hectares. The 98.3 ha consists of 76.4 ha currently owned by the appellant in Nam Sang Wai, and 21.9 ha of Government land which the appellant hopes to exchange for the 21.9 ha in Lut Chau owned by the appellant. Of the 76.4 ha (Lot 1520 RP, Lot 1604 both in DD123) currently owned by the appellant in Nam Sang Wai, about 16.6 ha is zoned 'R(C)', the remainder is zoned 'unspecified use' in the Draft Nam Sang Wai development Permission Area Plan No.DPA/YL-NSW-1.

13. The Nam Sang Wai development will comprise a l8 hole golf course and 2,550 residential units (0.317 plot ratio). Of the 2,550 residential units, l,080 units will be found in 25 residential blocks ranging from 7 to 8 domestic storeys, 500 units in 3 to 4 storey buildings with 2 duplex units, 970 units in 2 - 5 storey cover carport designed for single family. There will also be a commercial area with a gfa of 5,000 sq. m. There will remain 13 ha of open water (as opposed to the present 98.8 ha) and 14 ha of woodland as opposed to the existing 1 ha. In addition there will be I ha of scrape compared to none at the moment.

14. The 21.9 ha [Lot 1534 in DD123] in Lut Chau is zoned as a site of Special Scientific Interest ('SSSI') on the Draft Mai Po and Fairview Park DPA Plan No. DPA/YL-MP/1

15. There are actively managed fish ponds in Lut Chau which tend to have low vegetation cover and steep banks. As such their value to wildlife is minimal.

16. On the other hand, many of' the fish ponds (about 75%) in Nam Sang Wai have been abandoned. Some dumping has taken place in the area. It is in a state of neglect. But, abandoned fish ponds, if left undisturbed by people, can become good wildlife refuges. However, their value to wildlife is likely to diminish if active management is resumed. It is common sense that commercial fish ponds are not run for the benefit of wildlife.

17. In Lut Chau, the appellant will build an actively managed nature reserve; which will be surrendered to Government. (We will refer to this as the Lut Chau Nature Reserve). The Lut Chau Nature Reserve will comprise 21.9 hectares owned by the appellant and 19.1 ha owned by Government. The management of the nature reserve will be funded by levy on residents of the Nam Sang Wai development.

18. The golf course at the Nam Sang Wai development will incorporate wildlife habitats. This will be by water channels and planted with appropriate vegetation to create habitats which, we believe, will attract and support a wide variety of wildlife. An outer perimeter of Crown land will be planted by the appellant and handed back to Government.

19. The appellant also undertakes that it will:

(a) use Integrated Pest Management which basically uses biological and mechanical means of pest control and would only use pesticides and fertilisers if EPD approval is obtained

(b) institute a habitat management of the fish ponds, lagoons, grassland, woodlands, shrubs, amphibian and dragontly ponds and the wetland channels

(c) monitor water quality

(d) employ a Staff Ecologist

(e) retain an independent Auditing Ecologist who will make an independent report to the Environmental Advisory Group and to Government

(f) form an Environmental Advisory Group, which meets twice yearly, to which body the Staff Ecologist and the independent Auditing Ecologist will report

20. In addition, and as part of a package, it is proposed that two water screening facilities will be built at the Kam Tin and Sam Pui River by the appellant. This will result in much cleaner water Flowing into Inner Deep Water thereby reducing pollution there. The present water quality in Inner Deep Bay, Yuen Long Creek (Shan Pui River) and Kam Tin River is extremely poor".

The First Set of Grounds - Misinterpretation

3. Before the Appeal Board there are the following documents, namely:-

(1) Draft Nam Sang Wai Development Permission Area Plan No.DPA/YL-NSW/1 together with the accompanying notes ("DPA Plan")

(2) Explanatory Statement issued by the Planning Department in July 1991 ("the Explanatory Statement")

(3) Consideration of s.16 application for development in areas around Mai Po Nature Reserve ("MPNR") issued by the Town Planning Board in October 1992 ("the 1992 Documents")

(4) Town Planning Board Guidelines for Application for Developments within Deep Bay Buffer Zones under s.16 of the Town Planning Ordinance issued by the Town Planning Board in November 1993 ("the 1993 Guidelines")

(5) Draft Nam Sang Wai Outline Zoning Plan No.S/YL-NSW-1 issued by the Planning Department in June 1994 ("the OZP")

4. The Appeal Board decided that they must decide the appeal on the basis of the DPA Plan by gathering the relevant planning intention from the DPA Plan. Apparently, there seems to be little dispute as to the proper construction of s.20(6A) of the TPO.

5. The Appeal Board did set out to consider the appeal on the basis of the DPA Plan:-

"5. In considering an appeal, the Appeal Board has to take the plans as they are. It is its duty to see that permissions which should be given thereunder are given but 'only to the extent shown or provided for or specified in the plan', s.16(4).

6. In considering an appeal, the Appeal Board must not trespass upon the Board's plan making function. Whether the Appeal Board agrees with any plan or not is irrelevant. Its duty is to see that plans are faithfully implemented."

6. The Appeal Board did, however, consider the planning intention of the TPB as expressed in the other published documents, namely: the Explanatory Statement, the 1992 Documents and the 1993 Guidelines ("the three publications"). These three publications are not in statutory language. They are policy guidelines of loose expression and on their face encouraged a flexible approach to development proposal.

7. In considering the DPA Plan, the Appeal Board noted that the land at Nam Sang Wai is designated "Unspecified Use". There are nine permitted users and any other development requires planning permission from the Town Planning Board. Any filling or excavation works necessary to effect a change of use to "agricultural use" (which included fish ponds) also requires the permission of the Town Planning Board. The Appeal Board considered that in the DPA Plan the fish ponds were not regarded as of intrinsic importance.

8. The Appeal Board did refer to the other three publications. In the Explanatory Statement it was noted specifically that "for the purposes of the Town Planning Ordinance, this statement shall not be deemed to constitute a part of the draft plan" (i.e. DPA Plan). Paragraph 6.2.5 thereof concerned with the "unspecified use" area. The Appeal Board cited paragraph 6.2.5(a)(iii) which applies to this area:-

"This unspecified area is rural in character and mainly comprises fish ponds with some ancillary structures. Since the area drains into Inner Deep Bay and its proximity to Mai Po Nature Reserve, the planning intention is primarily to protect and conserve the area's landscape, ecological value and its scenic qualities"

"(c) Agricultural uses in these areas will be encouraged and recreational uses, (including ancillary facilities) which are generally compatible with the rural environment and are unlikely to adversely affect local communities, may also be permitted. The main planning objectives of this zoning are to identify non-urban areas where appropriate forms of agriculture and rural activities can be sustained as a means of avoiding unwanted urban growth and to enhance the quality of the environment. Residential development in compliance with the conditions of the 'On-Farm Domestic Structure' scheme may be permitted where it is established that a dwelling is necessary to support the agricultural use

(d) There may be areas where private initiatives may wish to provide comprehensive low-rise, low density residential developments mainly through land exchange or lease modification. Applications should be made to the Board. If approved by the Board the development should be implemented in accordance with an approved Master Layout Plan with adequate provision for Government and Institution/Community use and recreational facilities to serve these developments. Due regard should also be given to minimizing the environmental, drainage and traffic impacts of these developments on the surrounding areas

(e) For any development within this zone, the owners/developers must demonstrate that their proposals would have insignificant adverse impacts on the environment, traffic and drainage of the area or appropriate measures will be taken by the applicants to minimize such impacts. The submission of Master Layout Plan, Landscaping Proposal, Environmental Impact Assessment, Drainage Impact Study and/or Traffic Impact Study may be required when the proposal is submitted to the Town Planning Board for consideration."

9. It is apparent from paragraph 6.2.5(d) that residential development in the Unspecified Use Area, far from being prescribed, is specifically contemplated.

10. The 1992 Document made it clear that it should not be construed as a set of guidelines for the preparation of s.16 applications. In any event, the Nam Sang Wai development falls within Buffer Zone 2 which says:-

"(b) Deep Bay Buffer Zone 2 consists of a much wider area which has a bearing on the overall amenity and water quality of MPNR and other SSSIs in the vicinity. The planning intention is primarily to restrict developments to agricultural and recreational uses only. New development within this zone would not be considered unless the applicant could demonstrate that the proposed development would have insignificant impact on environment, drainage and traffic in the area including the MPNR."

The Appeal Board considered that development in the area zone "Unspecified Use" is not precluded if the applicant could "demonstrate that the proposed development would have insignificant impact on environment, drainage and traffic in the area including the MPNR". Again, in this 1992 Documents, residential development is contemplated to take place in this area around the Mai Po Marshes.

11. The Appeal Board then referred to the 1993 Guidelines and noted that a development in accordance with this Conceptual Guideline would involve the disappearance of most of the existing fish ponds in Buffer Zone 2. The Appeal Board then concluded as follows:-

"36. It will be noted that neither in the notes accompanying the DPA Plan nor in the October 1992 Guidelines was there any reference to the conservation of water bodies as being the planning intention for Buffer Zone 2. Moreover, the reference to the conservation of water bodies as being the 'planning intention within Buffer Zone 2' is limited to a very small part of Buffer Zone 2. See Appendix 1 hereto. In any event, as Appendix 2 hereto shows, the appellant's proposal seeks to comply with the Board's Guidelines issued in November 1993."

12. In this respect, Mr Thomas, Q.C. for the developer, submitted the following four points:-

(1) The first consideration is whether the Appeal Board actually understood and implemented the three relevant papers. It did consider it, understand it and correctly interpret it.

(2) Even if the Appeal Board did not implement what was derived from the three publications, it cannot be attacked on that ground as it can if it wishes to "in a good case" fly in the face of the papers which are no more than policy guidelines.

(3) The Appeal Board's decision can be attacked with some prospect of success only if they either (a) refused or did not bother to look at the three publications at all, or (b) turn the world upside down by reading black as white in a perverse interpretation that no reasonable tribunal could do.

(4) The only other way it can be attacked is unrelated to the three guideline papers by showing whether after or without looking at the guidelines papers, they failed to follow what was expressed in the DPA Plan itself.

13. In my judgment, I do not find any misinterpretation of the Appeal Board in ascertaining the planning intention for the Nam Sang Wai Area. The Appeal Board should rely on the DPA Plan in accordance with s.20(6A). They did refer to and consider the other three publications. It cannot be said that they paid little or no attention to the planning intention as expressed in paragraph 6.2.5(a)(iii) of the Explanatory Statement:-

"Since the area drains into the inner Deep Bay and its proximity to MPNR, the planning intention is primarily to protect and conserve the area's landscape, ecological value and its scenic qualities."

14. I accept Miss Yuen's submission that the protection and conservation referred to MPNR and not those fish ponds per se. No criticism could be made against the Appeal Board's conclusion that the planning intention did not lie in the intrinsic importance of the fish ponds but in the area's importance as a buffer zone to the MPNR.

15. In this judicial review, I cannot find the Appeal Board's interpretation is anywhere near "Wednesbury" irrationality or unreasonableness.

16. The other complaint of the Applicant concerned with the intensity of the development, i.e. eight-storey instead of two-storey building. This is not capable of judicial review. The Appeal Board called for alternative layout plans and then considered the merits and demerits of these alternative plans and came to a view that eight-storey plans were more attractive. This could hardly be the subject of judicial review. I am only concerned solely with the legality of the decision-making process and not at all with the merits of the decision, (see Save Britain's Heritage v. No.1 Poultry Limited [1991]1 WLR 153 at 171).

Section 20(6A) of TPO, Cap.131

17. It provides as follows:-

"(6A) Notwithstanding that the plan referred to in subsection (1) ceases to be effective under subsection (6), sections 16, 17 and 17B shall continue to apply to applications for permission submitted under section 16 during the effective period of 3 years or the period of up to one additional year as extended by the Governor in Council, as referred to in subsection (5) until the right to be considered under section 16, right of review under section 17 and right of appeal under section 17B have been exhausted, abandoned or have expired; and the Board or the Appeal Board, as the case may be, shall consider under section 16, review under section 17 or hear an appeal under section 17B in respect of the applications to the extent as shown or provided for or specified in the plan referred to in subsection (1)."

18. The plan referred to in subsection (1) is the DPA Plan. The Applicant now accepts that the applicable plan is the DPA Plan. Its only argument apparently is that the Appeal Board should have "looked at" the OZP.

19. In the OZP only land owned by the Government has been zoned as "conservation area". For land owned by the Applicant, the area previously zoned as "unspecified" is now zoned "recreation". The area formerly zoned as R(C) remains as such. The Appeal Board, having "looked at" the OZP, concluded that the "recreation" zoning with its wide range of permitted or contemplated activities, (including golf course) did not assist the Applicant's case. In particular, the Appeal Board said at para.60:-

"Even if the applicable plan is the OZP, it does not support the [TPB's] case that the planning intention is that the fish pond should be preserved."

20. Section 20(6A) clearly means the DPA Plan "shall continue to apply to applications for permission submitted ..." until the rights of review and appeal have been exhausted notwithstanding the gazetting of an OZP in respect of the same land. In my judgment, the conclusion reached by the Appeal Board is one which is not only correct, but inevitable. There is and can be no scope for challenge by judicial review.

Conditions

21. The conditions are set out as an appendix to the decision at Bundle C, pages 114-120. There are twenty-five of them but only five are challenged, namely Conditions (l), (m), (o), (p) and (q). They are as follows:-

"(l) Submission and implementation of detailed plans for the Lut Chau Nature Reserve to the satisfaction of the Director of Lands or of the Board.

(m) Submission and implementation of a detailed management plan for the Lut Chau Nature Reserve, including enforcement arrangements for the Lut Chau Nature Reserve Levy on owners for the time being of the Nam Sang Wai Development, to the satisfaction of the Director of Lands or of the Board.

(o) Submission and implementation of detailed plans for the Kam Tin River Reed Bed Treatment System, to the satisfaction of the Director of Environmental Protection or of the Board.

(p) Submission and implementation of detailed plans for the Yuen Long Nullah Screening Plant to the satisfaction of the Director of Environmental Protection or of the Board.

(q) Submission and implementation of management plans for (o) and (p) above, including arrangements for a management levy on owners for the time being of the Nam Sang Wai Development terms of operation, and re-instatement upon removal, to the satisfaction of the Director of Environmental Protection or of the Board."

22. In order to be valid, a condition must satisfy three tests as decided in the case ofNewbury Council v. Environmental Secretary [1981] AC 578. Lord Fraser said at pp.607-8:-

"... In order to be valid, a condition must satisfy three tests. First, it must have a planning purpose. It may have other purposes as well as its planning purpose. But if it is imposed solely for some other purpose or purposes, such as furtherance of the housing policy of the local authority, it will not be valid as a planning condition: see Reg. v. Hillingdon London Borough Council, Ex parte Royco Homes Ltd. [1974] Q.B. 720. Second, it must relate to the permitted development to which it is annexed. The best known statement of these two tests is that by Lord Denning in Pyx Granite Co. Ltd. v. Ministry of Housing and Local Government [1958]1 Q.B. 554 which has been followed and applied in many later cases. Lord Denning said, at p.572:

'Although the planning authorities are given very wide powers to impose 'such conditions as they think fit,' nevertheless the law says that those conditions, to be valid, must fairly and reasonably relate to the permitted development. The planning authority are not at liberty to use their powers for an ulterior object, however desirable that object may seem to them to be in the public interest.'

One reason, relevant to the instant case, why it would be wrong to secure removal of buildings by the use of a condition unrelated to the permitted development is that it would enable the planning authority to evade its liability to pay compensation for removal under section 51 of the Act of 1971. Thirdly, the condition must be 'reasonable' in the rather special sense of Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948]1 K.B. 223, 229. Thus it will be invalid if it is 'so clearly unreasonable that no reasonable planning authority could have imposed it' as Lord Widgery C.J. said in Kingston-upon-Thames Royal London Borough Council v. Secretary of State for the Environment [1973]1 W.L.R. 1549, 1553."

23. I shall, first of all, consider generally all five conditions in light of the Newbury three tests.

The First Test

24. Condition which is "not for a planning purpose" is condition, the satisfaction of which has no planning relevance. An obvious example of a condition falling foul of this first test would be the requirement of a naked money payment as the price of the planning consent. As many judges have said it is axiomatic that planning permission cannot be bought and sold. However, none of the challenged conditions herein can be faulted under this head. They are, upon their own wordings, manifestly directed towards the achievement of planning objectives and it is equally clear that each of those objectives would be in the public interest.

The Second Test

25. Do the challenged conditions fairly and reasonably relate to the permitted development? It has been argued in some of the cases that where a condition requires the developer to carry out works, to provide facilities or benefits which fall outside the application site (sometimes referred to as "off-site infrastructure"), such a condition may fail the second test. However, it is now firmly established that an off-site condition is none the worse for that. In Encyclopedia of the Law of Town and Country Planning, Vol. 2 at p.106.20, it has been said:-

"P106.20 However, an obligation need not necessarily be tied to the site on which development is to occur. An obligation may be used in a displacement arrangement, as where a developer proposes to overcome an objection to the development on nature conservation grounds, by establishing on a different site a nature reserve or other conservation benefits. A planning obligation relating to future use and maintenance might then be attached to that site."

26. Those conditions concerning Lut Chau Reserve precisely correspond with this example given above.

The Third Test

27. This is the familiar Wednesbury test. It is of little use to the Applicant because in order to fail the test, a condition imposed or approved by the relevant tribunal must be so outrageously unacceptable that no reasonable tribunal would even have contemplated it. None of the challenged conditions could possibly fall into that outcast class.

Specific Review of Conditions

Condition (l)

28. The implementation of Lut Chau Nature Reserve is in line with the planning intention of conserving MPNR. It is an example of an environmental planning game where private interests shoulder some of the burden of providing a public benefit. This proposal could not be classified as "unlawful, irrational and/or ultra vires". It was introduced in the context of an enquiry which ranged over tracks of land around the Mai Po measures as an integral part of the area and thus it was related to the development.

Condition (m)

29. What is said in respect of Condition (l) is applicable to Condition (m) as well. The Applicant submitted that the Condition is "unworkable and uncertain". The appropriate authorities have to be satisfied with the detailed proposals put forward by the Respondent. Otherwise the development cannot proceed.

30. In the case of British Railway Board v. Secretary of State for the Environment [1994] JPL 32, the House of Lords has now conclusively established that even if a condition has no reasonable prospect of being implemented, that, of itself, does not invalidate the permission subject to which it was given. Lord Keith said at p.38:-

"The function of the planning authority was to decide whether or not the proposed development was desirable in the public interest. The answer to that question was not to be affected by the consideration that the owner of the land was determined not to allow the development so that permission for it, if granted, would not have reasonable prospects of being implemented. That did not mean that the planning authority, if it decided that the proposed development was in the public interest, was absolutely disentitled from taking into account the improbability of permission for it, if granted, being implemented. For example, if there were a competition between two alternative sites for a desirable development, difficulties of bringing about implementation on one site which were not present in relation to the other might very properly lead to the refusal of planning permission for the site affected by the difficulties and the grant of it for the other. But there was no absolute rule that the existence of difficulties, even if apparently insuperable, had to necessarily lead to refusal of planning permission for a desirable development. A would-be developer might be faced with difficulties of many different kinds, in the way of site assembly or securing the discharge of restrictive covenants. If he considered that it was in his interests to secure planning permission notwithstanding the existence of such difficulties, it was not for the planning authority to refuse it simply on their view of how serious the difficulties were."

31. Further, under Hong Kong Law, a positive covenant to make financial contributions can safely be attached to the various units of Sunnyville within the development so as to run with the land as provided under the Conveyancing and Property Ordinance, Cap.219, s.41.

Conditions (o), (p) and (q)

32. They concern with the Kam Tin River Reed Bed Treatment System and the Yuen Long Nullah Screening Plant, their implementation and management. They are also off-site planning and considerations made previously equally applied to them.

33. The foul and polluted condition of the Yuen Long Nullah and the Kam Tin River is common general knowledge of people in Hong Kong. The Yuen Long Nullah Screening Plant will collect the water from the Yuen Long Nullah and provide adequate treatment before it is discharged into the Shan Pui River. Similarly the Kam Tin Treatment System will do the same for the water in Kam Tin River at its source which runs along the southern side of the Development in Nam Sang Wai before it joins the Shan Pui River which in turn is running along the western side of the Development. Without the two proposed treatment plants, the Development will be surrounded on its 2 sides with extremely foul and smelly water. It cannot be said the proposed plant and system are unrelated to the Development.

Conclusions on Conditions

34. Where planning permission has been granted by the Appeal Board applying the correct planning intention, where there are obvious benefits in the public interest and where the land owner is accepted as being committed to performing planning conditions, the court should exercise caution to see that the position is not stultified by "problems" which become more contrived than real if the conditions are benevolently construed: see the case of Newbury at p.627E-F.

35. There was no legal dispute on the validity of any of the conditions before the Appeal Board. There is no further route of appeal on merits beyond the Appeal Board. In my judgment, the conditions are not ultra vires. They are for planning purpose and are related to the development in question. I find nothing unreasonable in the imposition of these conditions accepted by the Appeal Board.

36. Accordingly, it is not necessary to consider whether any condition should be struck out and therefore whether they could and should be "severed" from other conditions.

Conclusion

37. The Applicant failed in all three grounds of judicial review of the Appeal Board's decision. This application must be dismissed with an Order Nisi for costs to the 2 Respondents.