HYSAN DEVELOPMENT CO LTD AND OTHERS v. TOWN PLANNING BOARD

FACV Nos. 21 & 22 of 2015

FACV No. 21 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 21 OF 2015 (CIVIL)

(ON APPEAL FROM CACV NO. 232 OF 2012)

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AND

FACV No. 22 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 22 OF 2015 (CIVIL)

(ON APPEAL FROM CACV NO. 233 OF 2012)

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JUDGMENT ON COSTS

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Mr Justice Ribeiro PJ:

1.  This is the judgment of the Court on costs.  In its judgment handed down on 26 September 2016, the Court unanimously made an order nisi that there be no order as to costs “given the nature of the issues and the conclusions ... reached”.[1] Submissions on costs filed by the parties have now been received.

2.  Hysan and OGL both seek a variation of the order nisi, arguing that they should have their costs since, they contend, they were essentially successful on their appeal.  The Board submits that the order nisi should be affirmed and made final.

3.  Hysan points out that the Court reversed the Court of Appeal in holding (i) that Articles 6 and 105 of the Basic Law were engaged where planning restrictions have an impact upon privately owned land; (ii) that in such situations, a proportionality analysis has to be undertaken involving a fourth step which requires consideration of whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionality protected rights of the individual.  On this basis Hysan argues that it should be regarded as the winning party and that costs should follow the event. 

4.  OGL seeks to justify an order for costs in its favour relying on essentially the same arguments as those put forward by Hysan.  It argues that its intervention in the appeal was justified because it had its own interests to protect by separate representation.

5.  This is an unusual case.  Both Hysan and OGL had previously succeeded in having the Board’s decisions imposing planning restrictions on their respective properties quashed on administrative law grounds with directions for a remitter.  Thus, as pointed out in the Judgment,[2] there is some artificiality in the discussion since there are no extant decisions of the Board pending their re-consideration of representations made by Hysan and OGL.  It follows, as the Court noted: “How a proportionality analysis, if necessary, would be approached would depend on what planning restrictions result from that process.”  The Court’s decision regarding the constitutional principles involved therefore may or may not have any impact at all on the Board’s re-consideration of the issues. 

6.  It is true that the developers succeeded in having the Court of Appeal’s decision reversed in obtaining this Court’s ruling that Articles 6 and 105 are engaged in protecting private property rights affected by town planning restrictions and that the constitutionality of such restrictions is to be tested by a proportionality analysis which includes the fourth step mentioned above.  However, the developers’ objective went further. They sought to argue that the restrictions were a disproportionate and therefore unconstitutional infringement of their property rights.  Their aim in bringing this appeal was to have a second string to their bow so that they could argue that even if planning restrictions unimpeachable on traditional judicial review grounds were imposed, such restrictions are subject to a proportionality challenge.  To that end, they pressed for such proportionality to be assessed on the standard of reasonable necessity rather than on the manifestly without reasonable justification basis.  On that issue, they were unsuccessful and the Court made the following observation:

“If, as in the present cases, planning restrictions are imposed which are arbitrary, based on inadequate inquiry or procedurally flawed, traditional judicial review remedies are available. But the developers’ proposition on this appeal is that even if the Board avoids falling into any error and decides on planning restrictions which are unimpeachable on traditional grounds, a basis ought nevertheless to exist for them to challenge those restrictions as disproportionate and unconstitutional. While I do not rule out the possibility of such an exceptional situation arising, like Lord Hoffmann, I find it difficult, at least in the abstract, to envisage the emergence of such a case.”[3]

7.  OGL’s case is no stronger than Hysan’s.  Indeed, there is less ground for OGL to claim an order for costs since it chose to intervene in an appeal where the constitutional arguments that it was interested in advancing would be fully ventilated without its participation. It was allowed to be heard because its property interests might be affected, but it does not follow, especially given the overall result of the appeal, that the Board should be ordered to shoulder its costs.

8.  In these circumstances, we have concluded that the fairest costs order should be for each party to bear its own costs and that the order nisi should be made final.  The parties should also bear their own costs in relation to their written submissions on costs under consideration. We so order. 

[1] FACV Nos 21 and 22 of 2015 (26 September 2016) at §144.

[2] At §124.

[3] At §128.