HYSAN DEVELOPMENT CO LTD AND OTHERS v. TOWN PLANNING BOARD

CACV 232/2012
and CACV 233/2012
(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 232 OF 2012

(ON APPEAL FROM HCAL NO. 38 OF 2011)

________________________

________________________

________________________

(Heard together)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  These appeals concern challenges by the applicants to the draft Causeway Bay Outline Zoning Plan No.S/H6/15 [“the CWB DOZP”] and the draft Wanchai Outline Zoning Plan No.S/H5/26 [“the WC DOZP”]. All the applicants are companies within the Hysan group of companies and they are represented by the same team of lawyers in these appeals. For present purposes, we will simply refer to them collectively as “Hysan”.

2.  For both DOZPs, the administrative history leading to their promulgation and then the decisions of the Town Planning Board [“the TPB”] which were the subject decisions being challenged by judicial review applications are similar.  The respective approved OZP was referred by the Chief Executive in Council to the TPB for amendment on 6 July 2010 (for the CWB plan) and 4 November 2008 (for the WC plan).  The draft plans received consideration at meetings of the Metro Planning Committee [“the MPC”] on 10 September 2010 at which planning papers accounting for the amendments were also tabled.  The MPC is a committee of the TPB to which the function of preparation and exhibition of new and amendments to draft plans were delegated.  The MPC comprises of official members (5 as at November 2011) and non-official members (14 as at November 2011).  It conducts meetings on confidential basis.

3.  It is only after the approval of the MPC has been obtained that new versions of the DOZPs are published.  It is necessary to preserve confidentiality before the publication in order to prevent measures adopted in the plans being frustrated or pre-empted by submissions of tactical building plans (to the Building Authority) shortly before the plans are published.

4.  The CWB DOZP was gazetted on 17 September 2010 for public inspection.  This marked the commencement of statutory public consultation process for the plan.  Representations were received and Hysan submitted its representations in November 2010.  The representations, together with representations from others, were considered by the TPB at a meeting on 11 March 2011.  At the meeting, the TPB decided not to uphold most of the Hysan representations.  The only Hysan representation upheld by the TPB was to relax the building height restriction for the Sunning Road area from 100mPD to 130mPD.  The meeting was concluded at 00:15 am on 12 March.  On 1 April 2011, the TPB informed Hysan of its decision by a letter.

5.  The WC DOZP was gazetted on 24 September 2010 for public inspection.  Representations were received and Hysan submitted its representations on 23 November 2010.  The representations, together with representations from others, were considered by the TPB at a meeting on 26 April 2011.  At the meeting, the TPB decided not to uphold Hysan’s representations. The decision was communicated to Hysan by a letter dated 23 May 2011.

6.  Hysan applied for judicial review to challenge the decisions of the TPB.  The applications were heard by Reyes J [“the Judge”] and in a judgment dated 14 September 2012, subject to one aspect, the Judge dismissed the applications.  The Judge accepted Hysan’s challenge to the 5m Non-Building Area [“NBA”] at Hysan Place and quashed the same in the CWB DOZP.

7.  Hysan, represented by Mr Yu SC and Mr Stock, appealed against the dismissal of its other challenges.  The TPB, represented by Mr Jat SC and Mr Chan, cross-appealed against the Judge’s quashing of the 5m NBA.

8.  Before we embark on the discussions on the grounds of appeal and cross-appeal canvassed by counsel, we should highlight some of the features in the DOZPs which Hysan objected to.  Mr Yu and Mr Jat had prepared extracts from the DOZPs which identify the relevant features.  We annex Mr Jat’s extract as Annex 1, which shows the restrictions imposed on Hysan’s sites as well as other properties.

9.  The first feature is building height restriction [“BHR”].  It sets the height limit for a building to be built on the land.  As explained in the planning paper before the MPC, BHR had previously been imposed in respect of some other land use zones in the OZPs, including “Residential (Group B)”, “Residential (Group C)”.  The current amendments imposed BHR to the remaining development zones, including those zones for commercial uses.  The Hysan properties had not been previously subject to any BHRs.  In the new DOZPs, most of them are subject to BHRs of 130mPD except Lee Gardens One and Hysan Place (which are subject to BHRs of 200mPD).  These BHRs present additional constraints on redevelopment over and above plot ratios and site coverages prescribed under the Building (Planning) Regulations.  In respect of one of the Hysan sites, the existing building exceeds the BHR so imposed: The Lee Gardens has a height of 208.09mPD whereas the new BHR is 200mPD. 

10.  The second feature is podium height restriction [“PHR”].  In respect of some sites, the existing buildings have podia.  The PHRs are introduced to address air ventilation issues.  For the Lee Gardens site, there is a PHR of 32mPD at the eastern part of the site.  For Lee Gardens Two, there are two PHRs of 20mPD at the north-eastern part and the southernmost tip of the site.  The PHRs have the effect of limiting the parts of the land subject to such restrictions to be used as podia.  Thus, design flexibility on the use of the land as a whole is affected. 

11.  The third feature is non-building area [“NBA”]. These are restrictions prohibiting construction of buildings in areas above the ground.  Development below ground is permitted.  According to the Explanatory Statement for the CWB DOZP, NBAs are designated in order to facilitate ventilation along major wind corridors.  For Hysan sites, NBAs of 2m in width are imposed along each side of Yun Ping Road, affecting the Lee Gardens site as well as Lee Gardens Two. There is also an NBA of 5m imposed at the Hysan Place site along Lee Garden Road.

12.  The fourth feature is Setback.  The effect of setbacks is similar to NBAs.  However, they are primarily imposed to improve pedestrian traffic.  For some cases, they also serve the purpose of improving air ventilation.  For Hysan sites, a 1.5m setback is imposed on Lee Gardens along Lan Fong Road and a 0.5m setback is imposed at One Hysan Avenue along Lee Garden Road. 

13.  As noted by the Judge, in respect of 4 of the Hysan properties, there are existing building plans approved by the Building Authority which embodied heights of new buildings in excess of those permitted under these DOZPs: Sunning Court, One Hysan Avenue, Hysan Place and Leighton Centre.  The DOZPs do not affect these redevelopments from proceeding pursuant to those approved plans.

14.  Mr Yu’s attacks on these restrictions were multi-pronged.  At the forefront of his submissions, he contended these were micro-management of the land in question as such out-with the broad brush approach which the TPB should adopt.  Counsel submitted that these spot-zoning restrictions are ultra vires the Town Planning Ordinance, Cap 131 [“TPO”] and therefore unlawful.  Another point of law taken by Mr Yu is that by reason of Articles 6 and 105 of the Basic Law, curtailment of property rights by the Government (including the TPB) has to satisfy the proportionality test and in the present instances the TPB had failed to apply that test correctly.

15.  Mr Yu also mounted attacks based on traditional judicial review grounds: breach of the Tameside duty, misuse of power for improper purpose, mistake of facts, irrationality and lack of legal certainty.

16.  Mr Yu’s third line of attacks is directed towards procedural unfairness in the process before the TPB.

17.  Before we address the other issues, it would be helpful to start with a discussion on the two legal points: the spot zoning argument and the proportionality argument.

(A) Legality  challenges

A1. Spot zoning

18.  Mr Yu submitted that the plan-drafting function of the TPB is circumscribed by Sections 3(1) and 4(1) of the TPO.  They provide as follows:

“3. Functions of the Board

(1) With a view to the promotion of the health, safety, convenience and general welfare of the community, the Board shall undertake the systematic preparation of-

(a) draft plans for the lay-out of such areas of Hong Kong as the Chief Executive may direct, as well as for the types of building suitable for erection therein; and

(b) draft development permission area plans of such areas of Hong Kong as the Chief Executive may direct. (Amended 62 of 2000 s. 3)”

“4. Contents of lay-out plans and powers of the Board

(1) The Board's draft plans prepared under section 3(1)(a) for the lay-out of any such area may show or make provision for- (Amended 4 of 1991 s. 6)

(a) streets, railways and other main communications;

(b) zones or districts set apart for use for residential, commercial, industrial or other specified uses;

(c) reserves for Government, institution or community purposes;

(d) parks, recreation grounds and similar open spaces;

(e) zones or districts set apart for undetermined uses;

(f) comprehensive development areas; (Added 2 of 1988 s. 2)

*(g) country parks, coastal protection areas, sites of special scientific interest, green belts or other specified uses that promote conservation or protection of the environment; (Added 4 of 1991 s. 6)

*(h) zones or districts set apart for use for village type development, agriculture or other specified rural uses; (Added 4 of 1991 s. 6)

*(i) zones or districts set apart for use for open storage, (Added 4 of 1991 s. 6)

and any matter whatsoever may be shown or provided for or specified in or in respect of the plans by means of such diagrams, illustrations, notes or descriptive matter as the Board thinks appropriate; and any such diagrams, illustrations, notes and descriptive matter shall be part of the plans. (Replaced 59 of 1974 s. 2)”

19.  Counsel referred to the following matters to support his contention that spot zoning does not fall within the statutory scope of the TPB’s power:

(a) The dictionary meaning of the expression “lay-out”;

(b) The statutory scheme of TPO as a whole, contrasting section 4A with section 4 and the process under section 6 with the process under section 16;

(c) Some dicta in earlier judgments which suggested that the TPB should adopt a broad brush approach in contrast with the exercise of power by the Building Authority under the Building Ordinance to approve building plans;

(d) The effect of the proviso in section 4 and the mischief it aims at;

(e) The presumption against creation of blight on development; and

(f) The understanding of the administration of the power of the TPB as reflected in the aborted amendment exercise in 2000.

20.  In his oral submissions, Mr Yu clarified that he only relied on the spot zoning ground to challenge PHRs, NBAs and Setback. He accepted that the TPB had the power to impose BHR generally.

21.  On the other hand, Mr Jat took exception to the reference to these restrictions as micro-managing or spot zoning.  He submitted that when the DOZPs are considered holistically, as they should be, it can be demonstrated that these restrictions were laid down as a scheme serving the broad planning purpose of the district as a whole.  Counsel submitted that section 4 is only relevant for lay-out whilst section 3(1) empowers the TPB to prepare plans for lay-out as well as types of building suitable for erection in an area.  He contended that BHR (and PHR) falls within the scope of the latter.  Though he accepted NBAs and Setback are features of lay-out, he said section 4(1)(a) to (i) are not exhaustive as to what could be provided for under the expression “lay-out”.  Insofar as necessary, he would rely on the proviso in Section 4(1) to contend that NBAs and Setbacks are features within the scope of “lay-out”.

22.  The Judge examined Mr Yu’s argument along the same line and rejected it in his judgment in Turbo Top Ltd v Town Planning Board HCAL 23 & 52 of 2011 (unreported) 21 Nov 2011 paras 50 to 113.  He followed his previous decision in his judgment in the instant case.

23.  In our judgment, the Judge is correct in rejecting this argument.  We agreed with Mr Jat that the primary empowering section in terms of the preparation of plans is Section 3.  Section 3(1)(a) is the relevant provision in the present case.  That sub-section gives the TPB the power to prepare draft plans “for the lay-out of … areas … as well as for the types of building suitable for erection therein”.  And the power must be exercised “with a view to the promotion of the health, safety, convenience and general welfare of the community”.  There is no dispute that the DZOPs were prepared with those objectives in mind.  The only question is whether they were plans for the lay-out or the types of building suitable for erection in the areas concerned.

24.  We shall come back to the expression “lay-out” later.  In respect of “types of building”, the Court of Appeal has considered that in Attorney General v C C Tse (Estate) Ltd [1982] HKLR 7.  What was in issue there was whether draft OZP could prescribe plot ratio.  The court held that section 4(1) did not provide exclusively for what the TPB could do under section 3, see pp.10H to 11B and 11C to D, per Leonard V-P, pp.12I to 13G per Cons JA and p.19D to F per Zimmern JA.  On the meaning of the expression “types of building” in the context of section 3, Cons JA said at p.14 H to I:

“This could be introduced into the judge’s definition by the addition of the word ‘architectural’, so that it would then read: ‘types of building’ means classes of buildings sharing common architectural characteristics’, or to put it another way, when we wish to know into which type or types of building a particular building falls, we must look at the building as a building.

The question then is whether plot ratio is an architectural characteristic.  In my opinion it is. …”

And then at p.15B to C, dealing with the contention that plot ratio may not determine the shape or appearance of a building:

“It is thus not a rigid feature. It is a matter of proportion which leaves the architect considerable latitude, in theory at least. He may design a la pancake or a la pencil, or somewhere between those two extremes. Nonetheless, the resultant buildings will all have something in common. All will have the same relationship of floor area to site area. That is something which relates to the building as a building and in my view is an architectural characteristic as much as an auditorium or a garage. It may not be readily discernable to the untrained eye, but it is there all the same, and its effect would, I feel confident, be immediately discernable to anyone were he faced with buildings of plot ratios as widely varied as those we are concerned with here.”

25.  We agree with Mr Jat that BHRs and PHRs are architectural features of a building, as such it can come within the scope of the expression “types of building” as understood in C C Tse (Estate).

26.  As for “lay-out”, at the invitation of Mr Yu, we have referred to the dictionary meaning of this term.  We cannot find anything there to suggest that Setbacks and NBAs cannot be features coming within the ordinary meaning of this term.  It seems to us that they can properly be regarded as part and parcel of a plan for “the laying out, planning or disposition of land, streets, etc.” which is the meaning given to “lay-out” in the Oxford English Dictionary.

27.  Mr Yu submitted that in the context of TPO, “lay-out” is restricted to the matters set out in Section 4(1)(a) to (i).  A similar contention, based on the expressio unius rule, was accepted by the court in Singway Co Ltd v Attorney General [1974] HKLR 275.  However, that decision was reversed by an amendment in 1974 which added the proviso to Section 4(1).  Mr Yu contended that the proviso did not achieve the effect of giving a wider meaning to the term “lay-out”.  He said its scope is still confined to the specific matters set out in sub-paras (a) to (i).  The only effect of the proviso, according to Mr Yu, is to empower matters within the scope of these sub-paragraphs to be set out by means of “such diagrams, illustrations, notes or descriptive matter as the Board thinks appropriate”.

28.  The Judge rejected this construction of the proviso as unduly narrow, see paras 84 to 87 of Turbo Top.  The Judge also rejected Mr Yu’s reliance on subsequent addition of sub-paras (f) to (i) to section 4(1) as support for his contention, see paras 88 to 91 of Turbo Top. 

29.  We agree with the Judge.  We do not think the mischief created by Singway was confined to the inability of the TPB to provide for matters in explanatory notes.  The manner in which Leonard J applied the expressio unius rule to restrict the power of the TPB went not only to the form by which measures could be introduced in plans but also to the substance in terms of the nature of the restrictions to be imposed, see in particular the judgment of Singway at p.295-6.

30.  As set out at p.282 of Singway, the explanatory notes set out more details as to what could be done and what could not be done within a particular zone.  It did not merely show or make provision for different zoning.  These were what the Attorney General referred to as “notes which are either explanatory of matter shown on the plans or are of themselves declaratory of planning policy” during the second reading of the 1974 amendment.  The purpose of the amendment was to give the statutory backing to the legal effect of such notes.  Thus, the proviso refers to “any matter whatsoever” as opposed to confining itself to those matters set out at sub-paras (a) to (i) that precede it.  This amendment made it clear that the lay-out plan can prescribe for other lay-out matters within a zone by zoning the area into either one of those zones provided in sub-paras (a) to (i) above.

31.  The wider meaning of “lay-out” is also borne out by Section 4A (which was added to the TPO in 1988).  Mr Yu accepted what could be provided in a comprehensive development area could be much more detailed.  By necessary implication, the concept of “lay-out” in Section 3 is wide enough to cater for those details.  Given the beginning part of Section 4A(1), we agree with the Judge that this lends support to a construction of “lay-out” which is wider than simply identifying the zones and prescribing land-uses by reference to the categories under Section 4(1)(a) to (i).  In this connection, see paras 110 to 113 of Turbo Top.

32.  There is no doubt in our mind that the TPB must have the power to prescribe such other lay-out restrictions for planning purposes as sub-paras (a) to (i) only provide a general framework for different zoning without any detail guidance as to what can and what cannot be done within each category.  Plainly, the legislature has left it to the TPB to work out the details in light of the circumstances of each zone or district.

33.  We do not think there is any ambiguity in the statute and we agree with the Judge that there is no scope for referring to the aborted attempt to amend Section 4(1) in 2000 to assist in the construction of the statute as it stands, see paras 102 to 104 of Turbo Top.  Nor do we see any scope for doubt, the resolution of which would bring in the presumption against blight on development.  In C C Tse (Estate), an argument along similar line citing Colonial Sugar Refining v Melborne Harbour Trust Commissioner [1927] AC 343 was rejected by the Court of Appeal

34.  Perhaps the real question in the present case is not whether there could be prescription for lay-out other than the identification of an area to be a particular zoning or land-use category provided under Section 4(1)(a) to (i).  Rather, the real point of controversy is whether it is permissible for the TPB to prescribe detail measures which encroach upon the management of a particular site.  The real complaint of Mr Yu is that the PHRs, the NBAs and the Setbacks severely curtail the freedom of Hysan in the re-development of the sites in terms of design and configuration of the intended new buildings.

35.  Mr Yu submitted that such curtailment is against the broad brush approach that the TPB should follow in preparing DOZPs.  The broad brush approach is not explicitly provided for in the TPO.  In this regard, Mr Yu prayed in aid some dicta in earlier cases: Crozet Ltd v AG [1973-6] HKC 97 at p.100E to F; AG v CC Tse (Estates) Ltd,supra, at p.15F-G; and Wing On Bank v Building Authority (1996) 6 HKPLR 423 at p.438C-I.

36.  With respect, properly understood and read, none of these authorities provide support for the proposition that the TPB could not prescribe planning restrictions which have the effect of encroaching upon the design or configuration of any building redevelopment.  To start with, none of these cases actually concerned restrictions in the nature of those we are concerned with and the issues involved did not call for the determination of the power of the TPB in prescribing lay-out restrictions having the abovementioned effect.  Crozet and CC Tse (Estate)were challenges against the imposition of plot ratio in OZPs.  In both instances, the courts held that it was within the power of the TPB to prescribe for plot ratio for planning purposes, notwithstanding that plot ratio was a concept derived from the Building Ordinance.  Wing On Bank was about the exercise of discretion by the Building Authority to approve plans which departed from a DOZP.

37.  The dicta relied upon by Mr Yu contrasted the power of the Building Authority under the Building Ordinance with the power of the TPB under the TPO.  Admittedly, on a literal reading, some of the dicta suggested that the role of the TPB in drafting OZPs is broader whilst the Building Authority is more concerned with site or building specific consideration.  Thus, in Wing On Bank, Godfrey JA approved the following statement by the Building Appeal Tribunal at p.438E,

“…whereas the Town Planning Board is concerned with planning considerations for a particular zone or area, the Building Authority and this Tribunal are of course concerned with a particular site or specific building development.”

In Crozet, Briggs CJ said at p.100E:

“The powers of the Planning Board are widely drawn in the Ordinance and must be liberally construed. They do not include such matters as the proportions, height and design of buildings. That is left to the Building Authority under the Buildings Ordinance. …”

38.  Whilst we agree that the Building Authority and the TPB play different roles in the exercise of their respective function, we cannot regard these statements as circumscribing what the TPB can do in drafting OZPs.  On a high level of generality, it is correct that the TPB must adopt a broad planning perspective in deciding what restrictions are to be included in a set of OZP for a particular zone or area.  By broad planning perspective, we mean that the consideration of the TPB must cater for the area concerned as a whole as opposed to zooming in on factors which would only affect a particular building of a specific design.  However, this general observation must not be read as a curtailment of the power of the TPB in imposing restrictions which, in order to achieve its broad planning purpose, have incidentally the effect of imposing specific restrictions on redevelopment design for a particular site. After all, all planning restrictions or controls must inevitably have some effects on individual sites.  Plot ratios, height restrictions affect individual sites as much as PHRs, NBAs and Setbacks.  The actual decisions in Crozet and CC Tse (Estate) were that it was within the power of the TPB to impose plot ratio restrictions in OZPs.  This illustrate that whether a restriction is within the power of the TPB is not to be decided by reference to its effect on individual site.  Rather, the question is whether the restriction serves a planning purpose.

39.  Planning is an evolving discipline: as the society changes, there are new environmental issues which demand new planning solutions.  Thus, it would be dangerous to elevate dicta made generally in a completely different context to prescriptive statement circumscribing the scope of power given to the TPB under the TPO.  In the present context, the new restrictions imposed in the two sets of DOZPs were primarily designed to address air ventilation and pedestrian traffic issues.  If those new environmental issues require solutions which may on its face have greater adverse impacts on one site than others, subject to other public law constraints on the exercise of administrative power, we do not see any reason why the TPB should not have the power to adopt such solutions. We agree with Mr Jat that it is wrong to describe such exercise of power by the TPB as micro-management.

40.  We therefore agree with the Judge that these authorities could not assist Mr Yu, see paras 92 to 101 of Turbo Top.

41.  Before us, Mr Yu also contrasted the process for dealing with representations on DOZPs under Section 6 of the TPO and the process for dealing with application for permission under Section 16.  He submitted that the process under Section 16 is more site-specific and more geared towards a quasi-judicial kind of inquiry with rights of review and appeal under sections 17 and 17B of the TPO.  We have no quarrel with Mr Yu’s analysis in this regard.  However, we do not think it follows from such distinction between Section 6 proceedings and Section 16 proceedings that the TPB does not have the power to impose restrictions in DOZPs that impact more on one site than others.  As explained above, it all depends on whether the restrictions are laid down for a non-site specific planning purpose.  As regards the fairness of the procedure under Section 6, we shall consider it in another section below.

42.  We reject the submission that the TPB has no power to impose PHRs, NBAs or Setbacks as a matter of vires.

A2. Proportionality: the submissions

43.  The arguments on proportionality at the court below appear to have been more circumscribed than those advanced before us.  At para 190 of the judgment, the Judge recorded that as far as constitutional rights were concerned, Hysan accepted that there was no deprivation of property contrary to Articles 6 and 105 of the Basic Law.  The focus of the arguments was para 76 of the judgment in Oriental Generation (see para 189 of the judgment below) and the actual application of the proportionality test.  The reasoning of the Judge on this aspect of the case is at paras 193 to 196.  Para 195 is germane to our discussion here:

“… the mere fact that zoning restrictions imposed in the public interest will lead to a diminution of property values will not, without more, amount to an unlawful deprivation of property contrary to the Basic Law. A landowner takes property subject to an implied condition that, for the public good, the Government may by regulation (including OZPs) limit the uses to which such land can be put in the future.”

44.  As observed, the contentions of Mr Yu before us are more developed and refined.  At this juncture, we shall first examine whether there is any jurisprudential basis for the engagement of the principle of proportionality on the constitutional level.  It depends on whether any constitutional rights are engaged.      

45.  Though there is no deprivation of Hysan’s properties, because the restrictions in the DOZPs could have adverse impacts on the re-development potential of the Hysan properties, Mr Yu submitted Hysan’s constitutional rights to use its properties under Articles 6 and/or 105 of the Basic Law are engaged.  As such, Mr Yu contended that the restrictions must pass the proportionality test and he said that the restrictions in the present case were disproportionate.

46.  Mr Yu took the proportionality test from the judgment of Stock V-P in HKSAR v Asaduzzaman (unreported) HCMA 314 of 2009, 7 May 2010.  At paras 24 and 25 of that judgment, the Vice-President said:

“What we are concerned with in this case is a regulatory law imposed in the public interest which restricts the way in which certain property may be used. That is not a deprivation of property …

… He correctly says that any restriction imposed by law upon the right to hold property must satisfy the well-known proportionality test, namely, that the restriction pursues a legitimate aim; that the restriction is rationally connected to the legitimate aim; and that the restriction is no more than is necessary to accomplish the aim.”

47.  Counsel also relied on the judgment of Kwan J (as she then was) in SFC v C (unreported) HCMP 727 of 2008, 22 Oct 2008.  At para 104, Her Ladyship said:

“It is common ground that the right to property protected under the Basic Law is not absolute but can be abrogated in accordance with the law. The question is whether the interference with this right by sections 213(1)(b) and (2)(c) meets the requirements of proportionality and the principle of legal certainty.”

48.  Referring to Lord Steyn’s judgment in  R v Secretary of State for the Home Department, ex p Daly [2001] 3 All ER 433 at paras 25 to 28, counsel said the weighing of proportionality must ultimately be a matter for the court as opposed to the decision-maker.  Citing passages from Barak, Proportionality: Constitutional Rights and their Limitations (2012), Mr Yu submitted that the court must examine the marginal benefit to the public good derived from the restrictions and balance that against the marginal detriment being done to the rights of the individual on whom the restrictions are imposed.

49.  Mr Yu further submitted that the burden is on the public authority or the decision-maker to satisfy the court that a proper balance has been struck.  In Kwok Hay Kwong v Medical Council of Hong Kong [2008] 3 HKLRD 524, a case concerning publishing a medical practitioner’s services as a facet of the freedom of expression, Ma CJHC (as he then was) said at para 21:

“… Where a constitutionally guaranteed right has been shown to be relevant, the burden is on the decision-maker to justify any restriction on that right. …”

50.  In his reply submissions, Mr Yu summed up his arguments on this aspect as follows:

(a) Article 105 protects not only right to compensation for lawful deprivation, but also the right to “use, disposal and inheritance”;

(b) Article 7 is directed towards the responsibility of the HKSAR Government and not towards the right of property owners as lessees from the government;

(c) There is a difference between planning control imposed by way of lease conditions and those imposed by statutory means, like the DOZPs in the present case.  As regards the latter, whilst it can come within the permissible scope of restrictions as restrictions imposed by law, the concept of “law” in the context of Article 105 is impregnated with the requirement of proportionality;

(d) In this respect, the European jurisprudence on Article 1 of Protocol 1 of the European Convention on Human Rights could serve as a reference: Sporrong and Lonnroth v Sweden (1983) 5 EHRR 35; Chapman v UK (2001) 33 EHRR 18;

(e) Even without importing the European jurisprudence, under the common law concept of Wednesbury unreasonableness there is room for the application of the doctrine of proportionality, citing de Smith: Judicial Review 7^th Edn paras 11-084 and 11-085 and Hall v Shoreham-by-sea UDC [1964] 1 WLR 240;

(f) There are Hong Kong authorities adopting the concept of proportionality in the context of Article 105: HKSAR v Asaduzzaman, supra;  SFC v C supra; and

(g) The “manifestly without reasonable foundation” test in Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 is not applicable in the present context as we are not dealing with allocation of limited resources.

51.  We will deal with these arguments at greater length below.  At this juncture, we will make this observation.  Some of the arguments actually addressed the application of the proportionality test instead of the question on the engagement of Articles 6 and 105 and how the concept of proportionality is derived from Article 105.  As far as the last question is concerned, the crucial part of Mr Yu’s argument is that it is an implicit requirement within the concept of “law” in Article 105.   

52.  For the TPB, Mr Jat submitted that Articles 6 and 105 are not engaged, at least not in the way Mr Yu contended.  The extent to which a landowner can make use of his landed properties in Hong Kong is inherently subject to planning control and the starting position, counsel said, is that no-one other than the State has absolute use of the land in Hong Kong.  Article 105 refers to the duty of the Government to protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property in accordance with law.  Planning restrictions imposed in accordance with the TPO is lawful and they do not interfere with any rights protected by Article 105.  In this connection, one should bear in mind the distinction between subjecting the legislative scheme under the TPO to a proportionality examination (and there is no submission from Mr Yu suggesting the legislative scheme itself cannot satisfy the Yau Yuk Lung proportionality test) and subjecting the specific decision under that legislative scheme to such kind of examination. In the present context, Article 6 does not give rise to any freestanding right to challenge the restrictions.

53.  By way of alternative, Mr Jat submitted that even if Article 105 is engaged, the relevant proportionality test is the one espoused by our Court of Final Appeal, not the test put forward by Barak. As held in Fok Chun Wa v Hospital Authority, supra, for matters falling within the socio-economic sphere not involving fundamental rights, the court should accord a margin of appreciation to the administrative decision-maker and only intervene when the decision is shown to be “manifestly without reasonable foundation”.  He submitted that planning restrictions fall within that category of decisions.

A3. Proportionality: our analysis

54.  Articles 6 and 105 of the Basic Law provide as follows:

“Article 6

The Hong Kong Special Administrative Region shall protect the right of private ownership of property in accordance with law.

…

Article 105

The Hong Kong Special Administrative Region shall, in accordance with law, protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property.

Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay.

The ownership of enterprises and the investments from outside the Region shall be protected by law.”

55.  In respect of property rights regarding land, Article 7 of the Basic Law is also relevant.  It reads:

“Article 7

The land and natural resources within the Hong Kong Special Administrative Region shall be State property.  The Government of the Hong Kong Special Administrative Region shall be responsible for their management, use and development and for their lease or grant to individuals, legal persons or organizations for use or development.  The revenues derived therefrom shall be exclusively at the disposal of the government of the Region.”

56.  The rights and interests of a landed property owner in Hong Kong have never been absolute.  In Director of Lands v Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1, Lord Millett NPJ said at para 27:

“The Government’s right to charge the full value of the modification has not been and could not be challenged. Its policy is informed by the philosophy which formerly underlay the ownership of land in Hong Kong. While it remained a Crown Colony land in Hong Kong was regarded as belonging to the Crown, which parted with its ownership only for the duration of the lease and for the user specified in the lease. Subject thereto, it remained the undisposed property of the Crown. In granting a modification of the user covenants in the lease, therefore, the Crown in effect made a further disposal of the land for which it was entitled to charge full value. …”

57.  Further, at para 57, Lord Millett said this with regard to Article 105:

“Secondly, compensation is only required to be paid for ‘the property concerned’, that is to say for the interest acquired. In the present case, that means for the land for the duration of the Crown lease and subject to the user restrictions in the lease. The right to exploit the development potential of the land by using it as building land was not disposed of by the Crown and remains the property of the Government for which it ought not to be required to pay. …”

58.  These were said in the context of restriction on the use of land in Government leases and compensation for resumption, thus a case of deprivation.  In the context of planning control under the TPO, Mr Jat referred us to Fine Tower Associates Ltd v Town Planning Board [2008] 1 HKLRD 553 where Stock JA (as he then was) said at para 33:

“Article 105 of the Basic Law does not sit alone. It is to be read in conjunction with art 7 … There can be no expectation upon the purchase of land that the use permitted by the lease will forever after match the use permitted by town planning regulation. It is an incident of ownership that the uses permitted by the authorities may change. Land is purchased with that knowledge, actual or imputed. The value of these lots upon acquisition were enjoyed under the limitation that is implied by this knowledge …”

59.  Again the focus of the arguments in that case was on property deprivation. However, the discussion on the philosophy underlying ownership of land in Hong Kong (and the limited right of an owner to use his land) is equally applicable when the focus shifted to the scope of Article 105 in respect of protection to be afforded to the right to use landed property.

60.  We accept Mr Yu’s submission that Article 105 goes beyond protection against property deprivation without compensation.  The article also confers protection on the right of individuals to acquire, use, dispose and inherit property.  But the protection is only to the extent that such acquisition, use, disposal and inheritance is “in accordance with law”.

61.  In respect of landed property, we agree with Mr Jat’s submission that there is no absolute right on the part of a landowner in Hong Kong to use his land without regard to the general law.  Apart from lease conditions, restrictions are imposed on the right to use one’s land by the Buildings Ordinance, the TPO and other legislative provisions and common law. In these appeals, Mr Yu advanced submission on behalf of Hysan based on reduction of development intensities as compared with those derived from the GFAs and plot ratio permissible under the Buildings (Planning) Regulations. But these permissible development potentials are also set by statute, which is as much a part of the general law as the TPO.  When this court asked Mr Yu whether his contention based on Article 105 could be advanced in respect of the limits set by the Buildings (Planning) Regulations, he was constrained by logic to accept that it is theoretically possible though his client is not making that challenge here.

62.  The same point can be made by reference to the obligations imposed upon a landowner by the law of tort (like the law of nuisance, the principle of Ryland v Fletcher) in terms of the use of the land.  Likewise, there are common law and statutory restrictions on the disposal, acquisition and inheritance of land.  These are all part and parcel of the general law which, in a sense, prescribes what one can do with one’s land.  As a matter of law, an owner of a piece of land in Hong Kong holds a bundle of rights conferred by the general law upon him in relation to the land.  These rights are subject to the restrictions imposed by the general law.  It follows that a landowner does not have the right to use his land in any manner beyond that permitted by the general law.

63.  This has always been the position even before the Basic Law came into operation.  In light of Articles 8 and 18 of the Basic Law (which provide for the laws previously in force shall be maintained as the law to be applied in Hong Kong), this must inform the proper construction of Articles 6 and 105 in terms of the obligation of the Hong Kong Special Administrative Region to protect the right of land ownership “in accordance with law”.

64.  The above analysis does not depend on the fact that the relevant restrictions are laid down by way of lease conditions.  It is inherent in our legal concept of land ownership.  We reject Mr Yu’s submission that restrictions imposed by statutes stand in a different category for the purpose of considering whether a restriction is imposed in accordance with law.           

65.  But that is not the end of the matter.  Mr Yu argued that “law” in the context of Article 105 means law that satisfies the proportionality test.  In addition to HKSAR v Asaduzzaman, supra and SFC v C supra, Mr Yu relied on Sporrong and Lonnroth v Sweden, supra to contend that the proportionality test is applicable even in cases coming short of deprivation under Article 105.  That was a decision on Article 1 of the First Protocol to the Convention on Human Rights and Fundamental Freedoms which provides:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

66.  Mr Yu cited paras 30.004 to 30.006 from Chan & Lim, Law of the Hong Kong Constitution  (2011) and submitted that the differences in wordings between Article 1 of the First Protocol and our Article 105 should not dissuade us from applying the European approach in our application of Article 105.

67.  At para 69 of the judgment in Sporrong, it was said:

“For the purposes of [the first sentence of the first paragraph in Article 1], the Court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1.”

68.  The court further said in that paragraph:

“… it finds it natural that, in an area as complex and difficult as that of the development of large cities, the Contracting States should enjoy a wide margin of appreciation in order to implement their town-planning policy. Nevertheless, the Court cannot fail to exercise its power of review and must determine whether the requisite balance was maintained in a manner consonant with the applicants’ right to ‘peaceful enjoyment of [their possessions’, within the meaning of the first sentence of Article 1.”

69.  My Yu also placed emphasis on para 73 where the court found the objected measures in that case “created a situation which upset the fair balance which should be struck between the protection of the right of property and the requirements of the general interest: the Sporrong Estate and Mrs Lonnroth bore an individual and excessive burden …”                                                             

70.  In our judgment, there is considerable doubt whether the concept of “law” in the formula “in accordance with law” in Article 105 brings in the requirement of proportionality.  As submitted by Mr Jat, the rights under article 105 are not fundamental rights found in Chapter III of the Basic Law. 

71.  The phrase “in accordance with law” appears at a number of provisions in the Basic Law: Articles 4, 6, 26, 36, 41, 95, 104, 105, 110, 123, 136, 138, 141, 143 and 154.  In respect of some of these articles, the proportionality test has been applied: the right to vote and the right to stand for election under Article 26 (Chan Kin Sum v Secretary for Justice [2009] 2 HKLRD 166; Wong Hin Wai v Secretary for Justice [2012] 4 HKLRD 70); the right to social welfare under Article 36 (Kong Yunming v Director of Social Welfare [2014] 1 HKC 518).

72.  However, it is important to identify the legal reasoning by reference to which the concept of proportionality is held to be applicable in those instances.  In the context of right to vote and right to stand for election, the proportionality requirement stems from Article 21 of the Hong Kong Bill of Rights and the notion that these are fundamental rights in Chapter III within the scope of Article 39 of the Basic Law.

73.  In the context of right to social welfare, the proportionality requirement stems from it being a fundamental right which could only be subject to proportionate modification under a policy generated pursuant to Article 145.  For present purposes, it should be noted that in none of those instances did the court hold that the proportionality requirement is implicit in the formula “in accordance with law”.  In the discussion of Ribeiro PJ in Kong Yunming v Director of Social Welfare, supra, at paras 24 to 28 of the judgment, His Lordship referred to the accessibility of the relevant rules and their systematic application as the benchmarks for satisfying the formula.  

74.  In respect of cases decided under the other articles of the Basic Law not concerning fundamental rights where the court considered this formula, there is no suggestion that a requirement of proportionality is inherent in the concept of “law” in those articles: see Leung Kwok-hung v Legislative Council Secretariat (unreported) HCAL 112 of 2004, 6 Oct 2004 (the taking of oath “in accordance with law” under Article 104); Catholic Diocese of Hong Kong v Secretary for Justice [2007] 4 HKLRD 483 paras 188 to 191 with reference to Article 136(2)[1].

75.  Further, under Article 39(2) of the Basic Law, there is a reference to restrictions “prescribed by law”.  In Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229, the Court of Final Appeal held that the “law” must be adequately accessible and formulated with sufficient precision.  It was held that the same principle applies in respect of the concept of “law” in the formula “in conformity with the law” under Article 17 of the Hong Kong Bill of Rights Ordinance and “according to law” in Article 11(1) of the Hong Kong Bill of Rights Ordinance.  There is no reference to an additional requirement that the relevant “law” must be proportionate.

76.  In most cases, the requirement of proportionality stems from the constitutional requirement of necessity in relation to restriction on fundamental rights, see for example the restriction on freedom of assembly as discussed in Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 paras 33 to 38. 

77.  As mentioned, we are not dealing with fundamental rights under Chapter III of the Basic Law.  The above survey of the cases on the other constitutional provisions bearing the same or similar expression pointed against the incorporation of a requirement of proportionality into the requirement of “in accordance with law”.

78.  On the other hand, the two cases cited by Mr Yu suggest that there is a requirement of proportionality under Article 105.  HKSAR v Asaduzzaman, supra, was a criminal appeal in respect of a conviction for keeping live chickens at retail premises overnight under s.30AA of the Food Business Regulation Cap 132.  One of the grounds of appeal was that the regulation was contrary to Article 105 of the Basic Law.  After holding that it was not a case of deprivation of property, Stock VP recited the contention of counsel for the appellant at para 25 of the judgment:

“…He correctly says that any restriction imposed by law upon the right to hold property must satisfy the well-known proportionality test, namely, that the restriction pursues a legitimate aim; and that the restriction is rationally connected to the legitimate aim; and that the restriction is no more than is necessary to accomplish the aim. …”

79.  The court went on to find that the test was satisfied.  There was no further discussion in the judgment on how the proportionality test becomes relevant under Article 105.  It is also not clear whether this is derived from the concept of “law” in the expression “in accordance with law” and how it reconciles with the decisions of the Court of Final Appeal on “law” in Leung Kwok Hung v HKSAR, supra and Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381.  In the judgment, these cases were not referred to and we do not know whether they had been brought to the court’s attention.  Given the outcome of the appeal, the court did not find it necessary to examine the jurisprudential basis for accepting the submissions from counsel.

80.  The other Hong Kong authority relied upon by Mr Yu is SFC v C supra.  It was a decision of Kwan J (as she then was). The legislative provision in question was section 213 of the Securities and Futures Ordinance, Cap 571 which empowers the court to grant an interim injunction to freeze the assets of a foreign resident upon investigation by the Securities and Futures Commission in respect of market misconduct.  As stated at para 104 of the judgment, it was common ground that the requirement of proportionality was engaged under Articles 6 and 105.  Thus there was no debate before Her Ladyship on the very issue we have to decide.  In the circumstances, the judgment did not shed much light on the point.  From para 103 of the judgment, it appears that counsel in that case relied on JA Pye (Oxford) Ltd v United Kingdom (2005) 19 BHRC 705 para 46 (a decision of the European Court of Human Rights under Article 1 of Protocol No.1 [“Article 1”]) to support his contention.  We shall refer to this case after discussing Sporrong, another European Court of Human Rights decision.

81.  In Sporrong, the European Court of Human Rights held that Article 1 comprises three distinct rules (see para 61). Though the applicants complained of two measures imposed by the government: the expropriation permits and prohibitions on construction (see paras 58 to 60), the court’s decision focused on the expropriation permits and the combined effect of these two measures.  It did not find it necessary to express opinion on the compatibility of prohibitions on construction with Article 1 (see para 75).  The court held the second rule (concerning deprivation of possessions) and the third rule (concerning a state’s right to control the use of property in accordance with general interest) were not applicable to the complaint about the expropriation permits (see paras 62 to 65).  Thus, the analysis on fair balance was conducted in the context of the first rule, viz the first sentence of the first paragraph of Article 1.

82.  For present purposes, it is important to note that, unlike our Article 105, there is no qualification of the relevant right as being “in accordance with law” under the first rule.  The reference to “conditions provided for by law” is in the second sentence, thus the second rule, which the court held to be confined to cases of deprivation.  Following its earlier decision in Marckx v Belgium (1979) 2 EHRR 350, the court regarded the first rule as a general guarantee for the right of property (see para 57).

83.  In contrast, the right to use one’s property which is protected under Article 105 is subject to the rider of “in accordance with law”.  Whilst we should give a liberal and generous construction to Article 105 and sometimes our courts may be enlightened by the European jurisprudence notwithstanding some differences in the wordings of the relevant provisions, it does not mean we can ignore material differences in terms of wordings which substantially define the rights in question.  We do not agree with Mr Yu that in the present context one can simply transplant the Sporrong jurisprudence to Hong Kong without regard to this material difference.  

84.  Further, it should also be noted that even in Sporrong, the European Court applied the fair balance approach by examining the legislative regime (see paras 70 and 71) as opposed to examining how the relevant legislation was applied by the government.  The Court found that Article 1 was violated because the law in question was inflexible and there was no provision for re-assessing the relevant interests at reasonable intervals during the lengthy period (10 and 23 years respectively) at which the expropriation permits were in force.  Subsequent to the events, the Swedish legislature had in fact implemented ameliorative statutory measures as set out at para 71.  The Court further expressed the view at para 73 that the scheme could have been rendered legitimate if there was a possibility of seeking a reduction of the time-limits or of claiming compensation.  It is clear that the Court did not subject the actual conduct of the balancing exercise by the relevant state authority to a microscopic analysis (in the way as Mr Yu did before us).

85.  JA Pye (Oxford) Ltd v United Kingdom, supra, was another decision of the European Court of Human Rights.  The decision cited before Kwan J in SFC v C, supra, had been reversed by the Grand Chamber, see JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45. The English law on adverse possession was subject to an Art 1 of Protocol No 1 challenge in that case.  The Grand Chamber held that the law of adverse possession was compatible with that article.  For present purposes, it is to be noted that in its application of the fair balance test, the Grand Chamber focused on the examination of the law of adverse possession on a macro systemic level as opposed to its application to the facts of the case.  After finding that a 12-year limitation period pursued a legitimate aim in the general interest (see paras 67 to 70), the court at [71] adopted its earlier observation about margin of appreciation in Jahn v Germany (2006) 42 EHRR 49 at [91]:

“Finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one [the Court] will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment is manifestly without reasonable foundation.”

See also [74] where the test of manifestly without reasonable foundation was applied.

86.  We do not think the other European case cited by Mr Yu, Chapman v United Kingdom (2001) 33 EHRR 18 take his argument further.   The case concerned enforcement notice against the caravan of a gypsy.  It was primarily a case on Article 8 (right to respect for private life, family life and home) though Art 1 of Protocol No 1 was also touched upon.

87.  As we said, there is no systemic challenge against the TPO before us.  Thus, strictly speaking, it is not necessary for us to decide whether the European jurisprudence on fair balance (examined on a systemic level) is inherent in the concept of “law” under our Article 105.  We would confine ourselves to the following observations:

(a) In light of the previous Court of Final Appeal authorities on the concept of “law” on a constitutional level and the absence of discussion of the same in HKSAR v Asaduzzaman, supra and SFC v C, supra, we do not think these two authorities can be regarded as firm support for the proposition that proportionality is required under Article 105;

(b) There is material difference between the wordings of Article 105 and Art 1 of Protocol No 1;

(c) Even assuming that Article 105 has a requirement of proportionality, such requirement is only directed towards the relevant law in question as opposed to the actual application of the law.  Thus, in deciding whether a fair balance has been struck, the court will consider whether the law itself satisfies the Yau Yuk Lung proportionality test on a systemic level as opposed to take up a micro examination of the actual decision made under that law;

(d) In any event, the court will accord a wide margin of appreciation to the legislature and only intervene when the relevant law is manifestly without reasonable foundation.

88.  As regard Mr Yu’s submissions based on Wednesbury unreasonableness and Hall v Shoreham-by-sea UDC, supra, we shall deal with it in the context of the specific measures in question.  In our view, such a challenge is quite distinct from a challenge under Article 105.

89.  We therefore conclude that even assuming (with some reservations in light of our discussion on the concept of “law” on a constitutional level) Articles 105 and 6 contain an element of proportionality, in the absence of any systemic proportionality challenge to the TPO, Articles 105 and 6 are not engaged for present purposes. 

(B)     Traditional judicial review challenges

B.1 The Tameside duty

90.  Turning now to Mr Yu’s challenge by reference to the duty to investigate, counsel relied on the well-known principle set out by Lord Diplock in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 at p.1065:

“…the question for the court is, did the Secretary of State ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly?”

91.  Mr Yu also placed much reliance on the judgment of Watkin LJ in Prest v Secretary of State for Wales [1983] 1 EGLR 17 at p.21B:

“There are times, however, when a vital point, as it seems to him later, has either been insufficiently ventilated or not touched upon at all at an inquiry.

In either of these circumstances, if he is going to allow the point to affect him, he must cause inquiries to be made into it even to the extent of reopening the public inquiry. Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at p 229 said,

‘He must call his own attention to the matters which he is bound to consider.’

What he may not do is to proceed to exercise his discretion and allow it to be swayed by a factor which is inadequately presented to him. …”

92.  In the same case, Lord Denning also considered this duty to be adequately apprised of the relevant matters in the context of public inquiry at p.18L to 19B.

93.  These principles had been applied in Hong Kong in respect of decisions of the TPB in a process pursuant to section 6B of the TPO, see Capital Rich Development Ltd v Town Planning Board  [2007] 2 HKLRD 155 and  Smart Gain Investment Ltd v Town Planning Board (unreported) HCAL 12 of 2006, 6 Nov 2007. It is also pertinent to note what was said by A Cheung J (as the Chief Judge then was) in Smart Gain at para 87:

“It is of course true to say, as has been pointed out by Laws LJ in R(Khatun) v Newham London Borough Council [2005] QB 37, 55 (para 35), that it is for the decision-maker, not the courts, subject to Wednesbury review, to decide upon the manner and intensity of inquiry to be undertaken into any relevant factor accepted or demonstrated as such. His Lordship further approved an observation made by Schiemann J in R v Nottingham City Council, ex parte Costello (1989) 21 HLR 301, 309, where the judge said that the court should only strike down a decision by the authority not to make further inquiries ‘if no reasonable council possessed of that material could suppose that the inquiries they had made were sufficient”. …”

94.  Section 3(2) of the TPO itself requires the TPB to “make such inquiries … as it may consider necessary” for the preparation of draft plans. 

95.  Mr Jat did not dispute these principles and the duty of the TPB to make inquiries.  Instead, he submitted that Hysan had not shown that the inquiry which the TPB had undertaken was not one that a reasonable board would regard as sufficient.  He further asked the court to bear in mind that the TPB’s consultative role and the statutory scheme of the TPO in assessing that question.

96.  Mr Yu’s submissions on the failure of the TPB to discharge its duty to inquire were directed to two main aspects of the decision regarding the CWB DOZP.  The first main aspect is in relation to the adverse impacts on potential development intensity of the Hysan sites.  Mr Yu said that the TPB acted on the assurance from the Planning Department that development intensity of the sites could be accommodated within the constraints imposed by the DOZP notwithstanding the evidence placed before the TPB by Hysan that potential development intensity would be adversely affected.  Counsel pinpointed three specific areas where TPB should have make further inquiries which are pertinent to the question of impact on development intensity:

(a) The working assumptions of the Planning Department and their validity in coming to the opinion that development intensity could be accommodated;

(b) Hysan’s experts’ evidence to the effect that with such constraints the maximum possible development intensity could not be accommodated; and

(c) The combined effect of these measures and the Sustainable Building Design Guidelines [“SBDG”].

97.  These topics were raised at the question and answer session of the TPB meeting of 11 March 2011 after the evidence of Hysan was placed before the Board.  The response of the Planning Department appears at paras 166 and 167 of the minutes:

“166. Ms Brenda Au, DPO/HK, said that in formulating the BHRs, it had been ensured that upon incorporation of the height restriction, the development sites would generally be able to accommodate the development intensity as permitted under the OZP. Having regard to the stepped BH profile adopted for the area and planning intention and character of the concerned sites, a reasonable floor-to-floor height was assumed in the formulation of the BHRs. In general, for commercial sites subject to BHRs of 110mPD and 130mPD, a floor-to-floor height of about 4m to 4.5m would be possible for the typical floors. Some representers stated that their development schemes could not accommodate the maximum permissible development intensity. This might be due to their adoption of different assumptions, such as higher floor height for commercial buildings (Grade A office buildings), assumptions on basement/podium car park, etc. For the Sunning Road area, in order to achieve a compatible BH profile with the generally low-rise developments to the south and the adjoining ‘C’ zone on the Wong Nai Chung OZP which was also subject to a BHR of 100mPD, a more stringent BHR of 100mPD had been imposed which would imply a lower floor-to-floor height. In support of their requests to relax the BHRs, some representers proposed to incorporate various planning and design merits in their development schemes. There was, however, no mechanism to ensure that such enhancement measures would be materialized with the BHRs relaxed. To cater for site-specific circumstances and schemes with planning and design merits, there was provision for application for minor relaxation of the BHRs under the OZP. Each application would be considered by the Board on its individual merits. A set of criteria for considering such applications was set out clearly in the ES of the OZP, which included situations like providing better streetscape, building separation and other planning and design merits as well as accommodating bonus plot ratio.

167.     Regarding the representer’s presentation on Lee Gardens Two, Ms Brenda Au, DPO/HK, said that the the new measures on SBD and the OZP restrictions on BHR, NBA, building setback/gaps were under two separate regimes i.e. the building and town planning regime respectively.  The SBD Guidelines were generally applicable to all building developments with no reference to specific district characteristics and site circumstances.  Besides, the requirements under SBD Guidelines were for the granting of GFA concession under the Buildings Ordinance.  Developers did not have to follow the SBD Guidelines if they chose not to apply for GFA concession.  On the other hand, OZP restrictions were imposed at a district level to achieve certain urban design and planning objectives.  They were often location-specific taking into account various factors.  For the Lee Garden Two site, different development schemes/options could be worked out to achieve the permissible development intensity.  For the development options presented by the representers, it was hard for PlanD to verify at this stage in the absence of detailed information of the schemes.  However, according the PlanD’s assessment, a maximum site coverage of 53%, instead of 49.2% as suggested by the representers, could be achieved based on the development restrictions stipulated in the OZP.  In addition, the SBD Guidelines had set out possible exemption and compensatory measures for building separation requirement.  More importantly, to cater for site-specific circumstances, there was provision under the OZP for minor relaxation of these requirements on application to the Board.”

98.  Representatives of Hysan replied to that at paras 175 and 176 of the minutes:

“175. In response to DPO/HK’s comments, Dr L K Chan, representative of R147 to R152, made the following main points:

(a) in formulating the BHRs, it seemed that PlanD failed to take into account the actual ground level of respective sites and the need to accommodate a transformer room and other supporting building services in the buildings;

(b) a floor height of 4.5m, but not higher as suggested by PlanD, had been adopted in working out the development schemes;

(c) all possible development options had been explored for the Lee Gardens Two site. With the imposition of the OZP restrictions and the SBD guidelines, there was no development scheme that could achieve the permissible development intensity; and

(d) for the Sunning Plaza and Sunning Court sites, building plans for development with a building height of 180mPD had been approved. However, the approved scheme was not the most appropriate development scheme. The respresenters had prepared an enhanced scheme supported by detailed assessments, but PlanD did not provide any concrete comments.

176. In response to Member’s enquiry, Dr L K Chan replied that Caroline Centre had a floor-to-floor height of 3.75m.  Ms Monita Ho, representative of R147 to R152 said that for the Lee Gardens Two site, the maximum site coverage worked out by PlanD and the representers was 53.5% and 49.2% respectively.  Take the figure of 53.5% proposed by PlanD, it was still less than the maximum permissible site coverage of 62.5%.   Regarding the response of DPO/HK on podium separation, it should be noted that there was a 5m level difference between Yun Ping Road and Jardine’s Crescent.  Those exemption measures in respect of building separation could not be applied to the frontage at Yun Ping Road.”

99.  There is no dispute that impact on development intensity is a relevant matter which the TPB must consider.  As repeatedly acknowledged by the TPB in the reasons given for rejecting the representations from Hysan, it has to strike a balance between public aspirations for a better living environment and private development right.  Thus, it is necessary for the TPB to have some understanding as to the adverse impacts on development potentials if the constraints proposed in the DOZP are implemented in order to carry out that balancing exercise.       

100.  However, that does not mean that the TPB must work out with precisions as to how much GFA loss a developer would suffer as result of the proposed constraints.  That would be an impossible task.  As Mr Jat rightly pointed out, unlike an application for building plans approval, there is flexibility in terms of the ultimate design for the building to be constructed in future re-development (and nobody can tell when would re-development take place).  Even though Hysan had placed before the meeting some options in design to illustrate the adverse impacts on potential re-development, such options are not binding and Hysan is at liberty to adopt an entirely new design in any future re-development.  We agree with counsel it is inevitable that in whatever calculations one does at this stage there are built into them elements of assumptions or even speculations.  This applied to the calculations by the Planning Department as well as calculations by the experts for Hysan.  Hence, it would not be meaningful for the TPB to resolve the difference between the calculations adopted by the Planning Department and those put forward by Hysan.

101.  On the other hand, the TPB should not simply brush aside the evidence put forward on behalf of Hysan as to the likelihood of adverse impacts.  To be fair, the TPB did try to address some of the issues raised, see paras 165, 188,193 and 205 of the minutes.  But it is also apparent from the minutes as a whole that the TPB accepted the position advanced by the Planning Department that even with the restrictions imposed, development intensity in terms of potential permitted under the Building Ordinance regime can be accommodated, see para 223(b), (e) and (m) where the TPB gave reasons for rejecting Hysan’s representations.  In these sub-paragraphs, the TPB held the view (as advocated by the Planning Department) that development intensity permissible (viz permissible under the Building Ordinance regime) could be accommodated:

“…

(b) the BHRs were formulated on the basis of reasonable assumptions with allowance for design flexibility to accommodate development intensity permissible under the OZP. Blanket relaxation of the BHRs was not supported as it would result in proliferation of high-rise developments, which was not in line with the intended planning control. Deletion or piecemeal relaxation of BHRs for individual sites would jeopardize the coherency of the stepped BH profile and could result in proliferation of high-rise developments, which was not in line with the intended planning control;

…

(e) the BHRs were intended to avoid developments with excessive height, and the development intensity of individual sites would not be affected. There would not be adverse impacts on the development intensity permitted under the OZP and property value in general. For an existing building which having already exceeded the BHRs, the rights of redeveloping the buildings to their existing heights would be respected on the OZP;

…

(m) in general, proposals involving dedication of land for public passage and surrender of land for street widening would be entitled to bonus GFA under B(P)R, and any such claim would be duly considered by the Building Authority in accordance with the normal practice. Since there was no plot ratio restriction for the relevant commercial, residential and ‘OU(MU)’ zones under the Plan, the inclusion of provision in the OZP for plot ratio to be exceeded as defined in B(P)R 22(1) and (2) was not necessary. The NBA, setback and building gap requirements on the OZP should not adversely affect development intensity of the relevant sites, and did not preclude the claim for bonus GFA under the BO; and

…”

102.  Though we agree with Mr Jat that those statements should only be understood as statements of a general nature (in the sense that the Board could not have any specific design in mind), we also agree with Mr Yu that they should be read in the context that the TPB was dealing specifically with the Hysan sites.

103.  From the record, the TPB had not examined the working assumptions of the Planning Department before it accepted its position.  The differences that may arise from different working assumptions were actually flagged up in the response of Planning Department (at para 166 of the minutes) and the response of Hysan (at para 175 of the minutes).  Further, Hysan’s case of adverse impact was that there is no commercially viable development scheme that could achieve the permissible development intensity.

104.  Mr Jat invited us to consider the deliberation of the TPB as recorded in the minutes, in particular paras 188, 191, 193, 205 to 209.  He drew attention to the fact that members had discussed on issues relevant to development intensity in the course of deliberations.  We have read those paragraphs.  Whilst there was discussion on topics like floor-to-floor height and SBDG, there was no record of any discussion on the other working parameters contained in the evidence of Hysan.  Nor is there any record of discussions on the working assumptions of the Planning Department.  In other words, there was no examination of the working assumptions by the TPB to see whether Hysan’s challenge to their validity was justified.

105.  According to para 193, the TPB considered SBDG to be irrelevant simply on the basis that it was a separate regime and there was no duplication between the two schemes.  Mr Jat supported the TPB’s disregard of the SBDG, contending that SBDG is not mandatory and that in the absence of a specific design for a specific site, it would not be possible to work out the combined effect.

106.  By and large, the Judge agreed with Mr Jat, see paras 54 to 58 of the judgment.  As a general proposition, we agree with what the Judge said at paras 54 and 55:

“54. As Mr Jat observes, the SBDG concern mattes of detailed building design for a specific site. There are a near infinite ways in which a site may be designed. I therefore find it difficult to see how Planning Department or the Board can reasonably be expected to cater for the infinite varieties of feasible design which a developer might wish to put up on a given site to qualify for concessions within the SBDG.

 55. Planning involves looking at a district in a broad-brush way and determining what features or restrictions should be imposed in which areas (including specific sites) for the betterment of the district as a whole.  There is no way in which the Board can realistically take planning decisions in respect of an entire district by examining in relation to any particular lot whether and (if so) in what ways  building can be designed on the lot so as to obtain maximal GFA concessions under the SBDG.”

107.  Thus, if the TPB acted on the basis that the proposed constraints might reduce the potential re-development intensity allowable though the precise extent could not be worked out at this stage and then exercised its planning judgment on that basis, there could be no room for complaint.  However, the TPB did not approach the question of potential adverse effect on re-development on this basis and it is not for the court to speculate in a judicial review whether the TPB would end up with the same decision on the DOZP if they had proceeded on that basis.  In the present instance, the TPB proceeded on the basis that development intensity would not be adversely affected in the process of striking the requisite balance.

108.  At paras 33 to 35 of his judgment, the Judge took the view that all that the Planning Department had said was that it had satisfied itself in general the proposed restrictions will still allow owners to develop their properties to more or less the permitted level of intensity.  There was no guarantee by the Planning Department that one can have building with FTFHs between 4 to 4.5 m and still obtain the full permitted intensity.

109.  The Judge was of the further view that minutes and planning papers should not be read liberally and out of context and the TPB would have realised that the Planning Department was speaking about the situation in general, see paras 37 to 39 of his judgment.

110.  With respect, the TPB was clearly dealing specifically with the Hysan sites when giving the reasons in para 223 (which was repeated in the letters of 1 April 2011 from the TPB to the consultant of Hysan and its associated companies rejecting their specific representations).  We accept, as we have in the above discussion, that the TPB cannot be expected to have any specific design for the sites in mind in making those statements.  However, in view of the representations from Hysan which demonstrated at least a substantial case of re-development intensity being adversely affected, we do not think the TPB could simply dismiss them by some general remarks.  Such an approach, in the absence of evidence showing that the TPB had actually given serious considerations to the evidence presented by Hysan at the meeting (and bearing in mind the substantial nature of such evidence and the limited time members of the TPB was given to review the same), is indicative of a lack of full and proper consideration being given to Hysan’s representations.

111.  At the very least, in our view, the TPB should re-assess the likelihood of the re-development intensity being affected.  For the purpose of that exercise, if the TPB were to hold onto the view (as they did in this instance) that permissible re-development intensity can be accommodated, in line with the duty to inquire on relevant considerations, they should compare the working assumptions of the Planning Department and those of Hysan’s experts.

112.  Further, though SBDG and the measures in the DOZP are two different regimes, SBDG can have effect on the working assumptions in respect of the GFA concessions on which the Planning Department relied.  Thus, though we agree that one cannot expect the Planning Department or the TPB to work out the full implications of SBDG (in view of the impossibility of having a specific design for the purpose of this exercise), we see no reason why the possible impact of SBDG in combination with the proposed restrictions under the DOZP should not be acknowledged on a general level in the overall assessment of the adverse impact on re-development intensity.

113.  At paras 41 to 44 of his judgment, the Judge considered a set of calculation put forward by Mr Jat by reference to Hysan’s presentation.  The Judge described that as a “back-of-the envelope calculation” and the purpose was to demonstrate that it may be possible to attain the permissible plot ratio even with a FTFH of 4.5m.  The Judge acknowledged that such calculation was not before the TPB.  He took the calculation into account as a support to Mr Jat’s submission that there was nothing misconceived or misleading in the Planning Department’s paper.

114.  With great respect to the Judge and counsel, we have serious misgivings about such a course.  First, the issue is not whether one can work out a back-of-the-envelope calculation to demonstrate it may be possible to attain the permissible plot ratio.  Even assuming that is the case, we are of the view that the working assumptions under that calculation should be examined by the TPB instead of the court hearing a judicial review application, so that the TPB could correctly assess the validity of the Planning Department’s premise that the restrictions in the DOZP would not have serious adverse impact on redevelopment intensity.  Of course, even if that premise may have to be adjusted, it does not mean that the TPB could not have come to the conclusion that these restrictions should be imposed on a proper balance of public interest against private interest.  However, the TPB must at least have a correct perception on the impact of these restrictions before it could have properly exercise its planning judgment.       

115.  Second, it is unsatisfactory for counsel to put forward calculation of this nature from the bar table.  Even though it is regarded only as a back-of-the-envelope calculation based on Hysan’s presentation, it is not a simple arithmetical exercise.  There are built into it some hidden assumptions (like the suggestion of utilising the plot ratio by way of construction of basements put forward by Mr Jat before us) which the court should not take it upon itself to consider in the absence of proper evidence and the lack of proper opportunity for the other side to address the same in terms of producing the relevant evidence before the court.  This is all the more so in the context of a judicial review application where the judge should not usurp the function of a primary decision maker. 

116.  On the whole, we agree with Mr Yu that in the present case, the TPB had failed to discharge its duty to inquire before acting on the basis that re-development intensity permitted under the Building Ordinance regime can be accommodated within the restrictions proposed in the CWB DOZP.

117.  The other main aspect which Mr Yu criticised the TPB for failure to discharge the Tameside duty is the treatment of the evidence on air ventilation as justification for the PHR and 2m NBA for Lee Gardens Two.  In his reply submissions, Mr Yu focused on two sub-issues under this head:

(a) How can a qualitative evaluation by the consultant engaged by the Planning Department provide justification for a finite NBA of 2m; and

(b) TPB did not properly consider the evidence of Hysan’s air ventilation expert.

118.  In our view, the focus of challenge should be on the lack of fair and adequate consideration of Hysan’s case and we would discuss the same in our later discussions in that context.  

119.  In respect of the WC DOZP, Hysan’s case before the TPB was presented along the same line.  It placed evidence before the Board at the hearing that with such constraints in combination with those under the SBDG full utilisation of development intensity could not be accommodated.  The TPB again regarded SBDG to be irrelevant to the exercise before the Board (see the views expressed in deliberation as recorded under paras 44, 52 and 53 of the minutes of meeting of 26 April 2011; para 92 (i) in the minutes on reasons for rejecting Hysan’s representations and the reasons given in the letter from the TPB to the planning consultant of Hysan of 23 May 2011).  The TPB also proceeded on the basis that the BHRs are formulated on the basis of reasonable assumptions with allowance for design flexibility to accommodate development intensity permissible under the Building Ordinance regime.  But there had not been any proper investigation as to Hysan’s complaints that for the Hysan sites this is not the case.  

120.  Thus, we are of the view that there had been a breach of the Tameside duty in that respect in relation to the WC DOZP.

B2.    Lack of certainty as to the meaning of NBAs and Setbacks      

121.  There is no definition for NBAs and Setbacks in the Explanatory Statement in the Notes to the DOZPs.  At para 4.4.4(f) of TPB Paper No. 8762, these features were explained as follows:

“(f) For ‘NBA’, the areas designated as ‘NBA’ are clearly marked and shown in the OZP. There should be no building structure above ground, but development is permitted below ground. Setback refers to the setting back of the building from the lot boundary. While the effects of the two on development/redevelopment is similar, they serve different functions. Their objectives are set out in paragraphs 7.10 and 7.12 of the ES. In sum, NBA is designated for air ventilation or urban design considerations, while setback is mainly to facilitate widening of footpaths to improve pedestrian walking environment and to meet the HKPSG’s standards, though it may also assist air ventilation.”

122.  The explanation suggested that for both NBAs and Setbacks, building above ground is not permitted but building below ground is permitted.  However, when faced with challenges by Hysan in the judicial review in respect of the rationality of setbacks which are imposed to improve pedestrian flow, Mr Jat after some wavering informed the Judge that the effect of Setbacks depend on the purpose a particular Setback is imposed.  The Judge accepted the same and set out his understanding of these restrictions at paras 8 and 9 of his judgment:

“4. The table’s 6th column (‘OZP Zoning’) summarises the changes in zoning designations which the Board made by the Draft OZPs. For example, the area where Hysan Place is situated was changed from a ‘C/R’ (Commercial/Residential) to a ‘C’ (Commercial) zone.

5. The BHRs imposed are set out in the table’s 8th column. In relation to Sunning Court, Sunning Plaza, 18 Hysan Avenue and 111 Leighton Road, the Board partially accepted Hysan’s representations and changed the height limit which it had originally intended to impose from 100 to 130 mPD. In respect of Lee Gardens I and II the Board imposed restrictions of 32 and 20 mPD on podiums to be built on those sites respectively.  The podium restrictions are more or less the same as the heights of the current podiums at Lee Gardens I and II.”

123.  Mr Yu’s submissions on this aspect of his appeal can be summarized as follows:

(a) Clear definitions for those features should be set out in the Explanatory Statement which is part of the DOZP (see Section 4 proviso), as such a public document with statutory backing, as opposed to a TPB paper which has no statutory force;

(b) The court does not have the power to supplement the definitions for these restrictions and the deficiency in the DOZPs in this respect cannot be cured by paras 8 and 9 of the judgment below; and

(c) The definition for Setback at para 9 of the judgment creates uncertainties because the effect of the same kind of restriction will vary depending on the purpose or purposes for which setbacks are imposed.

124.  Mr Jat submitted that Hysan had been able to challenge these restrictions before the TPB without any difficulty in understanding what they meant.  Further, if there was any material lack of clarity, this had been cured by the explanation of these restrictions in the judgment.  Counsel also referred to para. 7012 of the Explanatory Statement which set out the purposes for which the relevant setbacks were imposed: to improve pedestrian walking environment and to improve air ventilation.  

125.  The relevant legal principle can be taken from de Smith’s Judicial Review (7th Ed) para 11-040 cited by Mr Yu:

“Substantial doubt over what is intended may result in a decision being held invalid for uncertainty. A byelaw or statutory instrument may be pronounced invalid for uncertainty where it fails to indicate adequately what it is prohibiting. However, a byelaw will be treated as valid unless it was so uncertain in its language as to have no ascertainable meaning or was so unclear in its effect as to be incapable of certain application. Mere ‘ambiguity’ would not suffice. Uncertainty is a ground for invalidating conditions annexed to grants of planning permission and site licences. Such conditions may be void for uncertainty if they can be given no meaning at all, or no sensible or ascertainable meaning. An uncertain decision could also be described as arbitrary, in the sense that ‘it is incapable of providing any meaningful answer’, or indeed as failing to comply with the rule of law.”

126.  The question is whether the restrictions are so unclear as to its effect that it is not capable of certain application.  As de Smith noted, mere ambiguity would not suffice.  Whilst it is certainly better if the effects of the restrictions are fully set out in the Explanatory Statement, the failure to do so does not necessarily mean that the restrictions amount to legal uncertainty.  In the present case, the challenge of Mr Yu focused on Setbacks.  It is an ordinary English expression and if there is any dispute as to its meaning and effect in the context of its use in these DOZPs, it can be resolved by the court.  As accepted by Mr Yu in the course of hearing, Setback is a term used in the planning field.  Though Hysan did raise a query at para 5.6.1 of the representations placed before the TPB as to the full meanings of these expressions and their differences, there had not been any query raised specifically with regard to the possibility of building above the ground level.  Evidence of Hysan placed before the TPB was tendered on the basis that for both NBAs and Setbacks, there cannot be any building above ground.

127.  Whilst it is trite that the court does not have the power to supplement the deficiency in a DOZP, it is equally clear that if there is a dispute on the meaning of a term employed in the DOZP the court can interpret the same.  If there were dispute on the proper construction of the term “Setback” and the Judge came to his view on the meaning of “Setback” as a matter of construction, there cannot be any complaint.  There is nothing intrinsically wrong for a restriction by the same description to have different effects (depending on the context in which it is imposed).  Is there any difference when the Judge simply adopted what Mr Jat informed the court to be the position of his client?

128.  In our judgment, it is necessary to bear in mind that this is a judicial review challenging the imposition of restrictions in the DOZPs, including restrictions by way of “Setbacks”.  And it is the decisions of the TPB in those regards which are being challenged.  In the present context, the argument of Mr Yu is, by reference to what had been argued before the Judge and comparing that with the explanation of the restrictions set out in the TPB papers, that the term itself is uncertain.  It is not Mr Yu’s contention that the TPB had misunderstood the term or adopted an incorrect meaning of the term which is not the same as what the Judge held to be the meaning of it.

129.  We do not think there is any uncertainty in the expression “Setback”.  As Mr Jat observed, Hysan’s experts did not have difficulty in understanding the restriction in the context of these sets of DOZPs and presentations were made on the basis that the Setbacks in question would prohibit building above the ground level.  It is perhaps unfortunate that Mr Jat could readily not assist the Judge on the true effects of those restrictions at the hearing below.  However, that does not mean that the members of the TPB had the same difficulties.   Apparently, they had considered the objections to these restrictions on the same basis as those advanced by Hysan, viz no building allowed above the ground level.  The fact that there had been some confusion at the hearing before the Judge should not divert us from the real issue here: viz whether the term is so uncertain that it is not capable of certain application.

130.  When the restrictions are considered together with the purposes for which they were imposed (which were set out in the Explanatory Statement), we do not think they are void for uncertainty.  On the evidence, members of TPB, the Planning Department as well as Hysan’s experts understood the effects of these restrictions in the same way as the Judge held to be their true effects.  Thus, Hysan cannot rely on legal uncertainty as a ground for challenging the validity of the restrictions.

B3.    NBAs and Setbacks: irrationality, misuse of power and mistake of fact

131.  We shall deal with these two grounds together because Mr Yu argued misuse of power in the context of the imposition of NBAs and Setbacks instead of the exercise of powers under Section 13 of the Road (Works, Use and Compensation) Ordinance, Cap 370 [“R(WUC)O”].  Counsel contended that it was disproportionate (as such unreasonable) to do so, citing Hall v Shoreham-by-sea UDC, supra and de Smith,supra, paras 11-084 and 11-085.

132.  It is to be noted that in this context, we are not considering proportionality in terms of constitutional challenge which involved the Yau Yuk Lung approach (or what de Smith referred to at para 11-080 to 11-003) as the structured proportionality applied in R v Secretary of State for Home Department ex p Daly [2001] 2 AC 532).  We have already dealt with the constitutional challenge above.

133.  The notion of proportionality considered here is an aspect of Wednesbury unreasonableness.  It was observed at para 11-085 of de Smith, supra, citing Hall v Shoreham-by-sea UDC, supra:

“… the notion of proportionality of ‘minimal impairment’ (that a less restrictive alternative be pursued) has been applied in a number of cases based overtly on unreasonableness.”

134.  But as de Smith commented in the last sentence of para 11-085:

“… there seems some reluctance to adopt the full rigour of the minimum impairment requirement of proportionality.”

And the learned editors also observed at para 11-086,

“…The willingness of the courts to invalidate a decision on the ground that it is unreasonable or disproportionate will be influenced in part by the administrative scheme under review; the subject matter of the decision; the importance of the countervailing rights or interests and the extent of the interference with the right or interest. Indeed the intensity of review will differ, for the reason that ‘in public law, context is all’. The threshold of intervention is particularly influenced by the respective institutional competence of the decision-maker and the court.”

135.  In the context of the decisions of the TPB on DOZPs, we respectfully agree with the Judge as to what he said at paras 50 and 51 in Oriental Generation v Town Planning Board [2012] 3 HKC 369:

“50. Different people may reasonable disagree over whether a particular band should have a somewhat higher or lower height restriction. Different people may reasonably disagree over whether a building B of height x within a given distance from site A means that one should permit buildings in A to be of height x. Some might plausibly argue that B belongs to a different sub-area from A. Others could possible regard B as within the same sub-area as A, but view B as a tolerable variation in an otherwise smooth progression of skyline. There are bound to be many permutations and shades of opinion.

51. Given that there will inevitably be judgment calls involved, the Court should accord the Board a wide margin of deference in its decisions as to building height.  Lacking expertise in town-planning, the Court should hesitate to substitute its own opinions as to appropriate height for those of the Board.  The Court should only interfere if there is compelling reason to do so.”

136.  We are of the view that similar approach should be adopted as to the TPB’s planning judgment on the balance between private interest of the landowners and the public interest in planning.  Thus, the same approach is called for in considering the challenges under this head with regard to the other restrictions like NBAs and Setbacks.

137.  To the same effect is what A Cheung J (as he then was) said at para 75 in Smart Gain Investment Ltd v Town Planning Board, supra:

“… planning judgment is essentially a matter for the Board but not for the courts …”

138.  With these in mind, we shall examine Mr Yu’s challenges under this section.  First, counsel submitted that for improvement of pedestrian traffic, the Government can exercise the power under the R(WUC)O to achieve the same objective by widening the road or street in question. There would be compensation payable if such power were exercised.  To achieve the same ends by NBAs and Setbacks without paying compensation, Mr Yu submitted, is to avoid the financial consequences of R(WUC)O and a misuse of power.

139.  In Hall v Shoreham-by-sea UDC, supra the court held as a matter of construction that the power under section 14 of the Town and Country Planning Act 1947 should not be exercised by imposing conditions requiring the construction of road at the applicant’s own expense on granting planning permissions when the same objective should have been achieved by the process of dedication with compensation under the Highways Act 1959, see in particular the judgment of Willmer LJ at p251.

140.  But His Lordship also said at p.247-8:

“…merely to say that the conditions sought to be imposed interfere with the plaintiffs’ rights of property, such as, for example, their right to prevent other people from passing over their land, is not, in my judgment, sufficient of itself to warrant the conclusion that the conditions go beyond what is authorised by the statute. The whole scheme and purpose of the Town and Country Planning Acts is to limit the exercise of an owner’s property rights. The statute in question here does to my mind clearly and unambiguously authorise the imposition of conditions which will necessarily interfere with an owner’s right of property….”

141.  It is also clear that Willmer LJ was examining the matter by reference to the Wednesbury reasonableness standard, see his citation of the judgment of Lord Greene at pp.248 to 249.  In the end, what the court found to be unreasonable was set out at p.249:

“But it is said that the terms of the conditions actually imposed, particularly the requirement that the plaintiffs should give right of passage to and from the ancillary roads to be constructed on the adjoining land, are so unreasonable as to go beyond anything that Parliament can have intended, or that any reasonable authority could properly have imposed.”

And

“… this amounts in effect to a requirement that the plaintiffs shall dedicate the ancillary road when it is built to the public …”

142.  Mr Jat made a simple point in answer to this submission.  He contended that NBAs and Setbacks are planning measures to achieve planning objectives (in the present case, improving air ventilation and pedestrian circulation) and cannot be equated with the conversion of private land into a street pursuant to the power exercisable under the R(WUC)O.  Thus, Hysan can have the benefit of the land for the purpose of plot ratio calculation.  It can also make use of the land without erecting any building on the same.  It can build underground.

143.  Mr Yu contended that it would be irrational to impose NBAs and Setbacks for improving pedestrian traffic without also requiring Hysan to allow the public to pass and repass over the NBAs and Setback areas.

144.  In our view, the last point is the crucial distinction between the present case and the situation in Hall v Shoreham-by-sea UDC.  The restrictions in the DOZPs do not require Hysan to construct or maintain the NBAs and Setback areas as part of the street.  Hysan is free to utilise those areas so long as it does not involve the erection of any building there.  For example, it can allow some vending machines to be placed there.  It can also permit the use of such space for a coffee stall partly attached to the building.  Whether and what Hysan will do is a matter of commercial judgment.  Likewise, the assessment of likelihood of such occurrences and their likely impact on the objective of improving pedestrian traffic is a matter of planning judgment.

145.  As Willmer LJ observed, it is inevitable that planning restrictions would interfere with the use of the property by the landowner.  At the same time, one must also bear in mind that the improvement of air ventilation and pedestrian traffic also benefit the landowner as much as the other people visiting the vicinity and those in the neighbourhood.  This is what planning is about and one needs to balance the public interest as well as the private interest.  We are not saying Hysan does not pay regard to pedestrian traffic and air ventilation as a responsible landowner.  However, it must be recognised that the proper planning and control of development in a district requires planning judgments of this nature to be undertaken by an authority other than the individual landowner.  The legislature has entrusted that task to the TPB and subject to the fair and proper operation of the TPB process (which can be tested in a judicial review), we do not think the court should interfere with their planning judgments simply because the landowner has (perhaps legitimately), based on advices obtained, come to a different view on the same issues.  The court should give allowance for reasonable differences in judgments of this nature.  

146.  There are substantial differences between the imposition of NBAs and Setbacks in the DOZPs and the exercise of the statutory power under the R(WUC)O. Resumption of land for road works or notices of creation of easement issued under that ordinance takes effect immediately.  Resumption is clearly much more drastic than NBAs and Setbacks.  As for the creation of permanent easements, as presently advised, we are not convinced that such easements will simply be affecting the land as the NBAs or Setbacks do.

147.  We reject the submission of Mr Yu that it is Wednesbury unreasonable for the TPB to impose these restrictions when improvement in pedestrian traffic can also be achieved with compensation under the R(WUC)O.

148.  Mr Yu relied on the Judge’s judgment in Oriental Generation v Town Planning Board, supra, at paras 76 to 77 and 91 and submitted that in the context of the balancing exercise inherent in the planning judgment in respect of each restriction to be imposed, the Board must ensure that the restriction is no more than reasonably necessary to achieve the relevant planning objective.  Counsel took that to mean that the TPB must weigh quantitatively the marginal benefit to be derived from a restriction against the marginal detriment such restriction may occasion to the interest of the landowner.  In that connection, Mr Yu cited passages from Barak, supra,p.350 et seq to support his contention.  But it is quite plain that the learned author discussed the matter in some very different contexts.

149.  With the greatest respect, we cannot accept that this is the correct approach in the present context.  It is simply impossible to quantify the marginal benefit and the marginal harm in the manner suggested by Mr Yu in an exercise of this nature.  There are so many imponderables and uncertainties in the future development of the land in question and its neighbourhood which nobody can predict at this stage.  Any attempt to engage in such a quantitative analysis is at best educated guesswork.  We do not think the proper exercise of planning judgment goes as far as that. 

150.  In reading the learned exposition in Barak, supra, it is necessary to have regard to the context in which the concept of proportionality was being discussed by the learned author.  Such context can be found at p.347:

“Balancing rules have different roles in the law. In the present context, it is important to distinguish between interpretative balancing and constitutional balancing. In interpretative balancing, the balancing is used to determine the purpose of the interpreted law. It outlines its normative boundaries. Constitutional balancing, in contrast, is designed to determine the constitutionality of a sub-constitutional law. It is not designed to interpret the sub-constitutional law, but rather to determine its validity. Constitutional balancing – and the balancing rules it develops – are meant to resolve the tension between the benefit obtained in the realization of the law’s purpose, and the harm caused to the constitutional right.”

151.  The discussion at the subsequent pages, including those relied by Mr Yu, were made in the context of constitutional balancing.

152.  At para 11-089 of de Smith,supra, the learned editors discussed the more searching nature of a structured proportionality approach in dealing with cases involving a departure from a fundamental norm.  Under that approach, because of the requirement of minimum impairment of rights, the decision-makers have to consider less onerous means to achieve their ends.

153.  For the reasons we have canvassed in our discussion on Article 105, we do not think the imposition of these planning restrictions constitute any infringement of fundamental or constitutional rights.  Thus, the court should not adopt a structured proportionality approach to require every planning restriction to be justified quantitatively as no more than a minimal interference with property rights to achieve a planning objective.  On a broad brush exercise as the one involved in the decisions on DOZPs under Section 6B of the TPO, there are bound to be lines being drawn for the overall general macro considerations (as in the case of BHRs for the stepped profile) which can be criticised as being excessive upon a micro-consideration by reference to a single lot in question. However, this tension is inherent in planning and the existence of such tension should not by itself invalidate the planning judgment.  In a judicial review challenging the planning judgments in DOZPs, the court must resist the temptation to view matter from a micro perspective.  Having said so, there is still some scope for the application of the concept of proportionality.  As de Smith commented at para 11-085, this was often done in cases based overtly on unreasonableness.       

154.  Mr Yu also challenged the NBAs and Setbacks on the following grounds:

(a) In assessing pedestrian circulation, the TPB made a mistake as to the minimum width requirement under the Hong Kong Planning Standards and Guidelines [“HKPSG”];

(b) Discriminatory treatment in the imposition of NBAs at Yan Ping Road;

(c) Qualitative evaluation for air ventilation cannot provide justification for a finite NBAs; and

(d)     Misunderstanding or disregard of the report of Hysan’s traffic consultant, MVA.

155.  Some of his criticisms under these heads proceeded on the premise that the TPB had to adopt a marginal quantitative comparison between potential benefit and potential harm.  We have explained above why this is not the correct approach.  Another line of his attack is essentially highlighting the inadequate considerations being given to the materials placed by Hysan before the TPB, which we shall deal with below in the context of the fairness of the process.

B4. Error in placing reliance on minor relaxations    

156.  At various parts of the reasons given by the TPB for rejecting the submissions of Hysan, it referred to the possibility of minor relaxation to cater for site-specific circumstances and schemes with planning and design merits: see paras 223(g), 225(d) and 226(d) of the minutes of the meeting on CWB DOZP and para 92(f) of the minutes of the meeting on WC DOZP. These references were repeated in the letters from the TPB to the planning consultant rejecting the Hysan representations.

157.  The powers to grant such minor relaxations are set out in the Explanatory Statements.  For example, at para 7.8 of the Explanatory Statement of the CWB DOZP, it is stated:

“7.8 In general, a minor relaxation clause in respect of building height restrictions is incorporated into the Notes of the Plan in order to provide incentive for developments/redevelopments with planning and design merits and to cater for circumstances with specific site constraints. Each planning application for minor relaxation of building height restriction under section 16 of the Ordinance will be considered on its own merits and the relevant criteria for consideration of such application are as follows:

(a) amalgamating smaller sites for achieving better urban design and local area improvements;

(b) accommodating the bonus plot ratio granted under the Buildings Ordinance in relation to surrender/dedication of land/area for use as a public passage/street widening;

(c) providing better streetscape/good quality street level public urban space;

(d) providing separation between buildings to enhance air and visual permeability;

(e) accommodating building design to address specific site constraints in achieving the permissible plot ratio under the Plan; and

(f) other factors such as need for tree preservation, innovative building design and planning merits that would bring about improvements to townscape and amenity of the locality and would not cause adverse landscape and visual impacts.”

158.  In the Notes to the CWB DOZP for commercial use (which the Hysan sites fall under), it is provided:

“(5) Based on the individual merits of a development or redevelopment proposal, minor relaxation of the building height restrictions stated in paragraph (1) above may be considered by the Town Planning Board on application under section 16 of the Town Planning Ordinance.

(6)   Under exceptional circumstances, for a development or redevelopment proposal, minor relaxation of the non-building area restriction and setback requirement as stipulated on the Plan or stated in paragraphs (2) to (4) above, and the building gap requirement stated in paragraph (3) above may be considered by the Town Planning Board on application under section 16 of the Town Planning Ordinance.”

159.  Mr Yu submitted that the TPB should not rely on the existence of these powers to grant minor relaxation as a reason for rejecting Hysan’s representations because the representations were made on major issues which could not be addressed by an application for minor relaxation.

160.  Mr Jat did not dissent from the suggestion that Hysan’s representations touched upon major issues and as such do not come within the scope of minor relaxations.  Mr Jat also accepted before us that “minor” really means minor and an applicant cannot rely on the minor relaxation provision to achieve what a substantial revision of the restrictions imposed under a DOZP.  These concessions must be correct in view of the permissible scope for a s 16 application in light of the limitations laid down in an OZP, see the discussion in International Trader v Town Planning Appeal Board [2009] 3 HKLRD 339 paras 47 to 51.

161.  However he submitted that the TPB did not actually rely on the possibility of minor relaxation “as a positive justification for the restrictions”.  He said the restrictions were justified in their own right.  In connection with that, he referred to the evidence of Miss Ophelia Wong in her affidavit on the TPB’s awareness of the distinction between the section 6B process (for hearing representations on DOZPs) and section 16 process (for dealing with minor relaxation of a specific scheme put forward by an applicant).  She referred to para 205 of the minutes of the CWB DOZP meeting as a reflection of that.  That was a record of the deliberation by the members after hearing the representations.  At that paragraph, it was recorded:

“A Member said that although some planning and design merits had been incorporated in the enhanced scheme [by Hysan for the Sunning sites], there was no sufficient information to substantiate a further relaxation of the BHR, particularly as there was no mechanism to ensure that the proposed enhancement would be incorporated in the redevelopment. A more prudent approach was to make use of the provision of application for minor relaxation of the BHR. …”

162.  The Judge dealt with this issue at paras 156 to 157 of his judgment:

“156.     Mr Yu suggests that the Board relied on the possibility of a developer applying for minor relaxation of the restrictions as a basis for imposing restrictions.  I disagree that the Board so acted.

157.     It is true that, on a number of occasions, the Board in its deliberations refers to the possibility of minor relaxation.  But it does not follow from this that the Board regarded minor relaxation as a reason for imposing restrictions.  The Board considered individual restrictions on their own merits, regardless of the possibility of minor relaxation in meritorious cases.”

163.  With respect, the Judge might have overlooked the references to minor relaxation in the actual reasons for the TPB’s decisions, both as recorded in the minutes and as stated in the letters to the planning consultant.  Further, subject to what we said below on the extent to which one can rely on the statement of one member in the deliberation to supplement the actual reasons given by the TPB, the passage cited by Miss Ophelia Wong in the deliberation process actually demonstrated that at least one member of the TPB relied on the minor relaxation provision as a proper reason for rejecting Hysan’s representations. 

164.  Whilst it is not objectionable for the TPB to refer to the mechanism for minor relaxation after they had rejected the representations on other substantive grounds by way of reminder to an applicant of such mechanism, it is not open to the TPB to rely on that mechanism as one of the substantive reasons for rejecting representations.  In the latter scenario, the TPB would have taken an irrelevant consideration into account.  Even though it may only be one reason out of several reasons given in dealing with the representations, Hysan is entitled to say that it could not know whether the TPB would reach the same conclusion in the balancing exercise if such reason had not been relied upon.  In our judgment, the decision of the TPB is tainted by its reliance on the possibility of applying for minor relaxation.    

C.      Procedural fairness and inadequate consideration of Hysan’s representations

165.  Hysan put in a large volume of materials at the TPB hearings.  Attempts to put in such materials a few days before the CWB DOZP hearing were rejected by the TPB on the ground that to allow that would contravene the timetable laid down in Section 6 of the TPO for making representations before hearings.  We agree with Mr Jat that in these appeals we should not examine the question whether this construction of Section 6 by the TPB is correct.  We only refer to this as a matter of history to set the scene for the tabling of substantial materials at the hearings.  The TPB was contented with having such materials placed before it in such manner and the question is whether it had given the representations of Hysan (including these last minute materials) adequate and fair consideration.

166.  Section 6B (3) of the TPO specifically gives a person who had made a representation a right to be heard at the meeting.  Thus, not only has a person a right to put in a written representation, the statutory scheme actually confers a specific right to be heard orally at the meeting. This is a statutory manifestation of the second rule of natural justice: audi alteram partem.  And it is trite that the rule is to safeguard the procedural fairness of the process.  It is equally trite that a right to be heard is worth nothing if the decision-maker can simply close his mind to whatever were being said or put forward by way of submissions at a hearing.  As the learned editors of  de Smith, supra, succinctly put it at para 7-055:

“It is necessary for proper consideration to be given to representations made in the consultation and the government authority must ‘have embarked on the consultation process prepared to change course, if persuaded by it to do so’….”

167.  In the context of proceedings before the TPB, Cheung JA said to the same effect in Capital Rich Development Ltd v Town Planning Board, supra, at para 81(1):

“A planning authority must evaluate an application objectively and without pre-judgment on its merits …”

168.  It is also important to note that the decision-maker is the TPB, not the Planning Department.  There are official and unofficial members on the Board.  According to the evidence of the Secretary of the TPB, the current membership of the TPB is 35, comprising 6 official members and 29 non-official members.  The Permanent Secretary for Development (Planning and Lands) is the chairman.  The non-official members come from different sectors: architectural, surveying, engineering, environmental, business and finance, education and legal sectors.  They serve on a part-time basis.  Some of them are also members of the MPC but some are not.  Counsel are unable to assist us on how many members participating in the decision-making process at the CWB DOZP hearing and the WC DOZP hearing are members of the MPC.

169.  In the present case, there are features in the CWB hearing that drive us to the inevitable conclusion that Hysan had not been given a fair hearing and its representations (including the submissions and materials put forward at the hearing) had not been properly or adequately considered by the TPB.  We have given this question very anxious consideration but we cannot escape from this conclusion.  It should be made clear that in so deciding, we are not saying that members of the TPB had not been performing their duties conscientiously.  To the contrary, we acknowledge their dedication to their public duties and the sacrifice they make in terms of time and diligence in attending the meeting which lasted from 10:00 am on 11 March 2011 to 00:15 am on 12 March 2011.  Save for the lunch break from 1:30 pm to 2:00 pm, the TPB sat continuously to hear representations until after 10:00 pm, in the course of which it rejected Hysan’s application for adjournment.  It then conducted a Q & A session until after 11:00 pm. After that, the deliberation process took place in private which culminated in the decision made for the reasons set out in the minutes.

170.  However, we must not allow our admiration for the dedication of the members to dissuade us from holding that Hysan’s representations had not been fairly considered when the objective evidence compelled us to such conclusion.  Actually, one of the factors which weigh heavily in our mind is the long and continuous sitting hours with little time to digest the very full and substantial written materials tabled at the CWB DOZP meeting.  Mr Yu referred us to the judgment of Brooke J (as he then was) in R v Portsmouth City Council, ex p Gregory & Mos (1990) 154 LGR 713 at p.720:

“Justice requires proceedings which do not go on for too long each day, because it is well known that both judges and defendants get tired if they have to concentrate on important issues for too long at any one time.”

171.  We have to ask ourselves whether, objectively speaking, bearing in mind human nature and capacity, and in light of the objective circumstances of the case before us, Hysan has persuaded us that such representations had not been fairly considered.  The relevant objective circumstances include the long sitting hours, the substantial and technical nature and the volume of Hysan’s representations, the fact that the members had not been afforded time to read the materials tabled by Hysan on their own, together with the limited time for them to digest and consider those representations, together with the omissions in the reasons given by the TPB to address some of the pertinent issues raised in Hysan’s representations.

172.  We do not lose sight of the fact that Hysan put in their written materials very close to the meeting.  We also understand that the TPB had a tight schedule and it might be difficult to match the diaries of the unofficial members to get them back together in the not too distant future if the meeting were adjourned without completion of the business.  But there are limits to human capacity, and it has to be recognized that there would come a point when members’ level of concentration would drop.  Having said so, we do not think one should adopt a rigid and mechanistic approach and prescribe that a continuous sitting hour of more than a certain number of hours will result in procedural unfairness.  That is a wrong approach.  But the excessive length of a hearing is a factor when one assesses the overall fairness of the proceedings.  In the present case, the length of the hearing on 11 March 2011 (coupled with the complex issues that it had to deal with, not only in respect of Hysan’s sites but other sites as well) does cast some doubt on the extent to which members of the TPB could have properly considered the representations at the end of such a long session which required their intense attention.  Whilst the length of the hearing per se may not be enough to vitiate the process on the ground of unfairness, the complexity of the issues at hand, the scope of the hearing and the lack of time to read and digest the written materials placed before the members at the meeting are also significant in the present case.  It is against that light we examine the other factors urged upon us by Mr Yu.   

173.  We accept that some of the members have their expertise in the relevant field and some of them had been involved with the preparation of the plans at the MPC stage.  No doubt these members can digest the relevant representations and materials much more efficiently than other members.  However, there are members who were not in such a position.  And the statute confers the power to make the decision on the TPB as a whole, not only on those members who were experts in the field or those who were members of the MPC.  Whilst we must proceed on the basis that all the members had read the relevant TPB papers which had fully summarised the issues based on the pre-hearing representations and set out the responses of the Planning Department and its recommendations, it remains a fact that they did not have any opportunity before the hearings to read or reflect on the very substantial materials presented by Hysan at the meetings.

174.  Another aspect of Mr Yu’s challenge to the fairness of the proceedings is on the partial absence of some members who had participated in the decision-making process but were not present throughout the hearing.  Audi alteram partem is often translated as “he who decides must hear”.  This rule has recently been considered by the English Court of Appeal in R (Hill) v Institute of Chartered Accountants [2014] 1 WLR 86.  Though the case concerned a disciplinary hearing, the judgment touched upon some general aspects in the application of the rule.

175.  From the judgment of Longmore LJ and the authorities cited in that case, we derive the following propositions which are relevant for present purposes:

(a) Hearing needs not be confined to evidence or materials raised at an oral hearing (para 15);

(b) For judicial bodies where the rule applies in its full rigour, it is important that each member of the tribunal should hear orally all the evidence. Reading a transcript is normally no substitute for hearing evidence from a live witness given orally (para 15);

(c) In the context of a non-judicial body, there is no absolute rule that this must be achieved by the presence of all the members throughout the entire course of hearing.  See the example given in Jeffs v New Zealand Dairy Production and Marketing Board [1967] 1 AC 551 and the dicta of Viscount Dilhorne at pp. 568-569 cited at para 19.  Some other procedures may be acceptable when the credibility of witnesses or other reasons pertaining to the proper assessment of a matter which requires the presence of all the members is not engaged.  It is a matter of procedure and fairness (cf paras 19 and 22);

(d) In respect of administrative decisions which is not of a quasi-judicial nature, the crucial question is whether all members participating in the decision-making were fully apprised of what had happened at the hearing (or in the words of Viscount Dilhorne “fully informed of the evidence given and the submissions made”);

(e) Thus, if there are members who are partially absent during the proceedings taking part in the deliberation and decision making, there must be some other evidence to demonstrate that they have otherwise been adequately apprised of the relevant matters or representations which had been put forward during their absence;

(f) In assessing the adequacy of an alternative arrangement, the court will have regard to the nature of the process, nature of the case of the party concerned, the evidence or representations that were given, the issues that the decision maker need to address; and

(g) The rule may also be relaxed if the relevant process is statutory and the statute provides for such relaxation.  As stated by Pratte J in the Canadian case of Doyle v Canada (Restrictive Trade Practices Commission) (1985) 21 DLR (4^th) 366, “It … does not apply where this is expressly stated to be the case … nor does it apply where a review of all provisions governing the activities of a tribunal leads to the conclusion that the legislator could not have intended them to apply.” (para 27)

176.  It must be emphasised that the relaxation discussed above is only in respect of the alternative arrangement for some members to be apprised of the evidence and representations (without being personally present at the meeting when the representations were made) before they participated in the deliberation process.  It is not a relaxation which allows some members to take part in the decision making process when they were ignorant of relevant materials.  Thus, if the evidence shows that no attempt or inadequate attempt was made to apprise those absent members of the relevant representations before they participated in the making of the decision, that would vitiate the decision, see R v Preston Borough Council, ex p Quietlynn Ltd [1985] 83 LGR 308.

177.  A similar challenge had been mounted in R v Town Planning Board Ex p REDA [1996] 2 HKLR 267.  That was a case where Leonard J found on the evidence before the court that all members were fully apprised of all the representations (see p.284E) despite some members of the TPB were not present at the oral representation by the applicant.  In that case, a further meeting was held after the hearing at which representations were made.  Before the second meeting, detailed minutes of the first meeting were prepared and read by those who attended the second but not the first meeting.  The second meeting was necessary in order to achieve fairness and consistency between objectors as there were similar objections in other cases.  Leonard J considered many relevant authorities at pp.281-286 (including Jeffs v New Zealand Dairy Production and Marketing Board, supra, and R v Preston Borough Council, ex p Quietlynn Ltd, supra).  His approach was in line with the propositions of law stated above.

178.  At p.282G, His Lordship made the following observation which can serve as a sagely reminder:

“I agree that mere inconvenience is no excuse but practicality is a question to be considered, as is the advantage to be derived from the procedure adopted.”

179.  That is of course subject to the caveat that the procedure adopted must be fair and consistent with the principle that the decision maker must be adequately apprised of the relevant representations.  Otherwise, the hearing afforded to a party will be meaningless, as observed by K Subba Rao J in Rao v Andhra Pradesh State Road Transport Corporation  [1959] AIR 308 at p.327 (cited by Leonard J at p.281 of REDA, supra):

“If one person hears and another decides, then personal hearing becomes an empty formality …”

180.  Before us, Mr Jat relied on the judgment of Lord Denning in R v Race Relations Board, ex parte Selvarajan [1975] 1 WLR 1686 at pp.1695 to 1696 (as counsel for the TPB did before Leonard J).  Mr Jat submitted that the rule of natural justice should not be applicable to its full rigour in respect of the TPB bearing in mind its administrative and consultative function.  It should be allowed to be the master of its own procedure.

181.  As reflected in the propositions set out above, we agree that there is a distinction between judicial (or quasi-judicial) bodies on the one hand and administrative bodies on the other.  We also bear in mind the observations of Lord Diplock in Bushell v Secretary of State for the Environment [1981] AC 75 at p.95 and Tucker LJ in Russell v Duke of Norfolk [1949] 1 All ER 109 at p.118 cited by Leonard J at pp.285-6 of REDA, supra.  However, it does not mean the rule has no application to a section 6B hearing conducted by the TPB.  Leonard J was clearly of the view that the rule is applicable and that was why His Lordship had to satisfy himself that all members of the TPB were fully apprised of all the representations before he concluded that the process had been fair.  In respect of other decisions in socio-economic and quasi-planning context (concerning the balancing of public interest against private interest) where a right to be heard is conferred, there were cases which held that the tribunals are subject to this requirement of natural justice: see Jeffs v New Zealand Dairy Production and Marketing Board, supra, and R v Preston Borough Council, ex p Quietlynn Ltd, supra.

182.  Whilst it is correct to describe the decision of the TPB as administrative (and Mr Jat referred us to the judgment of Leonard J in REDA at pp.275 to 277 and 292, quoted with approval by Litton VP (as he then was) in Kwan Kong Co Ltd v Town Planning Board [1996] 2 HKLR 363 at p.373), it is nonetheless a decision which restricts the ability of the landowners to use their properties in future developments.  Even though, as discussed above, the constitutional rights under Articles 6 and 105 of the Basic Law are not engaged, the decision is of a different kind from the administrative decision of the Race Relation Board considered by Lord Denning.  We are conscious that the TPB is exercising a planning judgment which involves the balancing of private interest against public interest and the nature of a section 6 hearing is of a consultative as opposed to adversarial nature.  Even so, these are not valid grounds for permitting the planning judgment to be exercised by someone who is not fully apprised of the relevant representations.

183.  In contrast, the decision of the Race Relation Board in R v Race Relations Board, ex parte Selvarajan, supra, was one made under Section 15(5) of the Race relations Act 1968.  That provision required the board to consider the report from the conciliation committee and to either investigate a complaint or, without investigating it, determine whether or not to bring proceedings.  The board in that case decided to re-investigate after having the report.  It delegated the re-investigation to a conciliation officer.  The officer made a further report with a recommendation.  When the board met, some members had the full set of papers but some only had a summary.  At a meeting of the board, the members formed the opinion that no unlawful discrimination had occurred and therefore no proceedings were brought.  It was against such context that Lord Denning examined what the duty to act fairly required when the board made its decision.  It was against such context that His Lordship said the board was the master of its own procedure and it needed not hold a hearing before it decided (see p.1694).  It was against such background that the learned judge further held at pp.1695 to 1696 that a body making an investigation or conducting preliminary inquires could delegate the task of reading all the papers or hearing all the evidence to some of its members as “the ordinary accepted method of carrying on business”. Though His Lordship also made a passing reference to body exercising administrative functions, it is doubtful if he was having a body like the TPB in mind.

184.  In Race Relations Board, supra, Lord Denning distinguished Jeffs v New Zealand Dairy Production and Marketing Board, supra on the basis that on the construction of the relevant statue, the board in the latter case had no power to delegate its function.  In the present appeals, we are dealing with the general duty to inquire under Section 3(2) of the TPO.  We are concerned with the specific duty under section 6B of the ordinance.  Under that section, the TPB has a non-delegable duty to consider the representation at a meeting and a right to be heard at such meeting is conferred on a person who had made representation under section 6B(3).

185.  We do not think there is anything in the judgment in  R v Race Relations Board, ex parte Selvarajan, supra, to permit TPB members not fully apprised of the relevant representations to take part in the decision making process under Section 6B.

186.  As a matter of fact, the problem of members being partially absent from proceedings is not that serious at the CWB DOZP hearing.   As Mr Jat submitted, there was no member participating in the decisions who was not present at the time of the Hysan representations.  But the above discussion highlights the importance of all members participating in the decision-making must be apprised of the representations.  By a parity of reasoning, fairness of the process requires all those participated in the decision-making process to have the opportunity to digest the materials put forward in order to give proper consideration to the same.  Thus, one must take account of the position of those lay members who had not been involved at the MPC stage.

187.  The additional materials placed by Hysan before the TPB at the 11 March 2011 meeting include the following:

(a) Expert review by ARUP and visual presentation of Dr Rumin Yin on air ventilation;

(b) Presentation on development intensity and design flexibility for Lee Gardens Two and representations by David S K Au & Associates on redevelopment options for Lee Gardens Two;

(c) Mr Gavin Morgan presentation on floor-to-floor height;

(d) Ian Brownlee’s representations before the TPB;

(e) Dr L K Chan’s presentation on Sunning Plaza;

(f) Modified concept plan, photomontages and alternative building height profile;

(g) MVA report on pedestrian circulation; and

(h) Mr Chapman Lam’s presentation on pedestrian circulation.

188.  Though some of these materials were used as aides for presentation at the hearing and members of the TPB would have followed the same in the course of such presentation, some of them were not canvassed in detail.  They are materials of a rather technical nature and it would take more than just some quick reading for someone who is not in the particular field to fully understand and digest the same.  Bearing in mind that the meeting was held continuously (with different representations from many parties over many sites covered by the CWB DOZP raising different issues for each site), it would appear that the members did not have the time to read for themselves and digest the materials fully before they embarked on the deliberation process.    

189.  Mr Yu had taken us at some length to the issues which Hysan raised at the hearing by reference to these materials.  We have referred to some of them in our discussion on NBAs and Setbacks.  Some we have not.  Since we should not usurp the role of the TPB and for the purpose of these appeals we are more concerned about the fairness of the process than the merits or rationality of the decisions, it is not necessary for us to set out each and every issue on the merits in this judgment.  Suffice to say that we are satisfied that these materials are relevant to the exercise of the planning judgment on the restrictions imposed in the DOZPs and they cannot be dismissed out of hand as irrelevant materials.

190.  In this respect, we do not understand Mr Jat to be arguing otherwise.  His answer to this line of attack is that the minutes showed that the TPB was conversant with these materials and some of the issues raised were explicitly brought up in the course of deliberations.  In respect of the BHR for the Sunning Plaza area, the TPB actually relaxed the BHR to 130mPD though it did not accede to Hysan’s representation to relax it to 150mPD.  Counsel helpfully prepared a table identifying the various items of technical materials tabled by Hysan at the meeting and how they were dealt with in deliberations and the reasons given for rejecting the representations.

191.  In Capital Rich Development Ltd v Town Planning Board, supra, Cheung JA said at para 87:

“Personally I do not consider that too much weight should be attached to the summary of the discussions by members of the TPB. When a decision-maker deliberated on an issue there would be expression of ideas and views which may not be fully articulated or necessarily correct. But it does not mean that when the decision-maker finally decided on an issue it would necessarily have relied upon one or more of the matters that had been discussed. It is far more important to see how the decision-maker articulated the reasons for the decision.”

192.  We respectfully agree.  Further, the view expressed by one member in deliberations cannot be taken as evidence of the state of understanding of the issues by all other members.  They might not even be sharing the same view.  Neither can one infer from the fact that one member had taken an issue on board in deliberations that all other members were fully conversant with the same issue. 

193.  We have considered the relevant references to the minutes and transcripts which Mr Jat added to the table of Mr Yu.  Even taking those references into account, quite apart from the reservations we expressed in the above paragraph, we do not think they demonstrate that all the members of the TPB present at that hearing had properly considered the materials of Hysan.  We accept that in respect of some issues, the minutes of the deliberations show some members had taken the representations of Hysan on board, e.g. floor to floor height, see para 188; alternative stepped profile, see para 199; pedestrian circulation and footpath width, see para 195.  But the deliberations did not cover all the salient issues.

194.  Take the example of the air ventilation issue, whilst the Planning Department had produced comments from AVA Consultant to address the downwash effect mentioned in Dr Yin’s report and the Planning Department did make some comments on the Arup presentation at the Q&A session (paras 171 to 172 of the minutes), there did not appear to be much discussion by the members in the deliberation on the various alternatives put forward by Dr Yin.  The only reference one can find is at para 191 of the minutes which rejected in general terms the other alternatives in one sentence on the basis that they could not achieve the planning intentions/objectives.  There was no weighing of the views of Arup against those of AVA Consultant and the Planning Department.  In the discussion on each individual site (paras 205 to 207), reference was only made to the AVA’s opinion without any consideration being given to the opinions of Arup. 

195.  On the complaint by Hysan that the qualitative expert evaluation could not be properly translated into the specific quantitative restrictions in terms of 2m NBAs and 1.5m setbacks, we also do not find any discussions in the deliberations.  

196.  Whilst members of the TPB were entitled to prefer the opinions of AVA and the Planning Department to those offered by Arup, they should give proper consideration to Arup’s opinions before they came to that conclusion.  The record of the deliberations as set out in the minutes does not show that those members had properly considered the opinions of Arup. 

197.  At para 117 of his judgment, the Judge said the TPB preferred Planning Department’s views to that of Dr Yin in its deliberations.  There is however nothing in the transcript or the minutes to show the process of weighing the two different sets of expert opinions by members of the TPB.  We should not assume that the TPB must accept whatever opinions (including the expert opinion of AVA) put forward by the Planning Department.  The task of the TPB is to exercise an independent judgment after giving these contradictory expert opinions their proper consideration.  Having read the relevant paragraphs in the minutes, we can only find passages showing members relying on the original evidence of AVA.  There is no reference to the views of Arup and no indication of why such views were not accepted.  At para 206 of the minutes, there was only a reference to the view of AVA which had been canvassed in its original report.  There was no reference to the supplemental evidence of AVA on the downwash effect put forward by the Planning Department in the deliberations.  The Arup report canvassed arguments other than the downwash effect, see for example para 5.2.2.2 of the report.  Their opinions in those respects were not addressed in the minutes.

198.  There is a greater concern about the fairness of the process when the reasons for the TPB’s decisions are put into equation.  The reasons were basically a reproduction of the points canvassed by the Planning Department in the TPB papers.  Such practice had been commented upon by Stock JA (as he then was) in Captial Rich at paras 105 and 106.  Though, as observed by His Lordship, the reproduction of the same reasons of itself is not conclusive of anything, it is a relevant matter to be taken into account on the overall fairness of the process.  At para 98, Stock JA made this observation in his discussion on sufficiency of reason given by a decision-maker:

“… where a real issue arises as to whether an allegedly material issue was or was not taken into account, or what was at the end of the day made of that issue by the decision-maker, the courts are entitled to expect the answer to be sufficiently clear from the evidence before it without having to resort to guesswork.”

199.  In Smart Gain Investment Ltd v Town Planning Board, supra, A Cheung J (as he then was) gave a note of caution on this practice at para 105:

“… it is always dangerous to copy someone else’s reasons. In the long run, it would be wise for the Board to write its own reasons, even in cases where it agrees entirely with the views of the Planning Department, if for nothing else than to put to rest any possible doubt that the Board has not applied an independent mind to the issues before it. A corollary of this is that the practice of the Planning Department to provide suggested reasons in its planning papers prepared for use before the Board should be reconsidered. … the practice of actually formulating the reasons to be given by the Board for its adoption, in case it is with the Planning Department, may well constitute an unnecessary temptation to the Board not to provide its own reasons for its decision.”

200.  That was said in 2007.  Apparently the practice has remained unchanged.

201.  In the present instance, the temptation was particularly strong when the TPB had heard representations (some of them were rather substantial and complex) together with a Q&A session for 9 hours without any break up to 11:00 pm.  Though there were deliberations as recorded in the minutes, the question remains whether Hysan’s materials had received proper consideration notwithstanding the members’ determination to carry on with the meeting as stated at para 184 of the minutes.  According to the record, there was a 5-minute break between the end of the Q&A session and the commencement of the deliberation.  Even assuming that the members took up that short period to read the written materials (instead of having a real break after 9 hours’ continuous hearing), that could hardly do justice to the materials in view of their volume and technical nature.

202.  The fact that there were deliberations during which some members took on board some of the issues raised by Hysan does not necessarily mean that all the members have exercised independent judgments on all the issues raised by Hysan.  Some members might be more familiar with a topic and some not.  Hysan was entitled to have the collective judgment of all the members.  Thus, for those members who had not expressed any view in the deliberations (which seems to be the majority), this court must assess their consideration of the Hysan materials by examining the reasons given for their collective decisions.  When the reasons were the same as those set out in the TPB paper and there was no discussion on the additional materials tabled and presentations made at the meetings, the court must ask itself whether this an indication of momentarily lapse occasioned by the pressure to have a decision within a short time after a long, continuous and taxing hearing.  In this respect, it is also pertinent to note that that TBP papers were prepared before Hysan had made its presentations at the meeting.

203.  We must stress in this judgment that we are not discussing the general duty of the TPB to give reasons.  Instead, as it should be apparent from our citation of the judgment of Stock JA in Capital Rich, we are looking for evidence in the reasons given by the TPB to dispel the doubt (arising from the manner in which the meeting had been held in terms of its length and complexity) as to whether the members had properly considered the Hysan materials tabled at the meeting.  And we had to say that there is nothing in the reasons which the TPB could pray in aid in that regard.

204.  Taking all matters into account, Hysan has satisfied us that their materials tabled at the meeting had not received proper consideration before the TPB made the decision to reject them on 11 March 2011.

205.  As for the WC DOZP, the Form 86 filed in HCAL 57 of 2011 and the Notice of Appeal in CACV 233 of 2012 only challenged the fairness of the proceedings by reference to the failure to give adequate reasons, see Section B6 of the Form 86 and para 2 of the Notice of Appeal.  The main plank in that challenge is the reproduction of the reasons prepared by the Planning Department in TPB paper No 8764 despite the submission of additional materials by Hysan at the TPB hearing of 26 April 2011.  

206.  In view of the scope of the dispute between the parties in respect of WC DOZP and given our above conclusion on development intensity, we do not think the challenge by Hysan in this respect adds anything substantial to the other limbs of its arguments.   

D. Results

207.  For these reasons, we would allow the appeal. 

208.  As for the cross-appeal, in light of our decision on the appeal, it is academic.  However, we are prepared to indicate this.  We can see the force of Mr Jat’s contention that the Judge should not have interfered with the decision of the TPB on the basis of what he said at paras 148 to 149 of the judgment bearing in mind what we said above in respect of the role of the court in a judicial review against a planning judgment.

209.  Counsel requested that they be given the opportunity to address us before we decide on the orders (including order for costs) that we shall make.  To avoid unnecessary delay, instead of listing the appeals for a further hearing, we would direct as follows:

(a) The parties shall liaise with each other with a view to agreeing on the terms of the order to be made and report to the court within 21 days from the handing down of this judgement. 

(b) If there is agreement on the terms of the order, the proposed order shall be attached to the report;

(c) If there is no agreement, the parties shall notify the court in the report under (a) the extent of their disagreements, and shall within 14 days thereafter, separately submit their own  proposed orders and submissions in support of their position.

(d) Unless this court otherwise directs, we will deal with the disagreement on paper after receiving the written submissions.

210.  Lastly, we wish to thank counsel for their valuable assistance in these appeals.

                                                                                                                                        Annex 1