LAI SIU-KIN REMBERT v. BUILDING AUTHORITY

CACV 113/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 113 OF 2012

(ON APPEAL FROM BUILDING APPEAL CASES NOS. 29-2011,
392-2011 AND 431-2011 BY WAY OF CASE STATED PURSUANT TO
SECTION 53C(1) OF THE BUILDINGS ORDINANCE, CAP. 123)

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BETWEEN

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J U D G M E N T

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Hon Cheung JA:

1.  I agree with the judgment of Fok JA and the orders he proposes to make.  Accordingly there will be orders in terms of paragraphs 103 and 104 of this judgment.

Hon Fok JA:

Introduction

2.  The principal issue raised in this appeal by way of case stated is whether the Building Authority (BA) may disapprove general building plans (GBP) submitted for approval under the Buildings Ordinance (Cap.123) (BO) on the basis that the person on whose behalf those plans are submitted is not the owner of the site shown on the plans or does not have a realistic prospect of controlling that site.  The BA contends that it can and that it therefore follows that it can request particulars of the ownership or prospect of control of the site shown in such plans, whereas the appellant submits that it cannot do so.

3.  This appeal has been heard by the same Court which heard the appeal in CACV 19/2012 (referred to as the Dobrowen Appeal), which also raised a similar issue as to the propriety of the BA’s request for particulars of realistic prospect of control of adjoining land to the site in question.  Judgment in the Dobrowen Appeal was reserved and has been handed down at the same time as this judgment and the two judgments should be read together.

The facts

4.  The appellant is the authorised person appointed by the developer (Supergoal Investment Ltd.), a subsidiary of Henderson Land Development Co. Ltd., to prepare and submit plans for a mixed commercial and residential development at Nos. 5A to 7G Victory Avenue, Kowloon.

5.  Currently on the site are two composite buildings.  That at Nos. 5A to 5D (KIL 1327 RP) consists of a nine-storey building with a basement.  That at Nos. 7 to 7G (KIL 1322 Sections C, D, E, F, G, H, I and RP) consists of an eight-storey building with a basement.

6.  The two buildings are sub-divided into different units and the rights and obligations of the individual owners are governed by Deeds of Mutual Covenant.  There is one DMC for Nos. 5A to 5D and one DMC for each of Nos. 7, 7A, 7B, 7C, 7D, 7E, 7F and 7G.

7.  The appellant made three submissions of GBP to the BA on behalf of Supergoal (the Developer).  The first submission was dated 25 October 2010, which was rejected by a disapproval letter dated 20 December 2010.  The second submission was dated 19 January 2011, which was rejected by a disapproval letter dated 18 February 2011.  The third submission was dated 24 February 2011, which was rejected by a disapproval letter dated 25 March 2011. I will return to the reasons for the respective disapprovals later in this judgment.

8.  Each of the three submissions included a Form BA5 entitled “Application for approval of plans of building works and/or street works and certification of preparation of plans”.  The form is the specified form for the approval of plans for building works or street works[1] and gave the applicant an option to submit copies of relevant Land Registry Memorials and assignment plans to indicate ownership, or other documentary proof of control, of the land.

9.  At the time of the three submissions of GBP by the appellant, the Developer submitted documents showing that it was the owner of two units in Nos. 7 to 7G (being 6/F of No. 7D and 2/F of No. 7F).

10.  A table showing the actual ownership position of the Developer of units in the existing buildings at Nos. 5A to 5D and Nos. 7 to 7G respectively at the dates of each of the submissions of GBP and as at 14 November 2011 (the date of the agreed facts) was Enclosure O to the List of Agreed Facts submitted by the parties at the direction of the Appeal Tribunal (Buildings) (BAT).  This shows that the Developer incrementally acquired an increasing number of units in Nos. 7 to 7G and that, by 14 November 2011, the Developer owned over 85% of those units.  However, the Developer did not at any of those dates own any of the units in Nos. 5A to 5D.

11.  It is relevant to note that Form BA5 was amended with effect from 20 October 2010 by the inclusion of the statement and fields set out below to require proof of ownership or control of the land forming the site in respect of which building plans were being submitted.  Prior to that date, Form BA5 did not include the same fields requiring such proof.  The additional part of form BA5 after the amendment now provides:

“In respect of the aforesaid site of the proposed works, ^*I/we submit the following documentary proof of ownership or control of the land for your processing of plans:-

□ Copy of the relevant Land Registry Memorial and assignment plans (with Memorial Number and date) to indicate the ownership or ^{(to be submitted under separate cover)}

□ Other documentary proof of control of the land, please specify ______________.

^{* Delete where inapplicable}

□ ^{Put a tick against the box where appropriate} ”.

12.  The amendment to Form BA5 was explained in a circular letter issued by the BA to all authorised persons, registered structural engineers and registered geotechnical engineers dated 20 October 2010.  The first part of that letter was headed “Application for Approval of Building Plans – Proof of Ownership of Land” and read:

“The Building Authority has always taken the stance that the site of a proposed building for the purpose of the Buildings Ordinance (the Ordinance) can only include land which the applicant owns or which he has a realistic prospect of controlling. To facilitate the Building Authority to consider whether this requirement is satisfied, the applicant is required to submit a Form BA5, as attached, and particulars of ownership or realistic prospect of control of the land forming the site, together with the required documentary proof, when submitting new general building plans of any proposed new building on or after 21st October 2010.

 Depending on the facts in each case, the failure to provide the particulars or documentary proof as mentioned above may lead the Building Authority to refuse to give his approval of the plans under section 16(1) of the Ordinance.”

13.  The appellant has described this as “the 2010 policy” and characterised this as a change of policy.  The BA disputes that there was any change of policy as alleged.  Be that as it may, and it is not necessary for the determination of the questions of law raised in this appeal to decide if there was a change of policy, the question of the BA’s power to reject plans or require further information with reference to the ownership or control of a proposed site forms the main part of this appeal.  We were informed that there are some 116 appeals before the BAT which are in abeyance pending the determination of this issue.

Proceedings before the BAT

14.  In the respective disapproval letters, the common ground of disapproval was that, under s. 16(1)(d) and/or s. 16(1)(i) of the BO, the Developer failed to provide any, or sufficient, information or proof of ownership or realistic prospect of control over the site of the proposed development.  The first and third disapproval letters relied upon s. 16(1)(i), whereas the second disapproval letter relied upon s. 16(1)(d).  Those provisions are set out below.

15.  The three disapproval letters gave rise to the three appeals heard together by the BAT below which have in turn led to this appeal by way of case stated.

16.  At a preliminary hearing before the BAT, the BAT noted that it was the consensus of the parties and the BAT that the main thrust of the appeals related to:

(1) whether the BA has the power to reject building plans on the basis that the appellant does not own or have a realistic prospect of controlling the land forming the site of the proposed buildings shown on those plans; and

(2) whether the BA has the power to require in respect of any building plans submitted to the BA for approval particulars of ownership or proof/substantiation of realistic control of the site of the proposed buildings shown on those plans.

17.  The parties further informed the BAT that other outstanding technical matters in dispute were likely to be settled by way of agreement between the parties pending a decision on the main thrust of the appeals.

18.  Having been informed of a large number of pending appeals where the same main issue arises, the BAT considered that this should be referred to the Court of Appeal by way of case stated under s. 53C of the BO.

The questions of law

19.  Accordingly, pursuant to s. 53C(1), the Tribunal has referred the following questions of law to this Court for its decision, namely:

“1. Does the Building Authority in exercise of its statutory powers (or in exercise of any principle of common law) have the power to reject building plans on the basis that a developer does not own or have a realistic prospect of controlling the land forming the site of the proposed buildings shown on those plans?

2. Does the Building Authority in exercise of its statutory powers (or in exercise of any principle of common law) have the power to require in respect of any building plans submitted for approval particulars of ownership or proof/substantiation of realistic prospect of control of the site of the proposed buildings shown on those plans?

3. If the answer to question 1 and 2 is in the affirmative is the power of general application or limited to specific factual situations?

4. If the answer to question 1 and 2 is in the affirmative in determining the question of fact as to whether the developer has established such ownership or realistic prospect of control of the site is the Appeal Tribunal limited to considering the position at the time of the rejection of the plans or can the Appeal Tribunal consider the position as at the date of the hearing of the appeal thus taking into account any changes in the interim period?”

The statutory context

20.  It is relevant to begin the discussion of these questions with the relevant statutory framework in mind.

21.  The Long Title to the BO states that it is:

“To provide for the planning, design and construction of buildings and associated works; to make provision for the rendering safe of dangerous buildings and land; and to make provision for matters connected therewith.”

22.  The definition section in the BO, s. 2(1), defines “plan” as including “drawings, details, diagrams, calculations, structural details, structural calculations, geotechnical details and geotechnical calculations” and “building works” as including “any kind of building construction, site formation works, ground investigation in the scheduled areas, foundation works, repairs, demolition, alteration, addition and every kind of building operation, and includes drainage works”.

23.  It also provides that:

(1) “building owner … means a person desiring to build a new building or to alter an existing building …”; and

(2) “owner … includes any person holding premises direct from the Government whether under lease, licence or otherwise, any mortgagee in possession and any person receiving the rent of any premises …”.

24.  Part 2 of the BO is concerned with and headed “Control of Building”.  There is a two-stage process involved in carrying out “building works” as defined in the BO, namely the approval stage and the stage of demolition and/or commencement of building works.  By s. 14(1), the BO provides that:

“(1) Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority—

(a) his approval in writing of documents submitted to him in accordance with the regulations; and

(b) his consent in writing for the commencement of the building works or street works shown in the approved plan.”

25.  It is to be noted that s. 14(2) provides that:

“(2) Subject to section 28B(4), neither the approval of any plans nor the consent to the commencement of any building works or street works shall be deemed –

(a)  to confer any title to land;

(b)  to act as a waiver of any term in any lease or licence; or

(c)  to grant any exemption from or to permit any contravention of any of the provisions of this Ordinance or of any other enactment.”

26.  The onus of refusing approval of applications for the approval of plans of building works rests on the BA because approval is deemed to be given unless refusal is notified.  Thus, s. 15 provides as follows:

“(1) Where an application is made in the specified form for the Building Authority to approve plans or to consent to the commencement of building works or street works, he shall be deemed to have given his approval or consent, as the case may be, unless within the period prescribed by the regulations he has notified his refusal to give his approval or consent, as the case may be, in writing setting out the grounds for such refusal, and where one of such grounds is that further particulars and plans are required, he shall specify such plans and particulars.

(2) The grounds set out for any refusal to approve plans shall not be treated as being exhaustive, and no such refusal shall be construed as implying any approval of any part of such plans.”

27.  The grounds on which approval for plans of building works may be refused are set out in s. 16 (1), which materially provides:

“The Building Authority may refuse to give his approval of any plans of building works where –

(a) the plans are not such as are prescribed by regulations or are not such as he may have required under this section;

…

(d) the carrying out of the building works shown thereon would contravene the provisions of this Ordinance or of any other enactment, or would contravene any approved or draft plan prepared under the Town Planning Ordinance (Cap.131);

…

(i) in his opinion, it is necessary for him to have further particulars of such plans or of the building works shown thereon or, where all the plans prescribed by regulations have not been submitted, to have one or more of the other plans prescribed by regulations, to enable him fully to consider such plans.”

28.  There are other bases in the sub-paragraphs of s. 16(1) omitted from the extract above on which approval for the plans of building works may be refused but it is sufficient to set out sub-paragraphs (a), (d) and (i) for the purposes of this appeal.

29.  It was submitted by Mr Anthony Neoh SC, leading counsel for the Developer,[2] that s. 16 is a comprehensive code for the refusal of approval of plans of building works.  Reliance is placed on the statement in the judgment of Jerome Chan J in Filipino Club v Building Appeal Tribunal & Anor [1995] 3 HKC 356 at p.358H where it was accepted that the BA can only refuse to give approval to plans on the grounds set out in s.16 “and no others”.  On behalf of the BA, Mr Benjamin Yu SC[3] did not expressly accept this characterisation of s. 16 and contended that it was assumed in the Filipino Club case that the reasons for refusal in s. 16 were exhaustive.  However, since the BA’s case is that the failure to provide particulars of ownership or realistic prospect of control of a site falls within s. 16(1)(d) or (i), it is not necessary to resolve that particular difference between the parties on this appeal.

30.  By s. 38, the BO empowers the Secretary for Development to make regulations to provide for various matters including, by s. 38(1)(b), the manner of making application for and granting of approval of plans of building works and, by s. 38(1)(c), the planning and design of buildings.  The Chief Executive may, by s. 38(1A), make regulations providing for the imposition of fees in respect of matters provided for under the BO.

31.  The procedure in connection with the approval of plans of building works is governed by Part 4 of the Building (Administration) Regulations (Cap. 123A) (BAR) made pursuant to BO s. 38(1)(b). Regulation 29(1) and (1A) provide:

“(1) Save as provided in regulation 33, application for approval of plans of building works or street works shall be made in the specified form and shall be accompanied by such documents as are required under these regulations.

(1A)  The Building Authority may charge the applicant the prescribed fee in respect of an application made under paragraph (1).”

32.  This is the authorising power for the specified form BA5, to which I have referred above.  The plans are to be accompanied by a certificate in the specified form[4] by the authorised person, registered structural engineer or registered geotechnical engineer, as the case may be, certifying that the plans were prepared by him or under his supervision or direction and that, to the best of his knowledge and belief, the plans comply in all respects with the BO and regulations made thereunder.[5]

33.  The fees for the purposes of reg. 29 are prescribed in Part 6 at paragraph 7A of the Table under reg. 42.

34.  Detailed regulations for the planning and design of buildings are set out in the Building (Planning) Regulations (Cap. 123F) (BPR) made pursuant to BO s. 38(1)(c).  In Part I, the interpretation regulation (reg. 2) defines:

(1)  “permitted plot ratio” as meaning “the maximum plot ratio permitted under paragraph (1) or (2), as the case may be, of regulation 21”; and

(2)  “site coverage” as meaning “the area of the site that is covered by the building that is erected thereon and, when used in relation to a part of a composite building, means the area of the site on which the building is erected that is covered by that part of the building”.

35.  Part III of the BPR addresses heights, site coverage, plot ratio, open spaces and lanes.  BPR reg. 18A concerns site classification.  Site classification is divided into class A, class B and class C sites and depends broadly on the number of specified streets that abut on the site in question.

36.  General provisions concerning the maximum site coverage and maximum plot ratio are set out in BPR reg. 19.  Maximum site coverage for a building or buildings on a class A, B or C site is to be determined in accordance with BPR reg. 20.  Maximum plot ratios in respect of the same are to be determined in accordance with BPR reg. 21.  BPR reg. 21(3) explains how the plot ratio is arrived at:

“(3) For the purposes of this regulation and of regulations 19, 20 and 22, the plot ratio of a building shall be obtained by dividing the gross floor area of the building by the area of the site on which the building is erected.”

37.  Under BPR reg. 20 and reg. 21, the permitted site coverage and plot ratio for domestic and non-domestic buildings is set out in the First Schedule to the BPR.  That schedule specifies the maximum permitted site coverage and plot ratio for each class of site dependent on the height of the relevant building in metres.

38.  BPR reg. 22 provides for certain cases in which the permitted site coverage and plot ratio may be exceeded.

39.  BPR reg. 23 contains provisions supplementary to BPR regs. 19, 20, 21 and 22.  Reg. 23(1) addresses how, for the purposes of regs. 20, 21 and 22, the height of a building is to be measured and reg. 23(3) addresses how, for the purposes of regs. 19, 20, 21 and 22, the gross floor area of a building is to be measured.  Reg. 23(2) provides:

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

(a) no account shall be taken of any part of any street or service lane; and

(b) there shall be included any area dedicated to the public for the purposes of passage.”

40.  Finally, in the context of the questions raised in the case stated, it is relevant to note that, where plans for building works have been disapproved by the BA, a person aggrieved may appeal to the BAT against that decision of the BA pursuant to BO s. 44(1). By BO s. 50(2) it is provided that:

“In determining an appeal, the Appeal Tribunal may make an order confirming, varying or reversing the decision that is appealed against or substituting therefor such other decision or make such other order as it thinks fit.”

The Developer’s contentions

41.  The Developer contends that Questions 1 and 2 of the case stated should be answered in the negative.

42.  In support of this contention, it was submitted that there is no requirement in the BO for ownership or control by an applicant for approval of building plans.  Thus, it was the Developer’s case that BA5 was wrongly amended to include the additional part of the form now appearing on it, since nothing in the BAR nor any other part of the BO gives the BA power to require this.  No such power to reject building plans exists in the BO or regulations made thereunder because, it was submitted, the primary purpose of the approval scheme under the BO is to protect the public by subjecting the matter of structural acceptability to the scrutiny of the BA.[6]  That purpose can be achieved, it was submitted, without demonstrating ownership or realistic prospect of control of the site of the proposed building.

43.  The Developer also submitted that the BO’s definitions of owner do not require legal or equitable title to the site.  In this connection, reliance was placed on the definitions of “building owner” and “owner” in BO s. 2(1) (see above).  It was submitted that the definition of “building owner” is exhaustive[7] and envisages ownership as no more than a desire to build and not a legal or equitable title to the site.  This was so, it was submitted, because the purpose of the BO is to regulate the planning, design and construction of buildings and that the requirement of ownership or control of the site adds nothing to the objectives of planning, design and construction of buildings.

44.  Reliance was placed by the Developer on the fact that BO s. 14(1) speaks in terms of “no person” commencing or carrying out building works and the person liable to pay the prescribed fee on the submission of building plans is the “applicant” and it was submitted that neither of those terms indicate a need for that person to be the owner or person in control of the site.  It was further submitted that ownership or control is not part of the definition of “building works” (see above).

45.  The Developer also argued that the approval of buildings plans relating to land is separate and distinct from the title to such land and does not have any effect on private rights: see BO s. 14(2) (above).  The BA, it was submitted, is not concerned if a developer’s ownership of the land forming the site is disputed or about breaches of covenants in the lease of such land or the chance of Government re-entry for such breaches: reliance was placed in this context on the judgment of Lam J (now Lam JA) in Re Ho Mei Ling [2011] 6 HKC 1 at §41.

46.  Further, the Developer relied on BAR reg. 18A to support the contention that there is no statutory requirement to inform the BA of the identity of the owner of the site shown in the submitted building plans.  Reg. 18A only requires a certificate in a specified form from the authorised person, registered structural engineer or registered geotechnical engineer, as the case might be.

47.  Finally, reliance was placed on the fact that the application form for consent to the commencement and carrying out of building works, including demolition works, under BAR reg. 31, namely Form BA8, does not require proof of ownership or control.  Further, BO s. 28B(1) and (4) empower the BA after approval of buildings plans to authorise the carrying out of building works on land “of any person whose property would be entered upon, cut through or interfered with by or for the purpose of the works”.

48.  So far as Question 3 of the case stated is concerned, the Developer contends that this does not arise.  However, if contrary to its case the answers to Questions 1 and 2 are affirmative, then the Developer contends that the power is limited to the scenario in AG v Cheng Yick Chi [1983] 1 HKC 14.  The decision of the Privy Council in Cheng Yick Chi will be discussed in greater detail below.

49.  As for Question 4, the Developer contends that, by reason of BO s. 50(2), the BAT is not limited to considering the position as at the time of the rejection of the building plans but can consider the position as at the date of the hearing of the appeal and thus can take into account any changes in the interim period.

The BA’s contentions

50.  It is the BA’s contention that Questions 1 and 2 of the case stated should be answered in the affirmative.  It was submitted that the Privy Council and courts in Hong Kong have consistently held that this is so and that the answer comports with common sense and the sound administration of building control in Hong Kong.

51.  The BA’s case focuses on the meaning of a site for the purposes of the BPR and BO.  It is contended that this has been addressed by a line of high judicial authorities giving a consistent answer. The first case relied upon is Cheng Yick Chi and in particular the passage in the opinion of Lord Fraser delivering the advice of the Privy Council at pp. 19-20, where he said:

“Neither the Regulations nor the Buildings Ordinance contains a definition of ‘site’. The respondents contend that the site is the whole of the properties, including the unbuilt on land. The appellant contends that, in this case, it is only the land on which the houses at present stand. It was common ground between them that the site, in the sense of the Regulations, is not necessarily limited to the ground on which buildings actually stand. That it cannot always bear such a limited meaning appears from several provisions in the Regulations. For example, reg 5(2) refers to the provision of an access lane ‘within the site’ of a new building, and reg 25(1)(a) requires that every domestic building shall have ‘within the site’ an open space at the rear. Clearly, neither an access lane nor an open space can be on ground on which a building stands.

Mr Widdicombe for the respondents said that the site for purposes of development is normally a whole ‘lot’, using ‘lot’ to mean the leased area held directly or indirectly under a lease from the Crown. That may well be so. But (rightly), he did not contend that the ‘site’ was necessarily coextensive with the ‘lot’, because the word site must be flexible enough to apply to a case in which the person holding several adjacent lots under Crown leases proposes to develop them together as a single site. It must also apply where the owner develops only part of his lot, or develops it bit by bit at different times. For example, if a development scheme applies to a substantial area of perhaps an acre or more, to be developed by building a detached house on part of it, with the rest of the land being laid out as a garden and tennis court, the whole area would be the site. If some years later the tennis court is sold off in order to build a separate house on it, the site for that later development would be limited to the tennis court.

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

(Underlining added)

52.  The BA contends that Cheng Yick Chi was applied by the Privy Council in two further pre-1997 cases, namely Hinge Well Co Ltd v AG [1988] 1 HKLR 32 and Cinat Co Ltd v AG [1995] 1 HKLR 128.

53.  It was submitted that in each of these cases, the Privy Council was considering the meaning of site for the purposes of the BPR and that, under the BPR, the concept of permissible or maximum site coverage, plot ratio and gross floor area are all tied to the site.

54.  Reliance was also placed on the fact that Cheng Yick Chi was applied in two first instance decisions, namely Ashley 121 Ltd v Appeal Tribunal (Buildings) [2011] 2 HKLRD 728 by Reyes J and Building Authority v Appeal Tribunal (Buildings) & Anor, unrep., HCAL 20/2011, 20.12.11 by Lam J (as he then was).  The latter is the first instance decision leading to the Dobrowen Appeal (CACV 19/2012), to which I have already referred.

55.  The BA relies on the elucidation by Reyes J in Ashley 121 Ltd of the rationale behind Lord Fraser’s dictum quoted above.  In §83 of his judgment, Reyes J said:

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

56.  It was submitted that this statement accords with common sense and the statutory scheme of the BO since, under the scheme, the BA has a public duty to consider building plans validly submitted for approval and approval will be deemed if refusal is not notified within the statutory prescribed period.  Thus, it would be surprising, it was submitted, if a person with no connection with the land in the form of ownership or realistic control should be able to invoke a public law right with a corresponding public law duty on the BA.  It would be contrary to the statutory purpose of effective building control to require the BA to consider building plans on a purely hypothetical basis.

57.  Accordingly, it was the BA’s contention that plans based on land which an applicant neither owns nor has a realistic prospect of controlling fail to comply with the BPR and are thus liable to be rejected under BO s. 16(1)(a) since the plans are not such as are prescribed by the BPR.  Further, if the applicant’s plans contain site coverage and plot ratio calculations based on land failing to satisfy the BPR’s requirements for a site, these calculations would be incorrect and would in turn lead to breaches of the BPR as regards the applicable site coverage and plot ratio limits so that they would be liable to be rejected under BO s. 16(1)(d).

58.  The BA contended that, if it were lawful to disapprove the plans for the above reasons, it must also follow that the BA has power under BO s. 16(1)(i) to require, as particulars of plans, information or documents to verify whether the applicant does own or have a realistic prospect of control of the land included in the plans.

59.  As regards Question 3 of the case stated, the BA’s contention is that since the identity of the land that may form a site for a particular approval application is fact-sensitive in each case, there would be little utility in seeking to formulate a general answer as to when the BA’s statutory powers might appropriately be exercised in this regard.

60.  Finally, in respect of Question 4, the BA accepts that an appeal to the BAT against disapproval of building plans is a hearing de novo but, where such an appeal succeeds due to changed circumstances only since the time of the BA’s decision, that will be relevant to the incidence of costs.  Furthermore, where the decision concerns a decision under BO s. 16(1)(i) to require the provision of further particulars, the BAT’s function is only to confirm, vary or reverse that particular decision and not to take the further step of deciding substantively, in the light of any further particulars subsequently provided, whether the underlying building plans should be approved or not.

Discussion

61.  As I have already indicated, there is a dispute between the Developer and the BA as to whether the change to the Form BA5 in October 2010 amounted to a change of policy on the part of the BA as regards the submission of building plans for approval.  In the course of his submissions, Mr Yu provided the court with a copy of the affirmation of the Chief Building Surveyor of the Buildings Department filed in opposition to a judicial review (in HCAL 95/2011) by the Real Estate Developers Association of Hong Kong (REDA) which is yet to be heard.  REDA had in fact earlier applied to be joined as an interested party in this appeal but that application was dismissed.[8]  It is clear from the affirmation in question that the BA does not accept that there has been a change of policy.  The Developer not being a party to that judicial review, Mr Neoh was understandably not in a position to make submissions in reply to that affirmation.  However, it is clear that there are disputes of fact that arise in those proceedings, and which go beyond the question of whether there was a change of policy, that cannot be resolved in the context of this appeal.  In any event, the questions posed in the case stated are, by definition, questions of law so that, even if there was a change of policy as alleged, this would be no obstacle to answering the questions in this appeal in the manner contended for either by the Developer or the BA.

62.  The real contest which arises from the principal issue in this appeal is between, on the one hand, allowing developers to make submissions of speculative or hypothetical development proposals or, on the other, requiring that submissions are made and developments pursued only in respect of sites already owned or controlled by developers.

63.  Mr Neoh submitted, on behalf of the Developer, that prior to October 2010, it was always the case that a developer could submit his building plans before acquiring ownership of the property which was subject to the intended development.  This was referred to as “assembling” the site.  It was useful for developers to know the gross floor area they could obtain from a site before they assembled the site because that enabled the developers to know the size of development they could build and consequently how much income and profit they might derive from building that development. This, in turn, would avoid delay in the pursuit of development schemes and enable the developer to know how much it should pay to assemble the site by acquiring the property forming part of the development or by acquiring such property that it did not already own: this latter factor being of considerable importance in view of the high costs of land in Hong Kong.

64.  In this regard, it is telling that, whatever the explanation for the change in the Form BA5 in October 2010, in a practice note for authorised persons entitled “Re-engineering the Building Approval Process” (PNAP-272, 2005 Revision), there is no indication that ownership or realistic prospect of control over the site are fundamental issues to be checked in the processing of submissions.

65.  The BA’s answer is that it would be highly surprising if the Legislature had seen fit to permit a person with no connection with the land in the form of ownership or realistic prospect of control to be able to invoke a public law right, and thereby trigger the requirement of the BA to discharge his corresponding public law duty, to process building plans for what might ultimately be a wholly speculative and hypothetical development.  This would, at the very least, have resource implications and the mere fact that a submission of building plans is subject to the payment of fees is not sufficient to confer standing to make the application as a matter of substance.  Mr Yu further submitted that the the BO is concerned with practical outcomes that will impact on the public interest and that, since the essential purpose of the statutory scheme is to regulate the planning, design and construction of buildings in Hong Kong, purely notional developments are of little or no concern from a regulatory standpoint.  Thus, on a purposive construction, Mr Yu invited the court to be very slow to find that the meaning of site under the BO and BPR embraces land upon which a would-be developer had no realistic prospect of building because he did not own it or have a realistic prospect of controlling it.

66.  I can see the rationale of the BA’s argument of practicality but the questions posed must be answered by reference to the statutory language as construed in the light of its context and purpose: see HKSAR v Lam Kwong Wai & Anor (2006) 9 HKCFAR 574 at §63.  As Sir Anthony Mason NPJ there pointed out, a court cannot read words into a statute in order to bring about a result which does not accord with the legislative intention properly ascertained.  Furthermore, as Lord Millett NPJ observed in China Field Ltd v Appeal Tribunal (Buildings) (No. 2) (2009) 12 HKCFAR 342 at §36, purposive construction does not permit the court to construe a statute in whatever manner achieves a result which it considers desirable.

67.  So far as the point about fees is concerned, the answer to that would seem to be that if the number of applications is becoming an administrative burden the fee can always be increased and, in this context, it is to be noted that, by BO s. 38(3A), the amount of fees provided for in respect of the making of application for approval of plans of building works may be fixed “at levels which provide for the recovery of expenditure incurred or likely to be incurred generally by the Government in relation to such application or approval and need not be limited by reference to the administrative or other costs incurred or likely to be incurred in the processing of any individual submission of plans”.

68.  It is significant that, as Mr Yu acknowledged, there is no express provision in the BO or BPR requiring the person submitting building plans to be the owner or have a realistic prospect of control of the site on which the proposed building works are to be carried out.  On the other hand, as I have concluded in the Dobrowen Appeal, it seems to me that the BO and BPR, purposively construed,[9] do justify a requirement on a person submitting building plans for approval to demonstrate ownership or realistic prospect of control of the land intended to be developed where the application of BPR reg. 23(2)(a) is in issue.

69.  However, as to whether the inclusion of a blanket requirement on a person submitting buildings plans for approval in all cases[10] to demonstrate ownership or realistic prospect of control of the land intended to be developed is lawful, it is necessary now to consider the case of Cheng Yick Chi.  I have already set out the material part of Lord Fraser’s opinion above.  The BA contends that Lord Fraser’s analysis of the meaning of site forms part of the ratio decidendi of the case. Since Cheng Yick Chi is a decision of the Privy Council on an appeal from Hong Kong before 1 July 1997, it is a decision which is binding on this court: see Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117 at §§6-8.

70.  On the other hand, under the doctrine of precedent, only the ratio decidendi of a previous decision is binding and Mr Neoh submitted that it was necessary to place Cheng Yick Chi in its proper context and that the phrase “land which he owns or which he has a realistic prospect of controlling” in Lord Fraser’s opinion was merely an obiter dictum when applied outside the specific facts of that case.

71.  It is trite that not everything said by a judge when giving judgment constitutes a precedent and that, among the propositions of law enunciated by him, only those which he appears to consider necessary for his decision are said to form part of the ratio decidendi: see Precedent in English Law(4^th Ed.) by Cross and Harris at p. 40, and see also Halsbury’s Laws of England (5^th Ed.) Vol. 11 §91.

72.  Mr Neoh cited Quinn v Leathem [1901] AC 495 (per Lord Halsbury at p. 506)[11] in support of the proposition, which Mr Yu did not dispute, that a judgment must be treated as applicable to the particular facts proved, or assumed to have been proved, since general expressions of principle are not to be taken as expositions of the whole law but are governed and qualified by the particular facts of the case.

73.  Mr Neoh also referred to the reminder in the judgment of the Privy Council, delivered by Lord Upjohn, in Ogden Industries Pty Ltd v Lucas [1970] AC 113 at p. 127, that:

“… in a common law system of jurisprudence which depends largely upon judicial precedent and the earlier pronouncement of judges, the greatest possible care must be taken to relate the observation of a judge to the precise issues before him and to confine such observations, even though expressed in broad terms, to the general compass of the facts before him, unless he makes it clear that he intended his remarks to have a wider ambit. It is not possible for judges always to express their judgments so as to exclude entirely the risk that in some subsequent case their language may be misapplied and any attempt at such perfection of expression could only lead to the opposite result of uncertainty or even obscurity as regards the case in hand.

These general principles are particularly important when questions of construction of statutes are in issue.

It is quite clear that judicial statements as to the construction and intention of an Act must never be allowed to supplant or supersede its proper construction and courts must beware of falling into the error of treating the law to be that laid down by the judge in construing the Act rather than found in the words of the Act itself.

 No doubt a decision on particular words binds inferior courts on the construction of those words on similar facts but beyond that the observation of judges on the construction of statutes may be of the greatest help and guidance but are entitled to no more than respect and cannot absolve the court from its duty of exercising an independent judgment.”

74.  Finally, in this context, it is helpful to note Sir Anthony Mason’s description of the ratio of a case, namely, “the principle or statement of law on which the previous decision is based to the extent to which it is essential to the decision, it being recognized that there may be more than one ratio when the court assigns more than one ground for its decision.”[12]

75.  With these principles in mind, I turn to analyse the decision in Cheng Yick Chi and consider the question of whether the critical words in Lord Fraser’s opinion form part of the ratio decidendi of that case or not.

76.  First, the facts in Cheng Yick Chi were that the developers owned several houses on On Hing Terrace and a strip of unbuilt on land in front of them.  They wished to develop the properties by building a single new building on the land on which the houses stood but leaving the unbuilt on land as it was.  That unbuilt on land was open to the public and was used for passage by pedestrians.  The BA disapproved the building plans on the basis they did not comply with the BPR and the developers sought and obtained four declarations from the court, which were affirmed on appeal.

77.  The main issues raised in the appeal, as identified by Lord Fraser (see p. 16C-E), were: (1) whether the unbuilt on land formed part of the site to be redeveloped in the sense which the word site is used in the BPR; and (2) whether the unbuilt on land fell to be regarded as a street for the purposes of the relevant regulations.  Whether or not the unbuilt on land was a street would affect whether it was a corner site or not, which in turn would affect the permissible height of the development under the BPR.

78.  Four declarations had been sought and obtained at trial.  The declarations (see pp. 16I-17C) were that:

“(a) the portion of the above mentioned properties, not presently built upon, fronting the existing buildings (hereinafter referred to as the unbuilt portion) is an area dedicated to the public for the purposes of passage within the meaning of reg 23(2)(b) of the Building (Planning) Regulations made under (Cap. 123);

(b) the unbuilt portion should be included in the site area for the purposes of calculating the site coverage and plot ratio of a single building to be erected on the above mentioned properties, under the Building (Planning) Regulations;

(c) the above mentioned properties forming one site for a single building is a Class A site within the meaning of reg 2 of the Building (Planning) Regulations;

(d)       the street shadow calculations for a single building to be erected on the above mentioned properties should be made under the Building (Planning) reg 16, [as for a Class A site] and with regard to only one street, namely, Zetland Street, on which the above named properties taken as a single site front.”

79.  The appeal against the first two was abandoned before the appeal and the Court of Appeal dismissed the appeal against the latter two.  The Privy Council permitted the appellant to re-open argument on the grounds that had been abandoned since their Lordships considered “that they could not satisfactorily dispose of the third and fourth grounds of appeal if they [were] not free to consider also the first two grounds” (p. 17I).

80.  After setting out the background, Lord Fraser addressed the main argument and began by considering declaration (c), noting that it related to the first of the two main issues he had identified.  He set out the regulations dealing with site classification and street and then indicated that the point at issue would be determinative of whether the site was a Class A site or a Class B site.  It was in this context that the passage from the judgment quoted above (at §51) appears.

81.  Lord Fraser then held (p. 20C-F):

“Applying these considerations to the unbuilt on land here, their Lordships are of the opinion that it does not form part of the site in the present development scheme. It has been dedicated to the public for purposes of passage, and it is therefore not available for inclusion by the respondents in the present development. Mr Widdicombe submitted that, although the surface of the unbuilt on land was dedicated to the public, the land still belonged to the respondents and they could build cellars underneath the terrace if they chose. Their Lordships are not satisfied that the last part of that submission is correct, but they do not have to decide the question, because no such proposal forms part of the present scheme of development. If, as their Lordships think, the unbuilt on land is not included in the site, the site abuts on that land. It abuts also on Zetland Street. It is therefore a Class B site, and declaration (c) should be refused.”

(Emphasis added)

82.  I have emphasised the words underlined in the above passage because it seems to me to make clear that the Privy Council’s reasons for refusing declaration (c) included the entirety of the passage upon which the BA places reliance in this appeal but which the Developer contends is merely an obiter dictum.

83.  Since their Lordships considered that the proposed building abutted on two streets, declaration (d) was also refused (p. 21A).

84.  The Privy Council then considered declaration (a) and identified the question raised as being whether, in determining for the purposes of BPR regs. 20 and 21 the area of the site, the unbuilt on land should be excluded by reason of BPR reg. 23(2)(a) as the BA contended or included by reason of BPR reg. 23(2)(b) as the developer contended (p. 21E-F).  The problem was how to reconcile the two paragraphs and the Privy Council resolved this (p. 21H-I) by reading paragraph (b) as being subject to the inclusion of the words “to be” so that the paragraph only applied to areas which were proposed for dedication in the future.  The effect was that (p. 22D-E):

“… in determining for the purposes of regs 20, 21 and 22 the area of a site, no account is to be taken of any part of any existing street, but account is to be taken of any area which, in the proposed development, is to be dedicated to the public for passage. Areas dedicated in the past are excluded.”

85.  Accordingly, their Lordships held that declaration (a) ought to be refused and, since declaration (b) was merely consequential on declaration (a), it must also be refused (p. 22F).

86.  In my view, the relevant passage in Lord Fraser’s opinion relied on by the BA in this appeal is not a mere obiter dictum but does form part of the ratio decidendi of Cheng Yick Chi.

87.  First, as I have sought to demonstrate, the reasoning in the passage was applied in their Lordships’ reaching a conclusion on declaration (c).

88.  Secondly, the manner in which Lord Fraser expressed himself was general and there is no indication he was limiting his observations as to what constituted a site for the purposes of the BPR to the facts of that case exclusively.  This generality is supported by his reference to the ascertainment of the land which forms a site for the purposes of the development being “a question of fact in the case of each development” (p. 19H) (emphasis added).

89.  Thirdly, the suggestion that it was limited to the circumstances in which BPR reg. 23(2)(a) might apply, as contended by the Developer in this appeal, is not supported by an analysis of the judgment in Cheng Yick Chi.  Declaration (c) was considered, and refused, independently of any consideration of BPR reg. 23(2)(a).

90.  Fourthly, there is nothing to indicate that the arguments advanced by the Developer in this appeal by reference to the express statutory provisions in the BO and BPR, including the definition of “building owner”, were not matters of which the Privy Council was aware when deciding Cheng Yick Chi.  Indeed, it is clear that the Privy Council was well aware in that case that there was no definition of site (p. 19C) and, had their Lordships thought that the other provisions relied upon bore on the meaning of site, it might reasonably be expected that they would have said so.[13]

91.  Fifthly, I agree with the submissions made on behalf of the BA that the judgments of the Privy Council in Hinge Well Co Ltd v Attorney General [1988] 1 HKLR 32 and Cinat Co Ltd v Attorney General [1995] 1 HKLR 128 confirm the general application of Cheng Yick Chi because those cases concerned the extent of permissible development under the BPR and the question of what could or could not be included within a site under those regulations in order to determine the critical questions of permissible or maximum plot ratio, site coverage and gross floor area.

92.  It is true that in Hinge Well the issue was whether a particular scavenging lane fell to be excluded from a site as being a street within BPR reg. 23(2)(a), but the reliance by the Privy Council in Hinge Well on the dictum of Lord Fraser as a reason for concluding that the scavenging lane was to be excluded[14] does not, it seems to me, mean that the Privy Council was limiting Lord Fraser’s dictum only to the situation in which BPR reg. 23(2)(a) would be applicable. It follows that I do not agree with the Developer’s contention that the case of Hinge Well shows the narrow limits of the Privy Council’s decision in Cheng Yick Chi.  To the contrary, it is clear from the relevant provisions of the BPR, to which I have referred above, that the BA is required to have regard to the location and physical characteristics of a site in order to classify it and then to check a developer’s calculations against the appropriate maximum permissible plot ratio and site coverage by reference to the site area.  The exclusion of a street under BPR reg. 23(2)(a) is only one specific example of the need to perform these calculations.

93.  Sixthly, although this factor is not of course determinative because the decisions are not binding on this court, my conclusion that Lord Fraser’s dictum is not obiter but is instead binding is consistent with the decisions of Reyes J in Ashley 121 Ltd (see §82) and also Lam J in HCAL 20/2011 (at §§23-24), the latter holding the decision of the BAT in the Dobrowen case that Lord Fraser’s dictum was obiter and not binding on it to be wrong.

Addressing the Questions in the Case Stated

94.  In view of my conclusion that the dictum of Lord Fraser relied upon by the BA is part of the ratio decidendi of Cheng Yick Chi, it is therefore binding on this court and must be followed.  If and insofar as the Developer wishes to contend that Lord Fraser’s dictum is wrong and should be overruled, that is an argument that could only be pursued in the Court of Final Appeal.

95.  Accordingly, it follows, in my opinion, that Questions 1 and 2 of the case stated must be answered in the affirmative, as the BA contends.

96.  It was suggested by the BA that the stance of the Developer in relation to Question 3, i.e. that the BA’s entitlement to call for particulars of ownership or control and its right to reject building plans in the absence of proof of such ownership or control is limited to the situation in which BPR reg. 23(2)(a) may be engaged, is inconsistent with the unqualified negative answer which the Developer contended should be given to Questions 1 and 2.

97.  Whilst there is a prima facie inconsistency in that stance, I do not think this is necessarily the case because, as I understood it, the answer which the Developer would give to Question 3 is conditional upon it being held that the answers to Questions 1 and 2 are affirmative.  Presumably, if the answers to those questions were negative, as it had contended they should be, the Developer would contend that the answer to Question 3 should be “not applicable”.

98.  However, it would appear that the Developer did accept that Lord Fraser’s dictum in Cheng Yick Chi is binding at least to the extent of the situation in which BPR reg. 23(2)(a) may be engaged.  That acceptance would be sufficient to dispose of the ownership or control issue for the purposes of the Dobrowen Appeal, where BPR reg. 23(2)(a) was engaged in respect of the right of way in front of Nos. 7-9 Ying Wa Terrace.

99.  So far as Question 3 is concerned, I agree with the BA’s contention that the question is vague and that there is little purpose in seeking to specify the particular factual situations in which the statutory power may be exercised.  As Lord Oliver said in Hinge Well (at p. 39H-I):

“Of course, a landowner whose land is subject to a private easement may have, if he cannot negotiate with those entitled to the easement, to accommodate any use which he wishes to make of his land to the continued existence of the easement. But that is a very different thing from saying that he has no realistic prospect of controlling the land over which the easement is exercisable. That must be a question of fact in each case and their Lordships can see no ground in the instant case upon which it could properly be argued that such realistic prospect of control is lacking.”

100.  Thus, it will be a matter for the BA to determine if sufficient particulars of ownership or control have been provided in any given case and, if the BA disapproves plans on the basis that it has not, then it will be for the BAT to decide if he was correct in reaching that conclusion on any appeal to it from his decision.  Accordingly, in answer to Question 3, subject to ordinary public law requirements (as to fairness, rationality, etc.), the relevant statutory powers may be exercised whenever the BA in his judgment considers that the developer has not shown ownership of or a realistic prospect of control over the land within the proposed site.  The BA’s decision may, in addition to being subject to ordinary public law requirements, be the subject of an appeal to the BAT under the process stipulated in Part 6 of the BO where it is contended that the BA has, as matter of fact, wrongly disapproved building plans on the ground that insufficient particulars of ownership or control have been provided.

101.  As to Question 4, it was not in dispute that the hearing before the BAT is a de novo hearing.  That must follow from the nature of the powers conferred on the BAT in BO s. 50(1)(c), including the power to receive evidence and to require the attendance of a person to give evidence or produce any document.  Accordingly, the answer to Question 4 must be that the BAT should be entitled to consider the position as at the date of the hearing of the appeal and thus taking into account any changes in the interim period.

102.  However, this answer is qualified in the sense that the powers of the BAT on appeal may be different depending on the nature of the decision appealed from.  In this regard, I would agree with the BA’s contention that, where the appeal is against a decision made under BO s. 16(1)(i), the BAT can do no more than confirm, vary or reverse that particular decision of the BA or substitute its own decision on whether (and, if so, the extent to which) particulars are required.  On the other hand, where the appeal is against a decision going to the exercise of discretion by the BA on different grounds under s. 16(1), it may fall to the BAT to exercise that discretion afresh and this may lead to the imposition of an order under BO s. 50(2) of a substantive nature: cf. in this context the judgment of Au J in Ko Siu Luen v Appeal Tribunal (Buildings) [2012] 1 HKLRD 149 at §53 regarding a decision whether to issue a demolition order under BO s. 24.  In short, given the various ways in which a matter might come before the BAT on appeal from a decision of the BA, the dispositive powers of the BAT may be different depending on the nature of the decision appealed from.

Conclusion

103.  For the above reasons, I would answer the questions posed in the case stated as follows:

(1) Question 1:  Yes.

(2) Question 2:  Yes.

(3) Question 3:  Subject to ordinary public law requirements (as to fairness, rationality, etc.) and to the appeal process under Part 6 of the BO, the relevant statutory powers may be exercised whenever the BA in his judgment considers that the developer has not shown ownership of or a realistic prospect of control over the land within the proposed site.

(4) Question 4:  The BAT should be entitled to consider the position as at the date of the hearing of the appeal and thus taking into account any changes in the interim period.  However, given the various ways in which a matter might come before the BAT on appeal from a decision of the BA, the dispositive powers of the BAT may be different depending on the nature of the decision appealed from.

104.  As to costs, the BA having succeeded on the issues argued on the appeal, I would make an order nisi that the Developer pay the BA’s costs of the appeal, such costs to include a certificate for two counsel, to be taxed if not agreed.

Hon McWalters J:

105.  I agree with the judgment of Fok JA.