CAPITAL RICH DEVELOPMENT LTD AND ANOTHER v. TOWN PLANNING BOARD

  HCAL51/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 51 OF 2004

-----------------------

-----------------------

-----------------------

J U D G M E N T

-----------------------

1.  In these proceedings, the applicants apply to judicially review the decision of the Town Planning Board made on 19 March 2004 not to propose any amendment to the Draft Staunton Street/ Wing Lee Street Development Scheme Plan No. S/H3/URA1/1 to meet the applicants’ objection to it.   The plan relates to an urban renewal project undertaken by the Urban Renewal Authority.  The applicants’ objection is directed at the inclusion of their land in the Comprehensive Development Area zoning in the plan.  

The applicants

2.  The applicants are companies directly held by an affiliated company of Henderson Development Limited.  Between the applicants, they had since 1997 acquired and now own various lots of land situated at Nos. 70-72 Staunton Street, Nos. 9-12 Wa In Fong East and Nos. 5, 9-21 Cheung Wo Lane in Sheung Wan, Central District (“the Objection Site”).

3.  The applicants had since the commencement of these proceedings also acquired No.7 Chung Wo Lane.

4.  The applicants have also reached an agreement in principle with the owner of No.3 Chung Wo Lane for joint development.

The Town Planning Board (“the Board”)

5.  The Board is a public body established under the Town Planning Ordinance, cap.131 (“TPO”).  It consists of official and unofficial members appointed by the Chief Executive. Section 3(1) of TPO provides that the function of the Board is to undertake the systematic preparation of draft plans and draft development permission area plans of such areas of Hong Kong as the Chief Executive may direct with a view to the promotion of the health, safety, convenience and general welfare of the community.

The Urban Renewal Authority (URA)

6.   The URA is a statutory body established on 1 May 2001 under the Urban Renewal Authority Ordinance, cap. 563 (“URAO”).  It was established to replace the Land Development Corporation (“LDC”).

7.  The purposes of the URA are set out in section 5 of URAO.  Among others, the URA has the responsibility:

(1)	To improve the standard of housing and the built environment of Hong Kong by:
	(a)	undertaking, encouraging, promoting and facilitating urban renewal: section 5(a),
	and
	(b)	replacing old and dilapidated areas with new development which is properly planned and, where appropriate, provided with adequate transport and other infrastructure and community facilities: section 5(b).
(2)	To achieve better utilisation of land in the dilapidated areas of the built environment and to make land available to meet various development needs: section 5(c).

8.  Section 10(4) of URAO obliges the URA to exercise due care and diligence in the handling of its finances. 

9.  Under sections 21 and 22 of URAO, the URA is required to submit in each financial year draft Corporate Plan and draft Business Plan to the Financial Secretary for approval.  The URA cannot implement any development proposal or development scheme that are not included in or covered by the Corporate Plan or the Business Plan, except with the prior approval of the Financial Secretary.

The URAO

10.  The URAO provides the statutory framework for carrying out urban renewal in Hong Kong.

11.  Under section 6(2)(d), the URA may implement a project by way of either a development scheme pursuant to section 25 or a development project pursuant to section 26.

12.  In the case of a development project, section 26(2) provides that the URA shall ensure that it is one that can be lawfully implemented under any draft or approved plan for the purpose of the TPO and if permission is required under section 16 of TPO, the permission required has been obtained.  The procedure for objecting to the project is set out in section 24.  Under section 28, an objector who is aggrieved by the decision of the Secretary for Housing Planning and Lands on the objection may appeal to the Appeals Board.

13.  In the case of a development scheme, with which the present case is concerned, section 25(3)(a) requires it to contain a plan.  Under section 25(5), the plan may be submitted to the Board for consideration.  Under section 25(6), the Board may either deem the plan as being suitable for publication, with or without amendments, or refuse to deem it as being suitable for publication.

14.  Where a plan is deemed suitable for publication, section 25(7) provides that it shall be deemed to be a draft plan prepared by the Board under the TPO and the provisions of the TPO, including the objection procedures prescribed in section 6, shall apply accordingly. 

15.  Under section 29(1), in respect of any land required for  implementing a development project or falling within the area of a plan which is deemed to be a draft plan of the Board by virtue of section 25(7), the URA may apply to the Secretary for Housing, Planning and Lands, requesting him to recommend to the Chief Executive in Council to invoke the resumption power under the Lands Resumption Ordinance, cap.124. 

The TPO

16.  The TPO sets out the procedures that the Board must follow in dealing with a draft plan.

17.  Under section 5 of TPO, a plan deemed suitable for publication shall be exhibited for public inspection for two months.  Section 6 provides that any person affected by the draft plan so exhibited may make a written objection and may propose alteration to the draft plan.

18.  Under section 6(3) to (5), the Board may give preliminary consideration to the objection in the absence of the objector and may propose amendments to the draft plan to meet the objection.  Section 6(6) further provides that where the Board does not propose amendments or where the objection is not withdrawn, the Board shall consider the objection at a meeting, at which the objector may attend and make representations on his objection.

19.  Under section 6(9), the Board may, upon consideration of an objection, reject the objection in whole or in part or may make amendments to the draft plan to meet the objection.

20.  Section 8 requires the Board to submit, within nine months from the expiration of the exhibition period, the draft plan (with or without amendments) to the Chief Executive in Council for approval, together with a schedule of the objections not withdrawn and a schedule of amendments, if any, for meeting the objections.  The Chief Executive may extend the time for submission for up to a period of six months. 

Events leading to these proceedings

21.  On 30 December 1997, the then Secretary for Planning, Environment and Lands gave approval under section 13(1) of the now repealed Land Development Corporation Ordinance for the LDC to prepare a development scheme for the Staunton Street/ Wing Lee Street area (also known as the H19 project).  In January 1998, the LDC announced its intention to pursue the project.  However, the preparation of the draft development plan was not completed for submission to the Board by the time the LDC was dissolved. 

22.  Under section 20(1) of URAO, the Secretary for Housing, Planning and Lands may prepare from time to time an urban renewal strategy relating to the carrying out of urban renewal.  Section 21(3)(a) obliges the URA to follow the guidelines set out in the Secretary’s urban renewal strategy in formulating its Corporate Plan. 

23.  In November 2001, the then Planning and Lands Bureau published an urban renewal strategy (“URS”).  Under it, the URA is to implement an urban renewal programme consisting of new projects and 25 uncompleted projects of the LDC in 20 years.  The URS further states that priority shall be given to the 25 uncompleted LDC projects because the residents in the project areas have been waiting for redevelopment for some time.

24.  The Staunton Street/ Wing Lee Street project is one of the 25 uncompleted LDC projects, which the URA is required under the URS to afford priority.  In the URA Corporate Plan (2003/04 to 2007/08) and Business Plan (2003/04) approved by the Financial Secretary in March 2003, the project was proposed to be processed as a development scheme under section 25 of URAO. 

25.  On 21 March 2003, the URA, in compliance with section 23(1) of URAO, published in the Gazette notice that it would commence the implementation of the Staunton Street/ Wing Lee Street project by way of a development scheme under section 25 of URAO.

26.  On the same day as the project was published in the Gazette, the URA submitted the draft plan for the development scheme to the Board for consideration pursuant to section 25(5) of URAO. 

27.  The plan is accompanied by a set of Notes, which forms part of the plan.  The Notes indicate the uses that are always permitted in the scheme area and the uses that may be permitted by the Board, with or without conditions, on application.  There is also an Explanatory Statement setting out the planning intention and objectives, but it does not form part of the plan.  Paragraph 3 of the Explanatory Statement states that the development scheme “intends to achieve environmental improvement through comprehensive redevelopment, restructuring the street pattern, promoting efficient land use and providing community facilities/ public open space”. 

28.  Included in the submission to the Board are the Planning Report, draft Planning Brief, Preliminary Conceptual Design, Tentative Implementation Programme, Acquisitions Compensation and Rehousing Packages for Tenants, Preliminary Traffic Impact Assessment Report and SIA (Phase 1) Report.

29.  On 4 July 2003, the Board decided to deem the draft plan and its Notes as being suitable for publication under section 25(6)(a) of URAO.  The Board also endorsed the draft Planning Brief for the area, which serves as a guide to the detailed planning and design of the area and for subsequent Master Layout Plan submission.

30.  On 11 July 2003, the Draft Staunton Street/ Wing Lee Street Development Scheme Plan No. S/H3/URA1/1 (“the DSP”) was exhibited for public inspection pursuant to section 5 of TPO.  

31.  During the exhibition period that expired on 11 September 2003, a total of six objections were received.  The applicants’ objection was contained in a letter dated 10 September 2003.  It is directed at the inclusion of the Objection Site in the CDA designation in the DSP.  As for the other five objections, three of them relate to specific sites and two were against the CDA zoning.

32.  The Board gave preliminary consideration to the objections at its meeting on 14 November 2003.  It decided not to propose any amendment to the draft DSP to meet the objections received.  It further decided to hear all six objections collectively.  The applicants were notified of the decision and were also provided with the relevant papers (i.e. TPB Paper No. 6849) and extract of the Board’s minutes.

33.  On 24 December 2003, the applicants served on the Board further representations for their objection. 

34.  The first hearing of the objections took place on 6 February 2004.  The applicants’ representatives made a presentation of their submissions.  After deliberations, the Board deferred its decision on the objections and called for additional information from the Planning Department on the following:

(1)  Precedent cases involving approved building plans and/or planning permissions within the URA/LDC schemes, and how did they compare with the draft DSP;

(2)  The viability of the URA project if the scheme area was split into several smaller CDA sites;

(3)  The timing when the URA could start dialogues with the affected developers or landowners; and

(4)  An assessment of the implications of the Board’s decision to uphold the applicants’ objection or otherwise on the other two site-specific objections.

35.  The second hearing of the objections took place on 19 March 2004.  The Board received further representations from the applicants’ representatives.  The additional information requested was also made available to the Board by the Planning Department in TPB Paper No. 6963.  The Board deliberated on the objections in the absence of the representatives of the Planning Department, the applicants and the other objectors.  The Board decided not to propose any amendment to the DSP to meet the applicants’ objection.  None of the other objections was upheld.

36.  The Board’s decision and the relevant extract of the minutes were communicated to the applicants by letter dated 2 April 2004. 

37.  On 23 April 2004, the applicants commenced these proceedings.  On 3 May 2004, Hartmann J granted leave to judicial review and also ordered an interim stay on the submission of the DSP to the Chief Executive in Council pending the determination of the judicial review application.  The applicants issued the Notice of Motion on 10 May 2004.

The Staunton Street/ Wing Lee Street Development Scheme

38.  The development scheme covers an area of about 4,400 m² in Sheung Wan.  It is bounded by Staunton Street, Wing Lee Street and Aberdeen Street.  It includes the entire Objection Site, which is approximately 837 m² in area.

39.  Previously, the area covered by the development scheme was zoned “Residential (Group A)” (R(A)), “Residential (Group C)” (R(C)) and “Government, Institution or Community” (G/IC) on the draft Sai Ying Pun and Sheung Wan Outline Zoning Plan (OZP) No. S/H3/18.  Areas zoned R(A) have no restriction on development density whereas areas zoned R(C) are subject to either a plot ratio of 5 and a height restriction of 12 storeys or the plot ration and height of the existing buildings, whichever is the greater. 

40.  Under the DSP, the whole area is zoned as “Comprehensive Development Area” (CDA).  By section 25(9) of URAO, the draft OZP No. S/H3/18 has become replaced or amended by the DSP in respect of the areas delineated and described therein.  As explained in the Notes to the DSP, section 4A(2) of TPO requires an applicant seeking planning permission for development on land zoned as CDA, to prepare a Master layout Plan for the approval of the Board with the specified information. 

41.  The boundary of the scheme area has excluded buildings that are relatively new or in good condition.  Accordingly, the buildings in the scheme area are mainly 3 to 4 storeys high residential buildings built in the 1950s or early 1960s.  Illegal extensions and roofs are present on the buildings.  There are also a number of internal streets or back lanes in the area.  

42.  Under the proposed development, the intended use is mainly residential. The notional scheme comprises two separate residential buildings with retail or commercial uses on the lower floors.  An at-grade public space of no less than 855 m² is also proposed.  Having regard to the historic value of the area, the scheme proposes to build a public square in memory of Dr Sun Yat-sen.

43.  According to the 2001 census, about 183 households may be affected by the URA project, of which some 60 households are located on the Objection Site. Given the deteriorating physical condition of the buildings and the poor environment of the area, it is understandable that the development scheme is strongly supported by the local residents.  Over 400 of them had written to the Board requesting the Board to approve the draft DSP.

The Objection Site

44.  The Objection Site is a long, narrow “L” shape site located at a key position of the area covered by the development scheme.  As with the other areas in the development scheme, the Objection Site is predominantly occupied by low-rise residential buildings in poor physical condition.  Under the draft OZP No.S/H3/8, it was zoned R(A) and R(C).  The zoning becomes CDA under the DSP.

45.  The Objection Site was covered by several planning permissions.  In respect of Nos.70-72, the applicants obtained planning permission on 4 October 1996 for relaxation of the plot ratio from 5 to 8.736 and the building height from 12 to 25 storeys.  Although the building plans were approved by the Building Authority on 18 December 1997, they had not been pursued.  There was another permission relating to Nos. 9-12 Wa In Fong East for relaxation of the plot ratio from 5 to 8.16 and the building height from 12 to 39 storeys.  It was granted on 3 July 1998, but had not been pursued.

46.  The entire Objection Site was also the subject matter of four planning applications, two of which were approved by the Board.  The first was for a 33 storeys residential development. The approval was first given on 28 August 1998 and renewed for two years in 2003. The permission had since expired. 

47.  The second planning permission was for a 27 storeys residential development (over a two-storeys podium) with a plot ratio of 10.  The approval was given on 4 January 2002 to last for three years until 4 January 2005.  Shortly before the expiration of the exhibition period of the DSP, the applicants applied for approval for demolition works at 11 Wa In Fong East and the Building Authority gave its approval on 3 November 2003.  On 22 December 2003, invitations for tenders for the demolition work were issued.  On 24 December 2003, the applicants submitted general building plans for comprehensive development on the Objection Site to the Building Authority for approval.  The Building Authority gave its approval to the building plans on 20 February 2004.  

The applicants’ objection

48.  In the statement of objection dated 10 September 2003, the applicants made the following points of objection:

(1)  The Objection Site was subject to two planning permissions granted in 1998 and 2002.  The inclusion of the Objection Site in the CDA zone does not respect private landholdings and disregards the privately initiated scheme undertaken by the applicants.

(2)  The CDA zoning deviated from the objectives and was contrary to the recommendations in the URS Study that recognition and respect should be given to private sector involvement in urban renewal.

(3)  The designation of the Objection Site as CDA would eradicate all the time, effort and resources expended by the applicants on the Objection Site.

(4)  The private sector was capable of undertaking urban renewal in a more cost-effective and efficient manner.  

The applicants stated that they would withdraw their objection if the Objection Site is excised from the CDA designation.

The Board’s decision

49.  In its letter dated 2 April 2004 communicating its decision on the applicants’ objection, the Board gave the following reasons for not proposing any amendment to meet the objection:

(1)  The URS recommended that the URA might develop a property through joint venture partnership.  The applicants’ right on the Objection Site would not be deprived.

(2)  The Objection Site was at a key location and accounted for a substantial portion of the CDA zone.  Excision of it from the CDA zone would frustrate the planning intention of the CDA zone, jeopardize the whole development scheme and impose serious constraints on the comprehensive redevelopment of the rest of the development scheme area. 

50.  The deliberations of the Board at the 19 March 2004 meeting were reflected in the paragraphs 53 to 55 of the minutes.  

The grounds for judicial review

51.  The applicants put forward five grounds for judicial review in their Form 86A.  They are:

(1)  In considering the applicants’ objection, the Board erred in law in confining itself to planning merits and considerations as well as in casting a burden on the applicants to show that the exclusion of the Objection Site from the DSP would not adversely affect the integrity of the development scheme.

(2)  The Board failed to take into account all relevant considerations, namely, the applicants’ interest and accrued right to develop the Objection Site, the planning gains to the public that the applicants’ proposed development on the Objection Site will bring, the excision of the Objection Site will reduce the amount of compensation payable by the URA, the steps already taken by the applicants to develop the Objection Site, and a previous statement made by the then Deputy Secretary for Planning and Lands (Urban Renewal and Buildings) at the 9 May 2000 meeting of the Bills Committee on the Urban Renewal Authority Bill that there would be no role for the URA if private developers were willing or capable to undertake redevelopment.

(3)  The Board took into account irrelevant considerations, namely, the applicants’ right would not be deprived since the URA may redevelop a project through a joint-venture partnership.

(4)  The Board’s decision was Wednesbury unreasonable in that there was no evidence to support its finding that excision of the Objection Site would frustrate the planning intention of the CDA, jeopardise the whole development scheme and impose serious constraints on the comprehensive redevelopment of the rest of the development scheme area.

(5)  The development scheme has no legal effect and cannot lawfully include the Objection Site in that it fails to comply with the requirements of section 25(3)(b) of URAO.

Errors of law

52.  Central to the applicants’ first ground for judicial review is the role and function of the Board.  It also underpins the applicants’ arguments for the second and third grounds.

53.  At the objection hearing before the Board, Mr Yu SC who appeared for the applicants argued that the Board had a duty under the law to consider and balance the various conflicting interests, including those of the private landowners, and should not confine itself to planning considerations.  Referring to the Privy Council judgment in Silver Mountain Ltd  v. Attorney General of Hong Kong [1994] 1 WLR 925, 936, it was urged upon the Board that it should balance the competing interests at the planning stage rather than at the stage of resumption.  It was further said that the need to balance the interests and needs of all sectors of the community without sacrificing the lawful rights of any particular group was also highlighted in the URS of the Secretary for Housing, Planning and Lands.

54.  The applicants’ argument is that in the context of section 6 of TPO when read together with section 25(7) of URAO, the Board is under a duty to consider and balance the conflicting interests and needs of the URA and the applicants.  It is said that the Board has the role of an impartial tribunal and, similar to the Appeals Board set up under section of URAO in the case of development project, it has to adjudicate upon the conflicting interests.  For this reason, the applicants say that the Board erred in confining its considerations to planning merits and in casting the burden on the applicants to show that the exclusion of the Objection Site would not adversely affect the integrity of the development scheme.

55.  The role and function of the Board are set by statute.  Under section 3(1) of TPO, a major function of the Board is the systematic preparation of draft plans as directed by the Chief Executive.  When read together with section 25(5) to (7) of URAO, this function of the Board is extended to cover draft plans for urban renewal development scheme.  The overriding objective of the Board in discharging its statutory function is “the promotion of health, safety, convenience and general welfare of the community”.

56.  In the context of the statutory objection procedure under section 6 of TPO, Leonard J had observed in R v. The Town Planning Board, ex p. The Real Estate Developers Association of Hong Kong [1996] 2 HKLR 267, 292C-G that:

“The board did not make a final determination of the rights of any members of the applicant.  It was conducting an administrative consultative process, provided by statute, designed to enable it to take into account all shades of opinion before forming a view as to the final form of its recommendations to be made to the Governor-in-Council.”

57.  In Kwan Kong Company Limited v. Town Planning Board [1996] 2 HKLR 363, issue arose as to whether the Board’s constitution was inconsistent with Article 10 of the Bill of Rights.  The Court of Appeal held that Article 10 had no application to proceedings before the Board in that there was no determination or settlement of rights and obligations. Litton VP, after referring to Leonard J’s passage cited above, went on to say that (at 373J-374D):

“And when a person affected by a draft plan lodges a written statement of objection, it is difficult to see how, on any view of the matter, he can be said to be entering into a “suit of law”, or seeking the determination of his rights and obligations in terms of art.10.  There are no contesting parties before the Town Planning Board.  All that the board is empowered to do is to entertain the objection in accordance with the provisions of s.6 and [sic] under s.8 to forward to the Governor-in-Council, with or without amendments, the draft plan for approval, together with a schedule of the objections.  Any final “determination” – if that be the right expression – is made by the Governor-in-Council not by the board.”  

58.  Thus viewed, the primary role of the Board in deliberating on an objection must be to consider the planning merits of the proposed plan and the objection.  The task of the Board does not involve it in balancing any conflicting interests of the proponent of the plan and an objector.  This is so even in respect of draft plan for a development scheme proposed by the URA.  No doubt, the Board should also take into account the effect of the scheme on the rights of private landowners affected by the scheme, but this is not the same as balancing the conflicting interests of the URA and the landowners.  Still less does it put the Board in a position of adjudicating upon their conflicting interests. 

59.  The statement in the Board’s Guidelines for Designation of CDA Zones and Monitoring the Progress of CDA Developments, in particular, paragraph 1.2 that “CDAs are designated in the interest of the wider public although individual property owner’s right would be taken into consideration” (emphasis supplied) does no more than confirming that the Board would take into account the effect of a development scheme on the rights of private landowners.   

60.  Likewise, the statement in paragraph 3 of the Urban Renewal Authority Strategy Review issued by the Planning and Lands Bureau in November 2001 that “The Government has to balance the interests and needs of all sectors of the community without sacrificing the lawful rights of any group” does not mean that the Board is given a duty to balance the interest of the public and the rights of property owners.

61.  The function and role of the Board cannot be equated with those of the Appeals Board appointed under section 27 of URAO.  Firstly, it is plain that the role of the Appeals Board is to adjudicate upon the dispute between the Secretary for Housing, Planning and Lands and an objector to a proposed development project.  To enable it to discharge the adjudication role, the Appeals Board has been given wide power to order disclosure of documents, receive evidence and summons witnesses: see section 28(9) to (12) of URAO.

62.  Secondly, insofar as the applicants seek to refer to the Report of the Bills Committee on the Urban Renewal Authority Ordinance as an aid to interpreting the role and function of the Board, I do not consider this is a course open to the applicants.  In the first place, it is not the applicants’ case that there is ambiguity in the statutory provisions relating to the role and function of the Board and there is no justification to look to extrinsic aids in understanding the provisions: Pepper v. Hart [1993] AC 593. 

63.  In this regard, the cases of Regina (Westminster City Council) v. National Asylum Support Services [2002] 1 WLR 2956, 2959 and Director of Lands v. Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1 do not assist the applicants.   Lord Millett NPJ pointed out in the latter case that such evidence as Hansard materials is only admissible for a limited purpose, namely, to enable the Court to understand the factual context in which the statute was enacted and the mischief at which it was aimed: at p.15 para.22. In the present case, the reference to the Report of the Bills Committee is not to establish the factual context in which the URAO was enacted or the mischief that the URAO is aimed.  There is in fact no disagreement as to the independent role and adjudication function of the Appeals Board under the URAO.    

64.  Further, even if it is permissible to look at para.45 of the Report of the Bills Committee, it does not lend support to the applicants’ argument that the Board comes under a statutory duty to balance and adjudicate upon the conflicting interests of the proponent of a plan and an objector.  The focus of the paragraph is that under the Bill, while objections to a development scheme fell to be dealt with by the Board under the TPO, objections to a development project would only be considered by the Secretary.  The stated concern of the Bills Committee was that there was no input from an independent third party to consider objections to a development project.  The concern was recognized and led to the amendment of the Bill to provide for the appeal mechanism in the case of development project.  The paragraph does not shed light on what the proper understanding and construction of the role and function of the Board.  At the most, it only shows that the Board was regarded by the Bills Committee as affording some independent inputs into the consideration of the objections. 

65.  Moreover, there is a fundamental distinction between development scheme and development project that underlines the respective roles of the Board and the Appeal Board.  As explained in Mr Griffiths SC’s submissions, a development project must be undertaken in accordance with an existing draft or approved outline zoning plan and the URA must ensure it complies with the outline zoning plan and must obtain the Board’s permission, where this is required: section 26(2) of URAO.  There are two types of land uses in draft and approved outline zoning plans.  The “Column 1” uses are uses always permitted by the plan and do not require permission from the Board.  The “Column 2” uses are uses that may be permitted by the Board upon an application under section 16 of TPO.  “Column 1” uses are determined by the Board in the case of draft outline zoning plan, and by the Chief Executive in Council in the case of approved outline zoning plans.  As for permissions for “Column 2” uses, they are dealt with by the Board.  That being the case, it is not the concern of the Appeal Board on an appeal to deal with land use and planning issues. 

66.  By contrast, a development scheme necessarily involves amendment to an outline zoning plan, it being not provided for in the existing draft or approved outline zoning plan either at all or to the extent required by the scheme.  The action and involvement of the Board is therefore necessary, and the section 6 statutory procedures provide an appropriate forum for landowners to object and for the objections to be considered and dealt with.  In dealing with the objections to a development scheme, the Board must address land use and planning issues.  Thus analysed, it is doubtful whether it can be inferred that the Bills Committee was equating the role and function of the Board to those of the Appeals Board.  More importantly, there is no basis for interpreting the role and function of the Board as being equivalent to those of the Appeals Board.     

67.  The applicants have placed considerable reliance on the fact that land falling within the draft plan of a development scheme may be liable to be compulsorily resumed under the Land Resumption Ordinance.  In my view, notwithstanding this, there is no room for imposing on the Board a duty to balance the interests of the URA and private landowners giving the Board’s statutory role and the statutory framework under the TPO and the URAO.  The possibility or potential threat of resumption is one of the effects of a URA development scheme on the rights of private landowners, which the Board has to take into account when it comes to deliberate on the landowners’ objections.

68.  The applicants also criticizes the chairman’s statement as recorded in the minutes of the 19 March 2004 meeting that the crux of the matter was whether there was sufficient ground from a planning angle to justify the exclusion of the Objection Site from the DSP.  The applicants say that this places on them the burden to show that the exclusion of the Objection Site would not adversely affect the integrity of the development scheme and amounts to adopting a presumption in favour of upholding the DSP.  It is said that the Board had failed to adopt a wholly impartial approach.

69.  In R. v. Teeside Development Corporation ex parte Morrison [1998] JPL 23, the court stressed the importance of evaluating planning policies and arguments in an impartial and objective manner.   Although the Board does not assume any adjudication role, I accept that the Board is under a duty to act impartially when dealing with objections before it.

70.  Given that an objector is putting forward an objection or proposing an amendment, it is only natural that the Board should be looking to him for reasons in support of his objection and proposal.  In my view, the statement of the Chairperson at the meeting amounts to no more than this.  Although the DSP is not a plan originated from the Board, it had been considered by the Board before the decision was made for its publication under the TPO.  It therefore does not stand differently from plans prepared by the Board under the TPO.  The applicants’ submission that the Board had made no determination on the DSP is not correct.  To the extent it is said that the chairperson had directed the members to consider whether there are planning justifications for excluding the Objection Site from the DSP, it cannot be said that the Board had presumed in favour of the URA or the DSP and had thereby acted impartially.

71.  As to the planning permission previously approved by the Board, and which is extant, while it gives the applicants a right to develop the Objection Site, it does not give rise to a presumption in favour of preserving the applicants’ rights.  The applicants’ position is different from that of the licence holder in the case of Kam To Sauna, Town Planning Appeal no.1 of 1998.  What was at stake in that case is an existing use whereas the present case is about a planning permission.  I agree with the Board’s submissions that the applicants’ planning permission is no more than a material consideration for the Board when dealing with their objection: Wells v. Minister of Housing and Local Government [1967] 1WLR 1000, 1008G-H, 1010H-B and Spackman v. Secretary of State for the Environment [1977] 1 All ER 257, 261h-j.           

72.  For these reasons, the applicants’ first ground that he Board committed errors of law is not made out.

The Board’s considerations

73.  The considerations that the applicants complain the Board had failed to take into account or had wrongfully taken into account in deciding on their objection boils down to two broad matters.  The first is the adverse effect the inclusion of the Objection Site in the CDA zoning under the DSP has on applicants’ right to develop the Objection Site. The second is the relative merits of the development scheme and the applicants’ proposed development.

74.  It is evident from the evidence filed in these proceedings that in the course of dealing with and considering the applicants’ objection, the Board had received extensive submissions and papers from the applicants as well as the Planning Department.  A number of matters had been canvassed in these submissions and papers.  In ascertaining the considerations taken into account by the Board and understanding its deliberations, it is therefore important also to have regard to these materials that were before the Board.

75.  In the papers prepared by the Planning Department, there was clear acknowledgement of the applicants’ right to develop the Objection Site under the planning permissions they had obtained.

76.  It is the applicants’ case that their right is adversely affected by the inclusion of the Objection Site in the DSP in that their development is liable to be frustrated by the URA invoking the compulsory resumption procedure under section 29 of URAO, and that the threat of resumption places the applicants at a grave disadvantage in negotiations with the URA on any proposed joint venture. 

77.  The Board does not accept that the inclusion of the Objection Site in the CDA zoning adversely affects the applicants’ right to develop. This is because they are entitled to commence work under the approvals that they had obtained.  As a matter of reality, however, I am prepared to accept that the applicants’ concerns over the inclusion of the Objection Site are not unreal.

78.  That said, the consequences of potential resumption of the Objection Site on the applicants, including the steps and expenses that the applicants had incurred in furtherance of their planning permission, is a matter that had been put before the Board.  It was also raised and emphasised in the applicants’ presentations.  It could not have escaped the Board’s attention.  Indeed it is evident from the Board’s decision to defer its determination and to call for additional information that the Board did have in mind the rights of the applicants and the possible interference with the rights.  The point is further illustrated by the members’ observation during deliberation that the URA should start negotiation with the applicants to achieve a win-win situation, noting that the applicants do not resist joint venture development with the URA.     

79.  Although the Board gave as one of its reasons that the rights of the applicants would not be deprived, noting that the URS recommends that the URA may redevelop a project through joint venture partnership, I do not agree that it demonstrates that the Board had taken into account irrelevant consideration and had failed to take into account the applicants’ representations on the adverse effect of the inclusion of the Objection Site on their rights.  The objective evidence indicates that the Board was aware of the applicants’ wish to proceed with their development without being subject to the threat of resumption.  The Board was however more concerned with the benefits to the community and they considered that the renewal of the area in question would be best achieved by the comprehensive development proposed by the URA development scheme.  That is a decision open to the Board, with which this court should not lightly interfere.           

80.  As to the relative planning merits and gains of the development scheme and the applicants’ proposed development, they had been analysed in the papers prepared by the Planning Department and provided to the Board.  The Board also had the detailed submissions from the applicants’ representatives, including leading counsel.  It can be seen from the minutes of the 19 March 2004 meeting and the applicants’ presentation materials that the arguments forcefully put by Mr Yu SC in these proceedings had already been articulated before the Board.  The considerations that the applicants say the Board should take into account, including the financial gains from a reduction in the compensation to be paid to the individual owners caused by the excision of the Objection Site, had all been made to the Board at the objection hearings.

81.  In my view, there is no reason to believe that the Board members would not take note of the applicants’ submissions.  On the contrary, the questions and comments made by the members at the hearings on 6 February and 19 March 2004 suggest that they were keenly aware of the relevant issues involved.  Further, the comments made by the members during the deliberations clearly show that they were concerned with the relative merits of the different schemes in terms of the benefit to the local community.  In the end, they came to the view that there would be more planning gains if the whole DSP area was comprehensively developed.  Again, this is a conclusion that the Board is entitled to draw on the materials before it.

82.  In the circumstances, the second and third grounds for judicial review fail.       

Wednesbury unreasonableness

83.  In dealing with this ground of challenge, it is important to recognize at the outset the court’s limited supervisory role in judicial review proceedings: see the judgment of Lord Woolf in R v. Lord Saville of Newdigate and Others, ex parte A and Others [1999] 4 All ER 860, 870-871 at paras.31-33.  The court is not concerned with the merits of the decision, but whether it can be demonstrated that the decision maker’s decision is so absurd or irrational that it can be said to be Wednesbury unreasonable.  In this connection, it is common ground that planning decisions and merits are matters for the Board and not for the court.

84.  The crux of the applicants’ complaint under this ground is that there was no evidence to support its reason that the excision of the Objection Site would frustrate the planning intention of the CDA zone, jeopardize the whole development of the rest of the development scheme area.

85.  This reason given by the Board was an adoption of the view expressed by the Planning Department.  The considerations underlying the Planning Department’s view had been set out in its papers to the Board, in particular TPB Paper No.6963.  In its assessment, the site configuration of the Objection Site poses serious constraints on the building design if it were to be redeveloped on its own.  Further, owing to the key location occupied by the Objection Site, its excision will reduce the at-grade public space.  The Department takes the view that comprehensive development of the whole area is needed to achieve substantive environmental improvement, higher standard of urban design and better provision of public facilities.  It does not consider splitting the scheme area into smaller sites to be an attractive or viable option.  

86.  The adoption of the Department’s view is an indication of the Board’s agreement with the underlying reasons and considerations. Plainly, they are matters for planning judgment, which the Board is entitled to take.  It cannot be said that the Board’s reason is not borne out by the materials before it.

87.  Under this ground, the applicants also criticize the Board for preferring the financial interests of the URA to that of the applicants.  What gives rise to this is the assessment of the financial implications of the excision of the Objection site on the URA given in paragraph 4.5 of TPB paper 6963.  The paragraph points out that the available gross floor area would be reduced by the splitting up of the DSP, and this would erode the revenue of the notional scheme by 33% to 60%.   This would in turn affect the overall financial balance of the URA Corporate Plan, which had been approved by the Financial Secretary.  Given its mandate to manage its finance prudently, the URA would have to seriously consider whether to continue pursuing the development scheme.

88.  The applicants contend that this is wholly irrelevant and cannot form a basis for the Board’s reasons and decision.  It is even said that it demonstrates that the inclusion of the Objection Site is to provide more revenue for the URA for other projects.  I am unable to accept this submission. 

89.  Under section 10(4) of the URAO, the URA is obliged to exercise due care and diligence over its finances.  There is thus a real risk of the URA deciding not to proceed with the subject development scheme if it is financially not viable or because it may have a serious implication on its overall financial position.  If this should happen, public interest will be affected in that there will not be urban renewal either in the scheme area or other areas.  Alternatively, if the URA has to apply to the Financial Secretary for approval as a result of the financial consequences brought about by the excision of the Objection Site, this will cause delay to the urban renewal programmes.  The public interest will likewise be affected.  Given that it is the duty of the Board to promote the health, safety, convenience and general welfare of the community, it cannot be said that the financial implications of the excision of the Objection Site are wholly irrelevant.  The fact that the Board considered these matters is also not a ground for saying that the Board had preferred the financial interests of the URA and ignored those of the applicants.

90.  Looking at all the materials before the Board, I am of the view that it is open to the Board to have made the decision and the reasons it gave.  There is no ground for the court to interfere.  This ground of Wednesbury unreasonableness must fails.   

Legality of the development scheme

91.  The last of the grounds for judicial review relates to section 25(3)(b) of URAO, which provides that a development scheme shall:

“set out how the Authority intends that the development scheme will be implemented, including whether implementation will be by the Authority alone or the Authority in association with another person and in relation to land within the boundaries of the development scheme, what portion of the land is owned or leased by the Authority and what arrangements have been made or are contemplated by the Authority for the acquisition of any land not so owned or leased”.

92.  It is the applicants’ contention that the development scheme in question violates the section in that it does not set out:

(1)  How the URA intended that the development scheme would be implemented, including whether implementation would be by the URA alone or the URA in association with the applicants; and

(2)  Which part of the land in the DSP is owned or leased by the URA.

93.  There are a number of difficulties associated with this ground of challenge.  Firstly, it is clear from section 25(3) of URAO that a development scheme comprises documents other than a plan and its attached notes.  When considering whether the development scheme has complied with the requirement of section 25(3)(b) of URAO, it is necessary to look at all the scheme documents.

94.  In the present case, the URA had made a comprehensive submission to the Board.  Paragraph 7 of the Planning Report deals with the implementation of the scheme.  It states that the URA intends to acquire the property within the area by purchase on terms that are fair and reasonable, and that eligible tenants will be offered rehousing or compensated.  Supplementary documents detailing the implementation programme are also attached to the Planning Report.  Paragraph 7.6 of the Planning Report specifically states that: “URA may implement the Scheme on its own or in association with one or more joint venture partners.”

95.  Under paragraph 8.2 of the Explanatory Statement, which accompanies the DSP and is open for public inspection, it is further stated that: “URA intends to acquire the property within the area by purchase on the prevailing acquisition policy as directed by the Government.  Apart from property acquisition from the existing owners, land required for the implementation of the Scheme would be granted by the Government and, if necessary, by requesting the Secretary for Housing, Planning and Lands to recommend to the Chief Executive in Council the resumption under the Lands Resumption Ordinance.”   Paragraph 8.6 reiterates “URA may implement the Scheme on its own or in association with one or more joint venture partners”.

96.  In the notice gazetted on 21 March 2003, it was stated that a description of the general nature and effects of the project was available for public inspection at the places and time indicated in the notice.  In the paper open for public inspection, paragraph 4.2 states that “acquisition of property interests required for the project will not commence until after all the relevant procedure under the TPO in regards to the submission of the project as a development scheme under the URAO has been completed”.

97.  As for the requirement to identify what part of the land in the DSP is owned or leased by the URA, it is irrelevant given that none of the land in the scheme area was owned or leased by the URA.  At any rate, the position is made sufficiently clear by the indication in paragraph 8.2 of the Explanatory Statement that the URA intended to acquire land through land grants, resumption and purchase: see above.

98.  Clearly, the development scheme has set out the implementation details required under section 25(3)(b) of URAO.

99.  Secondly, section 25(3)(b) of URAO does not require the URA to furnish the implementation details to the Board.  Under section 25(5) of URAO, the URA is only required to submit the plan prepared under section 25(3)(a) to the Board for consideration.  It is also clear from section 25(6) and (7) that the Board is only concerned with the plan.  By contrast, when making a request to the Secretary for Housing, Planning and Lands to recommend to the Chief Executive in Council to invoke the statutory power of resumption, the URA is required by section 29(3)(a) to provide information on how it intends to implement the scheme. 

100.  It follows that the Board is not obliged to consider the implementation details when deciding whether to deem the DSP as being suitable for publication.  Accordingly, even assuming that the development scheme does not comply with section 25(3)(b) of URAO, it does not follow that the Board’s decision is thereby vitiated.  There is nothing in the statutory scheme established under the URAO and the TPO to suggest that a non-compliance by the URA of section 25(3)(b) will vitiate the administration decision taken by the Board under section 25(6) to deem the draft plan as being suitable for publication and to exhibit it for public inspection.  It will also have no impact on the legality of the Board’s decision under challenge in these proceedings, and does not provide a basis for granting the relief sought.

101.  Thirdly, as pointed out by the URA, even if the development scheme were unlawful, the challenge should be directed at the URA, who is responsible for the development scheme, and not against the Board.  The objection procedure under section 6 of TPO only enables an objector to raise objection and the Board to make amendments to a draft plan.  It does not enable objection or amendment be made to the intended method of implementation of the development scheme.  That is a matter for the URA alone.  

102.  Quite apart from whether it is possible to judicially review the URA on the legality of the development scheme, it is not open to the applicants in this judicial review against the Board, to mount an attack on the lawfulness of the development scheme and to rely on it as a ground to challenge the decision not to propose amendment to the DSP to meet the applicants’ objection to it.  It should also be noted that none of the relief sought by the applicants relate to the development scheme.  

103.  Counsel have advanced arguments on the timeliness of a challenge to the legality of the development scheme.  Given my view in the preceding paragraphs, the point does not arise for determination.  I would only observe that there is considerable force in the submission that the applicants are expected to and should explain why the challenge was not raised as and when the development scheme was published or even before the Board.  

Conclusion

104.  For the reasons set out above, the application for judicial review is refused.  Applying the normal rule of costs follow event, there is an order nisi that the applicants pay the Board the costs of these proceedings, including costs reserved, together with a certificate for two counsel, to be taxed if not agreed.  As for the costs of the URA, being the interested party, it is reserved.  The URA may within 14 days from the handing down of this Judgment, lodge with the court and serve written submissions on costs.  The applicants and the Board may within 14 days thereafter lodge with the court and serve written submissions in reply, if any.  The URA may within 7 days thereafter lodge with the court and serve its submission in reply, if any.