LEIGHTON PROPERTY CO LTD AND ANOTHER v. TOWN PLANNING BOARD

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Press Summary (Chinese)

FACV Nos. 21 & 22 of 2015

FACV No. 21 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 21 OF 2015 (CIVIL)

(ON APPEAL FROM CACV NO. 232 OF 2012)

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AND

FACV No. 22 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 22 OF 2015 (CIVIL)

(ON APPEAL FROM CACV NO. 233 OF 2012)

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J U D G M E N T

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Chief Justice Ma:

1. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

2. This appeal is concerned with the protection conferred by Article 6 and Article 105 of the Basic Law on private property rights in connection with planning restrictions laid down by the Town Planning Board (“the TPB” or “the Board”).  It also falls to the Court to consider how the principle of proportionality is applied in that context.

A.  The proceedings in the courts below

A.1  Hysan’s proceedings

3. The appellants in FACV 21 and 22 of 2015 are all companies in the Hysan Development Company Limited group and are collectively referred to in this judgment as “Hysan”. 

4. Hysan owns extensive and substantial properties on various sites in Causeway Bay and Wanchai.  It objected to a series of planning restrictions contained in two draft Outline Zoning Plans[1] (“OZPs”) gazetted by the Board.  Those restrictions (to which the relevant sites had not previously been subjected) comprised:

(a)   Building height restrictions (“BHRs”) which limited the heights of buildings to 130 mPD in most cases;[2]

(b)   Podium height restrictions (“PHRs”) setting height limits of 32 mPD and 20 mPD on podiums at particular sites;

(c)   Non-building areas (“NBAs”) of specified widths (2m and 5m at certain sites) prohibiting construction above ground in the designated areas; and

(d)   Building setbacks of specified widths (1.5m and 0.5m in certain instances).

5. The Board stated that the purpose of the NBAs, PHRs and setbacks was to facilitate air ventilation and pedestrian traffic flow in what are crowded and densely built-up areas.  It rejected all of Hysan’s representations against the restrictions with the exception of agreeing to increase the BHR limit from 100 mPD to 130 mPD for one site.  Hysan brought judicial review proceedings to challenge the Board’s decisions rejecting its representations.

6. At first instance, Reyes J[3] dismissed Hysan’s application save in respect of its challenge to the imposition of a 5m NBA in one location.  Hysan’s appeal was allowed by the Court of Appeal[4] on various administrative law grounds.[5]  It granted Orders of Certiorari quashing the Board’s decisions and Orders of Mandamus directing it to reconsider its decisions in accordance with the Court of Appeal’s decision.

A.2  OGL’s proceedings

7. Oriental Generation Limited (“OGL”) intended to redevelop a site occupied by dilapidated buildings known as Kai Tak Mansion, having entered into agreements to purchase over 80% of the undivided shares held by owners of units in those buildings.  OGL submitted to the Building Authority building plans for two towers with a height of 203 mPD which were consistent with the OZP then applicable.  However, the Building Authority rejected those plans because they were inconsistent with draft OZPs[6] gazetted by the TPB shortly afterwards imposing three new restrictions which comprised:

(a)   a 110 mPD BHR (subsequently raised by the Board to 130 mPD);

(b)   a 10m NBA on two boundaries of the site; and

(c)   a 20m wide Building Gap through the middle of the site.

8. In judicial review proceedings before Reyes J,[7] OGL succeeded in having the three new restrictions quashed on the ground that they were arbitrary.  The Court of Appeal dismissed the Board’s appeal.[8]

B.  The issues on this Appeal

9. Hysan and OGL had both unsuccessfully contended below that the planning restrictions represented a disproportionate and therefore unconstitutional infringement of their property rights in contravention of Articles 6 and 105 of the Basic Law.  Although they had succeeded in having the TPB’s decisions quashed on traditional judicial review grounds, they sought leave to appeal to this Court on the constitutional issues with a view to ensuring that, when reconsidering its decisions regarding the restrictions, the Board would have the guidance of this Court’s judgment as to the relevance and application of Articles 6 and 105. 

10. On 18 November 2015, the Appeal Committee[9] granted Hysan leave to appeal on the following question:[10]

“Whether in the determination of the lawfulness and validity of any restriction imposed by the Respondent by way of planning, Article 6 and/or Article 105 of the Basic Law are engaged, and if so, whether such restriction must satisfy the requirement of proportionality, and whether the Hong Kong Court should adopt the European jurisprudence on Article 1 of the First Protocol of the European Convention on Human Rights or some other test of proportionality, and if so, what.”

11. OGL was granted leave to intervene in Hysan’s appeal to enable it to be heard on the aforesaid question which is also relevant to OGL’s remitter.

12. The questions which fall to be answered on this Appeal are therefore as follows:

(a)   Are Articles 6 and 105 of the Basic Law engaged where landowners complain about planning restrictions imposed by the Board on the use of their land?

(b)   If so, must the restrictions be subjected to a proportionality analysis?

(c)   If so, what standards or tests should the Court apply in conducting a proportionality assessment in a case like the present, and in this context, is the jurisprudence of the European Court of Human Rights (“ECtHR”) on Article 1 of Protocol 1 (“A1P1”)[11] of the European Convention on Human Rights (“ECHR”) of assistance?

C.  The Basic Law Articles concerned

13. Article 6 states:

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

14. Article 105 (so far as presently relevant) is in the following terms:

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

15. Article 7 has also been cited.  It provides:

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

D.  Are Articles 6 and 105 engaged?

D.1  Reyes J’s approach

16. In Hysan’s case,[12] Reyes J understood Hysan to be contending that the planning restrictions “constitute a deprivation of property” in violation of Articles 6 and 105 on the basis that the restrictions “would have a negative impact of billions of dollars on the value of those sites”.[13]  He held in effect that Articles 6 and 105 were not engaged, stating:

“... the mere fact that zoning restrictions imposed in the public interest will lead to a diminution of property values will not, without more, amount to an unlawful deprivation of property contrary to the Basic Law. A landowner takes property subject to an implied condition that, for the public good, the Government may by regulation (including OZPs) limit the uses to which such land can be put in the future.”[14]

17. While this was said in relation to “deprivation”, the point, if valid, would be equally applicable to “restriction of use”.  The proposition is that statutory planning restrictions inherently form part of the property rights acquired by the landowner so that such restrictions, whenever imposed, do not (“without more”) infringe Articles 6 and 105.

D.2  The Court of Appeal’s approach

18. In Hysan’s appeal,[15] the Court of Appeal recognized that property rights of landowners are not absolute[16] and that the protection conferred by Article 105 extends beyond cases of deprivation without compensation to cover the rights of individuals to acquire, use, dispose of and inherit property.[17] However, it held that Articles 6 and 105 were not engaged in the context of the Board’s planning restrictions.

19. The Court interpreted the words “in accordance with law” in Articles 6 and 105 as qualifying or restricting the protection conferred so that such protection “is only to the extent that such acquisition, use, disposal and inheritance is ‘in accordance with law’”.[18] Thus, in distinguishing the case-law of the ECtHR on A1P1, the Court of Appeal stated:

“... unlike our Article 105, [in A1P1] there is no qualification of the relevant right as being ‘in accordance with law’ under the first rule...”[19]

It added:

“In contrast, the right to use one’s property which is protected under Article 105 is subject to the rider of ‘in accordance with law’.”[20]

20. The proposition is therefore that the words “in accordance with law” limit the protection conferred by Articles 6 and 105 exclusively to a requirement that property rights be protected by legally certain and accessible laws. 

21. The Court of Appeal, echoing Reyes J in Hysan’s case, proceeded additionally to decide that the protections conferred by Articles 6 and 105 are not engaged in respect of planning restrictions imposed on Hysan and OGL because their rights as property owners are intrinsically defined by and subject to legal restrictions, including the power of the Board to impose such planning restrictions, as incidents of their ownership in accordance with the general law, so that the restrictions whenever imposed do not represent incursions into constitutionally guaranteed rights and thus do not need to be justified.

22. It cited in support Fine Tower Associates Ltd v Town Planning Board,[21]where Stock JA said, in the context of rejecting a deprivation claim:

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

23. By way of elaboration, the Court in the Hysan appeal added:[22]

“... Apart from lease conditions, restrictions are imposed on the right to use one’s land by the Buildings Ordinance, the TPO[23] and other legislative provisions and common law. ... The same point can be made by reference to the obligations imposed upon a landowner by the law of tort (like the law of nuisance, the principle of Ryland v Fletcher) in terms of the use of the land. Likewise, there are common law and statutory restrictions on the disposal, acquisition and inheritance of land. These are all part and parcel of the general law which, in a sense, prescribes what one can do with one’s land. As a matter of law, an owner of a piece of land in Hong Kong holds a bundle of rights conferred by the general law upon him in relation to the land. These rights are subject to the restrictions imposed by the general law. It follows that a landowner does not have the right to use his land in any manner beyond that permitted by the general law.”

D.3  The parties’ submissions on whether the Articles are engaged

24. Lord Pannick QC appearing for the Board,[24] supports the Court of Appeal’s conclusion.  He submits that Article 105 is merely “a continuity provision” aimed at preserving Hong Kong’s capitalist economy and, like the Court of Appeal, lays emphasis on the words “in accordance with law”.  Indeed, Counsel accepts that if that phrase had been absent, there would be no basis for contending that Articles 6 and 105 are not engaged.

25. The Board’s submission is thus that the protection of property rights conferred by the Articles is limited to a requirement that such rights be protected by legally certain provisions.  The point as put in the Board’s printed case is that Article 105 only:

“... confers a limited right: a right to compensation for deprivation of property, and a right that any interference with property must be set out in an Ordinance, regulations or some other legal instrument.”[25]

26. In aid of that interpretation, Lord Pannick QC points out that Article 105 is not in Chapter III of the Basic Law dealing with Fundamental Rights; that under Article 7, the HKSAR retains responsibility for the “management, use and development” of land in Hong Kong; and that no provision is made for compensation for interference with land short of expropriation.

27. Mr Benjamin Yu SC,[26] on the other hand, asserts that Articles 6 and 105 are self-evidently engaged and seeks to refute the arguments in support relied on by the Board.  Mr Nigel Pleming QC,[27] adopts Mr Yu SC’s submissions on this point.

D.4  Conclusions as to engagement of Articles 6 and 105

28. In my view, Articles 6 and 105 are plainly engaged and the Court of Appeal fell into error in holding otherwise.

D.4a “In accordance with law”

29. The central feature of Articles 6 and 105 is that they impose an obligation on the HKSAR to protect private property rights.  Thus, Article 6 states that “The Hong Kong Special Administrative Region shall protect the right of private ownership of property...”  And Article 105 expands on the obligation, stating: “The Hong Kong Special Administrative Region shall ... protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property.” 

30. Articles 6 and 105 stipulate that the obligation is to be discharged by providing such protection “in accordance with law”.  That phrase and similar phrases such as “prescribed by law” and “according to law”, appear in numerous Articles of the Basic Law and the Bill of Rights.  It is well-established that they mandate the principle of legal certainty, requiring the subject-matter of the Article to be regulated by laws which are accessible and precisely defined.[28] It follows that the phrase introduces another aspect of protection: Property rights are to be guaranteed by clear and accessible laws, and not, for instance, left to uncharted administrative discretion.

31. In many other Articles of the Basic Law, the phrase functions in the same way, stipulating a requirement for legally certain means for protecting rights and freedoms.  To take just one example, Article 4 provides:

“The Hong Kong Special Administrative Region shall safeguard the rights and freedoms of the residents of the Hong Kong Special Administrative Region and of other persons in the Region in accordance with law.”

This appears alongside Article 6 in Chapter I which lays down General Principles.  It obliges the HKSAR to safeguard a broad spectrum of rights and freedoms in clear and accessible terms.

32. I can therefore see no basis for reading the words “in accordance with law” as qualifying or limiting the protection conferred by Articles 6 and 105.  Such an interpretation of the Articles in effect involves the unwarranted insertion of the word “only” before the phrase in question.  Far from diminishing the protection of those Articles, the phrase confers the added protection of legal certainty.

33. The ancillary points relied on by the Board do not impair this conclusion.  Whether a Basic Law provision confers constitutional protection on any rights depends on its proper interpretation and not merely on the Chapter heading of the section in which it is located. Articles 6 and 105 expressly confer protection on private property rights and it is nothing to the point that they are not located in Chapter III dealing with Fundamental Rights.  Various Articles conferring guaranteed rights can be found in other Chapters.  For instance, the important constitutional rights to a fair trial and to the presumption of innocence are found in Article 87 in Chapter IV, Section 4 which deals with the Judiciary.  And Article 121 conferring protection on land leases is found in Chapter V, Section 2.  Article 105 is likewise found in Chapter V.[29]

34. Contrary to the view taken by the Court of Appeal in Fine Tower Associates Ltd v Town Planning Board,[30]Article 7 does not bear on the question of whether Articles 6 and 105 are engaged.  It lays down the general principle that land and natural resources in the HKSAR are State property and allocates the responsibility and revenue from their management, use, development and leasing, etc, to the HKSAR Government.  Where the Government leases or grants land to some person, Article 6 plays the complementary role of guaranteeing protection of the private property rights acquired.

35. Neither does the fact that Article 105 makes no provision for compensation for interference with land short of expropriation have any present relevance.  Conferment of a right to compensation in deprivation cases does not diminish the protection conferred against other forms of interference with the right to acquire, use, dispose of and inherit property.

D.4b Intrinsic restrictions

36. The Board’s other argument,[31] which I also do not accept, is that Hysan’s and OGL’s property rights do not attract the protection of Articles 6 and 105 against planning restrictions because their rights are intrinsically subject to the imposition of such constraints so that the restrictions should not be regarded as encroachments on rights guaranteed by those Articles. 

37. In the present case, the developers’ challenge is not to the constitutionality of the TPO itself.  The challenge is to the Board’s decisions taken in the purported exercise of statutory powers conferred by that Ordinance.  The restrictions complained of are new, constraining the use by Hysan and OGL of the land in ways which did not previously apply while the sites were in their ownership.  In these circumstances, I do not accept that the more restrictive BHRs, PHRs, NBAs, setbacks and building gap imposed by the Board can be disregarded as mere incidents of ownership which do not engage the Articles 6 and 105 rights.

38. An argument similar to the Board’s was not accepted by the ECtHR in JA Pye (Oxford) Ltd v United Kingdom.[32] The Chamber rejected the suggestion that loss of the applicant’s land to a neighbouring land owner by adverse possession was merely an incident of the land’s ownership so that A1P1 was not engaged.  It stated:

“... the pre-existing rules on adverse possession could not be said to be an incident of the applicant companies' property right at the time of its acquisition such that Art 1 ceased to be engaged when the relevant provisions took effect and the property right was lost after 12 years' adverse possession.”[33]

39. This was upheld by the Grand Chamber:

“... Where there is a dispute as to whether an applicant has a property interest which is eligible for protection under Art.1 of Protocol No.1, the Court is required to determine the legal position of the applicant.

In the present case, the applicant companies were the beneficial owners of the land in Berkshire, as they were successive registered proprietors. The land was not subject to a right of pre-emption, as in the case of Beyeler,[34] but it was subject to the ordinary law of the land, including, by way of example, town and country planning legislation, compulsory purchase legislation, and the various rules on adverse possession. The applicant companies' possessions were necessarily limited by the various rules of statute and common law applicable to real estate.

It remains the case, however, that the applicant companies lost the beneficial ownership of 23ha of agricultural land as a result of the operation of the 1925 and 1980 Acts. The Court finds inescapable the Chamber's conclusion that Art.1 of Protocol No.1 is applicable.”[35]

40. A fortiori, in cases like the present, the fact that the statutory power to impose planning restrictions existed prior to the owner’s acquisition of the site does not mean that new and more intrusive constraints imposed by a TPB decision made after the land’s acquisition can be disregarded as mere incidents of ownership so as to exclude the protection of Articles 6 and 105.  Interference with the owners’ protected rights occurs when the new restrictions take effect, derogating from those rights and thus engaging those Articles. 

41. I should however make it clear that I am not excluding the possibility that it may in law be open to an owner to raise constitutional objections based on Articles 6 and 105 in respect of planning restrictions which were in place prior to his acquisition of the land. I wish to leave open such an argument since a similar question was the subject of disagreement in the House of Lords in Wilson v First County Trust Ltd (No 2).[36] There, the issue was whether A1P1 was engaged when a contract of loan made on the security of a car pawned to a pawnbroker was rendered unenforceable by a provision in the English Consumer Credit Act 1974.   Lord Hope of Craighead,[37] Lord Hobhouse of Woodborough[38] and Lord Scott of Foscote[39] held that it was not engaged since the Act had invalidated the contract from the outset so that no existing contractual right had been interfered with when the Act operated to make the transaction unenforceable.  Lord Nicholls of Birkenhead disagreed, stating:

“... The proposition advanced by the Secretary of State [accepted by the three members of the panel referred to above] would mean that however arbitrary or discriminatory such legislation might be, if it was in existence when the transaction took place a court enforcing human rights values would be impotent. A Convention right guaranteeing a right of property would have nothing to say. That is not an attractive conclusion.”[40]

42. The present discussion relates only to challenges made to decisions taken by an executive authority pursuant to statutory machinery, not involving a challenge to the constitutionality of the empowering statute itself.  Different types of legislation may give rise to different forms of interference having differing impacts upon property rights.  I wish also to leave open the question whether, and if so, in what way Articles 6 and 105 are engaged on a challenge to the constitutionality of such legislation.

E.  Must the restrictions be subjected to a proportionality analysis?

E.1  A criterion for assessing derogations from constitutional rights

43. This Court has recognized that certain constitutionally guaranteed rights, such as the prohibition against torture and cruel, inhuman or degrading treatment or punishment,[41] are absolute and that in such cases, there is no room for any proportionality analysis.[42]

44. Where the guaranteed right is not absolute, the law may validly create restrictions limiting such rights.[43]  It is for the Court to determine the permissible extent of those restrictions and it does so by a process referred to as a proportionality analysis.

45. That lawful limitations of guaranteed rights may validly be created is acknowledged by Article 39 of the Basic Law which states:

(1)   The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.

(2)    The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions of the preceding paragraph of this Article. 

46. Article 39(2) therefore makes it clear (although stating it in negative terms) that such restrictions are permissible but that they must be “prescribed by law”, satisfying the requirement of legal certainty, and must be consistent with the provisions of the specified international instruments as implemented through the laws of the HKSAR.  Thus, certain limits are placed on the nature and extent of permissible restrictions by provisions of the Bill of Rights contained in the Bill of Rights Ordinance[44] which implements the International Covenant on Civil and Political Rights in Hong Kong law.

47. Leung Kwok Hung v HKSAR[45] provides an example.  This was a case involving a challenge to the constitutionality of a statutory scheme giving powers to the Commissioner of Police to regulate public processions on the basis that the scheme violated the right of peaceful assembly guaranteed by Article 27 of the Basic Law[46] and Article 17 of the Bill of Rights.

48. Article 17 states:

“The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.”

49. It was held that in accordance with Article 39(2), the right to peaceful assembly both under the Basic Law and the Bill of Rights could be subjected to restrictions provided that two requirements were satisfied: (i) that the restriction must be prescribed by law and (ii) that it must be necessary in a democratic society, with the aim of protecting national security or public safety, etc.[47] The requirement that the measure be “necessary in a democratic society” was interpreted to require application of a proportionality test[48] and the purposes specified (ie, the protection of national security, etc) were held to represent an exhaustive list of the permissible aims of any limitation of the right.[49]

50. Where the constitutional right invoked is not absolute but no express guidance is given by the Basic Law or Bill of Rights as to the allowable limits of derogations from that right, principles have been evolved by the courts as to how the proportionality analysis is to be applied, drawing heavily on the jurisprudence of other jurisdictions.[50]

51. Thus, in HKSAR v Lam Kwong Wai,[51] a reverse onus provision regarding the offence of possession of an imitation firearm was challenged as violating the guarantee of the presumption of innocence in Article 87(2) of the Basic Law[52] and Article 11(1) of the Bill of Rights.[53] Neither of those Articles contains any express provisions regarding inroads into the protected right.  Sir Anthony Mason NPJ, writing for the Court, explained the approach to proportionality in the following terms:[54]

“In the context of contravention, the first question is whether s.20(3)(c) derogates from the presumption of innocence. If this question is answered in the affirmative, two further questions arise. Stated in accordance with the formulation in Leung Kwok Hung & Others v HKSAR (2005) 8 HKCFAR 229 at p 253I, they are:

(1) is the derogation rationally connected with the pursuit of a legitimate societal aim (the rationality test); and

(2) are the means employed, the imposition of the reverse persuasive onus, no more than is necessary to achieve that legitimate aim (the proportionality test)?”

E.2  A structured, three-step inquiry

52. In subsequent authorities, after a finding that the invoked right is engaged, the two questions referred to by Sir Anthony Mason NPJ have tended to be expressed as a three-step inquiry.  Thus, in Mok Charles v Tam Wai Ho,[55] Ma CJ formulated the approach as follows:

“The proportionality test, which is a well known test in our courts, consists of the following analysis in respect of any restriction or limitation:

(a) The restriction or limitation must pursue a legitimate aim.

(b) The restriction or limitation must also be rationally connected to that legitimate aim.

(c) The restriction or limitation must also be no more than is necessary to accomplish that legitimate aim.”

53. In their joint judgment in Official Receiver v Zhi Charles,[56] Fok PJ and Stock NPJ summarised the position as follows:

“There is a well-established sequence of questions that must be addressed when an issue of constitutionality is raised before a court. The first question is concerned with the identification of a constitutional right and asks whether such a right is engaged. If not, the constitutional challenge fails in limine. The next question is whether the legislative provision or conduct complained of amounts to an interference with, or restriction of, that right. Again, if the answer is no, the challenge fails without further inquiry. If, on the other hand, the answer to that question is yes, then it is necessary to consider whether those rights are absolute, in which case no infringement or restriction is permitted and no question of proportionality arises, or, if not absolute, whether the relevant infringement or restriction can be justified on the proportionality analysis.

The proportionality analysis in a case like the present involves asking, first, whether the infringement or restriction pursues a legitimate societal aim; secondly, whether the infringement or restriction is rationally connected with that legitimate aim; and thirdly, whether the infringement or restriction is no more than is necessary to accomplish that legitimate aim.”

E.3  Proportionality in the present case

54. In the light of the foregoing, it is clear that a proportionality analysis of the planning restrictions is required in the present case.  The right of private property guaranteed by Articles 6 and 105 is engaged.  They are Articles which make no express provision regarding permissible restrictions so that the existing approach is for the Court to undertake a three-step inquiry asking (i) whether those restrictions pursue a legitimate aim; (ii) whether they are rationally connected with achieving that aim; and (iii) whether they represent a proportionate means of achieving that end.  As discussed below, there is also substantial authority for including a fourth step which involves (iv) weighing the detrimental impact of the restrictions against the social benefit gained. 

55. The first two stages of the inquiry have attracted little discussion in the present case.  Hysan and OGL have tended to assume (without conceding) that the planning restrictions do pursue a legitimate aim and that they are rationally connected thereto.  They are right to do so. There is no suggestion that the Board was acting other than in good faith in the discharge of its duties under the TPO.  Its decisions have been successfully challenged on administrative law grounds, but it cannot be suggested that the objectives of lawfully imposed planning restrictions would not provide a legitimate basis for derogating from property rights.  The purposes of such restrictions are stated in section 3 of TPO which identifies the Board’s function as the exercise of its town planning powers “with a view to the promotion of the health, safety, convenience and general welfare of the community” which obviously involve legitimate aims.  The present planning restrictions aimed at facilitating air ventilation and pedestrian flow and at setting appropriate building heights, if properly arrived at, would clearly have been rationally connected to achieving those objectives.

F.  Assessing proportionality

56. It is at the third stage of the inquiry, assessing the proportionality of the impugned measure in relation to the legitimate aim, that issue has been joined.  It is at that stage that different standards have been evolved by the courts.  However, before embarking upon an examination of the different standards, it is appropriate to examine the nature of the structured approach to the assessment and to consider whether it should comprise a three or four-step inquiry.

F.1  The adoption of a structured approach in Hong Kong

57. The first case on the Hong Kong Bill of Rights to reach the Privy Council was Attorney-General of Hong Kong v Lee Kwong-kut,[57] which concerned the presumption of innocence and certain reverse onus provisions.  It was submitted by counsel that the structured proportionality approach of Dickson CJ in the Canadian Supreme Court in R v Oakes[58] (to which I shall return) should be endorsed.  However, Lord Woolf, delivering the Privy Council’s advice, considered it “not necessary, at least in the vast majority of cases, to follow the somewhat complex process”[59] Dickson CJ had adopted.  Instead, the Privy Council opted for a broad concept of “reasonableness”, holding that the Court should simply ask itself “whether, under the provision in question, the prosecution is required to prove the important elements of the offence; while the defendant is reasonably given the burden of establishing a proviso or an exemption or the like”[60] and if so, hold that no contravention has occurred.

58. That approach did not take root.  In the next (and last) Hong Kong Bill of Rights case to get to the Privy Council, Ming Pao Newspapers Ltd v AG of Hong Kong,[61] Lord Jauncey of Tullichettle who delivered the advice, turned to the ECtHR’s jurisprudence and approved the proposition that “[any] restrictions on the guaranteed right of freedom of expression must be proportionate to the aims sought to be achieved thereby”,[62] noting that “[the ECtHR] accepts that contracting states enjoy a margin of appreciation in determining what is necessary to achieve a legitimate aim.”[63] The Privy Council proceeded to employ a proportionality analysis[64] and concluded that the enactment “cannot be described as ‘so unreasonable as to be outside the state’s margin of appreciation’” adding that their Lordships thought the legislator’s decision “eminently sensible and by no means disproportionate to the important objectives sought to be achieved”.[65]  As we have seen, in subsequent cases in the HKSAR,[66] a three-step proportionality analysis has generally been adopted.

59. It is quite understandable that the more structured proportionality approach – what Baroness Hale of Richmond DPSC called “an orderly process of decision-making”[67] – should have been preferred over the relatively amorphous standard of reasonableness.  In Bank Mellat v Her Majesty’s Treasury (No 2),[68] (where a four-step approach was adopted) Lord Reed JSC explained why:

“Its attraction as a heuristic tool is that, by breaking down an assessment of proportionality into distinct elements, it can clarify different aspects of such an assessment, and make value judgments more explicit.”

60. However, the point to emphasise is that the three (or four) distinct elements of the analysis cannot be treated as existing in isolated airtight compartments, unaffected by each other.  Recent authority has highlighted the fluidity and flexibility of the proportionality concept and the fact that its elements are conceptually inter-related and inter-dependent.  As Lord Sumption JSC noted in the Bank Mellat case:

“The requirements of rationality and proportionality, as applied to decisions engaging the human rights of applicants, inevitably overlap.”[69]

61. His Lordship described his approach to proportionality as one which:

“... depends on an exacting analysis of the factual case advanced in defence of the measure, in order to determine (i) whether its objective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of the individual and the interests of the community.”[70]

62. Lord Sumption JSC accepted that the four requirements are logically separate, but reiterated that “in practice they inevitably overlap because the same facts are likely to be relevant to more than one of them.” He pointed out that “... in the normal case where the effectiveness of the measure and the degree of interference are not absolute values but questions of degree”, those two elements are “inversely related to each other”.  In other words, “The question is whether a less intrusive measure could have been used without unacceptably compromising the objective.”[71]

63. In Pham v Secretary of State for the Home Department (Open Society Justice Initiative Intervening),[72] his Lordship further underscored the inter-relationship among elements of the analysis, showing that the importance of the right encroached upon influences the substance of the proportionality assessment:

“... I doubt whether it is either possible or desirable to distinguish categorically between ordinary and fundamental rights, applying different principles to the latter. There is in reality a sliding scale, in which the cogency of the justification required for interfering with a right will be proportionate to its perceived importance and the extent of the interference.”

F.2  Three-step and four-step approaches

64. The tendency of the Hong Kong courts to adopt a three-step approach to proportionality is in line with the influential 1999 judgment of Lord Clyde in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing,[73] where his Lordship stated a test which asks:

“... whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective.”

65. However, a substantial body of authority exists for adding a fourth step, as exemplified by Lord Sumption JSC’s judgment in the Bank Mellat case cited above.[74] Indeed, in common law jurisprudence, a four-step approach can be found dating back to the important judgment in 1986 of Dickson CJ in R v Oakes[75] dealing with proportionality in the context of section 1 of the Canadian Charter of Rights and Freedoms.[76] Section 1 limits derogations from guaranteed rights to those which “can be demonstrably justified in a free and democratic society”.  Dickson CJ held that for such justification to be shown, the objective of the restriction had to be of sufficient importance to warrant overriding the guaranteed right; that the means chosen had to be proportionate, balancing the interests of society and individuals or groups; and that such means had to be rationally connected to the objective and such as to impair the constitutional right “as little as possible”.  His Honour added that “there must be a proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of ‘sufficient importance’”.[77]  As McLachlin J explained in RJR-Macdonald Inc v The Attorney General of Canada,[78] the final stage of the proportionality analysis involves “balancing the negative effects of the infringement of rights against the positive benefits associated with the legislative goal”.  And as her Honour there pointed out, it is only necessary to consider this fourth step if the first three requirements of legitimate aim, rational connection and minimal impairment are satisfied.

66. In Huang v Secretary of State for the Home Department,[79] Lord Bingham of Cornhill accepted counsel’s submission that the decision in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing,[80] was deficient in omitting reference to the fourth step.  Referring to “the overriding requirement” in Dickson CJ’s judgment in R v Oakes, his Lordship stated:

“This feature is ... the need to balance the interests of society with those of individuals and groups. This is indeed an aspect which should never be overlooked or discounted. The House recognised as much in R (Razgar) v Secretary of State for the Home Department,[81] when, having suggested a series of questions which an adjudicator would have to ask and answer in deciding a Convention question, it said that the judgment on proportionality: ‘must always involve the striking of a fair balance between the rights of the individual and the interests of the community which is inherent in the whole of the Convention. The severity and consequences of the interference will call for careful assessment at this stage.’ (see para 20)”

67. A four-step approach appears now to be generally accepted in the United Kingdom.[82] As Lord Reed JSC puts it in the Bank Mellat case:[83] “... the question at step four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure.”  And as Baroness Hale of Richmond DPSC states in R (Lord Carlile of Berriew) v Secretary of State for the Home Department,[84] the fourth question “can be encapsulated as ‘do the ends justify the means’?”

68. The fourth stage inquiry has also featured prominently in Strasbourg and UK jurisprudence by reference to a concept of “fair balance” in cases on A1P1.[85] I should interject (since it is a matter raised in the question on which leave to appeal was granted) that, subject to the usual need to pay careful attention to any differences that may arise from the language of A1P1 and the context of decisions on that Article, A1P1 jurisprudence is generally of assistance when the protection of property rights comes to be considered.

69. It should be noted that “fair balance” is used in more than one sense in the case-law.  It is often said generally to be an objective inherent in the whole of the ECHR[86] and in some A1P1 cases, “fair balance” has been equated with a standard of reasonable necessity in applying a proportionality test.[87]  But relevantly for present purposes, “fair balance” has been given a meaning reflecting a fourth step which mandates striking a fair balance “between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights”.[88]  In particular, it has been held that:

“... the Court must assess whether, taken overall, the applicants can be said to have suffered an ‘individual and excessive burden’.”[89]

F.3  Should Hong Kong adopt a four-step inquiry?

70. As we have seen, Lord Sumption JSC noted in Bank Mellat v Her Majesty’s Treasury (No 2),[90] that the elements of the four-step analysis inevitably overlap.  There is force in the argument that where a measure has passed the tests set at the first three stages – it pursues a legitimate aim, is rationally connected thereto and is no more than necessary to achieve that aim (a standard which is further discussed below) – such a measure could be expected to reflect a reasonable balance between the general interest of the community and protection of the individual’s fundamental rights.  One might therefore doubt the need for the additional step.

71. In Alberta v Hutterian Brethren of Wilson Colony[91] in the Canadian Supreme Court, that issue was addressed by McLachlin CJ:

“It may be questioned how a law which has passed the rigours of the first three stages of the proportionality analysis — pressing goal, rational connection, and minimum impairment — could fail at the final inquiry of proportionality of effects. The answer lies in the fact that the first three stages of Oakes are anchored in an assessment of the law’s purpose. Only the fourth branch takes full account of the ‘severity of the deleterious effects of a measure on individuals or groups’. As President Barak explains:

Whereas the rational connection test and the least harmful measure test are essentially determined against the background of the proper objective, and are derived from the need to realize it, the test of proportionality (stricto sensu) examines whether the realization of this proper objective is commensurate with the deleterious effect upon the human right. . . . It requires placing colliding values and interests side by side and balancing them according to their weight. [‘Proportional Effect: The Israeli Experience’ (2007), 57 UTLJ 369, at p 374.]

In my view, the distinction drawn by Barak is a salutary one, though it has not always been strictly followed by Canadian courts. Because the minimal impairment and proportionality of effects analyses involve different kinds of balancing, analytical clarity and transparency are well served by distinguishing between them. Where no alternative means are reasonably capable of satisfying the government’s objective, the real issue is whether the impact of the rights infringement is disproportionate to the likely benefits of the impugned law. Rather than reading down the government’s objective within the minimal impairment analysis, the court should acknowledge that no less drastic means are available and proceed to the final stage of Oakes.”

72. Lord Reed JSC commented:

“In relation to the fourth criterion, there is a meaningful distinction to be drawn (as was explained by McLachlin CJ in Alberta v Hutterian Brethren of Wilson Colony [2009] 2 SCR 567, para 76) between the question whether a particular objective is in principle sufficiently important to justify limiting a particular right (step one), and the question whether, having determined that no less drastic means of achieving the objective are available, the impact of the rights infringement is disproportionate to the likely benefits of the impugned measure (step four).”[92]

73. In my view, the case for accepting in principle the applicability of a fourth step in the proportionality analysis is logically compelling although in the great majority of cases, its application would not invalidate a restriction which has satisfied the requirements of the first three stages of the inquiry.  One would hope and expect that most laws and governmental decisions at the sub-constitutional level internally reflect a reasonable balance between the public interest pursued by such laws and the rights of individuals or groups negatively affected by those laws.  In such cases, where the law passes the first three tests, it would be unlikely to fail the test of proportionality “stricto sensu” (in the narrow, overall sense) at the fourth stage.  But one may exceptionally be faced with a law whose content is such that its application produces extremely unbalanced and unfair results, oppressively imposing excessive burdens on the individuals affected.

74. In his book Proportionality - Constitutional Rights and their Limitations,[93]Professor Aharon Barak, the former President of the Supreme Court of Israel, provides some examples[94] and refers to a hypothetical instance given by Professor Dieter Grimm[95] which illustrates the nature of the test and its potentially moral content as well as its importance:

“Assume a law that allows the police to shoot a person (even if this shooting would lead to that person’s death) if it is the only way to prevent that person from harming another’s property. This law is designed to protect private property, and therefore its purpose is proper. The means chosen by the legislator are rational, since it advances the proper purpose. Therefore, the law meets the necessity test as well. However, the provision is still unconstitutional because the protection of private property cannot justify the taking of human life.”[96]

75. As Professor Grimm points out (referring to what I have been calling the “fourth step” as the “third step”):

“... the impact of an infringement of a fundamental right can be fully assessed only in the third step. The two previous steps can only reveal the failure of a law to reach its objective; they cannot evaluate the relative weight of the objective of the law, on the one hand, and the fundamental right, on the other, in the context of the legislation under review.”[97]

76. The fourth step therefore requires the Court to examine the overall impact of the impugned measure and to decide whether a fair balance has been struck between the general interest and the individual rights intruded upon, the requirement of such a fair balance being inherent in the protection of fundamental rights.[98]  As the ECtHR pointed out in the context of the ECHR in Soering v United Kingdom[99]:

“... inherent in the whole of the Convention is a search for a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.”

77. Although this Court has not explored in detail the appropriateness of adding a fourth step, it has on several occasions referred to the need to balance the general interest of the community against the rights of the individual encroached upon.  Thus, Leung Kwok Hung v HKSAR,[100] the majority held that in applying a proportionality test, “a proper balance is struck between the interests of society on the one hand and the individual’s right of peaceful assembly on the other.”  Similarly, in Koon Wing Yee v Insider Dealing Tribunal (2008),[101] a case concerning the privilege against self-incrimination, Sir Anthony Mason NPJ acknowledged “... the need for a fair balance between the general interest of the community and the personal rights of the individual”, citing Sporrong and Lonnroth v Sweden,[102] a leading case on A1P1, in which the ECtHR endorsed a fourth step test,[103] holding that the Swedish measures had upset the fair balance in that they had caused the applicants to bear “an individual and excessive burden”.  His Lordship went on to contrast the case at hand with other cases where it had been held “that the legislation struck a fair balance between protection of an individual’s rights and the public interest...”[104]  And in A v Commissioner of Independent Commission Against Corruption,[105] another self-incrimination case, the impugned measure was held to represent “a fair balance between the public interest in realising the legitimate aim of suppressing corruption and protection of the fundamental rights of the individual.”

78. While in the great majority of cases the result arrived at after undertaking the first three inquiries is unlikely to be changed by it, a four-step analysis should, in my view, be explicitly adopted in Hong Kong.  Without its inclusion, the proportionality assessment would be confined to gauging the incursion in relation to its aim.  The balancing of societal and individual interests against each other which lies at the heart of any system for the protection of human rights would not be addressed.  This requires the Court to make a value judgment as to whether the impugned law or governmental decision, despite having satisfied the first three requirements, operates on particular individuals with such oppressive unfairness that it cannot be regarded as a proportionate means of achieving the legitimate aim in question.  But that should not cause the Court to shy away from the fourth question since such a value judgment is inherent in the proportionality analysis. As Lord Nicholls of Birkenhead noted in Wilson v First County Trust Ltd (No 2):[106]

“The court must decide whether the means employed by the statute to achieve the policy objective is appropriate and not disproportionate in its adverse effect. This involves a ‘value judgment’ by the court, made by reference to the circumstances prevailing when the issue has to be decided.”

79. And as Lord Reed JSC pointed out in Bank Mellat:

“An assessment of proportionality inevitably involves a value judgment at the stage at which a balance has to be struck between the importance of the objective pursued and the value of the right intruded upon.”[107]

80. I hasten to add that in holding that a fourth step should be added, I must not be taken to be casting doubt on the correctness of any previous decision involving a three-step assessment.

G.  What standards should the Court adopt in assessing proportionality?

81. I turn then to the standards applicable at the third stage of the inquiry.  Assuming that the Court has found that the impugned measures advance an aim that is legitimate and that they are rationally connected to achieving that aim, what standard (or standards) should it apply in deciding whether those measures are a proportionate means of achieving that aim?  How does the Court decide that a particular measure encroaches upon a guaranteed right to an unacceptable extent in promoting a legitimate aim, rendering that measure unconstitutional?

82. The parties have championed two main standards. Hysan and OGL advocate the Court’s adoption of a “no more than necessary” standard while the Board argues for a “manifestly without reasonable foundation” standard. 

G.1  “No more than necessary” – a standard of reasonable necessity

83. As we have seen, in adopting the proportionality principle, the Hong Kong courts have referred to the third stage of the inquiry as posing the question whether the encroaching measure is “no more than necessary” for advancing the legitimate aim espoused.  That is a natural way of expressing the test since it reflects the essential purpose of the exercise: the Court’s endeavour to accommodate acceptable limitations of constitutional rights in the pursuit of a legitimate societal interest while preserving to the maximum extent the guarantees laid down in the constitution.  However, the words “no more than necessary” do not lay down a strict, bright line test.  They lay down a test of reasonable, not strict, necessity.

84. Thus, in an A1P1 deprivation case, the ECtHR in James v United Kingdom,[108] held that there must be “a reasonable relationship of proportionality between the means employed and the aim sought to be realised”. It rejected the applicants’ argument that “only if there was no other less drastic remedy for the perceived injustice that the extreme remedy of expropriation could satisfy the requirements of Article 1”, commenting:

“This amounts to reading a test of strict necessity into the Article, an interpretation which the Court does not find warranted. The availability of alternative solutions does not in itself render the leasehold reform legislation unjustified; it constitutes one factor, along with others, relevant for determining whether the means chosen could be regarded as reasonable and suited to achieving the legitimate aim being pursued, having regard to the need to strike a ‘fair balance’.”

85. The element of reasonableness was emphasised by McLachlin J in RJR-Macdonald Inc v The Attorney General of Canada”:[109]

“As the second step in the proportionality analysis, the government must show that the measures at issue impair the right of free expression as little as reasonably possible in order to achieve the legislative objective. The impairment must be ‘minimal’, that is, the law must be carefully tailored so that rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement .... On the other hand, if the government fails to explain why a significantly less intrusive and equally effective measure was not chosen, the law may fail.”

86. In the United Kingdom, as explained by Lord Sumption JSC, the Court adopts a standard relative to the objective pursued, asking “whether a less intrusive measure could have been used without unacceptably compromising the objective”.[110]  His Lordship also pointed out that the standard operates in relation to rights viewed as on a “sliding scale” in which “the cogency of the justification required for interfering with a right will be proportionate to its perceived importance and the extent of the interference”.[111] The test is one of reasonableness:

“The court must consider whether some less onerous alternative would have been available without unreasonably impairing the objective.”[112]

87. In Hong Kong, in Fok Chun Wa v Hospital Authority,[113] Ma CJ recognized that a strict necessity test would cause problems in practice, citing Blackmun J who pointed out:[114]

“... a judge would be unimaginative indeed if he could not come up with something a little less ‘drastic’ or a little less ‘restrictive’ in almost any situation, and thereby enable himself to vote to strike legislation down.”

88. That the test in Hong Kong is one of reasonable necessity was reiterated in Official Receiver v Zhi Charles,[115] a case involving the freedom to travel, where reference was made to the RJR-Macdonald Inc case and Fok PJ and Stock NPJ stated that a minimal impairment test did not mean “that the restriction must be the very least intrusive method of securing the objective which might be imagined or devised”.

G.2  “Manifestly without reasonable foundation”

G.2a A concept linked to the margin of appreciation

89. The phrase “manifestly without reasonable foundation” is familiar in the jurisprudence of the ECtHR.  It is closely related to the concept of “margin of appreciation”.  The Strasbourg Court being a supra-national Court, recognizes that in some cases, it is appropriate to regard the national courts of Member States[116] as being better placed to assess the legitimacy and importance of national policy objectives and to determine what encroachments on Convention rights are acceptable as the means of advancing those aims.  In such cases, the ECtHR has afforded Member States a wide margin of appreciation and has not regarded encroaching legal measures as disproportionate unless they could be said to be “manifestly without reasonable foundation”.

90. In Buckley v United Kingdom,[117] the ECtHR acknowledged that the scope of the margin of appreciation will vary according to the context, and that relevant factors include the nature of the Convention right, its importance for the individual and the nature of the activities concerned.

91. The ECtHR has, for example, afforded a wide margin of appreciation and adopted a “manifestly without reasonable foundation” threshold in cases involving a Member State’s political and socio-economic policies.  Thus, in James v United Kingdom,[118] a case concerned with leasehold enfranchisement legislation which the applicants claimed violated A1P1, the Court stated:

“... the decision to enact laws expropriating property will commonly involve consideration of political, economic and social issues on which opinions within a democratic society may reasonably differ widely. The Court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment be manifestly without reasonable foundation.”

92. In Lithgow  v United Kingdom,[119] the Court explained its approach:

“Because of their direct knowledge of their society and its needs and resources, the national authorities are in principle better placed than the international judge to appreciate what measures are appropriate in this area and consequently the margin of appreciation available to them should be a wide one. ... Accordingly, the Court's power of review in the present case is limited to ascertaining whether the decisions regarding compensation fell outside the United Kingdom's wide margin of appreciation; it will respect the legislature's judgment in this connection unless that judgment was manifestly without reasonable foundation.”

93. Accordingly, in such cases, the Member State enjoys a broad margin of appreciation:

“... both with regard to the existence of a problem of public concern warranting measures of control and as to the choice of the detailed rules for the implementation of such measures. The Court will respect the legislature's judgement as to what is in the general interest unless that judgement be manifestly without reasonable foundation.”[120]

94. It is relevant to note that the ECtHR has placed town planning decisions within this category.  Thus, in Sporrong and Lonnroth v Sweden,[121] the Court:

“[found] it natural that, in an area as complex and difficult as that of the development of large cities, the Contracting States should enjoy a wide margin of appreciation in order to implement their town-planning policy.”

95. This has become accepted doctrine, as the Court indicated in Phocas v France:[122]

“Like the Government and the Commission, the Court reiterates that the Contracting States enjoy a wide margin of appreciation in order to implement their town-planning policy.”

96. The “manifest” standard has also been adopted in the United Kingdom.  Thus, in R (Carson) v Secretary of State for Work and Pensions,[123] referring to the standard as marking out “the appropriate intensity of scrutiny” Lord Walker of Gestingthorpe held that withholding of cost of living increases from certain welfare recipients was not manifestly without reasonable foundation.  Similarly, in R (SG and Others) Secretary of State for Work and Pensions (Child Poverty Action Group Intervening),[124] Lord Reed JSC applied the “manifest” standard where the question of proportionality involved “controversial issues of social and economic policy, with major implications for public expenditure”, the determination of such issues being regarded as “pre-eminently the function of democratically elected institutions”.

G.2b The “manifest” threshold and margin of discretion in domestic cases

97. Obviously, some matters of concern to the Strasbourg Court, such as the relationship between itself as a supra-national court and Member States with differing political and socio-economic policies, have no relevance to issues in a domestic court.

98. Nonetheless, it is well-recognized that parallel considerations arise in a domestic context where the court is determining the proportionality of a measure taken by the legislature or executive.  In R v Director of Public Prosecutions, Ex p Kebilene,[125] Lord Hope of Craighead, referring to the need for domestic courts to decide Convention-based questions involving issues of proportionality, stated:

“In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In some circumstances it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention.”

99. Objection has been taken to the suggestion of “deference” by the judiciary partly because (as Lord Sumption JSC puts it) of “overtones of cringing abstention in the face of superior status”[126] conveyed by that word and, more substantially, because it is the Court and not the legislative and executive authorities that is “the ultimate arbiter of the appropriate balance between two incommensurate values: the Convention rights engaged and the interests of the community relied on to justify interfering with it.”[127]  I agree that it would be better to use different terminology to describe the demarcation of functions between the judiciary and the other branches of government,[128] but, as Ma CJ has noted, the expression used is not of prime significance.  The important consideration is the need in this context to recognize the different constitutional roles of the judiciary on the one hand and the legislative and executive authorities on the other.[129]

G.2c Margin of discretion in Hong Kong

100. Along with domestic courts in the UK, this Court has recognized the existence of a domestic doctrine similar to that of the margin of appreciation at the supra-national level which I shall refer to as “the margin of discretion”.[130] It did so, for instance, in Lau Cheong v HKSAR,[131] a case in which particular weight was given to the legislature’s decision to impose a mandatory sentence of life imprisonment for murder, holding this not to be “manifestly disproportionate”.[132]  And in HKSAR v Lam Kwong Wai,[133] Sir Anthony Mason NPJ commented:

“The weight to be accorded to the legislative judgment by the Court will vary from case to case depending upon the nature of the problem, whether the executive and the legislature are better equipped than the courts to understand its ramifications and the means of dealing with it.”

101. A prominent example of this Court affording the government a wide margin of discretion and linking this to a “manifestly without reasonable foundation” standard for intervention is Fok Chun Wa v Hospital Authority,[134] where the applicants alleged that charging Mainland women married to Hong Kong residents higher obstetrics fees was discriminatory in violation of Article 25 of the Basic Law and Article 22 of the Bill of Rights.  Ma CJ, with whom the other members of the Court agreed, noted how the ECtHR doctrine had been taken up in cases like ex p Kebilene and then in the Hong Kong courts; and how that doctrine was particularly relevant to challenges to the government’s socio-economic policies, especially involving the allocation of limited public resources. His Lordship stated:[135]

“In the area of healthcare, where resources are also limited and the demands from many different interests heavy, the courts are not equipped (nor is it their role) to make the ‘difficult and agonizing judgments’ (in the words of Sir Thomas Bingham MR in R v Cambridge Health Authority, ex p B [1995] 1 WLR 898, 906E-F) that have to be made allocating funds to one sector or another. ...

In this area where limited public funds are involved, the courts have recognised that lines have had to be drawn by the executive or the legislature. On the whole, save where the line has been drawn in contravention of core values (this will be further discussed below) or where it is shown to be manifestly without reasonable foundation, the courts have left it to the authorities to identify the relevant line to be drawn: see R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] 1 AC 1312 , 1348C-D ([33]) where Lord Bingham of Cornhill made the point that it was for the Legislature to decide where the line had to be drawn, even if it meant that hard cases would arise when persons would fall within the wrong side of the line; Mathews v Diaz 426 US 67, 83-84 (a decision of the US Supreme Court).”

102. In summarising the position “[in] the socio-economic context, where policy considerations are best left to the executive, legislative and other authority”, Ma CJ formulated the “manifest” standard as follows:

“Where a number of alternative, but reasonable, solutions to a problem exist, the court will not put itself in a place of the executive or legislature or other authority to decide which is the best option. That is not its role. The court will only interfere where the option chosen is clearly beyond the spectrum of reasonable options; in other words, the option has clearly gone too far (or further than necessary) to deal with the problem. In this situation, the court will not have been satisfied under the third limb of the justification test.”[136]

103. A second prominent example is to be found in Kong Yunming v Director of Social Welfare,[137] where the issue was whether the government’s imposition of a requirement of seven years’ residence in place of the single year originally required as a condition of eligibility for a basic welfare benefit violated the right to social welfare under Articles 36 and 145 of the Basic Law.  Following Fok Chun Wah,the “manifestly without reasonable foundation” threshold for intervention was adopted in the following terms:

“Where the disputed measure involves implementation of the Government's socio-economic policy choices regarding the allocation of limited public funds without impinging upon fundamental rights or involving possible discrimination on inherently suspect grounds, the Court has held that it has a duty to intervene only where the impugned measure is ‘manifestly without reasonable justification’.”[138]

104. It was explained that this approach was linked to the ECtHR’s “margin of appreciation” adapted for application in our domestic context:

“That is a test initially applied by the European Court of Human Rights while according a broad margin of appreciation to member States in setting and implementing their socio-economic policies. As the Chief Justice points out, the margin of appreciation principle has previously been adapted to apply in the context of our domestic law. It is appropriate similarly to apply the ‘manifestly without reasonable foundation’ test in our domestic context.”

G.3  Factors relevant to choosing the basis for assessing the impugned planning restrictions

105. What principles should the Court apply in choosing between the competing standards?  If it should become necessary for the Court to determine whether, after re-considering the developers’ objections, the Board has acted in accordance with their Article 6 and 105 rights, Hysan and OGL contend that the Court should ask whether the restrictions then imposed are no more than reasonably necessary to achieve the legitimate aims advocated.  The Board, on the other hand, argues that in such eventuality, the Court ought only to intervene if satisfied that such restrictions are manifestly without reasonable foundation. 

106. In principle, the choice of the standard for the Court’s intervention depends on the extent of the appropriate margin of discretion, determined by factors which affect the proportionality analysis in the circumstances of the particular case.  In cases calling for a wide margin of discretion, the “manifest” threshold may well be apposite, whereas cases admitting of a narrow or no margin of discretion are more appropriately analysed on the basis of “reasonable necessity”.  Which standard or threshold to choose therefore depends on the appropriate width of the margin.

107. As we have seen,[139] in the ECtHR context the scope of the margin of appreciation is held to vary according to the context with a number of factors being relevant.  The same applies in domestic cases where such factors principally relate to (i) the significance of and degree of interference with the right in question; and (ii) the identity of the decision-maker as well as the nature and features of the encroaching measure relevant to setting the margin of discretion.[140]

G.3a The significance of and extent of interference with the right

108. A theme of the foregoing discussion has been the inter-related and inter-dependent qualities of the various elements of a proportionality analysis.  While there would be no point in attempting to construct a formal hierarchy of constitutional rights, a sliding scale has been recognized in which the cogency of the justification required for interfering with a particular right will be proportionate to the perceived importance of that right and the extent of the interference.[141] 

109. The specific right invoked may have a low significance and the lower the significance, the broader the margin of discretion is likely to be.  Thus, in Belfast City Council v Miss Behavin’ Ltd,[142] the applicant claimed that the city council’s refusal to licence use of premises as a sex shop selling pornography violated its right to free expression and its A1P1 property rights.  Lord Hoffmann held as follows:

“If article 10 and article 1 of the First Protocol are engaged at all, they operate at a very low level. The right to vend pornography is not the most important right of free expression in a democratic society and the licensing system does not prohibit anyone from exercising it. It only prevents him from using unlicensed premises for that purpose. ... This is an area of social control in which the Strasbourg court has always accorded a wide margin of appreciation to member states, which in terms of the domestic constitution translates into the broad power of judgment entrusted to local authorities by the legislature.”

110. This was also the view of Lord Neuberger of Abbotsbury PSC:

“...when it comes to restrictions on the dissemination of pornographic material, the margin of appreciation afforded to member states must, it appears to me, be wide.”[143]

111. In contrast, it has often been said that where a restriction is discriminatory on one of the “suspect grounds” (identified in Article 22 of the Bill of Rights[144]) there would have to be “very weighty” reasons justifying the incursion,[145] obviously resulting in a much narrower margin of discretion.

112. The extent of interference with the right is also obviously relevant.  A relatively trivial interference will be much easier to justify.  Thus, in Koon Wing Yee v Insider Dealing Tribunal,[146] a case about infringement of the privilege against self-incrimination, Sir Anthony Mason NPJ distinguished the case before the Court on the one hand from Brown v Stott,[147] and O’Halloran v United Kingdom,[148]on the other, pointing out that the encroachment in those cases was minor, consisting of the individual being compelled to answer “a single, simple question” whereas in Koon Wing Yee, the questions and compulsory answers were not so limited and constituted a substantial intrusion into the privilege.[149]

113. In some cases, the interference may be so great that neither proportionality analysis nor margin of discretion are meaningful concepts.  In such cases, a violation of a right may be held to have occurred on the footing that the impugned measure has destroyed “the essence of the right”.  For example, the right to marry guaranteed by Article 37 of the Basic Law and Article 19(2) of the Bill of Rights may validly be limited to some degree by rules relating to marriageable age, consanguinity and so forth.  But a law which imposes a blanket prohibition against a certain individual (a post-operative transsexual person) marrying was held to destroy the essence of the right in her case and ruled unconstitutional.[150]

G.3b The measure’s content and features relevant to the margin of discretion

114. The content and features of the impugned measure, the identity and constitutional role of its originator and any special competence possessed by such person, are likely to be highly relevant to deciding how wide the margin of discretion should be.

115. If assessment of the proportionality of the measure calls for the application of purely legal principles and an assessment which the Court is the expert to make, the primary decision-maker having no special competence or expertise, it is likely that the margin of discretion will have little role to play and that the Court will simply adopt a standard of reasonable necessity. 

116. On the other hand, a decision-maker’s views resulting in the promulgation of the impugned measure may be given much weight and thus afforded a wide margin of discretion reflected by use of a “manifest” standard where the decision-maker is likely to be better placed than the Court to assess what is needed in the public interest.[151]  The Court may for instance, be satisfied that he had special access to information; special expertise in its assessment; or an overview enabling him to assess competing and possibly prior claims for scarce resources.[152]  The Court might also refrain from intervening because the measure reflects a predictive or judgmental decision which it was the institutional role of the decision-maker to take and as to which no single “right answer” exists.[153]

117. The Court is likely to take such an approach, for instance, in relation to matters touching on national security.[154]  In Hong Kong there are, additionally, limitations placed on the Court’s role on questions touching on defence and foreign policy.[155]

118. A broad margin of discretion might also be mandated by separation of powers principles and recognition of the different institutional roles played by the Court and the relevant decision-maker.  Thus, a wide margin of discretion may be permitted to the legislature in respect of enactments allocating public resources on the footing that such distributive decisions are properly the responsibility of the legislature for which it makes itself politically accountable, rather than for the courts on a constitutional review.  A similar view was taken by this Court in Lau Cheong v HKSAR,[156] where the legislature’s decision to retain mandatory life imprisonment for murder, accompanied by statutory machinery for reviewing the prisoner’s incarceration, was regarded as a reflection of the separation of powers principle and a measure that could not be held to be manifestly disproportionate.

G.4  The meaning of “manifestly without reasonable foundation” and the relationship between the two standards

119. It should be noted that the difference between the two standards is one of degree.  Once it is recognized that the former threshold is a standard of reasonable necessity, it becomes clear that it is located on the same “reasonableness” spectrum as the standard which asks whether a measure is “manifestly without reasonable foundation”.  That may be why that phrase is sometimes referred to in the authorities as a measure of the “intensity” of judicial scrutiny rather than as a “standard”. 

120. In practice, where a wide margin of discretion exists, in applying the “manifest” standard, the Court will allow the decision-maker latitude to adopt one of a relatively wide range of possible alternatives in fashioning the impugned measure which encroaches upon the protected right.  Assuming that such measure pursues a legitimate aim and is rationally connected to achieving that aim, the Court will not be astute to insist on a potentially less intrusive measure but will only intervene to strike down the impugned provision as unconstitutional if, as Ma CJ put it in Fok Chun Wa,[157] “the option chosen is clearly beyond the spectrum of reasonable options” to deal with the problem.

121. Where, on the other hand, the standard of reasonable necessity is applicable, the “minimal impairment” approach explained by McLachlin J in RJR-Macdonald Inc v The Attorney General of Canada”[158] is apposite.  The legislative or executive authority must show that the measure impairs the right as little as reasonably possible in order to achieve the legislative objective: “If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement”.  On the other hand, if the authority “fails to explain why a significantly less intrusive and equally effective measure was not chosen” the measure may fail.  In these cases, the acceptable range of reasonable alternatives will depend on the factual context but one would expect such range to be significantly narrower than where the “manifest” threshold is applied.

122. It is perhaps worth re-iterating that while for the purposes of elucidation, two differently named standards are referred to: “reasonable necessity” and “manifestly without reasonable foundation”, they indicate positions on a continuous spectrum rather than wholly independent concepts.

123. One further point to make on the meaning of “manifestly without reasonable foundation” is that one should not be misled into thinking that the word “manifestly” suggests that the Court may dispense with a close examination of the circumstances of the case in considering whether the threshold is met.  As Lords Reed and Toulson JJSC stated in R (Lumsdon) v Legal Services Board,[159]

“It would however be a mistake to suppose that the ‘manifestly inappropriate’ test means that the court's scrutiny of the justification for the measure is cursory or perfunctory. While the court will be slow to substitute its own evaluative judgment for that of the primary decision-maker, and will not intervene merely because it would have struck a different balance between countervailing considerations, it will consider in some depth the factual foundation and reasoning underlying that judgment.”

G.5  The factors to be applied in the present case

124. Looking to the future, there is some artificiality in the discussion since there are no extant decisions of the Board pending their re-consideration of representations made by Hysan and OGL. How a proportionality analysis, if necessary, would be approached would depend on what planning restrictions result from that process.  What is stated here is therefore necessarily confined to remarks of a general nature.

125. In the present case, the developers’ rights as owners of the sites are obviously substantial and of high constitutional significance, reflecting the general principle of safeguarding private property rights guaranteed by the Basic Law.  What the extent of interference to those rights may be after the Board reconsiders the developers’ case involves a question of fact to be examined in due course. 

126. Leaving the factor of the extent of interference aside, the constitution and decision-making machinery of the Board as the originator of any potentially impugned planning restrictions would, in my view, strongly favour adoption of a broad margin of discretion near the “manifestly without reasonable foundation” end of the spectrum.  As Reyes J pointed out in his OGL judgment,[160] “[p]lanning is a holistic process, involving balancing numerous factors”.  Draft OZPs and individual planning restrictions are the product of a decision-making process carried out by machinery created by statute and designed to ensure consideration of competing views after consultation with the public and with the parties affected with the benefit of input from relevant experts.  Planning decisions are made with entire districts, and not just the parties’ sites, in view.  The system includes as part of its design, the possibility of an aggrieved party seeking administrative law remedies if material flaws occur in the way the Board arrives at its decisions, as occurred in the present cases.  But if the statutory process is undertaken without judicially reviewable flaws, it is hard to see any reason for thinking that the planning restrictions imposed should be liable to be struck down as constitutionally invalid.  As Lord Neuberger of Abbotsbury PSC noted in the Carlile case:[161]

“...where, as here, the relevant decision maker has carried out the balancing exercise, and has not made any errors of primary fact or principle and has not reached an irrational conclusion, so that the only issue is the proportionality of the decision, the court cannot simply frank the decision, but it must give the decision appropriate weight, and that weight may be decisive.”

127. And in Belfast City Council v Miss Behavin’ Ltd,[162] Lord Hoffman held that: 

“If the local authority exercises that power rationally and in accordance with the purposes of the statute, it would require very unusual facts for it to amount to a disproportionate restriction on Convention rights.”

In like vein, his Lordship remarked:

“... I find it difficult to imagine a case in which a proper exercise by the council of its powers under the Order could be a breach of an applicant's Convention rights.”

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

129. I would therefore conclude that town planning restrictions, assuming them to be unassailable on traditional judicial review grounds would in general only be susceptible to constitutional review if the Court is satisfied that they are manifestly without reasonable foundation.

130. A final point might be mentioned by way of guidance to the Board.  It should be emphasised that it is the Court which has the ultimate responsibility for determining whether any restriction imposed by the Board can be subjected to a successful constitutional challenge.  The Board’s role is to carry out its duties and to exercise its powers in accordance with the TPO.  To adapt what Lord Hoffmann said in R (SB) v Governors of Denbigh High School,[163] members of the TPB cannot be expected to make the Board’s planning decisions with textbooks on human rights law at their elbows.  No doubt the Board will receive appropriate legal advice including advice regarding the property rights of others guaranteed by the Basic Law.  But it is not the Board’s task to conduct a proportionality analysis, much less to mouth incantations about proportionality in rendering its decisions.

H.   Conclusions summarised

131. I would summarise the conclusions I have reached as follows. 

132. Articles 6 and 105 are engaged in cases where it is factually established that planning restrictions imposed by the TPB encroach upon a landowner’s property rights. 

133. Where such encroachment on the right is established, the extent, if any, of the encroaching measure’s validity is determined by a proportionality analysis.

134. In Hong Kong, such a proportionality assessment has been viewed as involving a three-step process of asking (i) whether the intrusive measure pursues a legitimate aim; (ii) if so, whether it is rationally connected with advancing that aim; and (iii) whether the measure is no more than necessary for that purpose.

135. A fourth step should be added.  In line with a substantial body of authority, where an encroaching measure has passed the three-step test, the analysis should incorporate a fourth step asking whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionally protected rights of the individual, asking in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual.

136. At the third stage, assessing the permissible extent of the incursion into the protected right, two main standards have been applied.  The first is the test of whether the intruding measure is “no more than necessary” to achieve the legitimate aim in question.  This must be understood to be a test of reasonable necessity.  If the Court is satisfied that a significantly less intrusive and equally effective measure is available, the impugned measure may be disallowed.

137. An alternative standard which may be applied at the third stage is one which asks whether the encroaching measure is “manifestly without reasonable foundation”, being a standard closely related to the concept of “margin of appreciation” in ECtHR jurisprudence.

138. At the supra-national level of the ECtHR, the margin of appreciation doctrine involves the recognition that on certain issues, the Court should allow Member State latitude to decide on the legitimacy of their societal aims and the means to achieve them since they are better placed to make the assessment.  Similar considerations have led the Court at a domestic level to allow the legislative and executive authorities latitude or a “margin of discretion” to do the same, applying the “manifestly without reasonable foundation” standard in such cases.

139. The “manifest” standard has been used in cases where the Court recognizes that the originator of the impugned measure is better placed to assess the appropriate means to advance the legitimate aim espoused.  This has occurred in cases involving implementation of the legislature’s or executive’s political, social or economic policies but the principle is not confined to such cases. 

140. The location of the standard in the spectrum of reasonableness depends on many factors relating principally to the significance and degree of interference with the right; the identity of the decision-maker; and the nature and features of the encroaching measure relevant to setting the margin of discretion.

141. The difference between the two standards is one of degree, with the Court in both cases, scrutinising the circumstances of the case and the factual bases claimed for the incursion.

142. No extant planning restrictions fall to be considered since the Board is to reconsider its decisions.  In general terms, where the Board reaches decisions which are not flawed on traditional judicially reviewable grounds, any imposed restrictions which encroach upon a landowner’s property rights should be subject to constitutional review applying the “manifestly without reasonable foundation” standard.  It is considered to be highly unlikely that Board decisions imposing planning restrictions arrived at lawfully and in conformity with the principles of traditional judicial review, would be susceptible to constitutional review unless the measures are exceptionally unreasonable.

I.  Disposal of the appeal and costs

143. The Court of Appeal made orders directing the Board in each case to reconsider its decisions in accordance with the Court of Appeal’s judgment.  The orders for remitter obviously remain.  However, the orders should be varied to delete reference to such re-consideration being in accordance with the judgments of the Court of Appeal.

144. Given the nature of the issues and the conclusions that I have reached, I would make an order nisi that there be no order in respect of the costs of this appeal.  I would direct that the parties have liberty, if so advised, to lodge written submissions as to costs within 21 days after delivery of this judgment and, in default of such submissions, that the order as to costs stand as an order absolute without further direction.   

Mr Justice Tang PJ:

145. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Fok PJ:

146. I agree with the judgment of Mr Justice Ribeiro PJ.

Lord Neuberger of Abbotsbury NPJ:

147. I agree with the judgment of Mr Justice Ribeiro PJ.

Chief Justice Ma:

148. For the above reasons, these appeals are determined in accordance with the orders set out in paragraphs 143 and 144 above.