CHAN CHOI SHING (IN HIS PERSONAL CAPACITY AS THE BENEFICIARY AND IN HIS CAPACITY AS THE EXECUTOR OF THE ESTATE OF CHAN YUK LUN, DECEASED v. DISTRICT LANDS OFFICER, TAI PO AND ANOTHER

HCAL 1899/2025

[2026] HKCFI 3369

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1899 OF 2025

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(Heard together)

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J U D G M E N T

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A. Introduction

1.  This is the determination of two judicial review applications concerning the same plot of land (“Lot”) situated at Section B of Lot No. 261 in Demarcation District No. 8, Tai Po, New Territories.

2.  The Applicant is not the owner of the Lot, but (1) previously he assisted the since deceased owner (“Deceased”) of the Lot in his dealings with the Respondents, the District Lands Officer, Tai Po (“DLO”) and Director of Lands (“Director”) respectively, and (2) he is also now the sole beneficiary of the Lot under a partial will of the Deceased.

3.  In HCAL 1899/2025 (“HCAL 1899”), the Applicant seeks to challenge the decision dated 23 June 2025 (“Refusal Decision”) refusing to consider and to accede to the Applicant’s application for the issuance of Certificates of Exemption (“COEs”) in respect of the intended building, site formation and drainage works at the Lot pursuant to sections 4 and 6 of the Buildings Ordinance (Application to the New Territories) Ordinance Cap 121 (“BOANTO”).

4.  In HCAL 2744/2025 (“HCAL 2744”), the Applicant seeks to challenge the decision dated 3 October 2025 (“Revocation Decision”) revoking and cancelling Building Licence No. 171/2015 dated 28 September 2017 and registered in the Land Registry by Memorial No. 18020101370077 (“Licence”) granted to the Deceased to erect upon the Lot one building containing not more than three storeys subject to the terms and conditions contained in the Licence, and rejecting the Small House Application.

5.  On 1 September 2025, in HCAL 1899, I granted leave to apply for judicial review on the papers.

6.  The Form 86 in HCAL 2744 was filed on 11 December 2025.

7.  By consent of the parties, HCAL 1899 was stayed pending the determination of leave to apply for judicial review for HCAL 2744.

8.  On 29 December 2025, I directed that HCAL 1899 and HCAL 2744 be heard together for directions.  Two overarching questions were brought for determination, being (1) whether the impugned decision in HCAL 2744, i.e. the Revocation Decision, is amenable to judicial review, and (2) if not, whether the challenge made in HCAL 1899 is academic and should be dismissed.

9.  The matter was brought to an oral hearing on 28 April 2026. At the hearing, the Applicant was represented by Mr Leung Sze Lum of Counsel, and the Respondents were represented by Ms Ebony Ling of Counsel.

10.  At the end of the hearing, I reserved my decision.  This is my Judgment.

B.  Factual Background

11.  The Deceased was an indigenous villager, being a male person of at least 18 years of age descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong.  The Applicant, on the other hand, is not an indigenous villager.

12.  Under the Small House Policy, an indigenous villager in the New Territories may upon meeting certain criteria apply for permission to erect, for once in his lifetime, a small house on a suitable site within his own village.

13.  The Deceased acquired the Lot for the consideration of HK$300,000 by Assignment dated 29 September 2010.

14.  By the Licence dated 28 September 2017, the Government had granted a licence to the Deceased (as “Licensee”) to develop a building on the Lot with certain specifications and conditions known to be required for “Small Houses” in the New Territories.  The Licence contains, amongst others, the following terms, which are relevant for present purposes:

This Licence is granted pursuant to the provision in that behalf and subject to the covenants, conditions and provisos contained in the Lease under which the lot is held (hereinafter referred to as “the Lease”) and subject to the Conditions herein contained (hereinafter referred to as “these Conditions”), and may be revoked at any time if the Licensee shall fail to comply with or observe or shall be in breach of any of these Conditions, without prejudice to the rights, remedies and claims of the Government in respect of any antecedent breach, non-performance or non-observance by the Licensee of these Conditions.  Any such revocation shall (inter alia) render the said building liable to be demolished by the District Lands Officer, Tai Po (hereinafter referred to as “the District Lands Officer”) at the cost of the Licensee.

2.  The Licensee shall, before the expiration of 36 calendar months from the date hereof, build and finish in a good, substantial and workmanlike manner one building fit for occupation and complying with the terms and conditions of this Licence and in all respects in accordance with the provisions of all Ordinances, bye-laws and regulations relating to building, sanitation and planning which are or may at any time be in force in the New Territories (other than New Kowloon) upon the building site.

3.  (a)  The Licensee expressly warrants, represents and declares that:

(i)  he is a male person at least 18 years of age descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong;

(iv)  he has never entered into any arrangements or agreement with any person or persons to transfer, alienate, dispose or otherwise deal with the lot or any part thereof or any interest therein or his rights in and over the lot, including but not limited to the right to develop the lot or any part thereof;

(v)  he has never made any arrangements to sell or otherwise dispose of his eligibility to apply for a grant of a Licence, Private Treaty Grant or Exchange of land under the Small House Policy referred to in Condition No. 4(a);

And agrees subject to sub-clause (b) of this Condition that if the Licensee is found to be in breach of any part of this warranty, representation and declaration the right of re-entry contained in the Lease and extended to these Conditions by Condition No. 31(a) hereof shall be exercisable in respect of such breach.  For the purpose of this Condition, the decision of the District Lands Officer as to whether the Licensee is in breach of any part of this warranty, representation and declaration shall be final and binding on the Licensee.

4.  (a)  Except as provided in sub-clauses (b), (c), (d) and (e) of this Condition, the Licensee (which expression shall, for the purpose of this Condition, include any mortgagee, whether legal or equitable, or an assignee of such mortgagee), having obtained this License on concessionary terms under the Small House Policy of the Government for indigenous villagers in the New Territories shall not assign, partition, mortgage, charge, demise, underlet, part with possession of or otherwise dispose of the lot or any part thereof or any interest or undivided share therein or any building or part of any building thereon or enter into any agreement so to do, whether directly or indirectly, or whether by way of direct or indirect reservation, grant of any right of first refusal, option, power of attorney, building agreement or through a solicitor, agent, contractor, trustee or otherwise howsoever.

(d)  Upon certification by the District Lands Officer that these Conditions have been complied with to his satisfaction the Licensee may, with the prior written consent of the District Lands officer and on such conditions as may be imposed by him (including the payment of such fee as may be required by him), assign (but not partition), mortgage or charge the lot (as a whole only and not a part thereof) or, subject to sub-clause (f) of this Condition, any interest or undivided share therein or part with possession of the lot and the building thereon or part with possession of part of the building on the lot, or enter into any agreement so to do but only to:

(i)  a male person at least 18 years of age who has satisfied the District Lands Officer that at the date of the application for such consent he is descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong; or

(ii)  a person other than a person referred to in sub-clause (d)(i) of this Condition provided the Licensee shall have first paid to the Government a premium equivalent to an amount based on the difference between the full market values of the lot before and after the sub-clauses (a), (b), (c) and (d) of this Condition shall have become null and void and ceased to have effect, both values as at the date of the application to the District Lands Officer for such consent, such values to be determined by the District Lands Officer whose decision shall be final and binding upon the Licensee, whereupon, such premium having been paid and such consent having been obtained, sub-clauses (a), (b), (c), (d) and € of this Condition shall be null and void and shall cease to have effect.

25.  (a)  Unless otherwise approved by the Building Authority, no building work, site formation works or drainage works shall be carried out on the lot unless and until the Licensee shall have applied for and obtained from the District Lands Officer a certificate of exemption or separate certificates of exemption in respect of such building works, site formation works or damage works pursuant to BOANTO, any regulations made thereunder and any amending legislation.

31.  It is hereby agreed and declared as follows:

(a)  Should the Licensee fail or neglect to perform, observe or comply with any of these Conditions, the Government shall be entitled to re-enter upon and take back possession of the lot or any part thereof and all or any buildings, erections and works erected or to be erected on the lot or any such part thereof or any part of such buildings, erections or works and thereupon this Licence and the rights of the Licensee hereunder shall absolutely cease and determine (in respect of such part if the re-entry is upon a part only) but without prejudice to the rights, remedies and claims of the Government in respect of any breach, non-observance or non-performance of the Lease and the terms and conditions hereof.

(b)  wherever in this Licence it is provided that:

(i)  the Government or its duly authorized officers shall or may carry out works of any description on the lot or any part thereof or outside the lot (whether on behalf of the Licensee or on the failure of the Licensee to carry out such works or otherwise) at the cost of the Licensee or that the Licensee shall pay or repay to the Government or its duly authorized officers on demand the cost of such works, such cost shall include such supervisory and overhead charges as may be fixed by the Government or by its duly authorized officers; or

(ii)  the prior approval or consent of the Government or its duly authorized officers is required, they may give the approval or consent on such terms and conditions as they see fit or refuse it at their absolute discretion.

(c)  In the event of re-entry by the Government for or in respect of or arising out of the breach, non-observance or non-performance by the Licensee of the provisions of this Licence, the Licensee shall not be entitled to any refund of the premium (if any) paid by him or any part thereof or to any payment or compensation whatsoever whether in respect of the value of the land or any part thereof or any building or buildings erected or to be erected on the land or any part thereof or part of any such building or buildings or any amount expended by the Licensee in the preparation, formation or development of the lot or any part thereof or otherwise.

(d)  The expression “Licensee” shall in this Licence include the person entering into and executing this Licence and, where the context so admits or requires, his or their executors, administrators and assigns, and the expression “lot”, except where the context otherwise refers, means the lot referred to in the preamble hereto.  Where the context so admits or requires, words importing the masculine gender shall be deemed to include females and corporations, and words in the singular shall be deemed to include the plural.

15.  Clause 3 will be referred to as the “Non-alienation Clause” and Clause 4(a) will be referred to as the “Disposal Clause”.

16.  At all material times, the Applicant assisted the Deceased in obtaining the Licence and liaised with the DLO and submitted necessary proposals to apply for the COEs so as to construct a “Small House” at the Lot.

17.  The Applicant also assisted in making similar applications to the DLO for the construction of “Small Houses” at various lots adjacent to the Lot, namely Sections A, C, D and E of Lot No. 261 DD8.

18.  COEs for the building of “Small Houses” were granted for a number of those lots in around June/July 2024.  However, no COEs were granted for the Lot itself.

19.  By will dated 4 July 2017 (“Will”), the Deceased devised the Lot to the Applicant.  The Will was a partial will covering only the Lot, with the Applicant being the sole beneficiary of the Lot under the Will.

20.  On 31 August 2020, the Deceased passed away in Hampshire, England.

21.  On 12 October 2021, the Applicant obtained Probate as the Executor of the Deceased’s Estate (limited to the Lot).

22.  On 15 October 2024, the Applicant attended the office of the DLO and had a meeting with DLO staff to follow up on the issuance of the COEs in respect of the Lot.  However, the DLO refused to entertain the application unless the Applicant was to pay a premium upfront before commencement of building works.  In the alternative, the Applicant was advised first to transfer the Lot to a direct relative of the Deceased before further applying for the issuance of COEs in respect of the Lot.

23.  By letter dated 22 October 2024, the Applicant through his solicitors Messrs Terry Yeung & Lai (“TYL”) referred to matters discussed during the meeting, set out the reasons for DLO’s wrongful refusal to issue the COEs in respect of the Lot and demanded the DLO issue the COEs within 21 days thereof.

24.  By letter dated 23 June 2025, the DLO wrote to the Applicant in response to TYL’s letter and rendered the Refusal Decision as follows:

Having consulted with our legal advice, please be informed that a personal representative does not have power to develop a lot under Probate and Administration Ordinance or Trustee Ordinance (Cap 29) and hence may not have capacity to apply for certificate of exemption.  In particular, the Will of the deceased owner does not expressly confer the power of development to the Executor.  In the circumstances, I consider the Executor does not have the capacity to apply for COE.

25.  As already stated, on 1 September 2025, the Applicant obtained against the DLO and the Director leave to apply for judicial review of the Refusal Decision, i.e. in HCAL 1899.  I also gave directions to bring the matter to a substantive hearing, including for filing evidence.

26.  Subsequently, the deadline for the Respondents to file affirmations in opposition was extended to 6 October 2025.

27.  One working day before that deadline, the DLO wrote to the Applicant by letter dated 3 October 2025, giving the Revocation Decision, namely that:

(1)  The Deceased’s deposing of his Will bequeathing the Lot to the Applicant as sole beneficiary constituted a breach of conditions (3)(a)(iv), 3(a)(v) and 4(a) of the Licence.

(2)  In view of the breaches of the non-alienation/disposal clauses of the Licence, the DLO revoked and cancelled the Licence with immediate effect.

(3)  All the Licensee’s rights under the Licence would absolutely cease and determine, and the Small House Application in respect of the Lot could not proceed further and was therefore rejected.

28.  Hence the commencement by the applicant of HCAL 2744.

C.  Relevant Legal Provisions

29.  By its long title, BOANTO provides for the application of the Buildings Ordinance Cap 123 (“BO”) to the New Territories, and provides for COEs from certain provisions of the BO for building works, site formation works and drainage works for certain buildings in the New Territories and to make necessary consequential amendments.

30.  The relevant provisions of BOANTO are as follows:

4.  General power to issue certificates of exemption in respect of building works

The Director may issue a certificate of exemption in respect of any building works in the New Territories.

6.  Site formation works and drainage works

Where the Director has issued a certificate of exemption under section 4 or 5 he may also issue-

(a)  a certificate of exemption in respect of site formation works;

(b)  a certificate of exemption in respect of drainage works.

9.  Director may impose conditions

The Director may issue a certificate of exemption subject to such conditions relating to safety and health or such other reasonable conditions as he may impose and any such conditions shall be recorded on the certificate of exemption.

11.  Powers of Director may be exercised by District Lands Officer

The powers of the Director under this Ordinance, other than his powers under section 4, may be exercised on his behalf by any District Lands Officer of a District in the New Territories.

31.  Part 1 of the Schedule to BOANTO provides for the structural dimensions of building works as follows:

1.  (1)  The building, when constructed, will be a building of not more than 3 storeys and-

(a)  of a heigh of more than 7.62 m but not more than 8.23 m and with a roofed-over area not exceeding 65.03 m², and in respect of which the thickness of each load-bearing wall-

(i)  in the case of a load-bearing reinforced concrete wall is not less than 175 mm thick; or

(ii)  of the lowest storey is in the case of a load-bearing brick wall not less than 340 mm; and

(iii)  of any higher storey is in the case of a load-bearing brick wall not less than 225 mm; or

(b)  of a height of not more than 7.62 m-

(i)  with a roofed-over area not exceeding 92.90 m² where the building complies with approved plans; or

(ii)  with a roofed-over area not exceeding 65.03 m².

32.  The informational pamphlet “Building New Territories Exempted Houses” (LDPM_0068 (09/2024)) issued by the Lands Department and last revised in September 2024 also assists.

33.  Section B provides for the guidelines to apply for COEs in the construction of New Territories Exempted Houses, including Small Houses.  The relevant paragraphs are as follows:

1.  General

(a)  New Territories Exempted Houses, although being relatively simple in their general arrangement and design, possess critical structural elements such as cantilevered balconies which are essential to building safety.  (Critical structural elements include cantilevered balconies and canopies; long span beams (those equal to or exceeding 6 m in span); long span slabs (those equal to or exceeding 4.5 m in span) and foundation footings.)

(b)  Any person who is given approval by a District Lands Officer to construct New Territories Exempted House (e.g. to construct a small house under the Small House Policy or to redevelop a village-type house) must apply for the issue of Certificates of Exemption pursuant to the Buildings Ordinance (Application to the New Territories) Ordinance Cap. 121 in respect of building, site formation and drainage works before commencement of the works unless approval and consent required for commencement of the works have been obtained from the Building Authority under the Buildings Ordinance Cap. 123.

(c)  The Certificate of Exemption in respect of building works includes technical requirements aimed at ensuring structural safety of the completed New Territories Exempted House.  The guidelines below provide information on how to apply for the Certificates of Exemption and how the construction works should be monitored and supervised.

2.  How to Apply for Certificates of Exemption

(a)  With effect from 8 May 1999, District Lands Officers will only consider the issue of Certificates of Exemption in respect of building, site formation and drainage works upon receipt from an applicant of a completed application form (Form CE/1) together with two completed Letters of Appointment (Form CE/2 and Form CE/3).  These Forms are obtainable from New Territories District Lands Offices.

(b)  An applicant (or an individual acting under his Power of Attorney) applying for Certificates of Exemption in respect of building, site formation and drainage works shall:

(i)  complete and sign Form CE/1 himself agreeing that no building, site formation and drainage works will commence prior to the granting of the Certificates of Exemption;

(ii)  appoint a building contractor and a *T2 competent person (or higher qualification) to construct the entire building including the critical structural elements and ask them to complete and sign the Letter of Appointment Form CE/2 and submit relevant documents to prove qualifications and experience; and

(iii)  appoint a Registered Structural Engineer or a Registered Professional Engineer (specialized in civil/structural/building work) to monitor the construction of the critical structural elements and ask him to complete and sign the Letter of Appointment Form CE/3.

3.  Issue of Certificates of Exemption

(a)  District Lands Officers will normally issue Certificate of Exemption in respect of building works upon receipt of the duly completed Form CE/1, Form CE/2 and Form CE/3.  The Certificate of Exemption in respect of building works will, among other things, contain a set of technical requirements for critical structural elements in the construction of New Territories Exempted Houses.  A set of technical requirements is contained in Section C of this pamphlet.

(b)  Certificates of Exemption in respect of site formation and drainage works are normally issued by District Lands Officers together with the Certificate of Exemption in respect of building works.  If Certificates of Exemption in respect of site formation and drainage works are not issued by the District Lands Officer due to site constraints, the applicant is required to submit site formation and drainage plans formally to the Building Authority under the Buildings Ordinance, Cap. 123 for approval of the plans and consent for commencement of the works.  No site formation and drainage works shall commence unless relevant plans have been approved by and consent for the commencement of the works have been obtained from the Building Authority.

34.  Importantly, the Small House Policy states that an applicant may apply to the Lands Department “once during his lifetime”.  For the purposes of this case, there is some room for interpretation with regard to “once during his lifetime”.

35.  The Applicant emphasises that it is a “once in a lifetime” right to apply to the relevant government authority for a small house to be built, and once permission has been granted that right has been exercised and the owner of the lot, who is an indigenous villager, has the right to develop the land in accordance with his application.  Mr Leung submitted there is subsequently a right to develop the land, which will survive the death of the indigenous villager who applied for the Small House.

36.  Conversely, it is the Respondents’ stance that the “once during his lifetime” requirement refers specifically to the indigenous villager’s lifetime, and that right is extinguished when that indigenous villager passes away.

D.  HCAL 2744/2025

D.1  Whether HCAL 2744 Amenable to JR

37.  The first question to be determined is whether leave for HCAL 2744 should be refused on the basis that the Revocation Decision is not amenable to judicial review.

38.  Mr Leung submitted the Applicant’s case targets the constitutionality of the provision of the Non-alienation/Disposal Clauses in the Licence by interference with the Deceased’s and/or the Applicant’s right of private ownership of property and right of inheritance under the Basic Law (“BL”) and Hong Kong Bill of Rights (“BOR”) as well as the implementation of the Small House Policy and Article 40 of the BL (“BL 40”), thus providing sufficient public elements of sufficient significance to render the impugned decision amenable to judicial review.

39.  On the other hand, Ms Ling submitted that the Revocation Decision was not amenable for the following reasons:

(1)  The Licence was a private instrument between the Deceased and the Director.

(2)  The Revocation Decision was made pursuant to the terms of the Licence rather than any statute.

(3)  As such, the Applicant is essentially seeking to reinstate the Licence, which should be based on a private law action rather than a challenge in public law.

(4)  The function exercised by the Director in revoking the Licence was in his capacity as land agent for the Government, which in turn acts as landlord and licensor of the Lot.

40.  Ms Ling argued the Deceased breached the Non-alienation Clause and the Disposal Clause.  How those clauses should be interpreted, Ms Ling submitted, is purely a matter of private law.

41.  The principles on amenability are well-settled and need not be repeated in detail.  It suffices to say that:

(1)  Not every decision made by a public body is amenable to judicial review.

(2)  It is trite that if the role performed by the public official is an essentially private and purely commercial one – one which is no different in substance from one made by an ordinary citizen – then the decision is not reviewable under public law.

(3)  The critical question for determining whether a decision by a public body is amenable to judicial review is also settled.  The source of the power is undoubtedly an important factor to take into account. But, the source of the power so exercised is not dispositive of whether a decision is amenable to judicial review.

(4)  It is important to consider whether the nature of the power and the function being exercised mean the decision had a sufficient, public element, flavour or character to bring it within the purview of public law.

(5)  What amounts to a sufficiency of public elements to render the decision-making process amenable to judicial review is a matter of fact and degree, depending very much on individual cases.

(6)  Questions of amenability, like all questions of law, also depend on the relevant practical and legal context in which they arise.  No hard and fast rule can be laid down.  It is, in a borderline case, very much a matter of overall impression and one of degree.

42.  It is authoritatively settled that a Government lease is a private lease, and ordinarily in relation to steps taken on the lease the Government is acting in a private capacity and thus not subject to judicial review.  When modifying leases – or choosing whether to grant or withhold its consent to the modification of the terms of a lease – the Government acts in a private capacity.  It is not right that a claimant suing a public body for breach of contract, who is dissatisfied with the remedy afforded him by private law, should be able to invoke public law simply because of his dissatisfaction, understandable though it may be.  If he could do so, it would place a party who contracts with a public body in an unjustifiably more privileged position than a party who contracts with anyone else, and correspondingly put the public body in an unjustifiably less favourable position than any other contracting party: see, for example, my own decision in Tang Chiu Man v Secretary for Justice for Director of Lands [2025] 5 HKLRD 165 at §§67-69.

43.  The amenability of decisions by the Government as owner or lessor of government land to grant, modify or terminate a lease or licence was further explained by Andrew Cheung J (as the Chief Justice then was) in Anderson Asphalt Ltd v Secretary for Justice [2009] 3 HKLRD 215 at §57.  Those principles can be summarised as follows:

(1)  In the absence of fraud, corruption, bad faith and breach of law, a purely commercial decision, or a decision made in the performance of a purely commercial function, is most likely a private law decision, not amenable to judicial review.

(2)  The same principles which apply generally to amenability also apply to decisions made in land transactions.  In lease modification cases, the Government’s decisions on whether to grant a modification and on the amount of premium to be extracted (if any) are in the nature of private commercial or economic decisions of a private landlord, and therefore not susceptible to judicial review.  Further, where the Government official, in making the decision, acts in his role as protector of the public interest, his decision is almost certainly liable to judicial review.

(3)  In land matters, invariably, there are restrictive user covenants in the relevant leases or grants.  Plainly, they serve the commercial and economic interests of the Government as landlord. But, equally plainly, they serve, to some extent, a purpose of town planning, which, no doubt, any responsible government must be responsible for, whether directly or indirectly.

(4)  Therefore, there is always a built-in town planning element in land grants and the system of land-holding in Hong Kong, leaving aside any specific town planning legislation.

(5)  However, that is not sufficient in itself to turn a decision made by the Director in relation to modifying a restrictive user covenant in a grant or demanding a premium for the modification into a public law decision, amenable to judicial review.

(6)  The mere presence of some public element (namely, town planning consideration) may not be sufficient to render the decision a public law decision.  The crucial question is whether some additional public elements of sufficient weight are present in the decision-making process to render the decision made a public one, amenable to judicial review. Put another way, the crucial question is whether the role played or function performed by the Government official is sufficiently public to render the decision a public one, susceptible to judicial review.

44.  The decision in Koon Ping Leung v Director of Lands [2012] 2 HKC 329 distinguished between an application for Government land under the Small House Policy and modification of a Government lease at §§18-21:

18.  Though the Small House Policy is non-statutory and the DLO can properly be described as acting as the land agent of the Government in making decision under the Policy, I do not think one can draw a parallel with the decision of the Director of Lands in modification of Government Lease.  As observed by Lord Woolf, the same entity may exercise functions of different characters.  In the present context, I do not think the labelling of the DLO as the land agent of the Government can be conclusive on the amenability issue: as demonstrated by the special purpose lease cases, there are cases where decisions would be amenable to judicial review though the Director of Lands acted as land agent.

19.  A fundamental difference between the type of decision under discussion and a decision with respect to modification of Government Lease is that in the latter case there is a contractual context governing the matter and the court has to ask whether there is any scope for a further fetter by way of judicial review over the contractual right of the Government as landlord.  The same cannot be said in respect of a decision on an application for Government land under the Small House Policy.  The concern of the Court of Appeal at para 60 in Anderson Asphalt 4 would not arise in the present context.  There is no contract between the applicant and the Government and if the matter is not amenable to judicial review, it is difficult to see what private law remedies he can seek.

…

21.  … As I have explained, the Small House Policy also pays regard to the housing needs of indigenous villagers.  This is reflected in the following features of the Policy,

(a)  The objective of the Policy, as stated in the Explanatory Notes of the Handbook, is to allow an indigenous villager to apply for permission to erect for himself during his lifetime a small house on suitable site within his own village.  The Chinese version of the Notes spells out explicitly that the small house should be used as the villager’s own residence: ‘旨在讓原居村民得以一生一次向當局申請批准, 在其所屬的鄉村内的合適土地, 建造一所小型屋宇自住。’

(b)  Thus, an applicant can only be eligible for one small house grant.  This is also stated in the eligibility criteria.

(c)  The Residence Requirement.

(d)  The requirement in respect of application over private land that an applicant must be the sole owner of the land and he must state in his statutory declaration that he had not transferred the land to someone else.

(e)  Alienation restrictions contained in the small house grants.

45.  In Hung Hing and 66 others v Director of Lands [2015] 5 HKLRD 516 at §31, Cheung CJHC (as the Chief Justice then was) reiterated that matters beyond the scope of the Small House Policy are not amenable to judicial review:

31.  Returning to Mr Dykes’ argument, once it is concluded as I have done that vehicular access does not form part of the Small House Policy, one falls outside the exception to the general rule based on Koon Ping Leung, and is back to the general basic principle (that land lease decisions are not amenable to judicial review).  In other words, it is not for the court to tell the government what its land policy should be.  Taken to the highest, Koon Ping Leung is only authority for the proposition that once the government has for good reason of its own decided to adopt a certain policy to house indigenous villagers in the New Territories in the form of the Small House Policy, some of its decisions made in the implementation of that policy may be amenable to judicial review.  It is a quantum leap to say that a decision on something which is not within the policy, i.e. the provision of vehicular access which by definition involves land other than land required for the erection of the house itself, is also amenable to judicial review.  And in the context of the present case, I have no doubt that it is not reasonably arguable, and there is no realistic prospect of success, that one can challenge the Small House Policy as being unreasonable or irrational in the public law sense by omitting from its ambit or scope the provision of vehicular access.

46.  In Chau Tam Yuen Ching v Director of Lands [2013] 3 HKLRD 169 at §38, the decision of the Director to terminate government land licences over plots of land in Sai Kung were held to be not amenable to judicial review on the basis that termination of a licence is to be governed by the terms of the licence and the validity of a termination must be adjudicated according to the private law of contract or land law.

47.  In Sime Darby Motor Services Ltd v Director of Lands [2024] HKCA 207, the issue of amenability for decisions based on government leases was discussed.  G Lam JA held at §57 that the decision by the Director to reject the application for an in-situ land exchange was not one made by way of application or implementation of the Small House Policy, but rather a decision made squarely in a contractual context where the Government as landlord had contractual rights under the existing leases to prevent the land from being developed and used in any manner inconsistent with the user and building restrictions, and the concomitant freedom to decide whether to release those rights, i.e. terminating the lease.

48.  Sime Darby is somewhat analogous to the current situation, where the decision in some way touches upon the Small House Policy as the application was rejected on the basis that the land was to be preserved for small house development by indigenous villagers.  However, it was also stated at §60 that it does not follow that any matter concerned or associated with the Small House Policy or its implementation injects a sufficient public element into the decision and is therefore amenable to judicial review.  What must be taken into account is the capacity in which the decision-maker is acting and the context surrounding the decision.

49.  Taking into account the above authorities, I conclude that there are no sufficient public law elements in HCAL 2744 which make it amenable to judicial review.  HCAL 2744 at its core seeks to challenge what is essentially a private contractual arrangement between the Deceased as licensee and the Government as licensor. The Revocation Decision arose from a contractual right offered to the DLO and/or the Director as land agent of the Government in its private capacity as licensor pursuant to clause 31, where there was a breach of the Non-alienation Clause and the Disposal Clause through the demise of the Lot from the Deceased to the Applicant.

50.  I am more so persuaded by this perspective, particularly where the identity of the Applicant is taken into account.  Unlike the Deceased, the Applicant is not an indigenous villager. His interest in the land arose not out of an application under the Small House Policy, but rather the Will devised by the Deceased.  With respect, I fail to see how BL 40 is engaged in the Applicant’s case.

51.  Lastly, the Applicant submits that there has been an abuse of power by the DLO and/or the Director because they took into account HCAL 1899 and extraneous considerations in the decision-making process leading to the Revocation Decision.  It is contended that the ulterior motive of the Revocation Decision was precisely to render the Refusal Decision in HCAL 1899 academic.

52.  Mr Leung relied on three facts as evidence of bad faith, being:

(1)  The DLO did not terminate or cancel the Licence after the meeting with the Applicant on 15 October 2024 and the subsequent letter from TYL.

(2)  The DLO granted extensions for completion of the Licence three times in 2022, 2023 and 2024 respectively after the Probate of the Deceased’s Estate was registered on 2 November 2021 and the Deed of Mutual Grant registered on 16 June 2023.

(3)  The Revocation Decision was made one day before the extended deadline for the Respondents to file their affirmation in opposition in HCAL 1899.

53.  On 2 November 2021, the Probate, with the Will annexed therein, was registered in the Land Registry in respect of the Lot.  The Applicant was a party to it and was named as the Executor of the Deceased’s Estate and the 2^nd Owner of the Lot in the Deed of Mutual Grant of Rights of Way with Plans dated 2 June 2023, which was registered on 16 June 2023.

54.  I have previously dealt with the question of bad faith in relation to judicial review applications in the Tang Chiu Man case, and I shall endeavour to repeat those principles once more:

(1)  “Bad faith” is not the test.  It is the conclusion at the end of the analysis.

(2)  What an applicant must show is that the public body’s conduct was so unreasonable or so perverse that it is akin to bad faith.  Mere faulty administration, or even administration which fails to take into account certain factors which should be taken into account, is not sufficient to show bad faith.

(3)  An ulterior motive may be indicative of bad faith, and the Court is allowed to examine those motives.  But, an ulterior motive is not the same as merely failing to take into account relevant considerations.  The former must carry some sort of moral impropriety in that the decision-maker either knowingly pursues a purpose that is different from that being openly pursued, or the decision involves a degree of personal malice, vindictiveness or animosity against a particular group or individual.

(4)  Allegations of bad faith attract a very heavy standard of proof, and require cogent evidence.

55.  I am inclined to agree with Ms Ling that the mere fact that the DLO did not terminate the Licence earlier did not mean he did so later in bad faith. That the Revocation Decision was rendered one working day before the extended deadline for the DLO and the Director to file evidence in opposition for HCAL 1899 is also not enough for me to infer bad faith.

56.  Further, the fact that the DLO granted extensions for the completion of the Licence previously did not necessarily mean the DLO would continue to grant extensions in the future.  There was agreement by the DLO to suspend the exercise of the rights provided in the conditions of the Licence upon payment of the premium.  But, as a matter of fact, the DLO reiterated in their letters that the Government would reserve those rights.  As such, the Government as licensor and the DLO and/or the Director (in the capacity of land agent) was at all times entitled to revoke the Licence in accordance with its terms where a breach has occurred.

57.  Nor do I think there was acquiescence of the bequest of the Lot from the Deceased to the Applicant.  To the contrary, it seems to me on the materials that the DLO was not aware of the Deceased’s death until the 15 October 2024 meeting.  As such, until he was informed differently, it was entirely within the subjective knowledge or assumption of the DLO that the Deceased was alive and there was no breach of the Licence yet.  In any event, upon discovering the death of the Deceased, the DLO acted as was within his powers to revoke the Licence in light of the breach.

58.  Therefore, I am not satisfied there is “cogent” evidence to demonstrate the Revocation Decision was made in bad faith.  To the contrary, the DLO and/or the Director effectively exercised a contractual right to revoke the Licence when it discovered a breach had occurred, namely a breach of the Non-alienation Clause and the Disposal Clause.

59.  For the reasons above, I find HCAL 2744 is not amenable to judicial review.

D.2  Grounds of Review

60.  For completeness, though not strictly necessary, I shall briefly consider the substantive grounds for judicial review below.

61.  The Applicant put forward four intended grounds of review, being:

(1)  The Revocation Decision constitutes an improper, unlawful and disproportionate interference to the Applicant’s right of private ownership of property and right of inheritance of property (“Proportionality Ground”).

(2)  The DLO acquiesced to/waived the alleged breach of the Licence and/or failed to take into account relevant considerations and has taken into account irrelevant considerations.

(3)  The Revocation Decision is Wednesbury unreasonable and/or irrational (“Wednesbury Unreasonableness Ground”).

(4)  The Revocation Decision constitutes bad faith and an abuse of power (“Bad Faith Ground”).

62.  As to Ground 1, Mr Leung highlighted the need to consider the legitimate aim of the Non-alienation Clause and the Disposal Clause.  If the aim is to preserve the unity of the indigenous community, i.e. to give indigenous villagers the right to apply for a Small House and to prevent the sale of those Small House rights to others, then there is no necessary need for a blanket restriction which includes disposing of the property by will.

63.  Taken to its logical conclusion, this line of reasoning cannot be right.  The object of the Small House Policy is for the provision of property rights for indigenous villagers in the New Territories and the protection of those rights.  It is not disputed by the parties that the privileges under the Small House Policy and the Licence are intended to benefit the indigenous villager personally, once in his lifetime, to permit building a small house in his own village for his own occupation.

64.  I do not agree that the legitimate aim is so narrow as to be merely to act against sham arrangements or misrepresentations to the DLO.  That is only one minor facet of the clauses.  The Non-alienation Clause and the Disposal Clause are in place to achieve the object of the Small House Policy. Therefore, the legitimate aim can more accurately be said to be for the provision and protection of property rights for indigenous villagers as described above.

65.  The Applicant is not an indigenous villager, and therefore is not actually affected by the Small House Policy or the conditions of the Licence as the Deceased would be.  As I have said, it seems to me that BL 40 is simply not engaged in this case.  Further, the Non-alienation Clause and the Disposal Clause are not aimed merely at the prevention of the sale of Small House rights, but rather any alienation of those rights.

66.  Mr Leung advanced the argument that the personal representatives of the deceased indigenous villager may not be able to develop the Lot under the Licence due to those restrictions in the Licence, even though the development is in the personal interest of the deceased indigenous villager.  With respect, I fail to see how that development benefits or is in the interest of a person who is deceased and can clearly no longer benefit from it.

67.  Ground 1 is not reasonably arguable with any realistic prospect of success.

68.  The parties in their submissions dealt with Grounds 2 and 3 together, and I shall do the same.  I note the following facts which are relevant:

(1)  The letters from the DLO dated 21 October 2020, 30 July 2021, 27 October 2022 and 13 September 2023 respectively were addressed to the Deceased.

(2)  In each of those letters, the DLO expressly stated that the Government reserved all its rights under the Conditions of the Licence, including its right of re-entry.

(3)  The DLO also asserted that a further premium would be payable should any further extension be sought and approved.

(4)  Following the 15 October 2024 meeting with the Applicant and upon discovery of the Deceased’s death, on 19 November 2024 the DLO issued a letter addressed to the Applicant in his capacity as “the sole executor”.  The Deceased is referred to as “the Deceased Owner”.

69.  In Eastrade Holdings Ltd v Secretary for Justice [2025] 1 HKLRD 400 at §59, it was stated in the context of a lease that there are different types of waiver, including:

(1)  Waiver of forfeiture, where there is a waiver of the right to forfeit a lease consequent upon a breach of covenant, without affecting the right to other remedies for the breach such as damages.

(2)  Waiver of breach, where the waiver in question is that of the covenantor’s liability in respect of that breach, and precludes the covenantee from pursuing any remedy therefor, but does not affect the covenantee’s right in respect of future breaches.  Waiver of breach is not based on election but on an inference of consent to the breach.

(3)  Waiver of covenant, which is a waiver or abandonment for all future time of the right to complain of any other breach of the covenant.

70.  It is clear that in extending the time for completion of the Licence, the DLO did not at any point make any unequivocal representation that he was waiving the right to revoke the Licence in case of a breach of the Non-alienation Clause and/or the Disposal Clause.  As to waiver of breach, I find against any such waiver.  Indeed, the DLO expressed the opposite, to the effect that the Government reserved any rights under the Licence, including the right to re-entry, and would exercise those rights in case of any breach by the Licensee in the future.  I also find that there has been no waiver of covenant.  In no circumstances did the DLO state or represent that he would waive the right to complain of future breaches by the Deceased and/or the Applicant.

71.  Mr Leung briefly touched upon the inclusion of “demise” in the Disposal Clause.  The ordinary legal meaning of demise refers to a conveyance or transfer of an estate by will or lease.  The Disposal Clause provides that the licensee shall not dispose of the Lot, including by way of a demise.  Mr Leung argued there is no positive act of transfer or divesting of the Deceased’s rights and interests in the Lot by the Will yet, as no assent or conveyance was executed in favour of the Applicant, and therefore he has not yet obtained any beneficial interest in the Lot. Instead, he argued, the Applicant only has a chose in action in the Deceased’s Estate properly administered: see Chung Wing On v Chung Wing Piu [2006] 3 HKC 546 at §15, citing Williams on Wills (2002) (8^th Ed).

72.  Generally, section 66(2) and (3) of the Probate and Administration Ordinance Cap 10 provides that the assent shall operate to vest in the beneficiary the estate to which the assent relates and shall relate back to the death of the deceased, and that an assent shall be in writing.  But the important point here is that the Disposal Clause provides that the Licensee shall not demise “or enter into any agreement so to do, whether directly or indirectly”.

73.  In reality, this question is one which ultimately goes back to amenability.  Bearing in mind the purpose of judicial review and the principle that the court does not substitute its own view as regards what decision should be made in place of the decision-maker, I agree with Ms Ling that this is a matter of interpretation with regard to the Disposal Clause and/or the Non-alienation Clause, and one which necessarily depends upon the precise facts of the case which the DLO and/or the Director are best-positioned to determine.

74.  Grounds 2 and 3 are not reasonably arguable with any realistic prospect of success.

75.  As to Ground 4, I repeat my above analysis on bad faith, and I find that Ground 4 is also not reasonably arguable with any realistic prospect of success.

E.  Whether HCAL 1899 is Academic

76.  The relevant principles are also well settled.  Where a question is purely hypothetical or academic in the sense that there are simply no events that have occurred that form the basis for the question to be answered, this Court will not entertain it.  However, the Court does have jurisdiction where the question before the Court is said to be hypothetical or academic only because the real dispute that drove the parties to litigation happens no longer to be in existence at the time of the hearing, even though the relevant facts giving rise to the dispute were real and had actually taken place.  In doing so, the Court will closely examine the relevance or utility of any decision: see Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465 at §20.

77.  HCAL 1899 is said by Ms Ling to be hypothetical or academic only because the Licence was revoked on 3 October 2025 subsequent to the commencement of HCAL 1899 on 25 August 2025.  Nevertheless, the Applicant submits the relevant facts giving rise to the dispute were real and had actually taken place.

78.  Mr Leung submitted that the Court may exercise its discretion to hear HCAL 1899, as it is in the public interest to do so and there is real and practical utility to the judicial review application.  In particular, Mr Leung argued that the determination of the issues in HCAL 1899 is of great public importance as it affects all personal representatives in the same or similar position as the Applicant.

79.  However, it seems to me, quite simply, that where the Licence was revoked, the Deceased (and by extension the Applicant) no longer had the necessary power to develop the Lot, and as such the question of COEs no longer exists, and a judicial review application in relation to the issuance of those COEs is no longer a real and existing issue.

80.  Further, there had been a breach of warranty before the Refusal Decision was given.  The Licence was granted on 28 September 2017.  The Non-alienation Clause provides that the Licensee must give a warranty that he has never entered into any arrangements or agreement with any person to transfer, alienate, dispose or otherwise deal with the Lot or any interest therein or his rights in and over the Lot, including the right to develop the Lot.  However, the Deceased made the Will on 4 July 2017 devising the Lot to the Applicant.  On that basis, there was a breach of the Non-alienation Clause at the time the Licence was entered into, and, upon knowing the Deceased made a Will and devised the Lot to the Applicant, the DLO and/or the Director were entitled to void the Licence.  Had the DLO and/or the Director known about the Will earlier, they might not have granted the Licence in the first place, and the very question of the issuance of COEs becomes an academic exercise.  Also, as a matter of established law, the Applicant had no right to develop the Lot as a personal representative.

81.  Even if it were to proceed to a substantive hearing, I do not think my findings would be any different.  I note Mr Leung’s submission that HCAL 1899 gives rise to a discrete point of law, about whether a personal representative of a deceased person, who owned a lot with the right to develop a Small House conferred by licence, has the capacity or power to develop the Lot.  But that his now academic in these proceedings, and I think this is an issue which should be considered with reference to real and existing circumstances, instead of a determination posed upon a hypothetical situation.

82.  Therefore, I dismiss HCAL 1899.

F.  Result

83.  Leave to apply for judicial review is refused for HCAL 2744 on the basis that it is not amenable to judicial review and the intended grounds of review are not reasonably arguable with a realistic prospect of success.

84.  HCAL 1899 is also dismissed, on the basis that it is academic.

85.  As to costs, I see no reason why they should not follow the event.  Therefore, I order the Applicant to pay the Respondents’ costs, to be taxed if not agreed.  However, I will make this order first on a nisi basis, which will become absolute after 14 days unless a prior application is made to vary this order.  Any variation application will be dealt with on paper.