BUILDING AUTHORITY v. GOOD FORTRESS LTD

DCMP 3411/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3411 OF 2016

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REASONS FOR DECISION

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INTRODUCTION

1.  At the hearing on 17 January 2017, having heard the submissions of Mr Simon Young appearing on behalf of the Building Authority (“the applicant”) and Mr Lam Tak Yin, a person authorized by the sole director of the company to appear at the hearing on behalf of the Interested Party, namely, Good Fortress Limited (“Good Fortress”), I was satisfied that a Priority Demolition Order (“PDO”) under Section 24B(1) of the Buildings Ordinance, Cap 123 should be granted in this case.

2.  Hence, I made an Order on that day in the following terms:

(1)  The applicant is authorized to demolish or cause to be demolished the signboard stated in the application herein dated 18 March 2016 made by Mr Chiong Kam Yueng Jacky, Chief Officer/Minor Works & Signboard Control for Building Authority, namely, a projecting signboard attached to the external wall at 2/F to 4/F facing Argyle Street, Golden Hill Commercial Building, Nos 39-41 Argyle Street, Kowloon (“the Signboard”);

(2)  The applicant is authorized to carry out or cause to be carried out such other incidental works as in the opinion of the applicant may be necessary or expedient;

(3)  The applicant is allowed not less than 45 days from the date of this Order to complete the works described in paras 1 & 2 above;

(4)  The applicant is allowed to recover from the Interested Party the costs of any works that the applicant carries out, or causes to be carried out in relation to the works mentioned in paras 1 to 2 of this Order;

(5)  Costs of the applicant in relation to the application, to be borne by the Interested Party, including the costs of the adjourned hearing before Deputy Judge Eric Tam on 30 November 2016 and today’s hearing, with certificate for counsel.

3.  I said that the reasons for the decision will be reduced into writing and handed down in due course.  Here are the reasons.

BACKGROUND

4.  The applicant applied to the court pursuant to s 24B(1) of the Buildings Ordinance (Cap 123) (“BO”) for a PDO against building works comprising the Signboard.

5.  Good Fortress is an interested party owing to the fact that, as owner of the Signboard, it is a “person affected” by the application. 

6.  It has applied pursuant to s 24B(7) of the BO to be heard by the court. An order was granted by Deputy Judge Eric Tam at the hearing on 30 November 2016 to allow Good Fortress to join as an interested party in this case. 

7.  I am very grateful to Mr Young for so ably and succinctly setting out the legal framework under s 24B of the BO and the factual background in his skeleton arguments.  Insofar as they are applicable, I shall adopt them here, perhaps with some of my own modifications. 

Legal framework

8.  The relevant parts of s 24B(1) and (9) of the BO provide as follows:

“24B. Priority demolition

(1)  Where any building has been erected or any building works have been or are being carried out in contravention of any of the provisions of this Ordinance, and it appears to the Building Authority that –

(a)  the building or building works constitute an imminent danger to life or property;

(b)  the building has been erected or the building works have been or are being carried out with a view to sale, letting or other disposal;

......

the Building Authority may, instead of making an order under section 24(1), apply to the District Court for an order under subsection (9).

(9)  Upon the application of the Building Authority under subsection (1), the District Court may, on being satisfied–

(a)  that notice of the application has been given in accordance with subsections (2), (3) and (4); and

(b)  that any one or more of the circumstances set out in subsection (1)(a) to (d) exist,

and after considering any representation of a person who has applied to be heard under subsection (7), if any, make an order for the demolition or alteration of the building or building works.”

9.  The Notice of Application (“the application”) served in this matter notifies that the Signboard “appears to the Building Authority” to “constitute an imminent danger to life or property” or to “have been or are being carried out with a view to sale, letting or other disposal”.

10.  Before making a PDO, the court must consider any representation of a person who has applied to be heard under s 24B(7) and be satisfied of the following:-

(a)  notice of the application has been given in accordance with s 24B(2), (3) and (4); (“Notice Condition”)

(b)  the Signboard is “building works” that have been or are being carried out in contravention of any of the provisions of the BO; (“Contravention Condition”)

(c)  the Signboard,

either

(i) constitutes an imminent danger to life or property; or

(ii) has been or is being carried out with a view to sale, letting or other disposal.

(“Circumstance Conditions”)

11.  For the reasons stated below, I was satisfied that there was strong and convincing evidence for the court to be satisfied of all the above 3 conditions, and thus the PDO should be made.

Factual background

12.  By Assignment Memorial No 5765362 dated 26 April 1993, Good Fortress acquired from Silvercrown Limited the exclusive right to install, construct, erect or affix a signboard on the external wall of the building, known as Golden Hill Commercial Building, Nos 39-41 Argyle street, and the sole right to use the external surface of the building.

13.  In October 1993, Good Fortress and Philip Morris Asia Incorporated (“Philip Morris”) signed a licence agreement that allowed Philip Morris to erect a signboard to display advertisements of its tobacco and cigarette products for 3 years.

14.  The Signboard was erected and installed by one Hop Shing Advertising Engineering Company in or about December 1993 and completed in January 1994.  Hop Shing was instructed by Philip Morris to build the Signboard.

15.  The Signboard is a massive three-storey steel structure, measuring 9.08 m high and 10.6 m wide (measured from the wall).  It hovers 8.5 m above the sidewalk and street.  It is supported by a small number of steel frames and guy wires attached to the top and bottom of the structure and, at the other end, secured by anchor bolts to the external wall of the building.

16.  At the time when the Signboard was erected and installed, s 14(1) of the BO (1993) provided that “no person shall commence or carry out any building works... without having first obtained from the Building Authority” the relevant approval or consent in writing.  It also provided in s 31(1) of the BO (1993) that no building or “other structure shall be erected in, over, under or upon any portion of any street” unless there was compliance with the relevant criteria in part II of the Building (Planning) Regulations or an exemption had been granted by the Building Authority pursuant to s 42 of the BO (1993).

17.  It is not disputed by Good Fortress that no relevant approval, consent or exemption was obtained from the applicant at any time before, during or after the Signboard was erected and installed.  Nor did the Signboard come within the criteria in Part II of the Building (Planning) Regulations (Cap 123 sub leg F), which are concerned with small structure projections.

18.  A second advertising licence agreement with Philip Morris for 4 years from 1996 to 2000 was signed, but was terminated by agreement in June 1999 due to the laws prohibiting advertising of tobacco products coming into effect.  On the termination date of 25 June 1999, Philip Morris delivered the Signboard to Good Fortress in the condition it was in at the time.

19.  From 1999, for a continuous period of more than 17 years, Good Fortress leased out the Signboard for advertising and received monthly licence fees from its licencees.  Under the terms of its current contract with Convey Advertising Company Limited, which commenced on 1 November 2015, Good Fortress is to receive licence fees of HK$73,000 per month until the end of October 2017.

20.  Following discovery of the Signboard by the Buildings Department in August 2003, the applicant issued an order pursuant to s 24(1) of the BO against Good Fortress requiring the demolition of the Signboard on the ground that it contravened s 14(1) of the BO.  Good Fortress appealed to the Appeal Tribunal (Buildings) (“ATB”) against the applicant’s order.  In a letter dated 24 September 2004, the applicant informed Good Fortress that the s 24(1) order “is hereby withdrawn”.  The Department of Justice (“DoJ”), who was also acting on behalf of the applicant at the appeal before the ATB, wrote to Good Fortress in a letter of the same date stating, “[u]pon further consideration, the Building Authority has decided to withdraw” the order.

21.  Mr Wong Wai Kai Ben, structural engineer with the Buildings Department, conducted a site inspection of the Signboard on 8 November 2016.  From his inspection, he formed the opinion that the Signboard constituted an “imminent danger” to life or property.  He formed his opinion primarily because the Signboard was unauthorized building works, for which approval or consent had never been sought, and thus insufficient information was known about the Signboard, particularly the quality of the construction materials and workmanship.  Its massive size also exceeded the safety standards set out in the Building Department’s Practice Note for Authorized Persons and Registered Structural Engineers (“PNAP APP-126”).  The lateral stability system, ie meaning the steel frames and guy wires at top and bottom, was considered “ineffective” because of their angle to the sign and the slenderness of the frames.  Mr Wong opined that since the Signboard “is projected directly above a busy road... failure of the structural frames could bring catastrophic consequences to the public safety”.

22.  Mr Lee Shui Tak, building surveyor in the Buildings Department, formed the same opinion as Mr Wong on the Signboard’s imminent danger.  He also formed the opinion that the Signboard was building works carried out with a view to sale, letting or other disposal.

23.  On 18 November 2016, the application for a PDO was filed by the applicant with the court, and the notice of application for a PDO was served in accordance with s 24B(2)-(4) of the BO.

24.  Good Fortress applied to be heard on the application and appeared with counsel before Deputy District Judge Eric Tam on 30 November 2016.  At the request of Good Fortress, the matter was adjourned until 17 January 2017 with deadlines to file further affirmation evidence.  Each party since then had filed a further affirmation in the case.

Priority Demolition Order

25.  Section 24B was added to the BO in 1990 to “empower the Building Authority in certain prescribed circumstances to demolish unauthorized buildings and building works expeditiously, after successful application to the District Court”.  The then Secretary for Planning, Environment and Lands, on second reading of the amendment bill, emphasized that “[i]n certain circumstances, it is important that unauthorized buildings and building works are demolished in a matter of days for reasons of public safety.”  See Hansard, 7 November 1990.

26.  As mentioned above, the court’s discretionary power to make such a PDO is exercised only after being satisfied of the (1) notice condition; (2) contravention condition; and (3) circumstance condition.

(1) Notice condition

27.  It is not disputed that the applicant posted and served the notice of application for a PDO in accordance s 24B (2)-(4) of the BO. 

28.  Hence, in my judgment, the notice condition has been satisfied in this case.

(2) Contravention condition

29.  In my judgment, there can be little doubt that the Signboard comes within the meaning of “building works” as defined in s 2(1) of the BO.  When the Signboard was built in 1993 to 1994, “building works” in s 2(1) included “any kind of building construction... [and] addition” (emphasis added).  I agree with Mr Young that this would naturally mean any kind of “addition” to the building.  Thus, I consider that the Signboard, which had been fixed to the external wall of the building for more than 23 years, must be treated as an “addition” to the building and therefore come within the meaning of “building works”.

30.  I further agree with the submissions of Mr Young that, when specific provisions were added to the BO in 2004 to regulate “signboards”, the legislature made clear that signboards were a special kind of “building works” being subject to further regulation.  For example, in s 24(2)(c) and (2B), the phrase “building works the subject matter of which is a signboard” clearly indicates that signboards are a form of building works: See also HKSAR v Joy Express (No 1) [2005] 2 HKC 140 (CFI) and HKSAR v Joy Express Ltd (No 2) [2005] 2 HKC 147 (CFI).

31.  I also agree with Mr Young’s submission that, as building works, the Signboard required, under s 14(1) of the BO (1993), approval and consent from the Applicant before its construction could commence and be carried out.  And since the Signboard was a structure erected over a street, it could only be built, without contravening s 31(1) (1993), if it complied with the criteria in Part II of the Building (Planning) Regulations (Cap 123 sub leg F) (19930 or if an exemption had been granted by the Applicant pursuant to s 42 (1993).  No relevant approval, consent or exemption has been given or granted by the applicant for the Signboard.  Given its massive size, I agree that the criteria in Part II of the Building (Planning) Regulations (1993) cannot be met.  As a result, I am of the view that the Signboard is building works that have been carried out in contravention of ss 14(1) and 31(1) of the BO (1993).

(3) Circumstance condition

Imminent danger to life or property

32.  The danger that the Signboard poses are too obvious to state.  Situated near one of the busiest intersections in Kowloon, the Signboard hangs over a dense and constant flow of vehicles and pedestrians.  It is a block away from the major intersection of Nathan Road and Argyle Street, a stone’s throw away from Mong Kok MTR Exit C2, and immediately across from Langham Place.  I agree with Mr Young that there is much life and property around all hours of the day, seven days a week, for there to be catastrophic harm should the Signboard fall.

33.  In my view, the word “imminent” used in s 24B(1)(a) is not equivalent to the word “immediate”.  The former denotes something overhanging, impending, will occur in the near future while the latter denotes something which occurs at once, instant: See R v Abdul-Hussain [1998] EWCA Crim 3528 (CA), noting the difference in those 2 words in the context of law of duress.

34.  I am satisfied that there is plenty of evidence in this case to find that the Signboard constitutes an imminent danger to life or property:

(1)  The Signboard is a massive steel structure that has been erected and projecting over the sidewalk of a major road for more than 23 years with no evidence of its structural safety and maintenance history being produced;

(2)  It is an unauthorized building works with unknown quality of construction materials, workmanship and maintenance;

(3)  It deviates from the safety standards set out in Appendix B of PNAP APP-126, a public document of the Buildings Department’s positional and dimensional requirements for signboards; and

(4)  According to the expert opinion of Mr Wong and Mr Lee of the Applicant, the Signboard constitutes an imminent danger.  

35.  Good Fortress, through Mr Lam’s 2^nd affirmation, argues that its expert Mr Paul Kong’s report has cast doubts on the conclusions made by the applicant’s experts on the issue of “imminent danger”.  Instead of doing that, quite the contrary, in my view, the structural report of Mr Kong has in fact provided support for it.  It is apparent that Mr Kong’s report only gives an opinion on whether the Signboard constitutes an “immediate danger” to the public but fails to address the critical question of whether it constitutes an “imminent danger”.  Indeed, Mr Kong’s call for “further investigation with more detailed tests and on-site monitor[ing]” and “remedial action... for its further strengthening” in my view is evidence in support of the “imminent danger” posed by the Signboard, otherwise there would be no need for such further action.

36.  Further, I agree with Mr Young’s submission that Mr Kong’s opinion that the Signboard does not constitute an immediate danger can only be given little if any weight.  His opinion is only a qualitative one based primarily on his judgment after a naked-eye inspection of the Signboard. He acknowledges the “limitation of data and engineering information”.  The mathematical formulas in the report lead only to a calculation of the force on the anchor bolts in heavy winds.  What is missing is a quantitative assessment of the Signboard’s factor of safety, meaning how much force the building and Signboard can withstand before there is danger.  As the applicant’s expert Mr Wong notes in his comments on the report, the wind load was underestimated by 30 per cent and no conclusion was given “to justify the structural adequacy of the signboard”.  The report also fails to consider a critical mechanism of failure, ie the likelihood of failure at the connection points of the steel frames and guy wires, not at the anchor bolts, but on the Signboard itself.

37.  In conclusion, I agree with the applicant’s submissions that the massive size of the Signboard; its unauthorized status; its unknown circumstances of construction and maintenance; its deficient lateral stability system; its deviation from current standards of safety; and its locus in a heavy pedestrian and vehicle traffic area provide compelling evidence of its imminent danger to life and property.

Carried out with a view to letting

38.  The circumstance in s 24B(1)(b) reflects the law’s policy to enable priority demolition and enforcement against unauthorized building works which have been or are being carried out with a view to sale, letting or other disposal, whether or not danger is imminent.

39.  As confirmed in the evidence of both Mr Lee and Mr Lam, Good Fortress has been profiting from letting out the Signboard for a continuous period of more than 23 years.  At the time of the application, it was receiving $73,000 per month from its licencee at the expense of posing an imminent danger to the general public.  In my judgment, the condition in s 24B(1)(b) is satisfied and demolition should follow.  Any further delay to justified demolition that allows Good Fortress to continue profiting from the Signboard would in my view be contrary to the policy of the law.

Other issues raised by Good Fortress

40.  Mr Lam’s affirmations raised further issues concerning (i) the delay to enforcement; (ii) the withdrawal of the s 24 order in 2004; and (iii) the alleged “legitimate expectation” of continued use of the Signboard.  I agree with the applicant that none of these issues preclude the making of the s 24B order or diminish the evidence in support of the conditions for making such order.

41.  On the first issue raised, I agree that the reasons for delayed enforcement are complex and often related to changes in enforcement policies.  However, in my view, the delay has no direct bearing on the separate and very different question of whether the building works was carried out in contravention of the BO.

42.  On the second issue, I am of the view that there is no law or legal principle that precludes the applicant from taking enforcement action against building works under s 24B after an application under s 24 against the same works has been withdrawn.  Both provisions involve different legal tests and reflect different policy aims.  I agree that the terms of s 24B(1) and (26) suggest that both methods of enforcement are generally available.

43.  On the issue of the alleged legitimate expectation, I am of the view that at no time the applicant has made any representation to Good Fortress, or to the public generally, that (1) the Signboard is not an unauthorized building works under the BO; or (2) no enforcement action will be taken against the Signboard.  In my view, whatever expectation there may be on the part of Good Fortress is self-generated and not legitimate.  The two letters sent to Good Fortress in 2004, communicating the withdrawal of the s 24 order, were brief in terms and did not in any way convey either representation (1) or (2): cf similar absence of representations made in the withdrawal letter considered in Chinluck Properties Ltd v Appeal Tribunal, unreported, CACV 242/2012, 3 September 2013, CA.  In my judgment, they do not come close to any form of legitimate expectation required by the law.

CONCLUSION

44.  For the above reasons, I granted the PDO requested for by the applicant under the application at the hearing on 17 January 2017.