SHANGRI LA HOTEL (KOWLOON) LTD v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 178/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 178 OF 2013

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J U D G M E N T

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1.  This is the hearing of an application by the Applicant for judicial review of the decision of the Appeal Tribunal (Buildings) (“Tribunal”) dated 17 September 2013 in Building Appeal Case No 686 of 2007 (“Decision”). 

Background

2.  The salient facts have been summarised in paras 1 to 10 of the Decision and paras 1 to 47 of the Form 86.  For the present purpose, I shall rely upon the summary in the Decision as follows[1] :

“1. By a letter dated 2^nd May 2007, the Appellant’s authorized person, Mr Dominic Kwan {‘Mr Kwan’} of K & W Associates submitted plans {May 2007 GBP} on behalf of the Appellant for approval in respect of certain addition and alteration building works which were proposed to be undertaken at the Shangri-La Hotel, Kowloon. By its letter dated 27^th June 2007 the Respondent disapproved the plans {RB/49 – 54}.

2. The Notice of Appeal by the Appellant was given on 4^th July 2007. The Appellant filed its Statement of Particulars on 9^th June 2008 and its Amended Statement of Particulars on 12^th February 2009. The Respondent filed Representations on 7^th May 2008 and Amended Representation on 11^th March 2009.

A. BACKGROUND

3. The Appellant has been operating and continues to operate a hotel at 64, Mody Road, Tsim Sha Tsui East, Kowloon pursuant to GBP approved by the Respondent on 6^th October 1980 which granted hotel concessions pursuant to section 42 (1) of BO. The concessions relevant to this Appeal comprised the following:

(a) basement concessions amounting 14,238.673 sq m were to be excluded in computing the GFA for purposes of calculating the Plot Ratio {PR};

(b) the PR could be based on a notional building of over 61 m in height and the permissible site coverage (SC) could be based on the actual height of the building, namely, 75% for a building 43-49 m high under Schedule I of the B(P)R;

(c) ‘bonus domestic’ PR from lobby floor (G/F) dedication of 1.475.

4. It is common ground that (i) the domestic and non-domestic GFA of the existing hotel building are 40,466.544 m² and 5,917.10 m² respectively (ii) the domestic and non-domestic PR of the existing building is 10.117 {in examination in chief, RW1 Chow Kim Ping corrected paragraph 5 of his witness statement to reveal this figure} and 1.479 respectively (iii) the total GFA and PR of the existing building is 46,383.644 and 11.596 respectively and (iv) the domestic SC of the existing building was 74.08%.

5. On the Outline Zoning Plan {OZP}, the site of the hotel was defined as a ‘Commercial’ zone. In the Notes to the OZP, it was stipulated that ‘(1) No new development, or addition, alteration and/or modification to or redevelopment of an existing building shall result in a total development and/or redevelopment in excess of a maximum plot ratio of 12.0 or the plot ratio of the existing building, whichever is the greater.’

6. On 20^th September 2006, Mr Kwan submitted plans on behalf of the Appellant which proposed to add two floors of guestrooms on top of the existing structure with other alteration works. The basement floors were included in the GFA computation for the purpose of calculating the PR, which was calculated under the then prevailing Practice Note for Authorised Persons and Registered Structural Engineers {PNAP 111}. The back-of-the-house areas were excluded in the calculation of the GFA. The plans were disapproved by BA by his letter dated 14^th November 2006. {RB/55 – 61}

7. On 22^nd December 2006, Mr Kwan submitted another set of plans, now proposing the addition of one floor with 14 guestrooms and converting some of the guestrooms on the 13^th and 14^th floors into suites without any increase in the number of guestrooms. The calculations accompanying the plan excluded the basement floors from the GFA computation. All the guestrooms were treated as non-domestic for GFA/SC purposes. The calculations postulated the SC and PR to be 58.642% and 11.997 respectively. The plans were also disapproved on 18^th January 2007.

8. On 11^th February 2007, Mr Kwan submitted a further set of plans which proposed an additional floor with 11 suites and 1 standard guestroom whilst also converting the existing 28 guestrooms on the 13 floor into 14 suites. The PR was assessed based on the original hotel concessions referred to in paragraph 3 above. The domestic and non-domestic PR was calculated as 10.483 and 1.482 respectively. Modification was sought to allow the SC to be calculated based on the original building height. These plans were also disapproved on 7^th March 2007. There is no appeal against the above three disapprovals.

9. On 2^nd May 2007, Mr Kwan resubmitted another set of General Building Plans (Alteration and Addition Works) {AB/169 – 171} proposing the addition of one floor as a hotel clubhouse comprising an open swimming pool with changing rooms, function rooms and other alteration works. The new clubhouse facilities were incorporated into domestic GFA. The PR was calculated based on the original 1979 hotel concessions and therefore excluded the GFA of the basement floors in the computations. The plans stated that the domestic PR was 10.477 and the total PR to be 11.959.

10. By a letter dated 27^th June 2007 {RB/49 – 54}, the BA disapproved the plans on the grounds, among others, that (i) the PR and SC calculations were incorrect and contravened B(P)R 20 and 21, (ii) the PR and SC of the hotel with the proposed extension should be assessed under the current B(P)R based on the actual building height and that the GFA of the basement floors and the portion of the staircase Grid 3/C on level 21 should also be included in the PR computations, (iii) the total PR exceeded that permissible under the OZP and (iv) that the clubhouse should be included in the non-domestic PR and SC of the building.”

3.  The hearing before the Tribunal took place in March 2010 before the Chairman sitting with 3 members. The Decision was delivered some 3½ years later, and was signed only by the Chairman with 2 members.  In the “Remark” appearing below the signatures, it was explained that the Secretary was not able to get in touch with one of the members (“Ms Ng”)[2] within a reasonable period of time to seek her comments and signature.  The Chairman and the other 2 members had agreed to issue the Decision without the signature of Ms Ng.

4.  It can be seen from the Decision that the issues before the Tribunal were, with the assistance of counsel on both sides, distilled down to one, namely, whether the exemptions granted to the Applicant as reflected in the 1980 Approved Plans (“Exemptions”) should or should not have been taken into account by the Building Authority (“BA”) when the May 2007 General Building Plans (“GBP”) were submitted for approval by the Applicant (“Issue”) : see Decision, §11.

5.  The Tribunal (acting by the Chairman and 2 members) dismissed the appeal of the Applicant and held that the May 2007 GBP[3] had to be examined in the light of the prevailing law at the time of the submission and rejected the argument that the concessions previously granted should have been taken into account.

Grounds for judicial review

6.  Two grounds have been advanced for judicial review.

7.  The complaint in Ground 1 is that the Tribunal is wrong in law in its determination of the Issue[4].

8.  The complaint in Ground 2 is two-fold.  Firstly, it is said that the Chairman and two members lacked jurisdiction to decide the appeal[5]. Secondly, the Tribunal acted in breach of its duty to be fair because the Applicant was denied a judgment from it as a single adjudicating body[6].

9.  This court has been invited by Mr Yu SC, appearing with Mr Ismail for the Applicant, to consider Ground 2 first since it concerns the Tribunal’s jurisdiction.

Jurisdiction of the Tribunal

10.  The resolution of this issue turns upon the proper construction of sections 51(a) and 52(1) of the Interpretation and General Clauses Ordinance, Cap 1 (“IGCO”), on which Mr Ho SC, appearing with Mr Man SC for the BA, relies in answer to this complaint.

11.  I begin by setting out the relevant statutory provisions under both the Buildings Ordinance, Cap 123 (“BO”) and IGCO :

Buildings Ordinance

“48. Appeal Tribunal

(1) Where a notice of appeal is given under section 47, the Chief Executive shall appoint, from the Appeal Tribunal Panel, a tribunal consisting of a Chairman and not less than 2 members, for the purpose of hearing and determining the appeal to which the notice relates.

…

50. Determination of appeal

1. The following shall apply in relation to the hearing and determination of an appeal or a preliminary hearing held under section 49 –

(a) every question shall be determined by the opinion of the majority of the members of the Appeal Tribunal;

(b) where there is an equality of votes, the Chairman shall have a casting vote;

…

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

[emphasis added]

Interpretation and General Clauses Ordinance

“51. Powers of board, etc not affected by vacancy

Where any board, tribunal, commission, committee or similar body is established by or under any Ordinance, the powers of such board, tribunal, commission, committee or similar body shall not be affected by –

(a) any vacancy in the membership thereof;

(b) any defect in the appointment or qualification of a person purporting to be a member thereof; or

(c) any minor irregularity in the convening of any meeting thereof.

52. Power of majority and exercise of powers

(1) Where any Ordinance confers a power or imposes a duty upon a body or number of persons consisting of or being not less than 3, such power may be exercised or duty performed in the name of that body or number of persons by a majority of those persons.

(2) Whenever such body or number of persons is assembled, the chairman or other member presiding shall have a casting as well as a deliberative vote, in all matters in which a decision is taken by vote by whatever name such vote may be called.

(3) The exercise of any power vested in such body or number of persons may be signified either by the chairman or other person presiding at the meeting or other deliberation at which such power was exercised or at which, as the case may be, authority to exercise it was conferred, or by any person from time to time authorized by such body or persons to signify the exercise of such power. ”

[emphasis added]

12.  In this case, the notice of appeal was given on 4 July 2007, and in exercise of the power under s 48(1) of the BO the Chief Executive (“CE”) appointed a Chairman and 3 members to hear and determine the appeal (“Appeal”).  It is important to note that the CE had appointed more than the statutory minimum number of members to constitute the Tribunal.

13.  Mr Yu submits that under s 50 of the BO, the only body which had jurisdiction to hear and determine the Appeal was the tribunal appointed by the CE pursuant to s 48(1) of the same Ordinance.  The Chairman and the other two members who dismissed the Appeal were not the tribunal so appointed because it did not include Ms Ng.

14.  Accordingly, the Tribunal was not properly constituted at the time the Decision was made.  This court has been referred to a number of authorities[7] for the proposition that where the legislature has created a body constituted in a particular way, that body can only function in that way.

15.  The proposition that the Tribunal, being a creature of statute, must function in such manner as provided by the applicable legislation is not one which is disputed.  There is therefore no need to deal with those authorities here.  However, I agree with Mr Ho that those authorities involved different legislation, different complaints of irregularity and none of them was concerned with provisions similar to s 52(1) of the IGCO.

16.  Before dealing with the construction arguments, I should say that there is no evidence as to the whereabouts of Ms Ng or why it was that the Secretary was unable to contact her.  Nor is there any evidence as to whether Ms Ng had participated in the determination of the Tribunal.  It is, however, undisputed that she took part in the hearing of the Appeal.  I shall proceed on the basis that Ms Ng had made no contribution to the Decision, which is the view most favourable to the Applicant.

S 51(a) of IGCO

17.  I believe that the issue over s 51(a) of IGCO is relatively easy to decide.  Mr Ho submits that the unavailability of Ms Ng constituted a vacancy in the membership of the Tribunal.  However, by virtue of s 51(a) such vacancy did not affect the powers of the Tribunal.  The arguments turn upon the proper meaning of “vacancy”, which is not defined in the IGCO.

18.  According to the Shorter Oxford English Dictionary, 6^th edn, “vacancy”, in the present context, means :

“The fact or condition of a position, office, etc, being or falling vacant; an instance of this; a vacant position, office, etc”.

19.  There is no reason to ascribe a meaning to “vacancy” which is different to its ordinary or natural meaning.  Section 51 deals with various deficiencies in connection with the membership or the meeting of, inter alia, tribunals.  “Vacancy”, in its ordinary meaning, sits perfectly well within those provisions. 

20.  In the premise, I am inclined to agree with Mr Yu that “vacancy” would cover situations such as the expiration of appointment or the resignation of a member.  I would add that it should also cover the passing away of a member.  However, I do not believe that the incapacity of a member, eg, for health reason falls within s 51(a) because the seat of that member would not be vacated. 

21.  Turning to this case, I do not believe that the inability to contact a member can be said to constitute a vacancy in the seat of that member.  This is not consistent with the ordinary meaning of that word. 

22.  Further, the proposition may be tested.  If Ms Ng could not be contacted because she has emigrated or if the Secretary wrote to the wrong or outdated address in trying to get in touch with Ms Ng, I do not believe that Ms Ng’s membership in the Tribunal is therefore vacant. 

23.  For completeness, I should mention that s 2 of the IGCO provides that the application of the provisions of that Ordinance is subject to, inter alia, “contrary intention appears … from the context of any other Ordinance or instrument”. 

24.  In my view, s 51(a) should not be read as allowing the reduction in the minimum number of members of an appeal tribunal provided under s 48(1) of the BO.  In other words, I believe that s 48(1) constitutes a contrary intention against an application of the former which may result in a reduction of the membership to below 3.

25.  I believe that the above construction is consistent with the notion that an appellant has a right to have his case heard by an appropriately constituted tribunal.  Such constitution, in the context of the BO, involves both appropriate qualification and a minimum number of members of the tribunal.  This is by no means an unusual notion under our system of law.  A parallel may be drawn with the constitutions of the Court of Appeal and a jury.  In both cases, the law prescribes a minimum number of members required for the discharge of its duties. 

26.  Further, s 48(1) allows the appointment of more than the minimum number of members to a tribunal (as in this case) so that the danger of losing a member for a complicated appeal can be mitigated.  This is also consistent with the construction set out in para 24 above. 

27.  In the premises, I reject BA’s argument based on s 51(a) of the IGCO (see para 17 above).

S 52(1) of the IGCO

28.  Relying upon s 52(1) of the IGCO, Mr Ho submits that the clear statutory intention of these provisions is to enable a public authority to exercise its power, and to discharge its duty, by majority. Further, the effect of these provisions is that although the Tribunal consisted of 4 members, it could act by 3 members (being a majority), both by way of deliberation and the actual rendering of the Decision.

29.  On his part, Mr Yu argues that s 52(1) only covers the voting by the members of the Tribunal, ie, it merely sets out the well-known rule that a body of persons may decide by way of majority vote (“Rule”). 

30.  As I understand the arguments, the construction contended by Mr Ho covers the Rule.  In other words, the construction exercise for the court is to explore the limits of s 52(1).  Does it embrace the situation in the present case, ie, whether the Tribunal could have properly functioned with only 3 members? 

31.  As in all construction exercise, the most important consideration is the meaning of the words under scrutiny.  To begin with, the subsection was formulated in wide and inclusive terms.  If it is contrasted with s 50(1)(a) of the BO, it can immediately be seen that the formulation employed in the latter is specific to give effect to the Rule.  There is no need to deploy the terms as found in s 52(1) of the IGCO for the purpose of enshrining that Rule. 

32.  Further, I agree with Mr Ho that the use of the words “in the name of that body” supports the proposition that the subsection was intended to be of wider application than just stating the Rule.  

33.  Whilst Mr Yu is right to have pointed out that s 52(2) is only concerned with voting, subsection (3) again deals with the “exercise of any power”[8]. Read in totality, it is in my view difficult to escape the conclusion that s 52 is intended to cover generally the exercise of power or performance of duty by the majority members of a body such as the Tribunal.  This reading is consistent with the heading of the section : “Power of majority and exercise of powers” [emphasis added].

34.  Mr Yu submits that the words “those persons”, the concluding words of s 52(1), must mean in the present case a tribunal of 4.  Hence, the subsection sanctions the exercise by a majority of the power vested in the tribunal of 4, and in this case there was no tribunal of 4 at the time of the Decision.  With respect, I am unable to see why this understanding of those words is justified.  In my view, the reference to “a majority of those persons”, in the context of this case, simply means 3 out of the 4-member tribunal.  In other words, those 3 members might exercise the power of the Tribunal in its name. 

35.  I believe that this construction of s 52(1) makes good sense because it is a fact that a body of persons, such as the Tribunal, may lose one or even more of its members due to unforeseen circumstances.

36.  Mr Yu argues that on the construction contended by the BA, where a 4-member tribunal has been appointed by the CE, the Chairman or the majority members of that tribunal can decide to turn the tribunal into one of only 3 members, thereby overriding the decision of the CE.  That, says Mr Yu, cannot possibly be the intention behind s 52(1). 

37.  I believe that the abuse alluded to is more theoretical than real because the subsection only empowers, but not mandate, the majority to act (“such power may be exercised”).  Plainly, the power must only be exercised bona fide and on proper ground.  For instance, where 1 of the members was incapacitated, or uncontactable, at the early stage of an appeal, the majority may decide that the proper course is to have the incapacitated member replaced or to have another tribunal appointed to deal with the appeal. 

38.  Mr Yu also submits that at common law a judicial body is expected to function with each member giving his/her full participation[9], and that this court would not read s 52(1) as effecting a radical change in the law by a side-wind[10]. 

39.  The principles advanced by Mr Yu are not disputed.  However, I cannot agree that the construction contended by the BA would effect a radical change in the law.  It is a fact that a body of persons may lose the participation of its member(s) in the course of discharging its function.  Even in the context of a criminal trial, it is not unusual to find that a member of jury has become unavailable for various reasons.  Provided that the minimum number of jurors remains, the trial would normally proceed. 

40.  There are 2 further points I need to deal with. Firstly, I have been referred by Mr Yu to the relevant Hansard (meeting of 28 September 1966).  The Attorney General was recorded to have said the following in respect of Part VII of the IGCO :

“Part VII of the Bill expands the law governing the appointment and functions of boards, tribunals, committees and similar bodies. Clause 50 allows for the appointment of alternate and temporary members. Clause 51 preserves the validity of the proceedings of such bodies notwithstanding minor irregularities. Clause 52 deals with voting and clause 53 with the procedure for fixing the seal of a body corporate to a document.”

[emphasis added]

41.  Relying upon the Hansard, Mr Yu submits that the Applicant’s construction of s 52(1) is consonant with the same. 

42.  There are 2 issues for consideration, namely, (a) the extent to which the court may rely upon the Hansard, which is a legal question and (b) the weight of the Hansard, which is a factual question.

43.  In respect of the former, I have been referred by Mr Ho to De Smith’s Judicial Review, 7^th edn, 5-028 where the following dicta from Lord Browne Wilkinson can be found :

“However, as Lord Browne Wilkinson made plain the exclusionary rule should be relaxed to permit reference to parliamentary materials only where: ‘(a) legislation is ambiguous or obscure, or leads to an absurdity; (b) the material relied on consists of one or more statements by a minister or other promoter of the Bill together if necessary with such other parliamentary material as is necessary to understand such statements and their effect; (c) the statements relied on are clear’.”

44.  I do not believe that the conditions identified in the above dicta have been met.  In particular, I do not find s 52(1) ambiguous or that it leads to an absurdity. 

45.  As regard the weight of the Hansard, with respect, I do not find the material to be of assistance because (a) it recorded a very brief introduction of s 52 and (b) the 3 words used (“deals with voting”) plainly could not properly reflect the scope of that section. 

46.  Secondly, I do not find any contrary intention appearing in the BO which may have the effect of excluding the application of s 52(1) (see para 23 above).  To the contrary, the construction contended by the BA is consistent with s 50(1)(a) of the BO, and serves to compliment it by providing for the eventualities such as the incapacity of a tribunal member. 

47.  The references to “hearing and determining the appeal” in ss 48(1) and 50(1) of the BO do not change the complexion of the above analysis.  The purpose of appointing an appeal tribunal under s 48(1) would of course be hearing and determining the appeal.  I can detect no intention to inhibit the functioning of the tribunal by a majority of its members.  The fact that the BO allows the appointment of more than the minimum number of tribunal members suggests that it did not escape the legislature that there may be a need for the tribunal to function with the minimum number of members due to the loss of participation of member(s) in the course of an appeal. 

48.  I have taken a step back to consider whether the above construction of s 52(1) is consistent with that of s 51(a) (see in particular paras 23 to 26 above), and I can see no inconsistency.  Under s 51(a), as construed above, it is not permissible for a tribunal to have less than the minimum number of members prescribed by s 48(1) of the BO.  On the other hand, s 52(1) allows the exercise of power (and the discharge of duty) by the majority of the tribunal members where the total number of members is at least 3. 

49.  Finally, I have reminded myself of the principles for statutory interpretation as summarised by Kwan JA in Moulin Global Eyecare Trading Ltd (in liq) v Commissioner of Inland Revenue [2012] 2 HKLRD 911, §§ 31 and 32.

Fairness

50.  The Applicant’s case is underpinned by the same principle referred to in para 38 above.  Without in any way diminishing the importance of that principle, I do not believe it advances the Applicant’s case any further.  Like most legal entitlements, the right of the Applicant to have the Appeal determined by all 4 members appointed by the CE is not absolute : see the analogy in para 39 above.  This court must give effect to the provisions of s 52(1) of the IGCO.  In this case, the Decision was made by no less than the minimum number of members required under s 48(1) of the BO.  In these circumstances, I can see no real unfairness to the Applicant.

51.  In the premises, I hold that the Tribunal (acting by the majority of its members) did not lack jurisdiction in the determination of the Appeal and that it did not act unfairly in doing so.

The Issue 

52.  Before dealing with the Issue, I need to flesh out the material facts.  The hotel concessions referred to in para 3 of the Decision were contained in 2 Circular Letters (CL 45 and CL 48) from respectively the Director of Public Works and the BA to all authorised architects dated October 1968 and September 1969.  In February 1985, PNAP 111 was issued to amalgamate CL 45 and CL 48 and to clarify certain aspects pertaining to the granting of concessions.  Para 4 of that document stated that “[CL 45 and 48] issued to all Authorised Architects are hereby cancelled”.

53.  The concessions in relation to exclusion of basement from the calculation of Gross Floor Area (“GFA”) and the relaxing of SC for the domestic part of the building had ceased on the coming into effect of PNAP 111 Revision September 1995.  Para 4 of that document stated that “The various concessions listed in earlier versions of this PNAP are considered spent and are now withdrawn.”

54.  In place of the spent concessions, BA would exercise a general discretion to “favourably consider applications to modify SC and PR limits in the Building (Planning) Regulations (“B(P)R”) up to non-domestic standards”, subject to PR restrictions in the OZPs.

55.  In PNAP 111 Revision August 1996, a new concession for hotels was introduced whereby back-of-the-house facilities[11] would be excluded from GFA calculations.  There was no automatic exemption for basement floors per se.  Para 4 of that document contained a reference to the concessions listed in the earlier version of this PNAP as spent and withdrawn.

56.  In both the PNAP 111 Revision September 1995 and Revision August 1996, there was a reference to the BA seeking the necessary legislative amendments to the BO and Regulations in the longer term.

57.  These new hotel concessions under PNAP 111 have now been consolidated into the B(P)R, Cap 123F, Reg 23A.  The BA’s practice under B(P)R 23A has been set out in subsequent versions of PNAP 111.

58.  Further, it has been the BA’s policy, in cases of application for extension of existing hotels, that the hotel be reassessed completely in accordance with the new criteria, set out in B(P)R 23A and the current PNAP 111 : New Buildings 1 Division Manual, Section 4, Practice Note 19 (“PN 19”)[12].

59.  Finally, as Mr Ho has emphasized, it is not in dispute that without taking into account the Exemptions the May 2007 GBP would fall foul of the prevailing law and B(P)R.  In particular, the SC did not comply with Reg 20 and the total PR exceeded that permitted under Reg 21 and the 1^st Schedule. 

60.  The arguments here are not complicated.  The central pillar of the Applicant’s argument is that the Exemptions continue to have effect until revoked.  In answer to a question from the court, Mr Yu said that revocation here means that in the future the Applicant will not be able to rely on the Exemptions. 

61.  On the other hand, Mr Ho submits that the BA’s decision on the May 2007 GBP must be made in accordance with B(P)R 23A which was applicable at the time of the submission of the same, and the Exemptions could not be relevant.  Mr Ho also says that the Exemptions were plan specific, ie, they relate to the 1980 approved plans. 

62.  Further, Mr Ho has drawn the court’s attention to s 42(2) of the BO.  This section provides that in exercising his discretion the BA “shall not be required to take account of exemptions granted in the past”.  Mr Ho says that these provisions makes clear the obvious statutory policy of not requiring the BA’s practice to be ossified, or generating any “accrued right” to enjoy any concession forever.

63.  The submission that the Exemptions are “plan specific” has generated a good deal of arguments.  To my mind, it is no more than a label.  In substitution thereof, one may say that the Exemptions were “project specific”. 

64.  It seems to me that the true analysis is quite simple.  In a highly congested place like Hong Kong, there is very heavy competition on the use of space and gaining such use would normally result in very handsome economic reward.  Consequently, the Government has to regulate the use of space with detailed provisions set out in the BO and its subsidiary legislation as well as the OZPs.  From time to time, the Government may think it right to encourage certain use of the available resources and thus make it a policy.  The hotel concessions granted to the Applicant constitute a good illustration of such a policy. 

65.  The effect of the Exemptions is simply that the applicable regulations were relaxed for the building of the hotel in question (“Hotel”) in order to fulfil the policy to encourage the building of hotels. 

66.  It is clear from the Permit granted for the building works in question[13] and the plan referred to therein[14] that the Exemptions were given for the building of the Hotel.  In particular, the exclusion of basement area from PR calculation was stated on that plan. 

67.  I am not attracted by the Applicant’s argument that the Exemptions should continue to have effect until revoked.  I believe that the simple and logical understanding of the facts is that the Exemptions had been consummated.  The Hotel was built in accordance with the 1980 approved plans.  The Applicant has enjoyed the benefit which the Exemptions had brought for 35 years. 

68.  With respect, it is obfuscation to refer to the revocation of the Exemptions.  The Exemptions cannot be revoked after consummation[15].  I am unable to see any legal foundation for the proposition that unless the Exemptions are revoked, when the Applicant decides to rebuild or make alteration to the Hotel those same Exemptions must remain applicable.  It should be noted that the BA’s policy is not to undertake a complete reassessment in respect of minor alterations in accordance with PN 19 where such alterations did not involve any increase of SC or PR[16]. 

69.  The Tribunal dealt with this argument of the Applicant in para 76 of the Decision as follows :

“Beguiling and superficially attractive as this argument is at first blush, we believe that it fails to properly address the point that the concessions given to the Appellant in 1979 have not been taken away from the Appellant. They can still enjoy the concessions in respect of the hotel as it presently stands at the site. However if they decide to submit new plans involving additional GFA, those plans have to be examined in the light of the prevailing law at the time of the submission.”

70.  I respectfully agree with the Tribunal.

71.  The key to resolving the Issue is the understanding that the Exemptions were granted in 1980 in exercise of a discretion vested in the BA[17].  I see no reason to believe that such exercise of discretion would forever bind the BA (until revoked) when fresh plans are submitted for approval subsequently.

72.  In my view, the proposition that the BA must apply the law and any relevant policy prevailing at the time when the May 2007 GBP was considered cannot be faulted. 

73.  There is no dispute that the BA is entitled to adopt new practices to cater for evolving and changing circumstances : see Huges v Department of Health and Social Security [1985] AC 776, 788Band Mo Chun Hon v Director of Agriculture, Fisheries and Conservation Department, unrep, HCAL 52/2006, 22 February 2007, §25.

74.  Further, I agree with Mr Ho that the contention advanced by the Applicant would result in manifest unfairness in that other applicants submitting plans identical to the May 2007 GBP would be treated differently because he did not have the benefit of the Exemptions.  Further, if the Exemptions were to continue, the Applicant would be in a position to enjoy double benefit in that it would be able to benefit also from the new concessions for back-of-the-house facilities.  Even if no double benefit is claimed, the Applicant would be in a position to choose between the former and current concessions. 

75.  Next, there are 2 authorities on which the Applicant relies heavily.  With respect, I am unable to see any principle of general application which may be derived from these authorities that is of assistance to the Applicant. 

76.  Firstly, Building Authority v Appeal Tribunal (Buildings), unrep, HCAL 45/2012, 22 November 2012, Lam JA.  The salient facts ofthat casemay be summarised as follows.  In 2007, the BA granted a permit under BO section 42 and approved the developer’s GBP with bonus SC and PR concessions in exchange for certain surrender of land for footpath widening and dedication of area for public passage.  Substantial work was carried out on the land afterwards.  However, before construction was completed, there was a change in the government’s policy such that the surrender and dedication were no longer required, and the developer’s superstructure plans that corresponded to the GBP were disapproved by the BA. The result was that the original construction works contemplated in the GBP could not be completed as planned.  It was common ground between the parties that the original approval under the s 42 permit remained extant. 

77.  It was in this context that the court found that the BA was not entitled to disregard the original approval granted under the permit, and was legally bound to exercise the power under s16(1)(d) of the BO on the basis that there were modifications/exemptions in place in respect of that particular development project.

78.  The result in this case is hardly surprising. This is, however, a very different case from the present.  There is no extant section 42 permit in respect of the May 2007 GBP, and there is no attempt by the BA to blow hot and cold due to a change in policy. 

79.  Secondly, Re Proposed Extension of the Eaton Hotel, unrep, decision of the Appeal Tribunal (Building) (“BAT”) (chaired by Geoffrey Ma QC, as he then was) in Appeal Case 28/1994, 6 December 1994.  In that case, the hotel was built in the early 1990’s with concessions which had been applied by the BA since 1988.  In 1994, the owner sought to build extensions to the hotel. 

80.  It should be noted that the approval of the extensions was sought before the withdrawal of former hotel concessions by PNAP 111 Revision September 1995.  However, the BA did not take into account the same concessions when calculating the PR for the purposes of the OZP.  That resulted in an excessive PR for the purposes of the OZP.

81.  The issue in that case was, therefore, whether there should be different standards for calculation of PR for the purposes of the B(P)R and the OZP.  It was held that only one PR would apply for both purposes.

82.  The present case is fundamentally different. The former concessions have been withdrawn and superseded by B(P)R 23A.  There is no question of different standards being applied in respect of the OZP and the B(P)R.

83.  Further, Eaton Hotel does not stand for the proposition contended by the Applicant, namely, that once hotel concessions have been granted they should continue to be taken into account. 

84.  Finally, Mr Yu has advanced a new argument in the course of his reply submission based on BAT Case 880/2011 (26 November 2013)[18].  The argument runs as follows.  The May 2007 GBP did not seek approval for any building works that had previously been approved and subsequently built (eg, the basements).  The BA had no power to grant approval for works already built.  Thus, for the works already approved, the Applicant was entitled to rely on the Exemptions.  The new alteration and additional works plus the old approved works (with the Exemptions) did not contravene the B(P)R. 

85.  Again, I believe that BAT 880/2011 has to be read in the context of that case and I see no principle of general application to be distilled from that case. 

86.  In that case, the developer had obtained approvals for building works in respect of site X (including A9 Plan).  In the course of the development, site X was combined with an adjoining site for a bigger development.  There was a later submission of plan (B2 Plan) for the combined site, which incorporated the A9 Plan.  The B2 Plan was rejected by the BA on, inter alia, the ground that it covered certain completed building works under the A9 Plan and therefore amounted to an application for retrospective approval of completed or substantially completed works. 

87.  The BAT disagreed with the BA and held that the amendments in question only sought to incorporate certain amendment already approved by the BA.  It was held by the BAT at para 36 that :

“If the BA’s stance was correct, once any building works were commenced, it would not be possible to change the site area of those works even if the proposed building works were still in compliance with the BO under the new site area. We do not believe that can be right.”

88.  This case does not support the Applicant’s new argument.  I do not agree with the argument.  If it were correct, the Applicant would indeed be in a position to have a perpetual claim to the Exemptions.  I see no basis to dissect the May 2007 GBP in the manner suggested.  They must be considered by the BA as a whole in light of the prevailing law and policy.

Conclusions

89.  For the reasons stated above, I dismiss this application with costs to the BA and a certificate for 2 counsel. 

90.  Out of deference to submissions made, I should say that if I were to hold that the Tribunal had acted outside its jurisdiction, I would have referred the matter back to a differently constituted tribunal with a direction that it is to consider whether to exercise its residual discretion (pursuant to s 50(2) of the BO) to approve the May 2007 GBP as suggested by Mr Yu.  I would do so notwithstanding my view that, on a fair reading of the Decision, the Tribunal did in fact consider that issue but saw no ground for exercising its discretion in favour of the Applicant. 

91.  Whilst I have considerable reservation as to the merits of the Applicant’s case on the exercise of residual discretion, I am unable to agree with Mr Ho that no reasonable tribunal properly directed can exercise such discretion in favour of the Applicant (see R v Monopolies and Mergers Commission, ex parte Argyll Group Plc [1986] 1 WLR 763).  I bear in mind that the court should act with caution in refusing relief on the basis of futility and that the threshold here is a high one. 

92.  Last but not least, I am grateful for the assistance I have been given in this case.