The Wing On Co. Ltd. and Others v. Building Authority

IN THE COURT OF APPEAL

1996, No. 168
(Civil)

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J U D G M E N T

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Sears, J. :

1. This is an appeal from Cheung J. who on 25th July 1996 dismissed an application for judicial review of a decision of the Building Appeal Tribunal.

2. The facts can be briefly stated. The appellants are the owners and developers of a site at 343-361 Nathan Road. They are the proprietors of the well known Wing On Department Stores. The site was originally occupied by three buildings which had a combined plot ratio of some 11.8.

3. On 23rd December 1993, they submitted building plans to redevelop that site. The plot ratio adopted was 13. At that time, the current Outline Zoning Plan ("OZP") permitted a plot ratio of 13 for commercial buildings. The type of development was somewhat unusual in that the gross floor area was split almost equally between office and retail. The retail would have been for a new department store.

4. On 24th December, one day after the submission, there was a draft revised OZP S/K2/6 published. This imposed a maximum plot ratio of 12, or that of the existing building whichever was the greater. The plans therefore that had to be considered by the Building Authority contravened that draft OZP. On 18th February 1994 the Building Authority rejected the plans. At that time it was thought, by virtue of the current authorities, that the word "may" - to which I shall refer in a moment in s.16 - meant "must". After April 1995, following a decision of mine in Head Step Ltd. v. Building Authority, MP 2491/94, it was clear that it had a discretion under s.16(1).

5. On 30th June 1995 the appellants re-submitted the building plans requesting the Building Authority to exercise its discretion. On 29th July it rejected them again and the Appeal Tribunal later heard the appeal. Its decision was given on 31st January 1996. It comprises a 20-page document which sets out all the relevant facts, the chronology, the appropriate law and the submissions which were made by counsel on the appellants' behalf, and the decision which they came to. It upheld the Building Authority's decision to refuse permission for the development.

6. The appellants then, pursuant to leave given by me, applied by way of judicial review to quash that decision which was heard by Cheung J. He dismissed the application and from that application, the appellants appeal to this court.

7. It must be first observed that the court has a limited role in judicial review proceedings in appeals from the Buildings Appeal Tribunal. The Ordinance has entrusted the decision-making process to a particular tribunal, which comprises experienced persons. This court does not sit in an appellate capacity from that tribunal. It can only review its decision when the tribunal itself has committed one of the well known errors of law postulated in the CCSU case. Here, Miss Eu Q.C. submits that there is an error of law in that the tribunal failed to take into account a relevant consideration.

8. The statutory framework for applications to the Building Authority is found in Part II of the Buildings Ordinance, Cap.123. Before building work commences, approval must be given by the Building Authority and in s.16 which is headed "Grounds on which approval or consent may be refused", sub-section (1) reads :

(1) The Building Authority may refuse to give his approval of any plans of building works where -

.......

(d) the carrying out of the building works shown thereon would contravene the provisions of this Ordinance or of any other enactment, or would contravene any approved or draft plan prepared under the Town Planning Ordinance (Cap.131);

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The building works as submitted which have a plot ratio of 13 therefore do contravene the new draft revised OZP which has a maximum plot ratio of 12 or that of the existing building which was only 11.8. Therefore the Building Authority may refuse it by virtue of that contravention.

9. The word "may" however, does give it a residual discretion, because there may well be cases where it considers that despite the contravention, building approval can be given. It is important, however, to recognize that the reason for refusal is the contravention of the draft plan prepared under the Town Planning Ordinance. This particular draft plan was prepared under that Ordinance and considered by the Town Planning Board. The appellants had lodged an objection concerning their site and the Board considered that objection and took no action on it.

10. It was common ground before the Buildings Appeal Tribunal that the fundamental basis for the imposition of a plot ratio of 12 for commercial use was the traffic generated in the zone, by both the vehicular traffic and the pedestrian traffic, and the consequent strain on the road network and on the public facilities, such as the MTR and the public buses. During that hearing before the Town Planning Board, there was a detailed examination of traffic matters and a consideration of surveys carried out and reports prepared. It came to a conclusion that in the area which encompasses this particular site, a plot ratio of 12 was appropriate.

11. The figure of 12 was a base figure, which was made up as to 9 for office use and 3 for retail use. The main submission of Miss Eu Q.C. was that the particular development which was to be carried out on this site, which comprises, as I have said, offices and a new department store, had approximately a 50/50 split - that is half of the site being used for office space and half for retail space. Therefore, there was led at the Building Appeal Tribunal evidence from experts called by the appellants to demonstrate that for that particular split of floor space, the traffic generation was less than the standard traffic generation on a split as to 9 for offices and 3 for retail use.

12. The Building Appeal Tribunal listened to the evidence which was given and the submissions which were made. It was submitted that because of this particular split between retail and office, this was a relevant consideration which the Building Authority should take into account when exercising their discretion under s.16. It was clear, and the Tribunal accepted, that the function of the Building Authority, and Building Tribunal on appeal, is to examine whether there are any specific considerations for the site which would justify a departure from the draft OZP. In other words, whether specific reasons were put forward to justify a development which exceeded a plot ratio of 12. What was said at the forefront of the appellants' case was that their traffic generation was a relevant consideration which would so justify this departure.

13. The Tribunal examined the submission which was made and the evidence called to support it, and said in conclusion :

"In truth, the traffic considerations which are the subject of a balancing exercise for the town planners having regard to the area or zone as a whole are not in our view site-specific considerations. Traffic considerations are clearly matters affecting the area as a whole which town planners must take into account but are not matters which the Building Authority either can or should take into account as giving rise to special circumstances justifying the exercise of its discretion in approving building plans which contravene the OZP. Apart from anything else, neither the Building Authority nor for that matter this Tribunal is in a position of determining whether there is a real 'planning gain' from a development such as that proposed by the Appellants in terms of traffic considerations. A so-called planning gain in one case may be wholly neutralised by a planning loss in another. Furthermore, it is not a question of the Building Authority attempting to strike a balance in a situation such as this - that balance has already been attempted and hopefully achieved by the town planners.

In conclusion therefore we do not regard the traffic considerations in this case as constituting a matter which the Building Authority can or should give any weight in exercising its discretion."

14. Miss Eu Q.C. on behalf of the appellants attacks that finding, with which the judge agreed. Miss Eu Q.C. submits that because the traffic was the basic reason for the imposition of the plot ratio in the zone, therefore, if she can demonstrate that the redevelopment provides a traffic generation less than that which was considered to be appropriate in the standard mix, that is a relevant consideration which the Building Authority should have had regard to.

15. With respect, I disagree with that approach. It must be recognized that the discretion which is given in s.16 is a discretion to depart from the draft plan which has been prepared under the Town Planning Ordinance. That plan therefore is of vital importance when the Building Authority have to consider any application.

16. It is for the town planners to decide what the appropriate plot ratio is for any particular zone and for them to come to a reasoned decision having regard to a variety of factors such as the capacity for public transport to take additional persons, the constraints upon the road network caused by traffic generation, all those matters which affect an area as a whole. In my judgment, the Tribunal was right to say that it was for the town planners to take those consideration into account. Otherwise it would mean that each individual application, which sought to depart from the standard mix of 9 to 3, may be subject to detailed examination of traffic generation by the appellants and would involve the Tribunal having to listen to that detailed evidence, and making a judgment on each such application, thereby effectively destroying the concept of a plot ratio for a zone.

17. In my judgment, what s.16 is contemplating is that developers should recognize that if they do contravene the draft plan, in other words, if their development does exceed the plot ratio of 12, then it is probable that a refusal will be given. It is not absolute, because the word "may" is used. There is a residual discretion to allow matters to be judged on the site's specific considerations. For example, in a commercial re-development, there may be brought about substantial environmental benefit which would justify the Building Authority departing from the standard plot ratio; or, it might have within it some public benefit which would similarly justify a departure.

18. This development which is proposed - and I do not say this in any way offensively of it - is a standard commercial development. It is what it is. It will be a department store and offices. In my judgment, the Building Appeal Tribunal was correct in deciding that the traffic generation from that specific site was an irrelevant consideration. It was unnecessary for the Judge below to embark upon an examination of the background information which justified a plot ratio of 12, but it may be that he was persuaded by the able advocacy which was before him.

19. As I said at the beginning of this judgment, the court has a limited role to play in judicial review. One must find an error of law. I can find no error of law by the Building Appeal Tribunal and, in my judgment, the judge was correct in rejecting the application and I would dismiss this appeal.

Rogers, J. :

20. I agree. I have very little to add. The crucial part of the judgment below is incapsulated on page 8 where the Judge said

"I agree with the conclusion of the Appeal Tribunal that traffic generated by the new building is not a matter which should be taken into account in deciding how the discretion should be exercised."

21. The matter which concerned me at one stage was whether that statement was too sweeping.

22. This was a proposed commercial building. What is commercial use is defined in the Draft Revised Outline Zoning Plan. This proposed development, being a mixture of office and retail, falls clearly within that definition. The Draft Revised Outline Zoning Plan having taken into consideration various factors and in particular the likely traffic generation from different plot ratios concluded that the plot ratio should be 12 for commercial developments. I cannot at the moment envisage circumstances where, in a commercial development, traffic generation, on its own, being a factor relevant to the specific site, would be a matter which should be taken into account by the building authority. Having said that, however, I emphasize that this decision relates to this case.

23. I too would dismiss this Appeal.

Godfrey, J.A. :

24. The Building Appeal Tribunal clearly understood the principles on which it had to exercise the discretion conferred on it here. It summarised those principles in words which, in my judgment, bear repeating and which I would expressly approve. It said this :-

"Leading Counsel for the Appellants contended that in exercising the discretion to approve building plans even if they contravene the TPB plans, the Building Authority and this Tribunal must do a balancing exercise on site specific considerations. We agree with this proposition and would incidentally observe that this approach underlines the difference between the functions of the Building Authority and this Tribunal on the one hand and the Town Planning Board on the other: whereas the Town Planning Board is concerned with planning considerations for a particular zone or area, the Building Authority and this Tribunal are of course concerned with a particular site or specific building development. It is therefore perhaps not surprising that in the objection hearing the Town Planning Board was not willing to revise the draft OZP for the sake of the Appellants' building plans in respect of their specific site and were not therefore prepared to treat the Appellants' Site as a special case.

The Building Authority on the other hand is and can only be concerned with a specific site. Leading Counsel for the Appellants and Counsel for the Building Authority were agreed that relevant considerations for the exercise of the discretion were (a) whether the planning intention in the OZP is contravened and (b) whether there are special considerations which warrant approval. Leading Counsel for the Appellants also contended that the question as to whether or not there were special considerations relating to the Applicant or the application was a relevant consideration for the purpose of the exercise of the discretion. Counsel for the Building Authority contended otherwise but we are satisfied that in principle this factor is a relevant consideration for the exercise of the discretion."

25. The law is clear. If a decision-maker entrusted with a discretion to grant or refuse an application refuses to take into account a relevant consideration it falls into error of law, and its decision is amenable to judicial review. If satisfied that the decision-maker has fallen into such error, the court will send the case back to it for re-consideration.

26. The question in the instant case, however, is whether, in rejecting the site specific traffic consideration urged on it here by the appellants, the Tribunal did refuse to consider a relevant consideration. Having regard to the way in which the Tribunal expressed itself in the passage from its Decision which Sears, J. has quoted, it is clear that the Tribunal did regard the allegedly site specific traffic considerations here as irrelevant. We, then, must consider whether it was justified in doing so. For this purpose, it is important to examine, as it always is in this sort of case, just what is the nature of the consideration which the decision-maker has rejected as irrelevant.

27. There are, in my judgment, three categories of consideration. First, those clearly (whether expressly or impliedly) identified by the relevant legislation as considerations to which regard must be had. Second, those clearly identified by the relevant legislation as considerations to which regard must not be had. Third, those to which the decision-maker may have regard if, in its judgment and discretion, it thinks it right to do so. There is, in short, a margin of appreciation within which the decision-maker may decide just what considerations should play a part in its reasoning process. (In setting out these categories, I am indebted to the judgment of Simon Brown, LJ in R. v. Somerset County Council, ex parte Fewings [1995] 1 WLR at p.1037; see particularly at pp.1049 and 1050.)

28. The consideration with which we are concerned here, that is to say, the site specific traffic considerations relied on by the appellants, falls within the third category. This consideration is not one which the legislation expressly or impliedly requires the Tribunal to take into account. It is a matter, as I see it, entirely for the judgment and discretion of the Tribunal whether and if so to what extent to take this consideration into account. The Tribunal is specially qualified to perform this exercise; better qualified to do so than is the court. In deciding that the site specific traffic considerations urged on it by the appellants were not considerations which (for the reasons it gave) it ought to take into account, it acted within the scope of the discretion conferred on it and fell into no error of law.

29. For these reasons, and for those given by Sears and Rogers, JJ, I too would dismiss this appeal. The appellants must pay the respondent's costs of the appeal.