TANG CHI FAI v. DIRECTOR OF LANDS FOR AND ON BEHALF OF LANDS DEPARTMENT

CAMP 319/2019

[2020] HKCA 339

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 319 OF 2019

(ON AN INTENDED APPEAL FROM HCAL 391/2019)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

Introduction

1.  This is the applicant’s renewed application for leave to bring an appeal to this Court out of time against the decisions of Chow J (“the Judge”) given on 21 August 2019 ([2019] HKCFI 2041; “the Main Decision”) and 21 October 2019 ([2019] HKCFI 2567; the “Leave Decision”), respectively.  The applicant also seeks an order of stay of execution of the Main Decision and the Leave Decision (“the Stay Application”).

2.  After reading the materials placed before us, we are of the view that it is appropriate to exercise the court’s power under Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap 4A (“the Rules”) to determine the present application on the papers without any oral hearing.

3.  This is our judgment.

Background

4.  The applicant’s mother, now deceased (“the Tenant”) had been operating a factory upon certain land at Tai Tong Wu in DD46 (“the Land”) since 1965 in Sha Tau Kok, New Territories pursuant to various Crown Land permits, licences or short term tenancies.  The last short term tenancy was numbered 441 dated 11 January 1983 (“STT No 441”). SST No 441 provides that the purpose for which the Land may be used shall be “A bone crushing factory”.

5.  In about 1992, the Tenant applied for change of use of the Land from “bone crushing” to “lard processing” in the planning context. Planning permission was granted by the Town Planning Board on 6 November 1992 subject to various conditions. The Tenant subsequently complied with the conditions in 1998.

6.  Due to objections raised by the villagers, the District Lands Office (“DLO”) issued a letter in June 2001 to the Tenant to reject his “Application for Cancellation & Re-issue of Short Term Tenancy No. 441 for the purpose of Lard Boiling Workshop”, and advised the Tenant to return the use of the Land to a bone crushing factory.  There were subsequent applications made by or on behalf of the Tenant to the DLO to change the use of the Land, but these applications were not approved by the DLO.

7.  In other words, notwithstanding the planning permission, the DLO had never approved the change of use under STT No 441.

8.  The Tenant passed away in 2011.  The applicant applied to the DLO for the transfer of STT No 441 into his name but the application was rejected on the ground that there were subsisting breaches of the short term tenancy.  The Land has been and currently is still being occupied by the applicant and/or Kun Fung Lard Limited (of which the applicant is one of the two directors) (“the Company”) since the death of the Tenant.

9.  On 18 December 2017, the DLO issued a notice to quit requiring the delivery up of possession of the Land to the Government on 31 December 2018 (“the Director’s Decision”) as the Government intended to allocate the Land to the Drainage Services Department for its use as a site office or for storage purpose.

10.  The applicant and/or the Company did not comply with the Director’s Decision.  On 2 January 2019, the DLO carried out land enforcement action in respect of the Land requiring unlawful occupation of the Land to cease by 28 February 2019.

Decisions of the Court of First Instance and Appeal

11.  On 12 February 2019, the applicant lodged his application to the Court of First Instance for (i) extension of time to apply for leave for judicial review of the Director’s Decision; and (ii) leave to apply for judicial review of the Director’s Decision.   

12.  By the Main Decision handed down on 21 August 2019, the Judge dismissed the application for extension of time to apply for judicial review on the following grounds:

(a)  The decision of the Government to terminate STT No 441 and recover the Land is a matter of private law which is not amendable to judicial review.  The mere presence of some of public elements in the Government’s decision to terminate a land lease, licence or short term-waiver is not sufficient to transform it into a public law decision.

(b)  The Land was government land granted to a private individual on a short term basis.  The Director was entitled to recover the Land for use by another Government department (DSD).  Whether the Land was suitable for DSD’s purpose, and whether there were other suitable sites for those purposes were matters for the Director/ Government to decide.  It was equally a matter for the Director/ Government to decide what (if any) weight ought to be given to the environmental consequences (if any) arising from the closing down of the Applicant/ Company’s lard processing operation on the Land.  Accordingly, the Director’s Decision is not Wednesbury unreasonable.

13.  The refusal of extension of time to bring judicial review is an interlocutory decision: see MI & IYW v Permanent Secretary for Security [2018] HKCA 419. Before an effective appeal can be brought, a party must obtain leave under Section 14AA of the High Court Ordinance.

14.  The applicant lodged his application for leave to appeal against the Main Decision on 3 September 2019.  By the Leave Decision handed down on 21 October 2019, the Judge refused to grant leave to the applicant to appeal against the Main Decision.

15.  Notwithstanding the refusal of leave by Chow J, the applicant purported to bring an appeal against the Main Decision and the Leave Decision by a Notice of Appeal of 4 November 2019 in CACV 509/2019. That appeal had been struck out by this Court on 22 January 2020.

16.  On 23 December 2019, the applicant renewed the application for leave to appeal in this Court under Section 14AA of the High Court Ordinance. 

Legal Principles

17.  The proper procedure for renewing an application for leave to appeal before this Court is to apply by way of summons in a separate set of proceedings in CAMP and not to appeal against the refusal of such leave by a Notice of Appeal. 

18.  The time for bringing a renewed application is 14 days from the refusal of leave at the court below, see Order 59 Rule 2B(3).  The Leave Decision of Chow J was made on 21 October 2019.  The applicant was therefore late by more than one month when he applied by summons on 23 December 2019.  

19.  In an affirmation filed on 23 December 2019, the applicant explained that the delay to lodge his application was caused by the problem with transportation and the road conditions in Hong Kong and he had difficulty of seeing his lawyers after working hours on weekdays and also on weekends.  He said he was only able to see his lawyers after the transportation and road conditions were back to normal after 24 November 2019. 

20.  We do not accept this explanation. After the Leave Decision, the applicant was able to instruct his solicitors to bring the defective appeal in CACV 509/2019 on 4 November 2019.  He had the assistance of counsel and solicitors in the preparation of that appeal.  There was no good reason why he could not pursue the renewed application for leave at that stage within time.

21.  We regard the delay of about 1½ month as substantial in the context of a judicial review brought grossly out of time. The Decision under challenge was made by the DLO on 18 December 2017, and gave one year’s notice to quit to the applicant.  No explanation had been given as to the lack of challenge to that decision during that whole year.  By virtue of these proceedings, there was substantial delay in procuring the vacant possession of the Land for other Government uses.

22.  Accordingly, we hold that the delay is substantial and inexcusable.  The applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success before getting leave.

Lack of prospect of success

23.  In his written statement lodged on 23 December 2019, Mr Hunter, Counsel for the Applicant, put forward his arguments that the Judge erred in dismissing the application for extension of time for leave for judicial review on the two grounds in the Main Decision, which are set out in [11] above.

24.  Mr. Hunter submitted that the Director’s Decision is not a matter of private law as the Company’s operation performs an important service to the community in that it is the only lard processing plant in Hong Kong. 

25.  He further submitted that, by reference to the Environmental Report 2018 issued by the Lands Department, the Lands Department is not in effect carrying out its land administration functions as espoused by the Environmental Report 2018 of formulating and implementing departmental policies and practices in line with Government’s environmental objectives.

26.  He contended that the Director’s Decision is not in line with Articles 7 and 19 of the Basic Law as the Lands Department is not managing or leasing the Land with the protection of the environment in mind when demanding the applicant and/or the Company to quit the land.

27.  The law on amenability to judicial review in land and lease management matters by the DLO as the land agent of the Government was discussed by this Court in Chau Tam Yuet Ching v Director of Lands, supra, at [22]-[31], in particular at[22] – [23]:

“ 22.  … But for the statutory regime under the LMO, it is beyond argument that decisions to grant and to cancel (on the ground of the breach of the terms of the licence) a licence for the occupation of unleased land are not susceptible to public law challenges. Such decisions are, like decisions to grant, modify or terminate a Government lease, the grant or modify or termination of a short term waiver, “commercial decisions” which are guided by the interest of the Government as landowner or landlord and governed by private law such as the law of contract, the law of landlord and tenant and land law: see Hang Wah Chong Investment v Attorney General [1981] HKLR 336; Canadian Overseas Development v Attorney-General [1991] 1 HKC 288; Polorace Investments v Director of Lands [1997] 1 HKC 373; Rank Profit Industries v Director of Lands [2009] 1 HKLRD 177 (CA) and FAMV 7 of 2009; Anderson Asphalt v Secretary for Justice [2009] 3 HKLRD 215

23.  The mere presence of some public element in the Government’s decision is not sufficient to transform such decisions into public law decisions.  After all, the Government administers land in Hong Kong, whether qua landowner or landlord or covenantee, for the benefit of the general public and it is difficult to imagine a case where a public official can make such decision without affecting the public interest either directly or indirectly...”

28.  And at [29] to [31]:

“ 29.  In Anderson Asphalt v Secretary for Justice [2009] 3 HKLRD 215, A Cheung J (as he then was) had to deal with a challenge in respect of the grant of a short-term waiver to an asphalt production plant.  The decision was challenged by the plant’s competitor on public law grounds. The challenge was held to be unsustainable because the decision was not amenable to judicial review.  After reviewing the authorities, A Cheung J summarized the relevant principles at para 57 of his judgment.

30.  Though His Lordship referred to the reviewability of the decision of a Government official acting in the role as a protector of the public interest at para 57(f), that has to be understood in light of what was said at para 57(h) to (l) which emphasized that the mere presence of town planning considerations (or for that matter, some other public interest considerations) in the decision making process is not enough to render a decision on land administration qua landowner or landlord reviewable.

31.  Subject to the above, I respectfully agree with what was said by the Chief Judge at para 57 of Anderson Asphalt.”

29.  In Anderson Asphalt v Secretary for Justice [2009] 3 HKLRD 215, A Cheung J (as he then was) held at [57], (as stated above, sub-para (vi) has to be read subject to the observation at [30] in Chau Tam Yuet Ching),

“ Having thus reviewed the relevant case law, it appears to me that:

(i) Only a decision made in the public law domain is amenable to judicial review.

(ii) Whilst the nature of the source of power or discretion is by no means irrelevant, it is the nature of the functions that the decision-maker was performing when making the decision under challenge that is of crucial importance.

(iii) 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.

(iv) Put another way, the presence of a public element(s) of sufficient significance in the decision-making process could turn an otherwise commercial decision into a public law decision, amenable to judicial review.

(v) What is sufficient is a matter of fact and degree, depending very much on individual cases. 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: R v Legal Aid Board, ex p Donn & Co [1996] 3 All ER 1, 11h, cited with approval by Mortimer VP in Matteograssi, supra, at p 219C-D.

(vi) In relation to decisions made in land transactions, the same legal principles apply. A complete statement of the Hang Wah Chong principle does not merely state that 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. A complete statement of the principle also says that 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.

(vii) Thus understood, the so-called Hang Wah Chong principle is no more than a special application of the general principles on the distinction of public/private law to land matters in Hong Kong.

(viii) 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.

(ix) 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.

(x) That, however, 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, according to the decided cases.

(xi) This illustrates that 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 element(s) of sufficient weight is/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.

(xii)   Again it depends on the facts, and in a borderline case, it is really a matter of overall impression and degree.”

30.  In the more recent case of Wong Ho Tong v Director of Lands [2018] HKCA 330, these principles were reiterated at [45] to [47].

31.  Though Chow J had referred to Anderson Asphalt and Chau Tam Yuet Ching in the Main Decision, counsel for the applicant surprisingly did not deal with these principles at all. Instead, counsel cited an earlier case, Hong Kong and China Gas Co v Director of Lands [1997] 3 HKC 520.  That case was discussed in a judgment of the Appeal Committee in Rank Profit Industries v Director of Lands FAMV 7/2009, 25 June 2009 alluded to at [27] to [28] in Chau Tam Yuet Ching. At [11] in Rank Profit Industries, commenting on Hong Kong and China Gas Co and another case, Ribeiro PJ said:

“ We do not consider it necessary to express a view in these Reasons as to whether those two cases were or were not correctly decided. It is however important to note that they were both cases involving special purpose leases, that is, leases granted by the government for defined special purposes subject to a permanent prohibition against assignment. Both cases arose out of the passage of the New Territories Leases (Extension) Ordinance and the government’s stated policy of considering extensions of such special purpose leases on a case-by-case basis, with the decision whether to extend being dependent on investigation into whether the land was no longer being used for its original purpose or unlikely to be so used for the full period or whether the land was required for a different public purpose. The decisions relating to the grant and extension of special purpose leases in the aforesaid context were therefore strongly coloured by public purposes.”

32.  There is no suggestion that STT No 441 is a special purpose lease. The Decision of the DLO to issue a notice to quit was a simple decision of land management in the capacity of agent for the landowner.  

33.  The DLO had not approved the change of use. In any event, as rightly held by the Judge, it is a matter for the Director to decide how much weight is to be given to the environmental consequences.  In Wong Ho Tong v Director of Lands [2018] HKCA 330, it was said at [49]:

“ ...The administration of Government land is the function of the Director, not the court ...”

34.  We do not find the new materials sought to be adduced by the applicant take the applicant’s case further in this respect.

35.  Bearing the above principles in mind, we cannot see how articles 7 and 119 of the Basic Law can advance the case of the applicant.

36.  We agree with Chow J that the Decision is not amenable to judicial review. We also agree with the Judge that no good reason has been shown for extending time for the applicant to bring an application for judicial review.

37.  For the above reasons, we are of the view that there is no prospect of success in the intended appeal.

Stay of execution

38.  The application for stay is misconceived. The Main Decision of Leave Decision of Chow J are decisions on refusal to extend time and refusal of leave to appeal. It is not meaningful to ask for a stay of those decisions in the present context.

39.  The applicant has not made any application for injunction to prevent the enforcement of the notice to quit.

40.  In any event, given that CACV 509/2019 had been struck out and the present application for leave to appeal is dismissed, there is no basis for any stay to be granted.

41.  Accordingly, the Stay Application shall be refused.

Disposition

42.  We dismiss the applicant’s summons of 23 December 2019.

43.  Further, we are of the view that the application is totally without merit and we make an order pursuant to Order 59 Rule 2A(8) that no party may request the determination to be reconsidered at an oral hearing inter partes.