In re WING ON CO. LTD. and Others

1996, No.MP1279

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H E A D N O T E

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Judicial Review.

Under the Revised Outline Zoning Plan, commercial building has a plot ratio of 12. The Applicants wish to build with a plot ratio of 13. They argued that traffic generated from the building, because of its special mix of office and retail space, is lower than others with a plot ratio of 12 and this is a matter which should be considered.

Held : Traffic generated from the new building is not a relevant consideration. Application refused.

1996, No.MP1279

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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Background

1. The Applicants are the owners and developers of a site at 343 - 361 Nathan Road and 40 Woo Sung Street ("the site"). The site consists of a total area of 2360 metres2. It was occupied by three buildings which had since been demolished.

2. On 23rd December 1993, the Applicants submitted building plans for the redevelopment of the site. The new development will be a commercial building consisting of offices and retail space in the form of a department store ("the new building"). The proposed plot ratio for the development is 13 which is almost equally divided between the office and retail area at about 6.5/6.5.

3. At the time of the submission of the plan, the permissible plot ratio was 13 under the Temporary Control of Density of Building Development (Kowloon and New Kowloon) Ordinance, 1989. On 24th December 1993, one day after the submission, the draft Revised Outline Zoning Plan S/K 2/6 ("OZP") issued under the Town Planning Ordinance was published. This imposed a plot ratio of 12 or the plot ratio of the existing building whichever is greater. The combined average ratio of the then three buildings was 11.8.

4. On 18th December 1994, the Building Authority rejected the plans. On 30th June 1995, the Applicants resubmitted the plans requesting the Building Authority to exercise its discretion to approve the plans under s.16(1)(d) of the Building Ordinance, Cap 123 ("the Ordinance") or alternatively under s.42. If approval was given, the new building would have a plot ratio of 13 which contravened the OZP.

5. The Building Authority rejected the plans again. The Applicants appealed to the Building Appeal Tribunal ("Appeal Tribunal") which dismissed the appeal on 31st January 1996.

Judicial review

6. Pursuant to leave, the Applicants are now applying for an order of certiorari to quash the proceedings and decision of the Appeal Tribunal and an order of mandamus to remit the proceedings back to a differently constituted Appeal Tribunal for consideration.

Basis of the application

7. The Applicants argued that although the Appeal Tribunal recognized it had a discretion in the matter, it had failed to exercise the discretion at all because it had excluded from its consideration a relevant factor, namely, the traffic generated by the new building. The rationale or planning intent of imposing a plot ratio of 12 was to ensure traffic generated from new development in areas covered by OZP would not overload the existing traffic infrastructure. Before the OZP was introduced, the government had commissioned a study, namely, the "Review of Building Density & Height Restrictions in Kowloon & New Kowloon" ("KDS"). Under the KDS, the plot ratio of 12 for commercial buildings was based on a plot ratio of 9 for office use and a plot ratio of 3 for retail use. The new building with a plot ratio of 13 was based on a plot ratio of about 6.5 for office use and 6.5 for retail use. Studies carried out by the Applicants demonstrated that traffic generated by the new building with such a plot ratio mix would be lower than a building with a mixture of plot ratio of 9 for office and 3 for retail.

8. The Applicants argued that despite the increase in plot ratio, the building plans have not breached the intention of the OZP because traffic movement would be reduced notwithstanding the increase in plot ratio. Matters relating to the traffic was specific to the site and constituted special circumstances for the Building Authority and the Appeal Tribunal to consider in the exercise of their discretion.

9. The Appeal Tribunal had considered that traffic of the new building was not something specific to the site in which it or the Building Authority could or should take into account as giving rise to special circumstances justifying the exercise of their discretion in approving building plans which contravened the OZP. The Applicants argued that traffic consideration was by its very nature site specific. The amount of traffic to be generated from a site would depend on the size, user and plot ration of the site. In saying that the traffic consideration was not site specific, the Appeal Tribunal committed the classic error in which the issue of a certiorari would be justified : R v. IAT ex parte Singh, [1986] 1 WLR 910.

10. The Applicants argued that the Appeal Tribunal totally ignored the special and unusual mix of plot ratio and in so doing it confused its own discretion with that of the Town Planning Board and had thereby wrongly excluded from consideration the relevant factor of low traffic implications of the new building. The Applicants argued that the Appeal Tribunal should adopt the approach suggested by another Appeal Tribunal in Ying Fai Terrace (Case No.28 of 1992) namely,

"........... what the Building Authority has to do when considering the exercise of this discretion under this limb of Section 16(1)(g) is to ask himself what negative factors will result from the difference in height between the buildings previously on the site and the proposed building. After doing this the Building Authority has to weigh both the positive factors resulting from redevelopment and such negative factors in the balance and decide whether or not there is such a weight of negative factors resulting from the difference in height as to justify a refusal. We believe there must be some significantly greater weight in the resulting negative factors if a refusal is to be justified because the use of the section limits a developer's right to develop his site to the full extent otherwise granted to him by the Crown Lease and the Building Ordinance and Regulations."

Two preliminary matters

11. There are two preliminary matters I should deal with first. It is clear from the case of Building Authority v. Head Step Limited [1996] 6 HKPLR 87 that the Building Authority has a discretion to approve building plans notwithstanding that they are not in compliance with the OZP. It is also clear from AG v. Fire Bird Limited [1983] HKC 1 that the submission of plans did not give the Applicants an accrued right to have the plan considered on the basis of the law applicable at the time of the submission without regard to subsequent amendment. The law to be applied was that applicable at the time when the Building Authority considered the submission within the time limit allowed. When the Building Authority considered the submitted plans of the Applicants, the law applicable was that set out in the OZP. The Applicants could not have any cause of complaint that the former plot ratio was 13 at the time the plans were first submitted.

Plot ratio of 12 is based on traffic consideration

12. The rationale of imposing a maximum plot ratio of 12 based on traffic consideration is amply justified by the documents.

13. The purpose of KDS was to propose a set of building density controls for application to Kowloon following the lifting of the Temporary Control of Density Ordinance at the end of 1993 and the ultimate lifting of all airport height restrictions when the airport is relocated from Kai Tak. The recommended plot ratio was chosen to strike an acceptable balance between a variety of planning objectives. Page 1 of the Report stated that :

"A prime consideration was to ensure that any additional development potential realised would not lead to levels of population and economic activity that might exceed the capacity of existing and planned infrastructure and other urban facilities, particularly transport. At the same time, it was an important objective to create suitable conditions to promote a vigorous development sector which will assist in bringing about the redevelopment and substantial improvement of the older substandard districts of Kowloon.

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In principle, a single maximum plot ratio should apply to all areas covered by a major land use zoning.

The Study examined various factors which might justify the imposition of different plot ratios for the same land use zone in different geographical areas. It was concluded that infrastructure capacity would provide the only convincing basis for limiting plot ratios below the statutory limits set by the Building (Planning) Regulations. The capacity of existing and programmed utilities infrastructure poses only very limited constraints on acceptable density levels, but transport problems are likely to be met at the higher plot ratios examined, for most uses and areas."

At page 4, it was stated that:

"COMMERCIAL ZONES

The maximum total plot ratio for commercial development should be 12.0. The rate of build-up of commitment for office floor space in Tsim Sha Tsui and Mong Kok must be carefully monitored.

There are significant capacity constraints on the Nathan Road corridor section of the MTR, the key factor being the level of office development in Tsim Sha Tsui and Mong Kok. The study concluded that total employment levels in these areas should not be allowed to rise substantially above existing (1991) levels. Much of the increase in office GFA projected for the period 1991 to 1999, however, is already committed through Building Permits and Section 16 approvals. Consequently, further reductions in permissible office plot ratio would not have a substantial impact on projected 1999 levels of employment.

However, passenger flows on the MTR in this area could approach capacity by 1999 and be in excess by 2006. Careful attention must therefore be paid to the rate at which approvals are granted for further office floorspace in Tsim Sha Tsui and Mong Kok. In particular, there should be a presumption against permitting Section 16 applications for office uses in R(A) zones, except where very special grounds can be argued. If it becomes clear that the outstanding office GFA commitment is likely to lead to excessive employment, the approval of further new office developments should be delayed."

The Report concluded that, inter alia,

"The capacity of the MTR line along Nathan Road is a very firm constraint on employment generating floor space potential in the main commercial areas. It was concluded that the maximum total plot ratio for commercial development should be 12, including a retail component."

Explanatory Statement

14. In the Explanatory Statement of the OZP, it was stated that :

"6. LAND USE ZONING PROPOSALS

6.1 Commercial ('C') : Total Area 6.57 ha

6.1.1 This zone is applied to sites on both sides of Nathan Road. In these locations, many sites have been redeveloped for commercial purposes including shops, department stores, cinemas, restaurants and offices. The commercial development along Nathan Road has been fulfilling the need for commercial expansion in the main urban area. Improved accessibility by public transport especially, the MTR, would further attract commercial expansion along this Corridor. Uses such as retail shops, offices, restaurants are permitted as of right on any floor of a building within this zone.

6.1.2 The intention of the 'C' zoning in these locations is to encourage commercial development to locate along the main arterial road, which offer good accessibility, particularly via public transport. This may reduce pressure for commercial use in the outlying streets where the residential environment may be enhanced accordingly.

6.1.3 Developments within this zone are subject to a maximum plot ratio of 12 to restrain traffic growth which will otherwise overload the existing road network. In the circumstances set out in Regulation 22 of the Building (Planning) Regulations, the about specified maximum plot ratio may be increased by what is permitted to be exceeded under Regulation 22."

Is traffic generated by the new building a site specific?

15. The Appeal Board agreed that the rationale behind the plot ratio of 12 was traffic. But it concluded that :

"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."

16. There was some argument whether the Appeal Tribunal had misunderstood the idea of traffic gain. But that argument is irrelevant to the present application. 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. The plot ratio of 12 for commercial building was arrived at by an overall assessment of the capacity restraint of the traffic infrastructure. The maximum plot ratio of 12 for commercial use is to contain the traffic generated by the development. In the summary of the recommendations of KDS, it is stated that :

"Road and rail transport networks are open systems; traffic originating in any location can have impacts on any part of the system, not just nearby. It is therefore difficult to establish categorically which development area should be considered responsible for projected congestion and therefore in which areas development potential should be restricted in order to preserve limited available capacity for traffic generated by the same use in other areas."

17. The KDS clearly showed that different areas should have different maximum plot ratio in order to meet traffic capacity. For example, in the extracts at page 129, it was said that Tsim Sha Tsui which had the greatest office development potential, the limiting plot ratio would be six.

18. Different levels of traffic would be generated by different use of a building, but the plot ratio of 12 was not arrived at by reference to a specific building with a specific volume of traffic generated by a specific mixture of the use of the building. There was reference in the KDS that the commercial plot ratio of 12 was assumed to comprise of plot ratio of 9 for office and 3 for retail respectively, but there was not indication that the plot ratio of 12 was arrived specifically by reference to traffic generated from such a specific mix.

19. The argument that the special mix in the new building will generate a lower traffic flow than the "standard mix" is based on wrong premises, namely, there was a standard traffic flow based on a standard mix of plot ratio and the plot ratio of 12 was reached specifically by reference to that. This is not so. Once it is recognized that the plot ratio of 12 was based on an overall determination of the traffic capacity of the areas covered by the OZP, then traffic generated by a particular building becomes irrelevant in determining whether the plot ratio should be allowed to exceed the maximum of 12. The balancing act for traffic flow had already been done and the result was embodied in the OZP with the plot ratio of 12.

Circumstances in which the plot ratio could be increased

20. Furthermore, the particular traffic flow of a particular building should not be considered as a site specific is clear from the OZP itself. In the Remark for Commercial Use Zone it is stated that :

"(2) Where the permitted plot ratio as defined in Building (Planning) Regulations is permitted to be exceeded in circumstances as set out in Regulation 22(1) or (2) of the said Regulations, the plot ratio for the building(s) on land to which paragraph (1) applies may be increased by the additional plot ratio by which the permitted plot ratio is permitted to be exceeded under and in accordance with the said Regulation 22(1) or (2), notwithstanding that the relevant maximum plot ratio specified in paragraph (1) above may thereby be exceeded."

The remark is also referred to in the Explanatory Statement at Para.6.1.3. The circumstances in which the plot ratio may be increased under Regulation 22 are firstly where a building is set back from a boundary that abuts a street and that part of the area that is not built upon is dedicated to the public for the purpose of passage and secondly where part of a lot which abuts a street is acquired by the Crown for the purpose of street widening. Even in those circumstances there is a limit to the increase of the plot ratio. A strong case needs to be shown that the plot ratio can be increased on other grounds and without any limit.

21. Miss Eu argued that the circumstances set out in Regulation 22 are not conclusive. She referred to the Practice Note issued by the Building Department in relation to concessions for hotel development. It modified the Building (Planning) Regulations by excluding certain areas in hotel development in the calculation of gross floor areas and permitting an increase in plot ratio.

22. In my view the concession has no relevance on the matter under consideration. The Practice Note itself demonstrates that the departure from the regulations are merely concessions. The circumstances in which the plot ratio of a commercial building can be increased are not in any way enlarged.

23. At the end, the Building Tribunal has not ignored any relevant consideration by excluding traffic generated from the new building from its consideration. This is an irrelevant factor in considering how the discretion should be exercised.

Section 42

24. The Applicants are also relying on s.42 of the Building Ordinance which provides that :

"(1) Where in the opinion of the Building Authority special circumstances render it desirable he may, on receipt of an application therefor and upon payment of the prescribed fee, permit by notice in writing modifications of the provisions of this Ordinance."

Sub-section 5 states that s.42 shall not apply to s.14. The Applicants argued that as only s.14 was excluded from the Building Authority's power of exemption, the Building Authority or the Appeal Tribunal should consider the Applicants' application for exemption. The Applicants argued that the Building Authority can approve the plans by exempting the provisions of s. 16(1)(d). Conditions can be imposed. Mr Cooney, Counsel for the Appeal Tribunal argued otherwise.

25. In view of my conclusion that traffic is not a relevant consideration, it is not necessary for me to reach a concluded view on Section 42. Likewise it is not necessary for me to deal with the questions of conditions to be imposed in the event of modification or enforcement difficulties.

26. The application is dismissed with costs nisi to the Appeal Tribunal.

(P. Cheung)

27. Judge of the High Court