BUILDING AUTHORITY v. APPEAL TRIBUNAL (BUILDINGS)

CACV 229/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 229 OF 2016

(ON APPEAL FROM HCAL NO 180 OF 2013)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the Court):

1.  This is the application of the Building Authority (“the BA”) for leave to appeal against the judgment of this court handed down on 11 August 2017. It relates to two dangerous hillside orders served by the Government for remedial work to be carried out to parts of the man‑made slopes on which Hilltop Road is located. By our judgment, we allowed the appeal of the interested party, ENM, in respect of the construction issue on Special Condition (31) (“SC31”) of the Grant. We set aside that part of the judgment of Au J and in lieu thereof dismissed that part of the BA’s application for judicial review in respect of the determination of the Appeal Tribunal (Buildings).

2.  The BA seeks leave to appeal to the Court of Final Appeal on the basis that the proposed appeal raises questions of great general or public importance.  It also relies on the “or otherwise” ground.

3.  Having considered the submissions in writing, we do not think it necessary to hold an oral hearing and will determine this application on paper.

4.  The background matters are set out in our judgment at §§4 to 17, 28, 29 and 32.  Au J’s construction of SC31 was set out in §19 and BA’s construction at §21.

5.  At the appeal, the BA did not seek to argue that the judge’s construction of SC31 was erroneous.  It did argue that that part of the judgment (the Tribunal’s determination of the construction of SC31 be quashed) should be supported on an additional ground being its own construction of SC31.

6.  In our judgment, we declined to support the judge’s construction for the reasons at §§23, 34 to 36.  We rejected the BA’s construction for the reasons at §§38 to 43.

7.  These questions of construction were framed in the notice of motion:

“3.1 On the proper construction of SC31, whether the maintenance obligation under it is confined to maintaining the paved way and any incidental structures on the paved way such as the matters mentioned in sections 19 to 25 of the Building (Private Streets and Access Roads) Regulations, or whether, on a proper construction, the maintenance obligation encompasses the obligation to maintain everything that is (a) constructed in association with the paved way (b) adjoining the paved way and (c) essential to the supporting of the paved way (including supporting slopes or structures)?

3.2 Whether the construction of SC31 ought to be different where (a) the paved way had already been constructed when the Government lease was executed or (b) the paved way had not been constructed at the time the Government lease was executed?

3.3 Whether a grantee subject to SC31 or a lease condition that is substantially similar to it (i.e. containing the phrase “uphold, maintain and repair such paved way and everything forming portion of or pertaining to it …” or words to that effect) is, for the purpose of section 27A of the Buildings Ordinance (Cap 123), a person whom the BA may serve a dangerous hillside order on as someone who under the terms of a Government lease is under an obligation to maintain natural, formed or man-made land or any earth-retaining structure?”

8.  For the purpose of this application, the BA filed an affirmation of a Chief Building Surveyor of Slope Safety Section of the Buildings Department deposing to these matters with supporting documents:

(1) There are currently approximately 1,600 registered features across Hong Kong, the maintenance responsibilities of which may be governed by lease conditions either identical or very similar to SC31 (for instance containing the phrase “and everything forming … pertaining to it”).  These features include retaining walls, cut slopes and fill slopes.

(2) Of the 1,600 registered features, there are 79 active orders issued by the BA under section 27A of the Buildings Ordinance.

(3) Of the 79 active orders, 25 involve registered features not sited within the boundaries of the lots and the boundaries of the access road concerned a right of way clause.

(4) Over half of the 25 orders are found to involve a developed or underdeveloped access road that had already existed before the execution of the Government leases or land grants concerned.

9.  It was submitted that the judgment of the Court of Appeal is particularly pertinent to these 25 orders as their circumstances are similar to the facts of the present case, even though some facts are bound to differ.  The financial burden to discharge the maintenance obligation is likely to be substantial.  Hence the questions of construction are of great general or public importance and the “or otherwise” ground is invoked in view of the significant impact the Court of Appeal judgment may have on the proper construction of Government lease conditions identical or substantially similar to SC31 and the wide application of section 27A.

10.  The purpose of adducing the new evidence is not to show why the Court of Appeal had erred in its construction of SC31 but merely to support the contention that its judgment may have significant impact on a large number of active orders issued by the BA.  This is not the kind of situation in Ladd v Marshall [1954] 1 WLR 1489.  We will allow the new evidence to be admitted for this application.

11.  ENM opposed the application primarily on the basis that the questions are not of great general or public importance.  It emphasised that questions of construction cannot be answered in a vacuum but must have regard to the background of a particular case and its factual matrix. Even though similar phrases may be found in similar conditions in Government leases, the question of construction of a condition in a particular case cannot be determined without a full set of facts and circumstances.  Thus, of the five leases and grant documents exhibited in the new affirmation, one does not know the factual circumstances surrounding these leases and grant documents; considerations in those cases relevant to the granting of a right of way (for instance as a quid pro quo for other obligations in the lease) may be very different from the present; it is not known if the maintenance obligations in those five cases are anywhere as onerous as those in the present situation or what was the commerciality of the assumption of such obligations; and one does not know whether the paved way in those five cases leads only to the grantee’s land or is used exclusively by the grantee or not.

12.  We are mindful of the above considerations.  Our determination on the construction of SC31 was made in the context of the specific circumstances surrounding the Grant.  As was said by Lord Neuberger NPJ in Penny’s Bay Investment Company Limited v Director of Lands, FACV 1/2017 and 2 to 9/2017, 16 October 2017 at §63: “As is so often the position in cases concerning issues of interpretation, earlier decisions involving different documents and different facts are of no assistance, and can sometimes be positively unhelpful as they take the eye off the ball.”  Our judgment would not have the effect of determining the scope of the maintenance obligations in other Government leases, notwithstanding the similarity of provisions to SC31.

13.  Having said that, our approach as to how we construed SC31 may have some impact on the interpretation exercise in future cases, particularly those which involve a developed or underdeveloped access road not sited within the boundaries of the lot and had already existed before the execution of the Government leases or land grants.  Of particular relevance is the question whether the construction of SC31 or similar provision ought to be different where the paved way had already been constructed when the Government lease was executed and where it had not been constructed when the lease was executed.  This is the material difference between the judge’s construction and BA’s construction, see §22 of our judgment.  The BA’s construction is that on a proper construction, the maintenance responsibility under SC31 does not depend on who has built what and ENM shall be responsible for the maintenance of the paved way and everything forming portion of or pertaining to it as if it were the absolute owner, irrespective of whether it had built any of them.  An appeal to the Court of Final Appeal would help to clarify whether the distinction drawn is sustainable on a proper construction of the contract.

14.  For the above reasons, we are persuaded that the intended appeal does raise questions of great general or public importance.  It is not necessary to go into the merits of the arguments save to say that we do not think BA’s construction is not reasonably arguable.  Nor is it necessary to consider the “or otherwise” ground.

15.  It would be appropriate to exercise our discretion to grant leave to appeal in this instance.  Costs of this application would be in the cause of the intended appeal.

16.  We direct the Department of Justice to submit the usual order for the proposed respondent’s comments and the court’s approval within 7 days of the handing down of this judgment.