MA TAK YUEN v. DIRECTOR OF LANDS

HCAL 1551/2022

[2023] HKCFI 781

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1551 OF 2022

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D E C I S I O N

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A.  Introduction

1.  This application relates to certain land (“Land”), being the Remaining Portion of Lot No. 466 in Demarcation District No. 109 (“DD 109”). According to the Land Register, the Land is owned by Tang Nam Kai (or Chai) Tso or Nam Kai Tso (“Tso”).

2.  As it is put in the Form 86 dated 20 December 2022, the Applicant seeks for leave to apply for judicial review of the decision (“Decision”) shown in the letter dated 19 October 2022 from Lands Department (“LandsD”) to Cheong Fat Motor & Parts Company Ltd (“Cheong Fat”) for exercise of power to re-enter the Land for breach of provisions in the Government Lease of DD 109, and a letter dated 7 December 2022 from LandsD to the Applicant without reply to the letter dated 22 November 2022 of the Applicant as to when LandsD would make a decision about whether the Government will withhold from exercising the power of re-entry into the Land pending the outcome of the application for approval of Planning Department (“PlanD”) for current usage of the Land.

3.  The relief sought in the Form 86 is (1) a declaration that LandsD should withhold from exercising the power of re-entry of the Land pending the outcome of application to PlanD for approval of current usage of the Land, and (2) an order requiring LandsD to make a decision in reply to the Applicant’s letter dated 22 November 2022.

4.  Although the timetable given was interrupted by the Applicant’s application for Legal Aid, I gave directions permitting the Director of Lands (“Director”) as putative respondent and Cheong Fat and the Tso as interested parties to file an initial response, with leave to the Applicant to file a reply. I also identified that, depending on the content of the initial response and any reply, the Court would decide whether to deal with the application for leave to apply for judicial review on paper, which it might proceed to do without further notice to the parties.

5.  The Director filed the initial response on 13 February 2023, signed by Ms Elsie Chu, Senior Government Counsel. In it, the Director submitted that the leave application should be refused for one or a combination of various reasons (see below). Neither of Cheong Fat nor the Tso filed any initial response.

6.  The Applicant filed a reply dated 22 February 2023.

7.  Subsequently, by letters dated 9 and 10 March 2023, Ms Chu informed the Court that following a site construction conducted by LandsD on 28 February 2023, it was revealed that all unauthorised structures on the Land had been demolished, and that there is no breach of the conditions of the Government Lease of the Land as at 28 February 2023.

8.  On the materials available to the Court, I am satisfied that this application can be dealt with on paper. This is my Decision.

B.  The Intended Challenge

9.  In the Form 86, the grounds for the intended relief are set out as follows:

The Grounds of Judicial Review of the said Decision shown in the letter dated 19^th October 2022 from Lands Department to Cheong Fat Motor & Parts Company Limited for exercise of power of government re-entry into The Remaining Portion of Lot No.466 in Demarcation District No.109 (“the Land”) for breach of provisions in the Government Lease of D.D.109 and mandamus or order that Lands Department shall make decision as to whether the Government will withhold from exercising the power of re-entry into the Land pending the outcome of application for approval of Planning Department for current usage of the Land and seeking the reliefs are :-

1.  Lands Department erred in deciding to exercise the power of government re-entry into the Land before Planning Department shall decide whether the current usage of the Land for storage and placing of motor vehicles and motor parts for display and trading purpose shall be approved since the government has not interfered with such current usage of the Land since 1980’s until as late as Lands Department issued warning letter dated 4^th July 2016 (registered in the Land Registry by Memorial No.16081600580141) to Tang Nam Kai Tso (the “Tso”), a tso registered under the New Territories Ordinance, Cap.97 as owner of the Land and further letter dated 29^th December 2021 to the Tso although no manager is or was at all material times known to be appointed to act for and on behalf of the Tso, and no address of the manager of the Tso was stated or correctly stated in the said letters dated 4^th July 2016 and 29^th December 2021, so that Lands Department has not duly given any notice to the Tso or the manager of the Tso to require rectification or remedy of the breach of provisions of Government Lease of D.D.109;

2.  Lands Department erred or delayed in making decision in reply to the letter dated 22^nd November 2022 from the Applicant (which Lands Department acknowledged receipt thereof by letter dated 7^th December 2022) to request the Government to withhold from exercising the power of re-entry into the Land pending the outcome of the application for approval of Planning Department for current usage of the Land;

3.  There has been lapse of about 40 odd years since 1980’s after the rattan factory on the Land was burnt and people started to erect structures for storage and placement of motor vehicles and motor parts for display and trading purpose, and the Government has not made any demand or direction to demolish any such structures or require discontinuance of such usage or development until the said warning letter dated 4^th July 2016 which was not duly communicated to the Tso or the manager of the Tso as owner of the Land, so that the Government’s non-action constitute acquiesce to the current usage of the Land, which induced or led the Applicant to believe that the current usage of the Land was permitted and therefore rented the Land from Cheong Fat Motor & Parts Company Limited and borrow loan under SME Loan Guarantee Scheme to finance his business operation with the current usage of the Land;

4.  The Applicant is aggrieved by the decision of Lands Department to exercise power of government re-entry into the Land, which Lands Department threatened to exercise on 26^th December 2022.

5.  Cheong Fat Motor & Parts Company Limited made application to Planning Department (ref: A/YL-KTN/236) as early as on 26^th and 29^th July 2005 but could not proceed with the application because no manager was appointed to act for the Tso as owner of the Land so that the Applicant should not be prejudiced or aggrieved for non-appointment of manager to represent the Tso to support the application.

10.  In his affirmation in support of the application, the Applicant also makes the following points (in summary):

(1)  He has rented the Land from Cheong Fat about nine years ago for operation of his business, namely to display motor vehicles for sale.

(2)  As far as he knows, the land is owned by the Tso.

(3)  Prior to April 1999, Tang Lo Ping acted as the manager of the Tso, but he passed away in that year and no new manager was appointed.

(4)  Sometime after a fire destroyed the premises on the Land in the 1980s, someone erected structures for storage and placement of motor vehicles and ancillary facilities for repair of vehicles.

(5)  LandsD did not interfere with or object to that usage of the Land until about 2016. Even then, since that date no enforcement action has been taken.

(6)  Cheong Fat made an application as early as in 2005 for PlanD approval for the current usage of the Land. But the application could not be proceeded with because of the absence of a manager to represent the Tso.

(7)  Cheong Fat informed the Applicant that LandsD would take enforcement action by exercising the power of re-entry and to demolish all current structures on the Land not later than 26 December 2022.

(8)  Therefore, the Applicant wrote his letter dated 22 November 2022 to LandsD, requesting them to withhold from exercising the power of re-entry pending the outcome of the application for planning approval.

(9)  Although LandsD sent an acknowledgement receipt by letter dated 7 December 2022, no other reply was received.

(10)  There is no urgent need for LandsD to take enforcement action after the lapse of 40 years since the erection of the structures for current usage.

(11)  As he is aggrieved by the decision of LandsD, and has suffered loss and damage, the Applicant seeks leave to apply for judicial review and for the relief sought in the Form 86.

C.  Factual Background

11.  Insofar as it is necessary to identify the relevant factual background, the following matters can be rehearsed:

(1)  The Block Government Lease to which the Land is subject contains conditions prohibiting the lessee or any other person or persons from erecting or constructing any building or structure of any description on any part of the Land without first having obtained relevant government approval.

(2)  Site inspection on 21 August 2015 revealed unauthorised structures erected on the Land.

(3)  On 4 July 2016, LandsD issued a Warning Letter to the Tso, pointing out the unauthorised structures and requiring the Tso to rectify the breach within the grace period.

(4)  Following a site inspection in 2016, LandsD notified the Tso that the Warning Letter was to be registered against the Land at the Land Registry.

(5)  On 29 December 2021, LandsD issued a Reminder Letter, which was also posted on the site for the attention of the occupiers of the Land.

(6)  Following requests, LandsD gave two extensions of the grace period for rectification of the breach. The first extension was until 27 September 2022, and the second (and final) extension was until 27 December 2022.

(7)  On 7 December 2022, LandsD received an email from the Applicant with a copy of his letter dated 22 November 2022 attached. (Though I do not think it particularly significant in the determination of this application, LandsD says it had not previously received that letter either by post or fax as suggested on the face of the letter.)

(8)  On the same day, LandsD replied to the Applicant, mentioning the matter was under consideration and that a further reply will be sent as soon as possible.

(9)  By letter dated 15 December 2022, LandsD informed the Applicant that the Warning Letter, Reminder Letter, and two time extensions had been issued to the Tso and occupiers, and reiterated that failing rectification of the breach by 27 December 2022, LandsD would take further lease enforcement action, including re-entry of the Land.

(10)  A final warning was given on 31 January 2023, requiring the Tso to rectify the breach by 28 February 2023.

(11)  As already stated above, a site inspection on 28 February 2023 revealed all unauthorised structures on the Plan to have been demolished by that date.

(12)  As a result of the extensions of time granted for rectification, and the demolition of the unauthorised structures by 28 February 2023, the Director has not re-entered the Land.

12.  I will refer to those facts as necessary, below.

D.  Application is Academic

13.  I agree with the point made by Ms Chu on behalf of LandsD that the short answer to this application is that, by reason of the demolition of all unauthorised structures on the Land, meaning that there is no longer any breach of the Government Lease conditions relating to the Land as at 28 February 2023, the application for leave to apply for judicial review has been rendered academic.

14.  This is, on its own, sufficient for me to refuse leave to apply for judicial review. I have considered, but reject the notion, that the application should be permitted to continue notwithstanding that it has become wholly academic.

15.  I will, nevertheless, consider whether the application has any merit.

E.  No Merit in Application

16.  In the event, I agree with Ms Chu that – for various reasons – it can be seen that the application has no merit. In particular, there is no apparent public law failure and the application is not reasonably arguable with any realistic prospect of success.

17.  First, despite the fact that the Form 86 was drafted by solicitors acting for the Applicant, it fails to articulate or identify any proper grounds of review in the form of any alleged public law breach or failure on the part of the Director. The suggestion made by the Applicant in his reply is that he did set out his grounds, namely the current usage of the Land has been existing since the 1980s so that LandsD had not interfered with the usage of structures until July 2016, and still took no enforcement action for a further 6 years, and that the Applicant is entitled to apply for PlanD approval for the current usage, especially when no manager is appointed to represent the Tso. But I do not think those (essentially factual) assertions are a proper identification of alleged public law failures as might ground an application for leave to apply for judicial review. Nor does offering an undertaking to submit an application for approval of the current usage of the Land cure the defect.

18.  The failure to identify proper grounds of review is in breach of the mandatory requirements in RHC Order 53 rule 3(3), and is itself a reason for dismissing the application.

19.  Secondly, it is settled law that lease enforcement action (including a decision to terminate a Government lease) is a matter of the Government’s land administration and management as a private landlord, which is not amenable to judicial review. It seems to me that it was properly open to the Director to issue the Warning Letter, the Reminder Letter and the extensions of time for rectification of the breaches, and to threaten lease enforcement action in the absence of timely rectification.

20.  If, as is plain, the impugned decisions are not amenable to judicial review, that is the end of an application for leave to apply for judicial review.

21.  Even if public law considerations were triggered, there is no basis to suggest that the various steps taken were not taken after fair consideration of all relevant circumstances, including the breach of the conditions of the Government Lease, the circumstances of the Land, and the requests for extensions of time to take rectification action. There is no arguably apparent Wednesbury unreasonableness, nor any other public law failure.

22.  Therefore, the intended challenge to the first part of the Decision identified in the Form 86 is without merit.

23.  The intended challenge to the second part of the Decision identified in the Form 86 is also based on a factual error, in that there was a substantive reply to the Applicant’s letter dated 22 November 2022 (see above). In any event, the second part of the Decision and the substantive reply given to the Applicant were also within the rights of the Director acting as private landlord, and taken in consideration of all the relevant circumstances.

24.  Therefore, the intended challenge to the second part of the Decision is also without merit.

25.  I also see the force in Ms Chu’s submission that the Applicant has failed to provide full and frank disclosure. He failed to mention that he had in fact received a substantive reply sent to his email address on 15 December 2022, before the Form 86 was issued. Further, it is factually incorrect to suggest that there was a pending application for PlanD approval, when in fact the Appeal Board (Town Planning) (“TPAB”) had given a (publicly searchable) decision dated 15 January 2007 identified that the Town Planning Board had rejected Cheong Fat’s planning application because it did not comply with the relevant guidelines and was not in line with the planning intention of the zone. The TPAB dismissed Cheong Fat’s appeal. There is no further or current application for approval of the current use of the Land, so that it was misleading for the Applicant to suggest that LandsD should await a decision on any such application.

26.  I do not think the apparent failure to have provided full and frank disclosure is answered or negated by the points made in reply for the Applicant. It is not a strong answer to identify that the Applicant has no knowledge of the rejection of Cheong Fat’s planning application and appeal in 2007. Whilst it may be correct that the Applicant has no access to documents belonging to Cheong Fat, the TPAB decision is publicly available. Nor is it an answer to suggest that the reasons for the TPAB decision referred to relevant factors other than those submitted by the Applicant and this application for judicial review.

27.  I do not see the need to deal with Ms Chu’s other points relating to the timing of the application.

F.  Result

28.  In the circumstances, the application for leave to apply for judicial review is dismissed.

29.  In the particular circumstances of the case, I see no reason why cost should not be awarded against the Applicant. Though the application was originally made on an ex parte basis, I have held that there was a failure to meet the obligation of full and frank disclosure on such an application. Further, there is clearly no merit in the application. I have also been assisted by the initial response provided on behalf of the Director.

30.  The costs payable by the Applicant to the Director will be summarily assessed.