DISTRICT LANDS OFFICER, TAI PO Ex Parte RITA ENTERPRISE CO. LTD. v. R.

HCMP No. 606, 1996

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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1. This is an application for Judicial Review of a decision of the District Lands Officer whereby he granted certificates of exemption dated 16th November 1995 in respect of lots T1 96 and 97, and lots 312 and 313 in DD21 Pun Shan Chau, Tai Po which contained, inter alia, a condition that "no building work shall commence until Planning Permission for village type development has been obtained." It is the imposition of this condition which gives rise to this application. The Applicant contends that the Director in giving such a certificate has no power to impose a condition of this nature; further, or alternatively, if there is such a power, the Director has broken with past and existing practice or policy without any notice of such a change, and the Applicant has a legitimate expectation that no conditions would be imposed other than those set out in the Schedule to the Building Ordinance (Application to the New Territories) Cap. 121.

The Lots in Question

2. These lots are shown on an agreed map just outside a designated village area. The applicants owned other lots identified as 314, 315 and 316 and also T1 95. Approval to rebuild houses erected on those lots was given in 1993 and 1994. Those lots were considered to be within the designated village zone by the Planning Department. However the four lots which are the subject of this application, are considered by the Planning Department to be outside the designated village zone and within a Green Belt zone in the draft Tai Po Outline Zone.

3. The applications for planning permission for these subject lots has so far been refused but a review is pending.

4. The Applicant made application to rebuild houses on these lots and approval was given under the Block Crown Lease on 11th September 1995 but when the certificates of exemption were issued on 20th November 1995 the contentious condition was imposed. No such condition had been imposed in respect of the other lots which fell within the designated zone.

The relevant legislation

5. By the Buildings Ordinance (Cap. 123) section 14, no one "shall carry out building works without the prior approval and consent of the Building Authority (the Director of Buildings)". If any plans submitted show that work, if carried out, would contravene any approved or draft plan prepared under the Town Planning Ordinance, the Director may refuse his approval - see section 16(1)(d). This section has been described in this hearing as the planning section of the Ordinance. I shall return to consider this as it is one of the crucial sections in this application.

6. This Ordinance applies to the New Territories by virtue of the Buildings Ordinance (Application to the New Territories) Cap. 121. This Ordinance provides for certificates of exemption under section 5. It is important to note that the preamble to the Ordinance itself includes "to provide for certificates of exemption from certain provisions of the Buildings Ordinance for building works."

7. Part III of the "New Territories" Ordinance, as I shall call it, deals with the certificates of exemption. Section 5 is mandatory and provides that "the Director of Lands (or any one authorised by him i.e. District Lands Officers) shall issue a certificate of exemption in respect of building works in the New Territories (a) for a building to be built by any person and to be used for non-industrial purposes ..." - (b), (c) and (d) do not concern us but specific types of buildings are designated.

8. From that section we move on to consider section 7(1) in ascertaining the effect of the certificate. Subject to section 7(2) and compliance with the conditions imposed by section 9, section 7(1) provides that "sections 4, 9, 14, 21 and 30 of the Buildings Ordinance and the regulations made under [it] shall not apply

(a) in respect of building works ... and for any building specified in a certificate of exemption, and

(b) the provisions and regulations [mentioned above] and section 28 of the Buildings Ordinance shall not apply ... in respect of any drainage works ... and for any building specified in a certificate of exemption."

9. Section 7(2) makes it clear that these exemptions do not apply where the building is of "greater dimensions than the building described in the case of exemption in respect of new housing ... or in the case of exemption in respect of replacement housing." This qualification is straightforward. It catches building the eventual structure of which is greater than that provided for in the certificate. If it has breached those dimensions set out in the conditions, the exemption, understandably enough, no longer applies and the building is subject to the full provisions of the Buildings Ordinance. This subsection does not apply to this application since no building has yet been erected let alone one whose dimensions exceed those described in the exemption certificate.

10. Therefore it is necessary to look at these sections of the Buildings Ordinance which do not apply:

11. Section 4 relates to the appointment of an authorised person or registered structural engineer; section 9 to the appointment of a registered contractor, section 14 to the need for written approval by the Building Authority of the documents submitted to him and written consent to the commencement of works shown in the approved plan; section 21 to occupation permits in respect of new buildings and finally, section 30 relates to carrying out works for a means of access or opening to or from any street. I do not need to consider the regulations made under the Buildings Ordinance which are exempted "in toto".

12. It is argued by Mr. Cooney on behalf of the Respondent District Lands Officer that the regulations which are exempted from application to buildings to which such a certificate is granted, are categorised as representing simply the formality and expense of the procedures required of larger developments. I think that is an over-simplification of the nature of such regulations. It is certainly true that such regulations when applied, inevitably involve substantial expense, and there is necessarily a degree of formality involved, but the real difference is that sensible and practical differences are created for the benefit of smaller developments. It creates in fact different procedures and requirements for such developments. Of course certain regulations which have a common application to all building works, whether small and residential and/or agricultural or large and commercial/industrial and/or residential, remain as applicable to all. We must not lose sight of the fact that the provision for exemption certificates is not just tagged on, as it were, as an amendment to the Buildings Ordinance, but is specifically provided for as the main part of a wholly separate Ordinance.

13. I accept that this Ordinance, in applying to the New Territories, is not freeing landowners who wish to develop within the permitted parameters, freedom from any control. Section 9, does as I think both parties agree, establish a degree of control. What is in dispute of course is how extensive that control is. The exemptions apply only if there is compliance with any conditions imposed under section 9.

14. Before passing on to consider section 9 of the "New Territories" Ordinance, I will deal with section 16 of the Buildings Ordinance which featured in Mr. Cooney's argument. He made reference to subsection (1)(d) which enabled the Authority to

"refuse to give his approval of any plans of building works where ...

... 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)."

15. This is the basis upon which approval of plans of building works may be refused. It is part of the provision for the planning, design and construction of building ... in the preamble to the Ordinance. Since the "New Territories" Ordinance applies the Buildings Ordinance (subject to certain exemptions), so too its applies the preamble of that Ordinance and the exempting section does not mention 16(1)(d).

16. What does this mean as far as the Applicant's lots are concerned? It means that they remain subject to such planning controls as are provided for in the Buildings Ordinance from which they are not exempted. The explanation for the imposition of the condition given by the District Lands Officer is that the "site falls outside the village zone boundary and is within the area zoned 'Green Belt' on the Tai Po Outline Plan S/TP/7. I also consider it undesirable for this office to permit building work in contravention of the relevant outline zoning plans."

17. That decision, leaving aside for the moment that it was attached to a certificate of exemption is, I consider, within the ambit of the Authority's discretion in section 16(1)(d).

18. In fact it was not given as the basis of a refusal but as a qualified exemption certificate. Does that make any difference?

The effect of the section 9 Certification of Exemption.

19. This enables the Director to impose conditions relating to safety and health or such other reasonable conditions as he may impose. He imposed the conditions set out in the schedule part 1. There is no argument about that. He also added the complained of condition - "no building works are to commence until Planning Permission has been granted". It was repeated in the letter sending the certificate and had, of course, been set out in the last paragraph of the letter of 11th September 1995 from the District Lands Office Tai Po.

20. The condition does not relate to safety and health. Does it fall within the ambit of "such other reasonable conditions"? It is clear that the conditions which the Director may impose are not confined to those set out in the schedule. Conditions relating to safety and health are far wider and indeed the conditions covered by those two topics can be very wide indeed. The term "such other reasonable conditions" are not confined to safety and health topics. Those are already adequately provided for. Mr. Denis Chang Q.C. for the Applicants argues attractively that the term to be valid must be construed "sui generis" with the conditions set out in the schedule. I do not think that the construction should be so limited. The operative word is "reasonable". Is the condition imposed reasonable in the context of his powers under the Buildings Ordinance? I should add that the conditions set out in schedule 1 are so precise that it would be very difficult to construe the term as being restricted to a condition which bore some similarity in nature to those conditions. I cannot see a condition which could be regarded as of the same type as the precisely drawn specifications for the type of building approved.

21. It is also argued that to construe the term as validly imposing a planning condition would be to introduce planning controls by the back door. As we have already seen section 16(1)(d) gives the Director a measure of planning control and it is in fact this power which he was exercised in the form of the condition imposed. Although section 16 sets out the grounds on which approval of plans of building works maybe refused, this is not a case where approval has been refused. The exemption certificate has been granted and I see no reason why a matter which would entitle such approval to be withheld should not be imposed as a condition to a certificate with a view to achieving the same result i.e. no contravention of any approved or draft plan prepared under the Town Planning Ordinance.

The Reasonable Test

22. In order to test the reasonableness of the condition I should look at the precise wording and effect of the condition - "no building works are to commence until Planning Permission has been granted." It is common ground that Applicants have to obtain planning permission. Applications have failed so far, and a review is pending, but that is not relevant to my decision, merely a fact. The condition acknowledges exemption but holds the position in that no building can start before planning permission has been given. I see nothing in that which offends the spirit or letter of "the New Territories" Ordinance. It is merely prevents the start of building works prior to what is in any event, a pre-requisite - planning permission for village type development in a designated Green Belt area in the outline plan. In those circumstances there is nothing unreasonable in the decision or condition. It prevents the proliferation of buildings which have had approval in principle and have started or finished before planning permission has been given. It is the proper application of the planning element within the provisions of the Buildings Ordinance.

Legitimate Expectation

23. This has developed from the principle of allowing an individual to rely upon assurances given and promoting certainty and consistent administration (see Judicial Review of Administrative Action - De Smith, Woolf and Jowell).

24. Such expectation will be derived from either an express promise or representation or a representation implied from established practice based upon the past actions or the settled conduct of the decision-maker. It is argued by Mr. Denis Chang Q.C. that it is the second of these situations which applies to this Applicant.

25. The representation must be "clear, unambiguous and devoid of relevant qualification". The factual context in which the "representation" is made is important. It cannot arise from a misinterpretation of the words or actions of an authority. It is contended that the Director, not having imposed the condition in any previously given certificate of exemption has given rise to a settled legitimate expectation that he would never do so without a specific announcement or directive to that effect i.e. to a change in policy. Essentially the Applicant relies upon the fact that certificates of exemption had been granted without the condition in respect of the other lots. But these fell within the 'V' zone so they were given in a different factual context. As far as the expectation of the Applicant is concerned it is within the context of those other applications. I have already dealt with the reasons why I consider that not only was the Director entitled to impose the condition but also why I considered it was reasonable that he should do so.

26. I am not satisfied in fact that the omission of such a condition, even if omitted from the vast majority or even all certificates issued hitherto, would constitute a representation, or even if it did, that it reasonably induced the Applicant to rely upon it. As far as the former is concerned previous non-use of such a condition cannot give rise to a representation that such a condition would not be added bearing in mind the form of section 9. Each case has to be "examined individually in the light of whatever policy [the official] sees fit to adopt provided always that the adopted policy is a lawful exercise of discretion conferred upon him by statute. Any other view would entail the conclusions that the unfettered discretion conferred by the statute on [the official] can in some cases be restricted so as to hamper, or even prevent changes of policy." [per Lord Scarman -Re-Findlay 1985 A.C. p.318.]

27. As to the second matter on which I am not satisfied, the Applicant has not been induced to rely upon the absence of the condition hitherto. He knows that he has to obtain planning permission in any event. He has already made applications. The condition simply underlines the prohibition on any building work until such permission has been obtained. In this circumstance he is being reminded of the proper sequence of events. He can hardly be heard to say that he had a legitimate expectation of being able to commence or complete building works before planning permission had been obtained.

28. Although I have formed the view that I do not need to consider the detailed factual position in relation to policy, the evidence from the Director is that it is uncommon for an application for a certificate of exemption to be made where planning permission is required, and in the few cases where planning permission has been required. The Applicant for a certificate has obtained planning permission first. In 500 applications for a certificate of exemption, all have been for developments within 'Village' zones on outline zoning plans. This supports the contention that the Director has not departed from any established practice.

29. I do not consider that the Applicant had any legitimate expectation that any exemption certificate would be granted free from any such condition.

30. Having been satisfied that the condition is both lawful and reasonable and may properly be imposed under section 9, exemptions from the stipulated sections of the Buildings Ordinance operate only if there is compliance with the condition. Until there is such compliance there is no exemption and sections 16(1)(d) and 14 (together with all the others of the Ordinance) continue to apply.

31. The application fails and is therefore dismissed with an order for costs, to be taxed if not agreed, in favour of the Respondent against the Applicant.

(Conrad Seagroatt)

Judge of the High Court