HUNG HING AND 66 OTHERS v. DIRECTOR OF LANDS

CACV 118/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 118 OF 2015

(ON APPEAL FROM HCAL 138/2014)

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J U D G M E N T

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Hon Cheung CJHC:

The facts

1.  This is an appeal from the order of Anthony Chan J dated 12 May 2015 refusing to grant the applicants leave to apply for judicial review.

2.  Very briefly, the applicants are respectively the registered owners of various plots of land in DD 185, Shatin, New Territories.  They have all applied to the District Lands Office under the government’s Small House Policy to erect small houses on their respective plots of land, totalling over 60.  It is quite apparent that these applications are concerted applications comprising part of a sizeable residential development controlled or assisted by a developer.  The problem with the proposed development is that the land in question is “land‑locked” in the sense that there is no vehicular access to it from the nearby public roads, namely, Sheung Wo Che Road and Shatin Rural Committee Road.  The proposed development is separated from these main roads by some lots which were resumed by the government more than a decade ago (“the resumed lots”) as part of the Pai Tau and Sheung Wo Che Village Expansion Area, a village expansion plan which has apparently been shelved for many years and only reactivated quite recently.  Some of the applicants used to own some of the lots resumed by the government.

3.  Quite plainly, the lack of vehicular access affects the proposed development in more ways than one, including the construction of the proposed small houses as well as their values after construction, particularly bearing in mind that the proposed development is situated on a steep hillside.  Whilst the applicants have applied for and have been granted temporary permissions by the District Lands Office to go through the resumed lots for the purposes of carrying out some preliminary geotechnical works, there is no guarantee there will be any form of permanent vehicular access to the proposed development whether for construction purposes or after completion.

4.  By a letter dated 2 July 2014, the applicants, therefore, applied to the District Lands Officer, Shatin, for the purchase from the government part or all of the resumed lots for the purposes of constructing and maintaining a vehicular access to the applicants’ land.  The proposed purchase was said to be in furtherance of the Small House Policy and the related requirement or policy on the provision of emergency vehicular access (“EVA”), namely, that there must be an EVA to the planned site of a house if it is situated within a cluster of ten or more houses.  Specifically, the letter put the request for purchase of government land on this footing:

“20. In view of the complexities of the construction works needed to be carried out to execute our client’s plan to build 170 Small Houses on the Lots (specifically zoned for such purpose), it is administratively inefficient for the DLO to require our clients to continue to make applications for access on an ad hoc basis for temporary access.

21. More importantly, our clients will be required to provide EVA to all Small Houses as part of any development scheme. Bearing in mind the DLO’s need to accommodate the requirements of the Small House Policy to meet the housing needs of indigenous villagers, it is high time that a decision should be made about providing permanent vehicular access to the Lots.

22. It seems to us that, because of the Small House Policy and the associated policy on EVA, your office really has an obligation to provide vehicular access to the Lots so as to facilitate the site formation and construction works necessary for the building of small houses and for EVA purposes after construction.  We therefore make a formal application for permanent vehicular access to the Lots, which access would also serve as EVA.”

5.  By a short letter dated 2 September 2014, the request to purchase government land was rejected by the District Lands Officer, Shatin.  The letter explained:

“ I must advise your clients that it is not Government’s obligation to provide vehicular access in connection with Small House grants. All along, Government specifies clearly in relevant grant condition that right‑of‑way to Small House lots is not guaranteed. In a nutshell, Small [H]ouse applicants are not entitled to have vehicular access to their lots and this office will not consider request for such access no matter it involves government land or resumed private land.

Regarding Emergency Vehicular Access (EVA), it is built for use by emergency vehicles only and it will not be opened up for use by private cars.  If there is topographical constraint to construct EVA, as in the present case, the applicants should opt for other fire safety alternatives.  The pamphlet ‘A Guide to Fire Safety Requirements’ for New Territories Exempted Houses is enclosed for your reference.”

6.  In this regard, it should be noted that paragraphs 4 and 5 of A Guide to Fire Safety Requirements stipulate:

“4. Site Constraints in the Villages

If there are practical constraints rendering the provision of EVA impracticable, for instance if the village:

(a) has no vehicular access because of topographical or land ownership constraints, and there is no prospect of having any kind of access; or

(b) only has a sub‑standard vehicular access and its improvement is hindered by site constraints, the applicant should, having regard to the limitations of his proposed house site, apply to the District Lands Office to implement one of the fire safety alternatives below.

5. Fire Safety Alternatives

If the District Lands Office is satisfied that the provision of EVA is impracticable, the applicant should implement one of the following fire safety alternatives:-

(i) automatic sprinkler system; or

(ii) fire detection system and hose reel system – applicable if there is no fire separation between floors of the three‑storey Small House; or

(iii) fire detection system and fire extinguisher on each floor of the Small House – applicable if there is fire separation between floors of the three‑storey Small House.

If the applicant opts for the fire safety alternative (ii) or (iii) above, he or his representative is required to attend a fire safety training course arranged by FSD before applying for Certificate of Compliance.”

The proceedings below

7.  Dissatisfied with the District Lands Officer’s refusal, the applicants sought leave to apply for judicial review to challenge the refusal.

8.  In the Form 86, the applicants essentially contended that the Director of Lands, who was named as the putative respondent, has a public law duty to facilitate rather than to impede the implementation of the Small House Policy, and in the present case, the duty meant that the Director was obliged to provide, at fair market price, a permanent vehicular access over the resumed lots to connect the applicants’ lots with the public road.  Secondly, the applicants claimed that they had a legitimate expectation that the Director would grant a permanent vehicular access over government land that would serve also as an EVA.  Thirdly, the applicants argued that the refusal infringed upon their constitutional rights guaranteed under articles 40 and 105 of the Basic Law in that the permanent vehicular access applied for was required for the completion of the site formation work, without which the applicants’ small house development would fail.  Lastly, the applicants pointed out that the Director had granted vehicular access over government land in similar cases before, and therefore the decision was unlawful for being inconsistent.

9.  As mentioned, the learned judge refused leave, after holding a short oral hearing with written input in the form of an initial response from the Director of Lands.  The judge basically decided the application for leave on one ground, that is, the decision under challenge is not amenable to judicial review, it being a private law matter with the government wearing the hat of a private landowner or landlord.  In the CALL‑1 Form dated 12 May 2015, the judge explained:

“1. I agree with senior counsel for the applicants that the key issue in this leave application is the amenability of the Decision to judicial review.

2. It is not the applicants’ case that without vehicular access to their land (‘the Lots’) they will not be able to build their desired small houses.

3. In the heart of this application is the proposition that because of the intended building of small houses on the Lots the use of the adjacent Government land would bring into consideration the Small House Policy (‘SHP’), at least when there is a suggestion that it would enhance the development of the small houses.  With respect, I cannot agree, and I believe that this is an impermissible inroad into matters which are for the Government.”

10.  The applicants appealed.

The arguments on appeal

11.  Before us, Mr Philip Dykes SC, Mr Tommy Ho with him, presented the applicants’ case for leave to apply for judicial review in a different manner.  Essentially, counsel argued that thus far there is no policy document available to the applicants which sets out comprehensively the terms of the Small House Policy. Counsel pointed to some materials which, counsel submitted, provide some evidence that the Small House Policy is not confined to the individual plots of land on which small houses are built, but it includes the provision of vehicular access as a relevant consideration under the policy, at least to the extent such access is necessary for accessibility, security and enjoyment of the affected small house(s).  These materials essentially refer to the provision of EVA.  Counsel therefore argued, by reference to case law, that the refusal to sell land for the purposes of provision of vehicular access and/or EVA is amendable to judicial review, and the refusal is open to challenge on a number of public law grounds.  Counsel contended to the extent the Director of Lands appeared to suggest that the Small House Policy applies only to the individual plots of land on which small houses are built and nothing else and so it excludes vehicular access to the small houses, then, if that is indeed stated in clear terms in the policy, it is an unreasonable or irrational policy.  No other government housing policy catering for the need of a section of the community is so limited and so wasteful of land resources.  Alternatively, if the suggestion that the policy is limited in this way is based on an interpretation of the policy, that reading of the policy may be an unlawful misinterpretation of the policy.  Counsel submitted the court may review a policy for its rationality and any interpretation of it.

12.  Counsel therefore submitted that at this stage, the applicants have made out a case that the Small House Policy arguably applies on the facts of the case because their land can only be used in conformity with the policy; and their request for ordinary vehicular access through government land reserved for the construction of small houses as part of the village expansion project would, on the face of things, appear to be consistent with the policy and make good sense.  Leave should be granted, counsel submitted, and the Director of Lands can then say either (a) the Small House Policy is engaged but that, contrary to case law, it is a policy that is not amenable to judicial review or, (b) the Small House Policy is engaged and decisions under it are reviewable, but not in this case.

My views

13.  I do not accept Mr Dykes’ arguments.

14.  As a preliminary observation, it is for an applicant for leave to apply for judicial review to make out a reasonably arguable claim for relief which enjoys realistic prospect of success.  An applicant cannot plead potential arguability to “justify the grant of leave to issue proceedings upon a speculative basis which it is hoped the interlocutory processes of the court may strengthen”; potential arguability is no longer sufficient.  Po Fun Chan v Winnie Cheung (2007) 10 HKCFAR 676, paras 7, 14‑17.

15.  It is not enough for Mr Dykes’ clients to say they do not know what the Small House Policy, which is the subject matter of, amongst other things, a number of published documents and decided cases, is all about in relation to the provision of vehicular access, absent a government paper setting out the policy in its entirety.  It is for the applicants to tell the court whether the policy is engaged, and if so, why the decision is amenable to judicial review; or if it is not engaged, why the non‑engagement is challengeable by way of judicial review.  It is no longer acceptable for an applicant to seek leave to apply for judicial review with the hope that once leave is granted, evidence and materials will be disclosed by the putative respondent by which the applicant hopes his case may be strengthened.  That sort of approach, inherent in the former potential arguability test which was based on a quick perusal of the materials placed before the court, is no longer acceptable, as the applicable threshold for leave to apply for judicial review has long been raised.

16.  Even more importantly, it is beyond argument to the contrary that generally speaking, land leases and related matters are within the exclusive province of the government as landlord. Article 7 of the Basic Law specifically says that land and natural resources within the Hong Kong Special Administrative Region are State property.  The government shall be responsible for their management, use and development and for their lease or grant to individuals, legal persons or organisations for use or development.  A long line of cases, including the authoritative decision of the Privy Council in Hang Wah Chong Investment Co Ltd v Attorney General [1981] HKLR 336, have established that, as a general rule, government decisions in relation to land leases and related matters where the government wears the hat of a landowner or landlord are not amenable to judicial review.  For a convenient summary of the relevant case law, see Anderson Asphalt Ltd v Secretary for Justice [2009] 3 HKLRD 215 (CFI), paras 39‑57; as endorsed by this court in Chau Tam Yuet Ching v Director of Lands [2013] 3 HKLRD 169, paras 29‑31.

17.  Typically, whether the government sells a piece of land or makes a land grant to an individual is purely a private law matter not amenable to judicial review.  In a place like Hong Kong where land is a scarce resource and all land is State property, this is a principle of great importance, for otherwise there would be no end to litigation involving government’s use or disposal of land as landowner or landlord which, for obvious reasons, is not conducive to good governance.

18.  The Small House Policy needs no introduction. In Koon Ping Leung v Director of Lands [2012] 2 HKC 329, where Lam J (as Lam VP then was) gave a brief description of the policy in paragraphs 2‑4 of his judgment, the issue facing the court was whether a refusal by the Director of Lands to grant a piece of land to an indigenous villager to erect a small house pursuant to the policy was amenable to judicial review.  The learned judge observed, bearing in mind the history leading to the implementation of the Small House Policy and the function that it was intended to serve, that there was a strong public element in its due administration which distinguished the role of the government from that of a private landlord.  He therefore concluded that there was a sufficient public element in the decision of the District Lands Officer on a grant of government land under the Small House Policy to render it amenable to judicial review.  Strongly affecting the court’s decision on amenability was the view taken that the Small House Policy has its origin in the government’s effort to cater for the housing needs of indigenous villagers in the New Territories so that in that aspect, “there is an analogy with the function served by the public housing scheme administered by the Housing Authority” (para 15).

19.  On the footing of Koon Ping Leung, and bearing in mind that we are only at the leave stage, I am prepared to proceed on the basis that some decisions made by the District Lands Officer in the implementation of the Small House Policy may be amenable to judicial review.

20.  However, it does not follow that each and every matter concerned or associated with the policy or its implementation is amenable to judicial review.

21.  In the present case, the court has the Director’s submission through counsel that the Small House Policy does not require, or guarantee, any vehicular access.  It is neither a requirement for an application to erect a small house under the policy that there should be vehicular access, nor does the government guarantee any vehicular access in approving an application.  Indeed, at the hearing, Mr Anthony Chan, for the Director, specifically confirmed with the court the correctness of the following statement made in his written submission which was based on various matters set out in the initial response filed by the Department of Justice on behalf of the Director when the matter was before the judge below:

“29. The reason is because the success or failure of the Applicants’ applications for small house building licenses is not dependent on the outcome of the Decision. The Small House Policy and the associated policy on EVA (as well as their actual implementation) do not guarantee, promise or require the provision of a permanent vehicular access or right of way or EVA. If there is no such access and a successful applicant wants his small house to have the benefit of such access, he is expected to make his own arrangements to try to acquire the same. See for instance:

29.1. Small House Policy booklet.

29.2. Regulations 5 and 41D of the Building (Planning) Regulation[s] (Cap 123F).

29.3. Standard building license (special conditions 24 & 27; special conditions 26 & 29.

29.4. Guide to Fire Safety Requirements.

29.5. Letters; Decision.”

22.  Paragraph 29.1 and 29.2 deal with a successful applicant’s exemption (upon application) from the requirement under the Building (Planning) Regulations (Cap 123F) regarding the provision of access route and EVA.  Paragraph 29.3 refers to typical special conditions in standard building licenses granted under the Small House Policy which specifically say that no right of way to the lot in question is guaranteed, and the licensee “must accordingly make his own arrangements for acquiring such right‑of‑way” and for the provision of EVA or fire safety alternatives.  I have already referred to A Guide to Fire Safety Requirements mentioned in paragraph 29.4.  As for the letters and decision referred to in paragraph 29.5, they are documents relating specifically to the present case in which it has been clearly stated that no right of way is guaranteed under the policy.

23.  The Director, as the decision-maker in judicial review proceedings, owes a duty of candour to the court: Chu Woan‑chyi v Director of Immigration CACV 119/2007, 4 September 2009.  I have no reason to doubt that the Director is in full compliance with his duty in the present case, in terms of informing the court what the Small House Policy is in relation to vehicular access (and EVA).

24.  Indeed in the light of the above materials, and given that under the reasonable arguability test, the burden is on the part of the applicants to show a reasonably arguable case, I have no reason to doubt what the true position is in relation to the Small House Policy so far as the provision of vehicular access or EVA/fire safety alternatives is concerned.  In other words, I reject Mr Dykes’ argument that leave should be granted for the Director to go on oath to produce internal government documents to show what the Small House Policy really is.

25.  Nor do I have any reason to think that the Director has misunderstood this part of the Small House Policy which is so clearly evidenced by the materials placed before the court.  The contrary position is, in my view, not reasonably arguable with realistic prospect of success.

26.  Mr Dykes, at the oral hearing, referred to a recent Ombudsman’s Report (Issue No 2 of Reporting Year 2015/16) in relation to the regulation of fire safety measures for New Territories exempted (small) houses, and stressed the importance of the provision of EVA.  In my view, the Report is quite irrelevant for our purposes.  The court does not sit as an ombudsman.  The court is not concerned with the adequacy of the fire safety requirements as such in this appeal.  What the court is concerned with is whether under the existing Small House Policy and its associated fire safety requirements, the provision of an EVA is a must.  As explained, the guide clearly states that there can be fire safety alternatives, the wisdom of which is not for this court to comment on.  The significance of that is just this, that is, the applicants simply cannot make use of the primary requirement for an EVA to mount an argument that the government should therefore sell land to them in order to construct and maintain a vehicular access or EVA to their proposed development, given that they can adopt fire safety alternatives to satisfy the guide’s requirements.

27.  That being the case, since vehicular access (or for that matter, EVA) is not a feature of the Small House Policy, there is no question of the District Lands Officer making any public law mistake in relation to implementing the policy as regards his refusal to grant government land to the applicants for the construction of a vehicular access.  The policy is simply not engaged so far as vehicular access is concerned.

28.  That, therefore, only leaves Mr Dykes with his alternative argument that the policy, in so far as it does not deal with the question of vehicular access, is unreasonable or irrational in the public law sense,particularly given the reality that many of these small house applications are in fact substantial residential developments by developers.  According to counsel, as a quasi public housing scheme to house a particular sector of our population, it is simply unreasonable or irrational for the policy not to consider vehicular access.

29.  In my view, the law is quite clear on what is and what is not amenable by way of judicial review when it comes to land leases and related matters in Hong Kong.  As mentioned, a whole line of cases have long established that generally speaking, land leases and related matters, and the land policies behind, are exclusively matters for the government as landowner or landlord, as confirmed by article 7 of the Basic Law.  It is for the government to formulate its own land policies.  The court has no business with it for very good reasons.  The sort of policy that one is concerned with here is one that is dependent on social, economical as well as political considerations, which the court is neither constitutionally positioned nor institutionally equipped to deal with.  Take the present case as an example.  The land sought to be acquired by the applicants is in fact land earmarked by the government for a village expansion project involving the making of land grants to indigenous villagers to erect small houses.  Acceding to the applicants’ request for purchase of land would mean less land available for the building of small houses in the expanded village, to the detriment of those who may be interested in applying for a land grant.  As has been demonstrated by Koon Ping Leung, a decision to make or refuse such a land grant is amenable to judicial review.  Does it mean, therefore, that potential or actual applicants for land grants of the resumed lots should be allowed to intervene in the present proceedings if leave were to be granted?  How is the court going to decide what sort of policy the government should have or what sort of policy is reasonable or not irrational in the public law sense when faced with competing claims to scarce resources?  As the judge put it below, whilst the present case is in relation to vehicular access, a need considered by the applicants and perhaps many others to be reasonably necessary for a substantial development, what about, for instance, the need for a medical clinic or facilities for young children or the elderly given the size of the residential development?  And can someone come forward and say that more land in the vicinity should be resumed in order to cater for that need in furtherance of the policy?

30.  All these hypothetical questions, and it is not difficult to think of many others, simply demonstrate that there is wisdom in holding, as the cases have consistently decided, that as regards land leases and related matters, the government’s decisions as landowner or landlord are generally speaking not amenable to judicial review.

31.  Returning to Mr Dykes’ argument, once it is concluded as I have done that vehicular access does not form part of the Small House Policy, one falls outside the exception to the general rule based on Koon Ping Leung, and is back to the general basic principle (that land lease decisions are not amenable to judicial review).  In other words, it is not for the court to tell the government what its land policy should be.  Taken to the highest, Koon Ping Leung is only authority for the proposition that once the government has for good reason of its own decided to adopt a certain policy to house indigenous villagers in the New Territories in the form of the Small House Policy, some of its decisions made in the implementation of that policy may be amenable to judicial review.  It is a quantum leap to say that a decision on something which is not within the policy, ie the provision of vehicular access which by definition involves land other than land required for the erection of the house itself, is also amenable to judicial review.  And in the context of the present case, I have no doubt that it is not reasonably arguable, and there is no realistic prospect of success, that one can challenge the Small House Policy as being unreasonable or irrational in the public law sense by omitting from its ambit or scope the provision of vehicular access.

32.  In any event, even if the provision of vehicular access were something that ought to have been included in the policy, and even if it were something that was somehow open to judicial review, still it would not follow that it was incumbent upon the government to provide the vehicular access, as opposed to it being a requirement on the applicant’s part to ensure that there would be vehicular access before his or her application would be granted.

33.  Lastly, I also agree with Mr Chan that in any event, leave should be refused on the ground that the applicants have not exhausted possible alternative remedies.  The burden being squarely on the applicants to show a reasonably arguable case, there is simply no or little material before the court to show that the applicants cannot acquire land for a vehicular access by other means, that is, means other than requiring the government to sell to them the resumed lots or a portion of those lots.  For instance, there is simply no evidence before the court that an alternative vehicular access cannot be acquired from neighbouring lots owned privately.  Nor is there any explanation as to why the applicants have chosen not to pursue their previous application to the government to amend the village expansion area so as to allow land to be set aside for the construction of an EVA or a vehicular access.

Disposition

34.  For these reasons, I have come to the conclusion that the applicants have failed the reasonable arguability test for leave to be granted.  In other words, the judge was right in refusing leave.  I would dismiss the appeal with costs (on a nisi basis) to the Director.

Hon Cheung JA:

35.  I agree with the judgment of the Chief Judge.

Hon Kwan JA:

36.  I agree with the judgment of the Chief Judge.

Hon Cheung CJHC:

37.  Accordingly, the appeal is dismissed and we make an order nisi that the costs of the appeal be paid by the applicants to the Director, to be taxed if not agreed.