HONG KONG HOUSING SOCIETY AND ANOTHER v. WONG NAI CHUNG t/a SUN CHUNG FLOWER SHOP

HCMP 880/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 880 OF 2009

(ON AN INTENDED APPEAL FROM DCCJ NO. 3620 OF 2007)

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BETWEEN

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REASONS  FOR  JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.  On 30 January 2009, Deputy District Judge Richard Khaw gave summary judgment against the defendant which required, inter alia, the defendant to deliver vacant possession of a cockloft and other common areas in No. 494 Fuk Wing Street, Sham Shui Po, Kowloon (“the Property”). That property is the subject of a Notice of Resumption dated 7 July 2005. The Notice of Resumption was issued in respect of the implementation of development proposal K22 (“K22”) for urban renewal, which covered various lots of land including the Property.

2.  The defendant’s application for leave to appeal and a stay of execution pending appeal were dismissed by the learned judge on 24 April 2009.

3.  On 8 May 2009, the defendant applied to this court for leave to appeal. On 7 July 2009, a 33-page-skeleton submission prepared by counsel in support of the application was supplied. Earlier on 22 May 2009, counsel for the plaintiffs supplied a skeleton submission. On 10 July 2009, Tang VP directed that the application for leave should be heard by two judges and that a date should be fixed for that purpose.

4.  In the meantime, on 6 July 2009, the defendant was given final notice to deliver vacant possession to the plaintiffs on or before 13 July 2009.

5.  By summons dated 10 July 2009, the defendant applied for a stay of execution under O. 59 r. 13 until further order of the court. We heard the application the same afternoon. The defendant was represented by Mr Martin Lee, SC, leading Mr. Lee Siu Him. The plaintiffs were represented by Mr Anderson Chow, SC and Ms Queenie W.S. Ng.

6.  The skeleton submissions referred to above were prepared by the same counsel. Those skeleton submissions were directed to the granting of leave to appeal. But, as Mr Lee submitted at the outset of the application, relying on the judgment of Ma J (as he then was) in Star Play Development Ltd. v Bess Fashion Management Co. Ltd., HCA 4726/2001 (unreported) dated 28 May 2002, the defendant’s case is that there is good reason for a stay because the proposed appeal has a strong likelihood of success. Thus, the submissions before us were centred on the strength of the proposed appeal.

7.  The hearing ended after 5 p.m. and we refused a stay. We were able to deal with the matter in the afternoon of 10 July 2009 because we had had the benefit of the very full written submissions. We now give our reasons.

8.  Mr Lee put his case quite simply. The development proposal, namely, K22, in respect to which the Notice of Resumptionwas issued, was one of a number of “development proposals” prepared in about 1997 by the then Secretary for Planning, Environment and Lands (“SPEL”) under the Land Development Corporation Ordinance, Cap. 15 (“LDCO”). The LDCO was repealed by the Urban Renewal Authority Ordinance, Cap. 563 (“URAO”) in 2001. Mr Lee informed us that at the time URAO came into force, there were 25 outstanding projects which were prepared by the LDC under the LDCO, but which had not yet been fully implemented. He referred to them as “the inherited projects”.

9.  The Urban Renewal Authority (“URA”) was established to replace the Land Development Corporation (“LDC”) in undertaking urban renewal. Section 20 of the URAO provided that the then (in 2001) Secretary for Planning and Lands (I will refer to him and others who succeeded to his role as “the Secretary”) may prepare from time to time an urban renewal strategy (“the Strategy”) “relating to the carrying out of urban renewal”. In November 2001, the Secretary prepared the Strategy and issued the same to the URA.

10.  Mr Lee further submitted that the express powers given to the URA included:

“(a) under section 6(2)(d)(i) of URAO to ‘implement projects by way of a development scheme under section 25 of [URAO]’;

(b) under section 6(2)(d)(ii) of URAO to ‘implement projects by way of a development project under section 26 of [URAO]’;

(c) under section 6(2)(d)(iv) of URAO to ‘implement projects by way of the continuation and completion of a development scheme under section 36(7) [of URAO]’; and

(d) under section 6(2)(d)(iii) of URAO to ‘implement projects by way of the continuation and completion of a development proposal under section 36(4) [of URAO]’”

The only relevant difference between a development scheme and a development project or development proposal is in their size.

Section 36(4) provides:

“(4) Subject to subsections (5) and (6), where at the date of commencement of Parts II to VIII of this Ordinance, a development proposal has been prepared in accordance with section 5(2)(b) of the repealed Ordinance, the development proposal may be continued and completed by the Authority as if the repealed Ordinance had not been repealed and the powers and duties of the Land Development Corporation shall be exercised and performed by the Authority.”

There is no dispute that the development proposal K22 fell within section 36(4).

11.  By a letter dated 30 November 2004, the 1st Plaintiff (an agent implementing the inherited projects in association with the URA), requested the URA to make an application to the Secretary under section 15(1) of LDCO requesting him to recommend to the Chief Executive in Council to order the resumption of land covering the subject area of K22. There was annexed to this letter a survey (“survey”) which the Plaintiffs relied on as the requisite assessment under section 15(4)(b)(ii) of LDCO provided:

“(4) The Secretary shall not make a recommendation in pursuance of subsection (2)(b )-

…

(b) unless the application for resumption is accompanied by a statement-

…

(ii) containing an assessment by the Corporation as to the likely effect of the implementation of the proposal [‘the requisite assessment’], including, in relation to the residential accommodation of persons who will be displaced by the implementation of the proposal, an assessment [‘the specific assessment’] as to whether or not, insofar as suitable accommodation for such persons does not already exist, arrangements can be made for the provision of such residential accommodation in advance of any such displacement which Will result as the proposal is implemented; …’;

12.  By a letter dated 17 December 2004, the URA requested the Secretary to recommend to the Chief Executive in Council the resumption of land under section 15(1) of LDCO. That was done and the Chief Executive in Council then made the order for resumption of land which led to the notice of resumption referred to in para.   1 above.

13.  Mr Lee took us briefly through both LDCO and URAO. Mr Lee submitted that a development project could be divided into two stages, the preparation stage and the land assembly stage. It seems that Part IV covered the preparation stage and Part V the land assembly stage in LDCO. The corresponding parts in URAO are Part V and Part VI. During the preparation stage, the LDC had to prepare an assessment under section 13(2)(c). When it came to the land assembly stage, if resumption was required, then an assessment satisfying section 15(4)(b)(ii) by the LDC to SPEL is also required. Section 13(2)(c) is for all intents and purposes identical to section 15(4)(b)(ii).

14.  The corresponding sections under URAO are section 25(3)(c) and section 29(3)(c). Those sections are for all intents and purposes the same as section 13(2)(c) and section 15(4)(b)(ii) of LDCO.

15.  However, there are substantial differences between Part IV of LDCO and Part V of URAO although both dealt with “planning procedures”. For example, section 20 of LDCO requires the publication of an urban renewal strategy after public consultation. Part V also provides for objection (section 24) and appeals (section 28).

16.  Mr Lee also informed us URAO is an improvement on LDCO and:

“24. As stated by the Government in its Legislative Council Brief, Urban Renewal Authority Bill (‘Legco Brief’), prepared by the Planning and Lands Bureau and dated 2 February 2000:

‘2. The existing approach to urban renewal is inadequate to tackle the problems of urban aging and deterioration. A new legislative and institutional framework is required for the implementation of the new urban renewal strategy.

3. In his 1999 Policy Address, the Chief Executive announced a new and proactive approach to urban renewal and a plan to establish an Urban Renewal Authority (URA) to implement Government's urban renewal strategy.’”

17.  Mr Lee submitted that since it was left to the URA to implement both the new and inherited projects, the same assessment should be done and that assessment should be done in accordance with the URAO.

18.  Mr Lee has referred us to the Strategy which was prepared under section 20 after a public consultation. Amongst the content of the strategy referred to by Mr Lee are:

“Quality of life in our urban area	3 A ‘people-centred’ approach should be used to carry out urban renewal. The purpose of urban renewal is to improve the quality of life of residents in the urban areas. The Government has to balance the interests and needs of all sectors of the community without sacrificing the lawful rights of any particular group. The aim is to reduce the number of inadequately housed people.”
“Role of the URA
Introduction	8 The URA is tasked to implement an urban renewal programme consisting of 200 new projects and 25 uncompleted projects of the Land Development Corporation (LDC) in 20 years. The aim is to contain the problem of urban deterioration by the end of this period.”
“Redevelopment	12 The Government has included 200 new projects and 25 uncompleted projects of the LDC for redevelopment. The 225project areas cover a total area of 67 hectares. It is estimated that there are 126 000 persons living in 32 000 flats in these areas.
	13 Among the 225 projects, priority should be given to the 25 uncompleted projects of the LDC since the residents in these project areas have waited for redevelopment for quite some time. The URA should consider the following factors in determining the priority of individual redevelopment projects –
	(a) whether the proposed project area is old and dilapidated and requires urgent redevelopment; (b) whether the buildings lack basic sanitation facilities or are exposed to potential fire risks; (c) whether the living conditions of the residents in the proposed project area are satisfactory; (d) whether the proposed project will improve the area by replanning and restructuring; (e) whether the proposed project area will achieve a better utilization of land after redevelopment; and (f) whether the rehabilitation of buildings in the proposed project area is a practicable and viable option.”

19.  The defendant’s complaint is that in carrying out its assessment in relation to development proposal K22, the URA had not followed the URAO. Whether the it was obliged to do so turns on the proper interpretation of section 36(4).

20.  K22 is an inherited project and we understand that it had gone passed the preparation and approval stage. In other words, Part IV of LDCO had been complied with prior to the repeal of LDCO. Mr Lee did not contend that the preparation stage had to be repeated under URAO, such that e.g., there could be objections or appeals. Nor was it contended that the section 13 assessment had to be redone in accordance with URAO. Mr Lee accepted that the inherited project could be continued under section 36(4) as if LDCO had not been repealed. However, Mr Lee submitted that the second stage of K22, namely, the land assembly stage, had to comply with URAO, such that the assessment required for this stage must comply with URAO.

21.  Mr Lee has gone into some detail in the skeleton submission on the requirement of URAO regarding the assessment under section 25 as well as section 29. It is unnecessary for us to go into such detail. It is not the plaintiffs’ case that the assessment done in this case complied with URAO.

22.  Section 36(4) provides quite clearly that:

“(4) … the development proposal may be continued and completed by the Authority as if the repealed Ordinance had not been repealed and the powers and duties of the Land Development Corporation shall be exercised and performed by the Authority.” [Emphasis added]

23.  In our opinion, it is clear beyond argument that in relation to this development proposal, K22, an inherited project, the assessment should be done as if the LDCO had not been repealed. That is to say, not only might it be continued as if LDCO had not been repealed, it might be completed as if LDCO had not been repealed. Nor does it matter that the powers and duties of the LDC should be exercised and performed by URA. Such powers and duties should be exercised as if the LDCO had not been repealed.

24.  We do not believe the fact that the 25 inherited projects were referred to in the strategy could in any event affect or modify the proper construction of section 36(4). Moreover, more importantly, we do not read the references to the inherited project as suggesting in any way that when these projects are continued and completed, the URA should do so as if LDCO had been repealed. Even if, as submitted by Mr Lee, that URAO is an improvement on LDCO.

25.  We are not satisfied that the defendant’s proposed appeal has a strong likelihood of success. It turned on the construction of section 36(4) and its either right or wrong. We do not consider the proposed appeal to be reasonably arguable.

26.  For these reasons, we have dismissed the application for a stay.