TANG HOI SANG AND OTHERS v. DIRECTOR OF LANDS

HCAL 79/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 79 OF 2016

____________________

____________________

____________________

________________________

D E C I S I O N

________________________

1.  This is an application for leave to apply for judicial review relating to certain land in Chung Ying Street, Sha Tau Kok, on which 14 shops (“Shops”) stand. There are 15 street numbers involved, from Nos 37A1 to 37K Chung Ying Street. The Shops are on unleased Government land and the Applicants herein, being the occupiers, are essentially squatters.

2.  The decisions challenged are (i) the decision of the Director of Lands by a letter of 9 December 2015 refusing to grant short term tenancies to the Applicants (“Decision 1”); (ii) the refusal of the Director of Lands by a letter of 4 March 2016 to give reasons for Decision 1 (“Refusal”); and (iii) the decision of the Director of Lands by notice of 16 March 2016 to remove and take possession of properties from the Shops and to demolish the Shops (“Decision 2”).

3.  I should mention that very recently, the 1^st, 3^rd, 4^th, 5^th, 6^th, 7^th and 10^th Applicants have applied for legal aid for the purposes of these proceedings, even though the Applicants had together been jointly legally represented throughout.  Even by today their solicitors are still on record acting for them, although Ms Lau and Mr Fong said that they had instructions this morning only to represent them in relation to whether or not the statutory stay should be lifted.  Today’s hearing date was fixed in December 2016. There was a hearing on 13 March 2017 of an application by the Applicants to adduce further evidence.  Even then there was no indication that any of the Applicants would seek legal aid.  The Applicants’ and the Putative Respondent’s legal representatives have duly lodged hearing bundles and skeleton arguments.  There was no proper explanation why an application for legal aid was made at the last minute by those applicants.  There was nothing to indicate that they stand in any different position from the Applicants who have not applied for legal aid and whose position will be fully covered by the submissions of counsel at this hearing.  An adjournment would cause prejudice to good administration since the Putative Respondent has given an undertaking not to demolish the Shops pending the resolution of the application for leave.  For these reasons I had no hesitation in lifting the statutory stay of proceedings pursuant to s 15(4) of the Legal Aid Ordinance (Cap 91).  After that decision, Ms Lau and Mr Fong indicated that they had received instructions to act for all the Applicants for the purpose of the application for leave and the hearing proceeded accordingly. 

4.  While some of the facts alleged by the Applicants are controversial, for the purposes of this hearing the Putative Respondent is prepared to proceed on the basis that the Shops have existed at least since around 1980 and have been occupied by the Applicants.  In 1982 the Government conducted a territory‑wide Squatter Structure Survey and announced that the surveyed structures would be allowed to remain until the land was required for a public purpose or the structures had to be demolished for safety reasons.  The Shops should have been, but were not, registered in this survey as squatter structures.  On or about 11 August 1993 there was a meeting between the Sha Tau Kok Rural Committee, the Home Affairs Department, the Lands Department, the Police Department, the District Urban Council and representatives from other government departments, at which the government departments including the Director of Lands represented to and assured the Rural Committee on behalf of the Shops that so long as the occupiers of the Shops would demolish the areas overreaching the drainage area and confined themselves not to encroach onto the drain, they would be allowed to occupy up to the edge of the drain, which would stand as the boundary of the Shops.  Further, the Shops could continue to occupy the respective land for commercial or lawful purposes. Street numbers would be assigned to them, and rates and government rent demands would be issued to the Shops covering their proper areas.  Afterwards, the Government did assign street numbers to the Shops and had collected rates and rents for the Shops since.

5.  The Applicants’ occupation had continued for a long time.  However, there had since been considerable complaints from the public about the Shops beginning in 2010 and, on 15 October 2013, after various communications with the Shops’ owners, the Director issued a notice under s 6(1) of the Land (Miscellaneous Provisions) Ordinance (Cap 28) requiring the Applicants to cease occupation of the land in question before 16 December 2013 (“the 2013 notice”).  No further enforcement action was however taken pursuant to this notice at the time.  Instead, there were further meetings, steps taken for removal of certain structures and various reports that followed. 

6.  There were also new complaints made by the public.  On 23 November 2015, the Director posted on or near the Shops another notice under s 6(1) requiring the Applicants to cease occupation before 8 December 2015 (“the 2015 notice”), which stated in English and Chinese (and I will just read out the English version):

“LAND (MISCELLANEOUS PROVISIONS) ORDINANCE (Chapter 28 of The Laws of Hong Kong Special Administrative Region)

NOTICE UNDER SECTION 6(1)

LOCATION Unleased land near Lot No.727 s.A, ss.11 in Demarcation District No.40, Sha Tau Kok, New Territories

TAKE NOTICE that the authority designated pursuant to section 3 of the captioned Ordinance hereby requires unlawful occupation of the unleased land at the above location to cease before the 8th day of December 2015.

Date 23 November 2015

(CHAN Kai‑chung)

for Director of Lands

NOTE:

Pursuant to section 6(2) of the Land (Miscellaneous Provisions) Ordinance (‘the Ordinance’), if the occupation of unleased land does not cease as required by this Notice, any public officer, or other person, acting on the direction of the Authority may, with the assistance of such other public officers or other persons as may be necessary (a) remove from the unleased land the persons (if any) thereon; and (b) take possession of any property or structure on the unleased land in question.  By virtue of section 6(3) of the Ordinance, any property or structure of which possession is taken under section 6(2)(b) of the Ordinance shall become the property of the Government free from the rights of any person and may be demolished or otherwise dealt with as the Authority thinks fit.  Any person who, without reasonable excuse, does not cease the occupation as required by this Notice, may be convicted under section 6(4) of the Ordinance.  According to section 6(5) of the Ordinance, the Authority may recover, from the person convicted of an offence under section 6(4) of the Ordinance any cost incurred in or arising out of the demolition of any property or structure in the unleased land under section 6(3) of the Ordinance and the exercise of the powers conferred by section 6 of the Ordinance.”

7.  On 1 December 2015, the Applicants submitted a written application to the Lands Department for short term tenancies for the Shops.  By a letter dated 9 December 2015, the District Lands Office, (North) (“DLON”) declined to grant any such tenancies, stating:

“經詳細考慮後，按照現行適用的政策，本處未能接納上述申請”.

(English translation: “After thorough consideration, we cannot accept the above application(s) in accordance with existing applicable policies.”)

8.  Further correspondence involving the Applicants’ solicitors followed. On 4 March 2016, DLON wrote as follows:

“According to the prevailing policy, this office may consider processing Short Term Tenancy (STT) application where the situation warrants. Each case will be considered on its own merits. After considering the circumstances of this case, I regret to inform you that your clients’ STT application cannot be entertained. Land control actions against the subject 12 commercial retailing shops, which are unauthorised structures erected on unleased land, will be carried out. Please note that the clearance of the said 12 shops was reported to the North District Management Committee (the DMC) of the North District Council on 13 August 2015 and the clearance action had been agreed by the DMC.

As the said 12 shops have illegally occupied the unleased land and your clients do not take heed of our repetitious warnings, this office has no choice but resort to take stern clearance action herein.  In this regard, please take note that the Notices under Section 6(1) of the Land (Miscellaneous Provisions) Ordinance, Chapter 28 had been posted on the said 12 shops on 23 November 2015 and expired on 8 December 2015 (copies of the said Notices are attached).  You are reminded that if your clients do not cease the occupation of the unleased land as required by the said Notices, Government will take stern clearance action against the said 12 shops and all other Government’s rights in this matter are expressly reserved.”

9.  On 16 March 2016, DLON sent a notice to the Applicants which read in Chinese (in both traditional and simplified characters) as follows:

“重要告示：地政總署北區地政處將於2016年3月23日就中英街37號至38號之間的非法佔用政府土地情況採取執法行動，有關人士須停止佔用上址政府土地，屆時未被移走的物品將會由香港特別行政區政府接管成為政府的財產，上址的構築物亦會被清拆。”.

(English translation: “Important Notice: The District Lands Office, North of the Lands Department will on 23 March 2016 take law enforcement action against the illegal occupation of the Government land between Nos 37 and 38 of Chung Ying Street.  Those who are concerned shall stop occupying the Government land at the said address.  On the appointed day, articles remaining there unremoved would be taken over by the HKSAR Government and become Government property, and structures at the said address would also be demolished.”)

10.  On 23 March 2016, DLON posted a further s 6(1) notice (“the 2016 notice”) at the Shops in terms similar to the 2015 notice, requiring occupation to cease before 25 April 2016.

11.  On 27 April 2016, the Applicants filed their notice of application for leave to apply for judicial review in these proceedings.  The grounds put forward for judicial review are that:

(1)  the Putative Respondent failed to give reasons for Decision 1, in breach of natural justice and fairness;

(2)  the Putative Respondent took into account irrelevant matters in making Decision 2, namely, the opinion of the Shenzhen Yantian Zhong Ying Jie Management Bureau and the consent of the Northern District Management Committee;

(3)  in making Decision 2, the Putative Respondent failed to take into account the fact that the Shops should have been but were not registered in the 1982 squatter structure survey;

(4)  in making Decision 1 and the Refusal, the Putative Respondent failed to take into account the resolution made and assurance given in 1993;

(5)  the Applicants had a legitimate expectation that the Shops could remain and that no enforcement action would be taken against them in the absence of safety concerns or intended novel use of the land by the Government.  Decision 2 frustrated this expectation; and

(6)  Decision 2 was Wednesbury unreasonable, ie so unreasonable that no rational decision maker could have come to it. 

12.  It is clear that the challenge against Decision 1 was made out of time, about 1.5 months late.

13.  Having heard counsel, there are in my view insuperable hurdles for the Applicants.

14.  It is in my view clear that Decision 1, as a decision not to grant short term tenancies over Government land, is not amenable to judicial review. In Chau Tam Yuet Ching v Director of Lands [2013] 3 HKLRD 169, the Court of Appeal said at §22:

“...decisions to grant and to cancel (on the ground of the breach of the terms of the licence) a licence for the occupation of unleased land are not susceptible to public law challenges. Such decisions are, like decisions to grant, modify or terminate a government lease, the grant or modification or termination of a short‑term waiver, ‘commercial decisions’ which are guided by the interest of the Government as landowner or landlord and governed by private law such as the law of contract, the law of landlord and tenant and land law.”

15.  In Hung Hing v Director of Lands [2015] 5 HKLRD 516, which concerned a decision not to sell Government land, Cheung CJHC said:

“...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....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....”

16.  Although Decision 1 concerns short term tenancies (rather than licences or leases), the same principles apply.  The Court of Appeal, in a different context, considered it plain that a decision by the Government to grant or terminate a short term tenancy is a matter of private law: see Hong Kong Rifle Association v Hong Kong Shooting Association (No 2) [2013] 3 HKLRD 362, at §29.

17.  In the initial response filed by the Putative Respondent, it was explained that:

“...the reason why the Director made Decision 1 was because the Government has decided — after numerous rounds of discussions — that the shops and related structures situated on un‑leased Government land on Chung Ying Street (including the Shops) should be cleared so as to alleviate public safety concerns caused by the blockage of the shops and related structures to pedestrian access. The clearance would also facilitate better management of Chung Ying Street. Where the Government’s decision is to clear the shops and related structures, which is evident from the contemporaneous documents disclosed together with this initial response (and in particular the documents discussed in the chronology), it follows that the Director would not grant the short term tenancies sought as that would be contrary to the said decision.”

The good management of the area is a matter that the Government, as landowner and landlord of other land in the area, is entitled to be concerned about. 

18.  That the Government has a policy and has acted pursuant to a policy concerning whether or not to grant short term tenancies does not provide a sufficient public element to take Decision 1 into the public law domain. As Tang VP said in Rank Profit Industries Ltd v Director of Lands [2009] 1 HKLRD 177 at §42:

“...in having a policy and publishing it, the government was doing no more than what one would expect a private landlord to do”.

While this was said in connection with policies regarding modification of leases, it is in my view equally applicable to policies concerning the grant of short term tenancies over hitherto unleased land.

19.  Over the years there have been various concerns and complaints about the presence of structures beyond the curb line and other obstructions, but neither the fact that complaints were received from the public, nor that there were internal discussions among different Government departments, which is not unusual, is in my view sufficient to bring Decision 1 within the public law domain (see Rank Profit Industries Ltd (CA) at §47).  Nor does the fact that the Applicants may not have a remedy in private law suffice to remove the decision into the province of public law.

20.  The Applicants’ counsel referred in their skeleton argument to a report of the Director of Audit and appended the document.  In my view, this is not an appropriate course.  New evidence should not be introduced by advocates in their arguments.  I refuse to have regard to that document. 

21.  In their supplemental submissions, Ms Lau and Mr Fong have referred to the cases of R (Trafford) v Blackpool Borough Council [2014] EWHC 85 (Admin) and R (Agnello) v London Borough of Hounslow [2003] EWHC 3112 (Admin).  Whether or not there are sufficient public law elements in a particular case is a question that depends on the facts and circumstances of the case.  The English cases were decided on very different facts and legal context.  It may also be noted that the decision in Trafford was apparently based, in part, on the case of R (Molinaro) v Kensington and Chelsea Royal London Borough Council [2002] LGR 336 which had been explained by Tang VP in the Rank Profit case at §55 as a decision that can be explained on the narrow basis that the public body there was exercising statutory functions.  As to the case of Agnello, it may be noted from the first holding stated in the headnote that the council there derived its power to regulate the activities in question not merely from the lease, but also from the council’s power to pass bylaws, and that the council had indeed invoked its rights to make bylaws. 

22.  It follows for these reasons that leave to challenge Decision 1, and therefore the Refusal, should be refused.

23.  Decision 2 is also in my view not amenable to judicial review, but for a different reason: it is not a decision with legal effect.  What happened was that the Director had already issued a s 6(1) notice in 2013, and a further one on 23 November 2015 in terms I have already read out. Decision 2 was simply a notice sent before physical enforcement action, telling occupiers that any chattel remaining on the land by 23 March 2016 would be removed and forfeited to the Government and that the structures erected on the land would be demolished — which are consequences under s 6(2), (2A) and (3) of the Ordinance.  Decision 2 did not purport on its face to be a notice issued under s 6(1), unlike the 2013 and 2015 notices.  It contained no reference to s 6(1) or the Ordinance at all.  It was printed as issued by DLON, not by the “Authority” as required by s 6(1), ie the Director of Lands.  It did not require occupation of land to cease by a specified date as contemplated in s 6(1); instead, it informed readers when the Lands Department would take physical enforcement action.  It contained no note (in contrast with the 2013, 2015 and 2016 notices), setting out the criminal liability under s 6(4) and the other consequences.  It was clearly, in my view, not intended to be a notice under s 6(1), nor can it objectively be construed as such. 

24.  It is therefore plain that Decision 2 was not a s 6(1) notice; it was not a “decisive” exercise of discretion or a “substantive determination” by the Director of Lands invoking the power given by statute: Financial Secretary v Wong (2003) 6 HKCFAR 476 at §§93 to 95 per Litton NPJ.  It was a document issued for good order with a view to giving advance notice of physical removal action following the letter of 4 March 2016 I have mentioned earlier, forewarning enforcement action.  It follows that the attempt to seek judicial review in respect of Decision 2 is misconceived.

25.  In addition, Decision 2 was preceded by the 2013 and 2015 notices and followed by the 2016 notice.  All of them were indisputably s 6(1) notices enabling enforcement action to be taken after the respective specified dates if occupation had not ceased.  None of them has been challenged in this application for judicial review or otherwise.  The challenge against Decision 2 is, accordingly, wholly futile and lacking in purpose or effect. 

26.  This would be sufficient to dispose of the application.  I would, nevertheless, briefly deal with the underlying complaint made by counsel on behalf of the Applicants.  There can, on these facts, be no legitimate expectation that could give the Applicants the right to occupy the land permanently, nor did counsel for the Applicants contend otherwise.  The Government remains free to modify its policies.  The Applicants were first told to demolish the Shops in April 2013.  The 2015 notice was issued two and a half years later.  By the time of Decision 2, the Applicants had been given three years, during which the Government had made clear they would not be allowed to occupy the Shops indefinitely.  In particular, a s 6(1) notice was issued in November 2015 and the Applicants made an application for short term tenancies thereafter, which was rejected.  There is no realistic prospect of success, in my view, in an argument that, by reason of a legitimate expectation, the Applicants could remain in permanent occupation of the land as squatters.

27.  At the end of the day, the Applicants cannot, on the facts alleged, have any public law right to occupy the land forever, especially given that there have been numerous complaints and issues raised, and that there was no dispute that they have no title or any private law right to the land in question.

28.  There is a suggestion that the applicants were genuinely aggrieved because the failure to register them as squatters in the 1982 survey meant that they would not receive any resettlement or compensation arrangements under the squatter hut policy.  I can only say that if this is their real grievance, then it is not relevant to the present application for judicial review because it is neither a challenge against the omission to register the shops in 1982 nor a challenge against any decision, which actually has not yet been taken, not to consider affording them resettlement or compensation arrangements.

29.  For all these reasons, the application for leave must be dismissed.  The application by summons to adduce further evidence accordingly falls away.