BUILDING AUTHORITY v. APPEAL TRIBUNAL (BUILDINGS)

HCAL 47/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE PROCEEDINGS

NO. 47 of 2003

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J U D G M E N T

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Introduction

1. This is an application for judicial review commenced by the Building Authority ("the applicant"). Leave to do so was given on 13 May 2003. The decision under challenge is that made by the Appeal Tribunal (Buildings) ("the respondent") on 13 February 2003.

2. The applicant is a statutory body entrusted with duties and powers to inter alia identify and compel the removal of unauthorised building structures and works in Hong Kong: see the Buildings Ordinance (Cap. 123), in particular s. 24 thereof. On the other hand, the respondent is a statutory body set up to hear and determine appeals brought by anyone aggrieved by "any decision made by [the applicant] in the exercise of a discretion conferred on him under" Cap. 123: see ss. 44 to 50, Cap. 123 (especially s. 44(1) thereof).

Background Facts

3. The relevant background facts are undisputed. Some time before May 1985, 3 unauthorised building structures or works were identified at certain portions of the roof of Hong Kong Building, Tseuk Luk Street, Kowloon (respectively "the works concerned", the domestic unit related to the works concerned "the subject property" and the building in which the subject property is located "the Building").

4. Pursuant to s. 24(1), Cap. 123, the applicant issued an order (No. C&E K466/85) on 21 May 1985 against the then registered owners of the works concerned and the subject property ("the 1985 order"). The 1985 order required the then owners to demolish or remove the works concerned and to reinstate the relevant parts of the Building so as to accord with the building plans.

5. The works concerned were identified in the 1985 order as:-

(1) a structure erected on the roof of the subject property ("the roof structure");

(2) the formation of an opening in the roof slab and the erection of a metal staircase to connect the subject property to the roof above ("the roof opening");

(3) structures attached to the external wall of the subject property outside the living room and bedroom and the removal of part of the external wall thereat ("the external wall structures").

6. The 1985 order was registered with the Lands Registry against the subject property on 30 May 1985. It was also served on the then owners.

7. The subject property was assigned to the present registered owners on 27 October 1986 (that is, about 1 year and 5 months after the registration of the 1985 order). The registered ownership of the subject property remains unchanged up to the hearing of this application. According to the present owners, it was agreed between the then owners and the present owners that the works required to be performed by the 1985 order were to be carried out by the present owners: see p. 2, the respondent's decision and pp. 8 to 10, transcript of the hearing before the respondent.

8. On 7 March 2002, the applicant discovered at an inspection that the external wall structures had been removed. However, reinstatement works relating to the roof structure and the roof opening have not been carried out.

9. On 10 April 2002, the applicant issued another order (C/S1/90082/02/K) in respect of the works which have not been carried out ("the 2002 order"). The 2002 order was served on the present owners. The applicant contends that the 2002 order superseded the 1985 order. It specifies the unauthorised building structures as:-

(1) the roof structure;

(2) the roof opening.

(collectively "the outstanding structures"). The present owners are required by the 2002 order to inter alia:-

(a) demolish the outstanding structures;

(b) reinstate the parts of the Building affected by the outstanding structures in accordance with plans approved by the applicant.

The 2002 order requires the present owners to commence remedial work within 30 days and complete the same to the applicant's satisfaction within 60 days of the date of the 2002 order.

10. On 25 April 2002, the present owners lodged an appeal with the respondent.

The Respondent's Decision

11. After a full hearing on 12 November 2002, the respondent delivered its decision on 13 February 2003. In short, the respondent concluded that it was unnecessary and unfair to make the 2002 order and allowed the appeal on that basis.

12. The parts of the respondent's decision relevant to this application are:-

"Quite apart from the specific Grounds of Appeal raised by [the present owners], [the respondent] was troubled by the fact that [the 1985 order] had still not been complied with some 17 years later. [The 2002 order] was issued not because [the outstanding structures] included in [the 2002 order] were new structures but simply because [the 1985 order] which was issued in May 1985 had not been [complied] with and that in the meanwhile there had been a change of ownership of [the subject property]";

"In the present case, [the respondent] felt that whilst [the applicant] might be perfectly justified in issuing [the 1985 order] on the basis that [the outstanding structures] were then new structures and thereby warranted immediate removal, it did not make sense that when such an Order had not been complied with, the same reason was used 17 years later to justify the issuance of [the 2002 order] ... ";

"[The respondent] was of the view that if an Order was issued by [the applicant] under section 24 of the Buildings Ordinance and that Order has not been complied with over a long period of time, it was unreasonable for [the applicant] to issue a new Order covering exactly the same unauthorized building works or structures for the sole purpose of enabling it to recover the costs of works to be carried out by it under section 24(3) of the Building Ordinance against a new owner, should it decide to do so in the future ... In the present case, there had been only one change of ownership but in theory, it is possible that there may be several changes of ownership of the premises concerned and it is therefore unfair if only the 3rd or 4th successors in title was caught by a replacement Order and not the earlier owners";

"In any event, if one studies the Land Registration Ordinance carefully, it is very likely that an Order once registered in the Land Registry would loose its effect if its registration is not renewed after 5 years ... ".

As the respondent observed in the above decision, the present owners did not rely on the reasoning set out above. Their grounds of appeal were: (1) due to old age, poor health and financial difficulties, they were unable to carry out the 2002 order, and (2) it was physically impossible to comply with the 2002 order because other structures have to be removed first. The respondent apparently did not accept ground (1) and expressly rejected ground (2).

Grounds of this Application

13. The applicant contends that the respondent's above decision should be set aside because it erred in law in allowing the appeal of the present owners.

Necessity for the 2002 Order

14. The applicant puts forth two reasons in support of its argument that the 2002 order was necessary:-

(a) demolition orders, such as the 1985 order and the 2002 order, are in effect personal in nature;

(b) the applicant has the statutory power to substitute the 1985 order with the 2002 order.

15. In relation to para. 14(a) above, the applicant refers to s. 24, Cap. 123 which is the provision empowering the applicant to require the demolition (or alteration) of building works to cause the same to comply with the provisions of Cap. 123.

16. S. 24(1), Cap. 123 reads:-

"Where any building has been erected, or where any building works or street works have been or are being carried out in contravention of any of the provisions of this Ordinance the Building Authority may by order in writing require-

(a) the demolition of the building, building works, or street works; or

...

(c) such alteration of the building, building works or street works as may be necessary to cause the same to comply with the provisions of this Ordinance, or otherwise to put an end to the contraventions thereof,

and in every case specify the time within which the demolition, alteration or work required by such order shall be commenced and the time within which the same shall be completed".

The first thing which the applicant asks this court to note in this provision is that an order made thereunder should specify the time within which the required work should be commenced and be completed.

17. S. 24(2), Cap. 123 provides:-

"An order made under subsection (1) shall be served, where-

(a) the building has been erected, on the owner thereof;

(b) the building works, other than a building, have been completed, on the owner thereof;

(c) the street works have been completed, on the frontagers; or

(d) the building works or street works have not been completed, on the person for whom such works are being carried out or his agent".

It is clear that an order made pursuant to s. 24, Cap. 123 needs to be served on the owner of a building (or building works, as the case may be), the frontages of completed street works, or the person who is carrying out building or street works.

18. The applicant is empowered by s. 24(3), Cap. 123 to demolish or alter the works covered by such an order if the order is not complied with. The material part of s. 24(4), Cap. 123 reads:-

"The cost of works carried out under subsection (3) may be recovered from the persons upon whom orders had been served under subsection (2) ... ".

Hence, the costs incurred by the applicant in demolishing or altering the works in question can only be recovered from the person upon whom the order has been served.

19. The procedure for the applicant to recover his costs has been laid down in s. 33, Cap. 123. The relevant parts say:-

"(1) In any case where under this Ordinance the Building Authority is authorized to recover the cost of works carried out by him ... or to recover the costs of services provided by him ... , he may certify under his hand the cost due and names of the persons liable therefor, and may by such certificate apportion such cost among such persons" (emphasis supplied);

"(3) A copy of the Building Authority's certificate shall be served upon each person affected thereby" (emphasis supplied);

"(8) A certificate purporting to be under the hand of the Building Authority, made under the provisions of subsection (1), and setting forth that the cost claimed is due or payable to the Building Authority and that the person sued is liable for the payment thereof, and specifying the nature and particulars of the claim shall be prima facie evidence of the facts certified therein and of the signature of the Building Authority thereto" (emphasis supplied).

Where the applicant has incurred costs for carrying out works pursuant to s. 24(3), the phrase "[the applicant] is authorized to recover the costs of works" must mean that the applicant can only recover those costs from someone referred to in s. 24(4).

20. S. 33(9), Cap. 123 empowers a memorial of the said certificate to be:-

"registered in the Land Registry against the title of any premises or land in respect of which such cost arose ... " (emphasis supplied).

And in such case, s. 33(9)(a) provides that the applicant's costs may

"... be recoverable by action in Court in accordance with the provisions of this section from any person who from such Land Registry register then or thereafter appears to be the owner of such premises or land" (emphasis supplied).

S. 33(9)(b), Cap. 123 also provides that the applicant's costs shall constitute a first charge on the said premises or land. However, s. 33(9), Cap. 123 is only applicable when the applicant has already issued a certificate pursuant to s. 33(8), Cap. 123. In this application, no such certificate has been issued against the then owners (or indeed the present owners).

21. The applicant further submits that, prior to the date of the 2002 order, the 1985 order remained a valid order as against the then owner. The present owners have not been served with the 1985 order, nor could they have been served because they were not yet the owners of the subject property (or the works concerned) at that time: see also para. 19 above.

22. In relation to para. 14(b) above, the applicant relies on s. 46(1), Interpretation and General Clauses Ordinance (Cap. 1) the relevant parts of which provide:-

"Where any Ordinance confers power upon any person to make, grant, issue or approve any... order, notice, ... instrument, notification, ... such power shall include power-

...

(b) to substitute another ... order, notice, ... instrument, notification, ... for one already made, granted, issued or approved ... ".

Hence, since the issuance of the 2002 order (which expressly stated that it is a "Superseding Order"), the 1985 order was no longer a valid order because it has been substituted.

23. Finally, the applicant mentions that it is not aware of any power on the respondent's part to invalidate or annul orders made by the applicant pursuant to s. 24, Cap. 123 or s. 46, Cap. 1.

Fairness of the 2002 Order

24. The applicant submits that it is not unfair or unreasonable to issue the 2002 order. Not only is it empowered to do so: see para. 22 above, the enactment of the various provisions in Cap. 123 (s. 33(8) and (9), for example) shows that the legislature intended that the applicant's costs can be recovered irrespective of any change in ownership of the property or building works concerned.

25. The applicant also argues that the respondent has been overly concerned with the present owners' obligation to pay for the costs of the remedial work under the 2002 order. First, the respondent overlooked that the statutory scheme of Cap. 123 intends to cast the obligation to demolish or alter unauthorised buildings or works upon the owners of such buildings or works. Secondly, the 2002 order itself was not about the applicant seeking to recover its costs for remedial work from the present owners. As stated above, it is the present owners' obligation to perform the remedial work; there is no such obligation on the applicant's part. The need to recover the costs of the remedial work only arises if and when the present owners should fail to carry out the work and the applicant should decide, in its discretion, to do it for them.

The Present Owners' Stance

26. At the hearing of this application, the present owners put forth the following matters.

27. First, they repeated their arguments regarding the physical impossibility (or difficulties) of removing the outstanding structures. They also repeated their arguments advanced at the hearing before the respondent: see para. 12 above.

28. They also say that they would not object to the applicant enforcing the 1985 order but the applicant should pay for the costs of the remedial work. This is because the applicant has been negligent in failing to enforce the 1985 order in time and, for this reason, it should bear the costs for making good the failure.

29. As stated above, the present owners admit that, when they purchased the subject property, they knew of the works concerned and that they also said they would accept the responsibility to remedy the works concerned if required by the Government to do so: para. 7 above. However, in this application, the present owners contend that they only accepted a moral obligation, not a legal obligation.

30. The 2002 order, so the present owners argue, was issued under the applicant's new enforcement policy. However, the new enforcement policy is based on several criteria for determining when enforcement action is imminent such as the age of the unauthorised structure. They claim that the outstanding structures do not belong to those categories which warrant immediate enforcement action. In fact, they assert that there are other structures nearby which deserve the applicant's immediate action.

31. Finally, the present owners submit that although some of the language used by the respondent in its decision was inappropriate, the respondent's conclusion in its decision is correct.

Conclusion

32. Apart from stating that it has upheld the appeal, the respondent has not specified the order it made (if any). In this connection, the respondent's concluding statements in its decision were:-

"In view of the foregoing, [the respondent] came to conclusion that it was not necessary for [the applicant] to issue a replacement order [the 2002 order] every time there was a change of ownership of the property concerned. In view of this, [the respondent] came to the decision that the appeal should be upheld ... [The present owners] should nevertheless be informed that the upholding of the appeal does not mean that they do not need to comply with [the 1985 order] which still remains valid and effective".

33. S. 44(1), Cap. 123 stipulates that:-

"A person aggrieved by any decision made by the Building Authority in the exercise of a discretion conferred on him under this Ordinance may, except where this Ordinance provides otherwise, appeal from that decision in accordance with this Part and regulations made under section 38(1B)".

34. Further, s. 50(2), Cap. 123 provides:-

"In determining an appeal, the Appeal Tribunal may make an order confirming, varying or reversing the decision that is appealed against or substituting therefor such other decision or make such other order as it thinks fit" (emphasis supplied).

35. As can be seen from the passage quoted above, the respondent has neither expressly made "an order confirming, varying or reversing the decision" nor made "such other order". I will proceed on the basis that the respondent has implicitly made an order reversing the applicant's decision to issue the 2002 order.

36. In brief, save as to one matter, I agree with the applicant's arguments set out above. The matter which I disagree with the applicant is the contention that there is no power to invalidate or annul orders made by the applicant pursuant to s. 24, Cap. 123 or s. 46, Cap. 1 In view of s. 50(2), Cap. 123, I consider that the respondent has the power to reverse the applicant's decision to make those orders, provided the power is exercised correctly.

37. On the other hand, none of the present owner's arguments are sufficient to support the respondent's decision now under challenge.

38. There is no need to go into the details but briefly, in relation to the present owners' arguments set out in para. 27, 28 and 30 above, the legislature has conferred discretionary powers on the applicant and, unless it exercises them in a weird manner which justifies the court's intervention under the Wednesbury principle, those powers are for it to exercise.

39. Similarly, the legislature has conferred on the respondent the power to hear and determine appeals against the applicant's decisions. The respondent must exercise that power properly and can only take into account relevant matters and cannot take into account irrelevant ones. It must also act according to law. Here the respondent has failed to do so.

40. To conclude, I will grant the relief sought in this application. There will accordingly be an order of certiorari to remove into the High Court and to quash the said decision of the respondent of 13 February 2003.

41. It would appear to follow from the above that the only proper conclusion which the respondent should have reached was to confirm the issuance of the 2002 order. I leave it to the applicant to decide if the matter needs to be clarified by the respondent and if so, whether the matter needs to be remitted back to the respondent for such purpose. There will accordingly be liberty to apply regarding this within 28 days from the date of this judgment.

Other Matters

42. The applicant also puts forth the following points:-

(a) the registration of an order made under s. 24, Cap. 123 does not appear to enable the applicant to recover the costs of any remedial work carried out by the applicant;

(b) the respondent was wrong in saying in effect that s. 17, Land Registration Ordinance (Cap. 128) is applicable to an order made under s. 24, Cap. 123 because the word "order" in s. 17 in fact refers to a court order.

43. I do not find these points to be material to this application and therefore consider it unnecessary to determine them for present purposes.

44. Finally, I echo the concern of the respondent about the lengthy delay (of about 17 years) on the applicant's part to seek the removal of unauthorised structures. As the applicant accepts (in para. 12 to 15 of its outline submissions), Cap. 123 empowers the applicant to take action against unauthorised building works. One of the reasons why such action is needed must be the concern for public safety.

Costs Order Nisi

45. There is no apparent reason to depart from the usual rule that costs should follow the event. There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this application be paid by the present owners to the applicant to be taxed if not agreed.