CHINA FIELD LTD v. APPEAL TRIBUNAL (BUILDINGS)

FAMV No. 78 of 2008

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 78 OF 2008 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV NO. 299 OF 2007)

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D E T E R M I N A T I O N

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Mr Justice Ribeiro PJ :

1.  At the hearing, the Appeal Committee granted leave to appeal on two grounds pursuant to section 22(1)(b) of the Court’s statute, [1] but dismissed the application in so far as it was based on the contention that leave to appeal is as of right.  We stated that we would give our reasons later, which we now do. 

2.  The applicants are property developers who wish to redevelop properties which they do not own (but which they expect to acquire) in Wang Fung Terrace.  China Field wishes to redevelop Nos 11 and 12 while Sun Honest wishes to redevelop Nos 4 and 4A-D.  They submitted for approval plans to put up two 39-storey and one 40-storey residential blocks respectively.  Those applications were refused by the Building Authority (“BA”) whose refusal was upheld by the Buildings Appeal Tribunal (“BAT”).  Applications for judicial review challenging those refusals failed before Saunders J[2] and the Court of Appeal.[3]

3.  The applicants sought leave to appeal from the Court of Appeal on various grounds.  Leave was given restricted to a ground affecting only Sun Honest and referred to in the courts below as the “right of way issue” as a point of law of great general or public importance.[4]  However, as Mr Edward Chan SC, appearing for the applicants, submits, it would only make sense to proceed with that ground if leave to appeal was also granted in relation to a ground permitting the refusal of approval to be challenged.  Otherwise the proposed redevelopment could not in any event proceed and the right of way ground would be academic.

4.  The applicants accordingly now sought to argue that they are entitled to leave as of right on the proper construction of section 22(1)(a) of the Court’s statute.  In the alternative, they sought leave to appeal under section 22(1)(b) on the basis that in addition to the right of way issue, a point referred to as “the Tai Hang Road access point” is a point of great general or public importance involved in the appeal .  The applicants also suggested that they might rely on the “or otherwise” limb of section 22(1)(b), but this was not seriously pursued and requires no further discussion here.

A.  The argument that leave to appeal is as of right

5.  Section 22(1)(a) provides:

“An appeal shall lie to the Court ... as of right, from any final judgment of the Court of Appeal in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more...”

A.1  The applicants’ submission

6.  The applicants argue that the case falls within the second limb of section 22(1)(a) in that “the appeal involves ... indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more...”  Mr Chan submits that under this limb, it is “the value of the property, and not the value of the claim or question” which determines whether leave is as of right.  He argues that while the claim may not have the requisite value, leave is still as of right if it indirectly involves property worth $1 million or more.  The applicants urge this construction since they do not own or have any legal interest in the properties but are presently merely challenging the BA’s refusal to approve proposed building plans.  They therefore seek to rely on the value of the Wang Fung Terrace properties (obviously exceeding $1 million) and not the value of their claims as the criterion for leave to appeal as of right.

7.  Mr Chan relies in support on certain Commonwealth decisions relating to similar provisions governing appeals as of right to the High Court of Australia and to the Privy Council.  He cites Meghji Lakhamshi & Brothers v Furniture Workshop,[5] an appeal from Kenya to the Privy Council, where Lord Tucker stated:

“...their Lordships are of opinion that the case falls within the latter part of the article which deals with ‘some claim or question to or respecting property ... of the said value or upwards,’ and that on the true construction it is the value of the property, not the value of the claim or question, which is the determining factor.  The presence of the word ‘indirectly’ seems to require this construction.”

That was a case where the dispute was as to whether landlords were entitled to evict tenants who claimed statutory protection.  The Privy Council held that the criterion for leave was the capital value of the land in question (which exceeded the £500 threshold) rather than the value of the claim for possession. 

8.  Mr Chan also cites Becker v City of Marion Corporation[6] and AG for Queensland v Andrews,[7] which adopted the Meghji approach of looking to the value of the property involved rather than the value of the claim.  While their applicability in Hong Kong falls to be discussed below, these decisions, on their face, lend support to Mr Chan’s submission.

A.2  Other Commonwealth views

9.  Unsurprisingly, given the great range of jurisdictions concerned, on this aspect (as well as other aspects) of the rules regarding leave to appeal, cases from the Commonwealth do not speak with one voice.  Indeed, with respect, Lord Tucker’s construction is somewhat surprising.  Given that the relevant rule limits appeals as of right by reference to a specified value, one would have thought that the relevant value was the value of the claim to be decided on the appeal, and not of some property with which the claim is connected but which is not itself the subject-matter of the appeal.  In Meghji, no one was seeking to claim or to deprive the landlords of their property so that it is hard to see why its capital value was taken as the criterion for leave.  The point made by the New Zealand Court of Appeal in Re Bateman Television Ltd (In Liquidation),[8] is apposite.  McCarthy P stated:

“... we are unable to accept that an indirect interest of insignificant value in a dispute relating to property of the requisite figure entitles the holder of that interest to go to the Privy Council as of right.  So to read the rule would make the control of disputes which are worthy of consideration by the Privy Council ineffective.”[9]

He concluded that it was “more suitable to determine the right to appeal by an estimation of the value of the applicant’s right or interest.”[10]

10.  Similarly, in Oertel v Crocker,[11] the Australian High Court focused on the value of the claim and not of the incidental property.  Like Meghji, it was a case involving a landlord’s proceedings to recover possession of premises let to a tenant.  The value of the dwelling house was more than the £300 threshold amount but the value of the tenancy at issue was less.  Latham CJ held that the relevant provision only applied where disposing of the appeal directly produced a financial effect of the requisite value on the relevant party’s interest in the property or civil right in question:

“If the appellant can show that if his appeal succeeds the alteration consequentially made in a judgment with respect to some property or civil right will make him better off by at least £300, then the judgment appealed against is a judgment involving a claim &c respecting property or a civil right amounting to the value of £300. This view was clearly adopted in Beard v Perpetual Trustee Co Ltd (1918) 25 CLR 1. If, however, he cannot show that this is the case, the party has no right of appeal under s 35(1)(a)(2) [of the Judiciary Act of the Commonwealth].”[12]

His Honour concluded:

“Thus the effect of s 35 depends upon the claim, demand or question in relation to which the judgment is given, and which is the matter for determination upon the appeal.”[13]

11.  In the same case, Dixon J was of a like view:

“What the parties each claim is possession, the one to retain it and the other to obtain it. The physical subject of the possession is the house and land. The ‘property’ in the house and land, the estate in fee-simple, is what is worth £300 and upwards. But that is not the subject of the claim, demand or question.”[14]

While words like “indirectly” and “respecting” regarding the connection between a claim, etc, and the property or civil right relied on are capable of being given a wide meaning, Dixon J rejected any construction which would accept a tenuous connection as sufficient:

“...it seems to me to be obvious that the connection must be close, immediate or proximate and that the connection between a mere claim to possession of a thing and the full property therein, which alone possesses the required value, is too tenuous and distant.  ...  the claim or demand must itself relate to a civil right or legal property of the required value before it can fall within the true meaning of the expression ‘claim demand or question to or respecting any property or any civil right amounting to or of the value of £300’ as used in the sub-paragraph. The principle of a provision limiting the right of appeal by reference to the amount involved must go to the prejudice measured in money suffered by parties adversely affected by the judgment.”[15]

12.  Many other examples of cases adopting a construction differing from Lord Tucker’s in Meghji can be found.  It is unnecessary to go further into them.  The point is that reliance on cases from the Commonwealth on leave to appeal as of right is problematical, not least because opposing views abound.  Plainly, powerful arguments can be raised against the approach urged by the applicants.

A.3  Hong Kong practice

13.  In our view, it should be recognized that only limited assistance can be obtained from citation of such Commonwealth cases.  As the Appeal Committee stated in Chao Keh Lung v Don Xia,[16] it is exceptional for courts of final appeal to entertain appeals as of right.  The rules regarding such appeals as of right must be construed in the social and historical context of the court itself in the light of its intended role, its resources and the interests of litigants and of the administration of justice. 

14.  Historically, much has changed.  The rules being discussed were first promulgated in relation to appeals from the British colonies and dominions to the Privy Council sitting as the final appellate court.  With such widespread and disparate jurisdictions, it is unsurprising that the Privy Council should have adopted a policy in favour of uniformity of legal development and of conferring on local subjects a right to approach the final metropolitan appellate court.  These are considerations which do not apply to our Court. 

15.  With de-colonisation and the development by Commonwealth countries of their own final courts,  the Privy Council’s jurisdiction has shrunk but the case-load of the Court has grown far beyond what the case-load for final appeals was prior to 1997.  As Li CJ noted in Solicitor v Law Society of Hong Kong,[17] there were 128 and 121 applications for leave to appeal to the Court in 2006 and 2007 respectively, whereas the figures for the Privy Council in 1995 and 1996 were 11 and 28 petitions for leave respectively.  This trend has continued with the Court receiving 158 leave applications (of which 82 were in civil cases) in 2008.  The Court’s resources for dealing with these cases consist of a single permanent panel of judges.

16.  Litigants in Hong Kong have a right of appeal to the Court of Appeal in respect of final judgments generally.  The role of the Court of Final Appeal is not to permit a third bite of the cherry to any litigant who wishes to have another go.  An appeal to the Court as of right is in principle oppressive to the party who has won in the Court of Appeal where the further appeal is without substance.  Unless the appeal involves a point of law of public importance or unless grievous injustice would be done if the final court does not intervene, a successful litigant should not be dragged before a third tier of court. This approach does not, of course, argue against the Court retaining a discretion to grant leave to appeal in appropriate cases. 

17.  The foregoing considerations militate strongly in favour of a narrow construction of the provisions allowing appeals as of right.  Such an approach is consonant with the wording of the sections themselves.  Thus, where appeals are not as of right, the Ordinance sets demanding thresholds for leave.  In civil cases, section 22(1)(b) requires the applicant to show that “the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision”.  And in criminal cases, an appeal is not to be entertained unless it raises “a point of law of great and general importance” or it is reasonably arguable that “a substantial and grave injustice” has been done.[18]

18.   A narrow construction has consistently been applied to the first “as of right” limb in section 22(1)(a) so that the words “any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more” have been construed as referring only to liquidated claims.  While in cases where it is a virtual certainty that an unliquidated claim, if successful, would over-top that limit, the Court may consider exercising its discretion in favour of granting leave, the “as of right” aspect of this provision has been kept within strict bounds.[19]  In adopting this approach, the Court was following the lead of the Privy Council inZuliani v Veira.[20]  Construction of the second limb of section 22(1)(a) must be consistent with, and must not undermine, the established construction of the first limb.

A.4  The proper construction of section 22(1)(a)

19.  Section 22(1)(a) materially states:

“An appeal shall lie to the Court ... as of right, from any final judgment of the Court of Appeal in any civil cause or matter ... where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more...”

20.  It directs the Court of Appeal or the Appeal Committee (which we will refer to together as “the court”) dealing with the leave application to examine what the proposed appeal involves.  In particular, it requires the court to ask what claim or question is involved in the appeal. 

21.  In the past, the grammatical structure of the words “some claim or question to or respecting property or some civil right” has been questioned.  In our view, these words are an elided reference first, to “some claim ... to ... property or some civil right”; and secondly to “some ... question ... respecting property or some civil right”.  There is no grammatical difficulty and indeed, no material difference between the two aspects of the phrase.  The Court does not address questions in the abstract so that an appeal involving a question respecting property or some civil right is one where that question forms an integral part of someone’s substantive claim in respect of that property or right.  It may well be that the provision mentions both a “claim” and a “question” to ensure that it covers relief, whether expressed in terms of claims typically contained in a writ or in declaratory terms arising out of questions posed in originating summonses.

22.  Having identified the claim or question involved in the appeal, the section requires the court to ask whether it is a claim to property or a civil right amounting to or of the value of $1,000,000 or more, or what amounts to the same thing, whether it is a question respecting such property or right.

23.  In our view, the language of the section undoubtedly focuses on the value of the claim which is the subject-matter of the appeal and not on any property or right which has some connection with that claim.[21]  We respectfully decline to adopt the approach of Lord Tucker in Meghji.  Thus, in a proposed appeal concerning a landlord and tenant dispute, whether looked at from the perspective of the landlord or of the tenant, the appeal must be viewed as involving the value of the tenancy in dispute and not the capital value of the land owned by the landlord.  Indeed, one of the unsatisfactory aspects of adopting the capital value of the land as the criterion for leave is the result (from which Lord Tucker in Meghji did not shrink) that an appeal brought by a landlord claiming possession is – but an appeal brought by a tenant against whom possession is claimed is not – as of right where the value of the tenancy in dispute falls below the statutory threshold.[22]

24.  Consistently with the strict approach adopted in relation to the first limb of section 22(1)(a), it is only proper to ascribe a value which qualifies for leave as of right to the candidate claim or question if (i) on the evidence, such value is clearly quantifiable as a value of $1 million or more; and (ii) the court is satisfied that the Court’s order made upon disposing of the proposed appeal would take effect by immediately conferring or imposing on the relevant parties a financial benefit or detriment in the quantified amount.  It is not enough that one is able plausibly to say that such a financial impact is a likely  eventual result of the appeal.

25.  In so holding, we bear it in mind that the section applies to an appeal which involves “directly or indirectly” some claim or question to or respecting property or some civil right of the requisite value.  In our view, the words in quotation marks do not detract from the foregoing construction.  We construe those words as applying to the nature of the claim asserted and not as affecting the requirement for immediacy of the consequences of the Court’s order.  Thus, for instance, a claim for specific performance of a contract to convey land or a declaration that a party comes within a class of beneficiaries entitled under a trust to certain property would be covered as involving indirect claims to the relevant property if over the threshold in value.  In such instances, it remains the case that the measurable financial impact on the parties is immediately felt upon the Court disposing of the appeal and making or refusing the order sought.

A.5  Applying the construction to the present case

26.  China Field and Sun Honest each ask the Court to set aside the decisions below and to grant relief by way of judicial review, namely, an order of certiorari quashing the BAT’s decision and an order of mandamus directing the BAT to reconsider their respective appeals in accordance with the law.

27.  It is instantly evident that this is not a case coming within the second limb of section 22(1)(a).  The properties in Wang Fung Terrace which the applicants do not own but wish to redevelop are not the subject-matter of the appeal.  Their value is irrelevant for present purposes.  The claim is for an order requiring the BAT to reconsider their appeal.  Even if they succeed in obtaining such an order from the Court, no immediate financial benefits accrue to them.  It obviously does not follow that on a reconsideration of the case, the BAT would necessarily give approval to their redevelopment plans.  Of course, depending on the merits of their claim, there is the theoretical possibility of large eventual financial gains exceeding $1 million in value if they should secure approval of their building plans and if the intended redevelopment is successful.  But that is a tenuous possibility subject to many contingencies.  It cannot be invoked to characterise the claim as one having the necessary monetary value.

28.  Clearly, many if not all judicial review challenges are likely to fall outside the “as of right” category on the foregoing reasoning.  However, Mr Chan argues that the position in the present case is special by virtue of section 15 of the Buildings Ordinance which provides:

“(1)  Where an application is made in the specified form for the Building Authority to approve plans or to consent to the commencement of building works or street works, he shall be deemed to have given his approval or consent, as the case may be, unless within the period prescribed by the regulations he has notified his refusal to give his approval or consent, as the case may be, in writing setting out the grounds for such refusal, and where one of such grounds is that further particulars and plans are required, he shall specify such plans and particulars.

(2)  The grounds set out for any refusal to approve plans shall not be treated as being exhaustive, and no such refusal shall be construed as implying any approval of any part of such plans.”

29.  Mr Chan submits that section 15(1) must be construed as referring only to lawful refusals of approval by the BA.  He argues that here, the refusal was unlawful for various reasons, including a misunderstanding of the effect of section 16(1)(h) of the Buildings Ordinance considered below.  Thus, so the argument runs, upon the Court determining that there has been no lawful refusal within the prescribed period, the submitted building plans would be deemed approved.  Such approval would confer a huge immediate financial benefit on the would-be redevelopers, qualifying the case for leave to appeal as of right.

30.  This argument is based upon a dictum of Sears J in Heland Investment Ltd v A-G,[23] in the following terms:

“..., the wording in section 15(1) of ‘notification of a refusal’ means, in my judgment, a lawful refusal. This refusal was based on matters extraneous to a proper decision-making process.  As no lawful refusal was given, then a deemed consent would follow.  Mr. Thomas does not vigorously pursue this argument, as he submits it might deprive the Building Authority from raising other objections, but in my judgment, the court could tailor a mandamus, or declaration that would allow the Building Authority to review any matters of detail.  As this matter has not been pursued by Mr. Thomas, I would not base the grant of judicial review on it although, in my judgment, it could have been given.”

31.  For a variety of reasons, we reject this argument. 

(a)  In the first place, there is nothing in section 15 to suggest that the refusal notified has to be a “lawful refusal”.  The word “lawful” is a gloss introduced by Sears J, not supported by counsel and relegated by the Sears J himself to a mere dictum. 

(b)  Secondly, a refusal which has in fact been notified cannot be equated to the absence of any refusal.  Section 15 understandably provides that the absence of refusal is to be construed as approval since it is quite impracticable to deem consent withheld unless and until each and every aspect of the submitted plans has been expressly approved.  The Ordinance requires the BA to identify specific objections.  But where a specific objection has in fact been notified, it is contrary to principle to treat this as the absence of objection on the basis that the refusal has subsequently been successfully challenged by way of judicial review.  The consequence of a successful judicial review of a decision by the BA – as indeed is reflected in the relief sought by the applicants – is for the decision to be quashed and for the matter to be remitted back to him for re-consideration.  If the consequence of quashing the decision were a deemed approval, as suggested by Sears J and the applicants, there would never be any need to remit the matter.  That is wrong in principle and unacceptable as a matter of policy. 

(c)  Thirdly, section 15(2) makes it clear that a refusal is not exhaustive and does not imply approval of the rest of the submitted plans.  In other words, the Ordinance’s policy is to reserve to the BA the right to add objections to any earlier refusal.  This must apply equally to cases where the earlier refusal has been overturned on judicial review.

32.  We therefore conclude that this is not a case where leave to appeal is as of right.

B.  The Tai Hang Road access point

33.  The layout of the Wang Fung Terrace properties and the access road (referred to as Wang Fung Road) and its junction at an acute angle with Tai Hang Road are described in detail in the judgment of Le Pichon JA in the Court of Appeal.[24]  As her Ladyship points out:

“The proposed redevelopments would increase the number of flats on those two sites from 43 to 231 and would increase the number of flats on Wang Fung Terrace by 188 when, currently, it only has 214 flats.  That represents an increase of almost 88% in the number of flats.  There will also be an additional 82 car parking spaces.”[25]

34.  This would inevitably involve a marked increase in motor traffic entering and leaving Wang Fung Road (which provides the only access to Wang Fung Terrace) at its junction with Tai Hang Road.  It was common ground that this posed a significant danger to traffic.  Le Pichon JA notes this as follows:

“The Tribunal accepted the evidence of the expert that the junction ‘was currently “very dangerous” to traffic’.  As recorded in § 30 of the judgment, that finding was not in issue below.  The Tribunal considered that the dangerous situation would be exacerbated by the significant increase in traffic that would use that intersection if the proposed developments were allowed.”[26]

35.  It was on this ground (or at least principally on this ground) that the BAT decided that approval was properly refused on the basis of section 16(1)(h) of the Buildings Ordinance which provides:

(1)  The Building Authority may refuse to give his approval of any plans of building works where –

…

(h)  the building works consist of, or any part thereof involves, the construction, formation or laying out of any means of access or other opening, not being a street or access road, to or from any street, and the place at or manner in which such means of access or other opening opens on to the street is, in his opinion, such as to be dangerous or likely to be dangerous or prejudicial to the safety or convenience of traffic using the street, or which may be expected to use the same;”

36.  The applicants seek leave to appeal under section 22(1)(b) with a view to arguing that on the proper construction of section 16(1)(h), the BA is restricted to considering traffic danger only in relation to traffic using the street which the openings or means of access open onto, that is, Wang Fung Road, and that the admitted danger posed to traffic at the junction of Wang Fung Road and Tai Hang Road falls outside the scope of the provision and so is an irrelevant consideration for the purposes of refusing approval under section 16(1)(h).  They seek to contend that the decision of Mayo J in Circumwealth Co Ltd v A-G,[27] adopted by Saunders J and the Court of Appeal below, is wrong.

37.  We are of the view that the true construction of section 16(1)(h) in the present context is a point of the requisite importance and that the argument advanced by the applicants is reasonably arguable.  We accordingly grant leave to appeal on that point.

C.  The right of way point

38.  This is a point relevant to calculating site area under the Building (Planning) Regulations in relation to Sun Honest’s proposed redevelopment.  The Court of Appeal formulated it in the following terms:

“Whether a leaseholder in Hong Kong can acquire a right of way by prescription under the doctrine of lost modern grant against another leaseholder, both before and after the establishment of the Hong Kong Special Administrative Region on 1 July 1997”.

39.  Mr Joseph Fok SC, appearing for the Interested Party accepts that it is a point of sufficient importance.  Leave has accordingly also been granted on this ground as well.

[1]  Hong Kong Court of Final Appeal Ordinance, Cap 484.

[2]  HCAL 2/2007 and HCAL 3/2007, 31 July 2007.

[3]  CACV 229/2007 and 300/2007, Le Pichon and Cheung JJA and Hartmann J; 25 August 2008.

[4]  CACV 229/2007 and 300/2007, 10 November 2008.

[5]  [1954] AC 80 at 88.

[6]  [1977] AC 271.

[7]  (1979) 145 CLR 573.

[8]  [1974] 2 NZLR 221.

[9]  At 223.

[10]  At 223 – 224.

[11]  (1947) 75 CLR 261.

[12]  At 267.

[13]  At 268.

[14]  At 271.

[15]  At 271 – 272.

[16]  (2004) 7 HKCFAR 260 at 263, §8.

[17]  [2008] 2 HKLRD 576 at 596, fn 23.

[18]  Section 32(2).

[19]  See Cheng Lai Kwan v Nan Fung Textiles Ltd (1997-1998) 1 HKCFAR 204; Paul Ki Ping Ki v Oriental Daily Publisher Ltd FAMV 25 of 2000, 7 September 2000; Bill Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260.  Even where the unliquidated claim has since been assessed: Shum Kam Fai v Lam Chi Wai & The Kowloon Motor Bus Company (1933) Ltd FAMV 38 of 2002, 16 December 2002.

[20]  [1994] 1 WLR 1149.

[21]  This is consistent with the approach adopted by the Appeal Committee in, for instance, Kam Lan Koon v Secretary for Justice FAMV 22 of 1999, 17 January 2000; and Francis Cheung v Insider Dealing Tribunal (2000) 3 HKCFAR 380.

[22]  At p 88, Lord Tucker stated : “Looked at from the angle of the landlords, the value of the property, vacant possession of which they were claiming, was correctly taken on a capital value basis.  It by no means necessarily follows that the result would have been the same if the tenants had been appellants, ...”

[23]  [1994] 2 HKC 550 at 554.

[24]  At §§2 to 8.

[25]  At §9.

[26]  CACV 229/2007 and 300/2007, 25 August 2008 §15.

[27]  [1993] 2 HKLR 193.