Abstract

On 5 Sept 2012, Mr. Justice Reyes of the Court of First Instance handed down his judgment in the case Lindenford Limited v Town Planning Board (HCAL 51/2011), where he dismissed a developer’s application for judicial review of the decision of the Town Planning Board (“TPB”) to impose building heights and building gap restrictions on a site in a draft Outline Zoning Plan (“OZP”).

This case should be read together with Mr. Justice Reyes’ 2 earlier decisions in Turbo Top Limited v Town Planning Board (HCAL 23/2011 and HCAL 52/2011) on 21 Nov 2011 and Oriental Generation Limited v Town Planning Board (HCAL 62/2011) on 11 May 2012. An email legal update on Turbo Top case was prepared by us last year: “Broad brush” or “micro-management”? Can Town Planning Board impose specific restrictions on a particular building? The Court of First Instance says “yes”.

Facts and arguments

The facts of the Lindenford case are briefly summarised as follows:

  • The site is at Tai Kok Tsui, which is covered by the Mongkok OZP and designated as “Other Specified Uses (Business)” zone.
  • The TPB introduced two restrictions in the Draft Mongkok OZP: (i) a 13m wide building gap above 20 mPD in the middle part of the site; and (ii) a building height of 80 mPD for the remainder of the site. With the above restrictions, future development of the site will result in the creation of an odd shape with a “gap” in the middle.
  • The OZP allows a maximum plot ratio of 12 for the whole site. The site area is 2,760 sq.m. Taking into account the normal 20% GFA concession, the total permissible GFA under the OZP would be 38,448 sq.m. (i.e., 2,760 sq.m. x 12 PR x 1.2 concession).
  • Lindenford complained that, with the two restrictions imposed, Lindenford could not build up to the maximum GFA. However, the TPB rejected the complaint and, relying on a table prepared by the Planning Department (“PlanD”), considered that the maximum GFA could still be achieved.
  • In the PlanD’s table, the PlanD used certain figures to postulate a structure similar to that shown in the attached diagram. In essence, the PlanD considered that, with reference to those figures, it would be possible to have a GFA of 38,582 sq.m. despite the two restrictions.

Lindenford applied for judicial review of the TPB’s decision. Lindenford relied on nine grounds for its challenge; one of the major grounds was that the TPB committed an error by relying on the PlanD’s table to assume that Lindenford could redevelop the site up to the maximum GFA under the OZP:

  • It is a mandatory requirement under the Government lease that the developer should provide a minimum number of car parks. However, the scheme proposed in the PlanD’s table fails to take into account the need to provide a minimum number of car parks which are generally not accountable for GFA.
  • To satisfy this minimum car park requirement, Lindenford has to build more basement floors. However, as a matter of design, increasing basement levels is not economically viable for this small site as the efficiency of the basement levels will be very low.

Court’s Decisions

The Court rejected Lindenford’s arguments and held the following:

  • The Government lease of the site has the following restrictions: (i) a maximum GFA of 29,038 sq.m. and (ii) a maximum height of 51.5 mPD. Accordingly, to build up to the maximum GFA and building height under the OZP, Lindenford would in any event have to apply for lease modification to relax the restrictions under lease.
  • Lindenford therefore cannot rely on the current Government lease relating to a minimum number of car parks, because the current lease terms may be re-negotiated and changed in future. The TPB cannot have regard to existing restrictions in the Government lease to justify height limits imposed from a planning perspective.]
  • The TPB is entitled to have regard to the relevant restrictions in the Government lease, that is, those not capable of being changed. But the TPB is not required to take into account the Government lease conditions which could be varied in future.
  • Even if the current Government lease conditions are relevant, the fact that it may be more expensive or less efficient to build more basement levels to provide the car parks does not mean that it is not possible to do so.

Comparison with earlier decisions in Turbo Top and Oriental Generation

The Court also rejected all the remaining eight arguments. Among those arguments, Reyes J re-confirmed his decision in an earlier case, Turbo Top, that the TPB is entitled to have “spot zoning” and “micro-management” by imposing specific restrictions on individual sites covered by an OZP.

Although Reyes J also confirmed the TPB’s “spot zoning” and “micro-management” power in the Oriental Generation case, he nonetheless specifically laid down the following principles in the Oriental Generation case :-

  • The TPB’s decision to impose restrictions on a site must be backed up by cogent evidence. A restriction imposed must be no more than is reasonably necessary to achieve a planning objective.
  • The TPB cannot impose restrictions arbitrarily, but must have a rational justification for the measures implemented.

Reyes J did not overturn the above principles in the Lindenford case. Reyes J’s decision in the Lindenford case was mainly based on the fact that future redevelopment of the site is already subject to the GFA and building height restrictions imposed by the Government lease, and the developer will need to apply for lease modification to relax the restrictions.

The fact that the restrictions imposed under the Government lease are more restrictive than those imposed under the OZP may probably be one of the reasons why Reyes J did not have sympathy for the developer in the present case. This is different from the facts in the Oriental Generation case because the site in that case was not subject to restrictions which are more restrictive than those imposed by the OZP.

Abuse of judicial review process?

In concluding the Judgment of Lindenford case, Reyes J raised the following criticisms:

  • There is a “worrying tendency” for developers to treat a judicial review of a draft OZP as a “re-hashing of arguments run before (and rejected by) the Board” and this leads to “inflated judicial review applications with much time and cost being wasted in the preparation by both sides of their cases ...”
  • Such a tendency “seriously delays the hearing of a judicial review application in relation to draft OZPs ... there is a stay of presentation of the draft OZP to ExCo and the planning development of Hong Kong is held up”.

Whether it is correct to say that developers try to use judicial reviews as a means to “re-hash” the arguments run and rejected by the TPB is debatable. To answer this question properly, it is necessary to fully understand (a) how the town planning system operates, (b) the conduct of the TPB, PlanD and developers in the course of the OZP amendment process, and (c) why developers consider the current process deficient, and feel a need to resolve matters by judicial review.

Conclusion

The judgments in the Turbo Top, Oriental Generation and Lindenford cases were all handed down by the same judge at the Court of First Instance level. Given the far-reaching impact of the legal principles involved, It is expected that the TPB or the developers in some of those cases will appeal to the Court of Appeal (or even to the Court of Final Appeal).