On 22 November 2012, Mr. Justice of Appeal Johnson Lam handed down his judgment in the case Building Authority and Appeal Tribunal (Buildings) and Long Winner Development Limited (HCAL 45/2012), where he dismissed the Building Authority's (BA) application for judicial review of the decision of the Appeal Tribunal (Buildings) to reverse the BA's decision to reject the Superstructure Plans submitted by the developer, Long Winner Development Limited (Long Winner).
Long Winner proposed to redevelop a site in Central (located at the junction of Pottinger Street and Ezra's Lane) for a commercial/residential building.
The development took advantage of the Government's original plan to provide the Central West Station for MTRC's Shatin-Central Link in Central:
- In 2003, Long Winner proposed a pedestrian enhancement scheme involving creating a linkage of the site with the originally planned Central West Station. The proposal involved surrender of a certain part of the site area for footpath widening and the dedication of a certain part of the site area for public passage.
- The Government anticipated that, with the new Station, there would be increased pedestrian and traffic flows. In October 2007, the BA approved the general building plans (2007 GBP) submitted by Long Winner and granted a Permit (Permit) under s.42 of the Buildings Ordinance (BO) to modify/exempt the provisions of the BO and the Building Planning Regulations by granting certain bonus site coverage (3.48%) and a plot ratio (of 976.435 sq.m.) to Long Winner.
- The Permit was granted subject to certain conditions, including the execution of a Deed of Dedication and Agreement to Surrender for the proposed footpath widening and public passage respectively before application for an occupation permit.
- Long Winner proceeded with construction works based on the Permit. Before 2008, the BA continued to grant consent to commence the foundation works, excavation and lateral support works.
However, in late 2008, after Long Winner had completed the foundation and piling works, the Government decided to relocate the Central West Station:
- Transport Department took the view that, with the relocation, the pedestrian demand in the area might not be significantly increased and thus there was no justification for Long Winner's pedestrian enhancement scheme.
- In November 2009, Long Winner submitted Superstructure Plans corresponding to the approved 2007 GBP and the Permit to the BA for approval. The BA rejected the Plans on the ground that the proposed plot ratio and site coverage exceeded those permitted under the BO, because the Government no longer accepted the proposed surrender/dedication due to the relocation of the Station.
- Apparently, the BA proceeded on the basis that it was entitled to disregard the effect of the Permit as the circumstances had changed, although the Permit itself was still in effect.
Long Winner lodged a building appeal to challenge the BA's decision and the Appeal Tribunal allowed the appeal and directed the BA to approve the Superstructure Plans. The BA applied for judicial review of the Tribunal's decision.
The Court of First Instance dismissed the BA's judicial review application because:
- the Permit was still valid at the time that the BA rejected the Superstructure Plans;
- the modifications/exemptions granted in the Permit were effective upon the issuance of the Permit and this was reflected in the BA’s approval of the 2007 GBP;
- without any revocation of the Permit, the modification to/exemption from the usual limits for site coverage and plot ratio granted under the Permit was still in effect.
The BA was therefore legally bound to approve the Superstructure Plans subject to the same modifications and exemptions as previously granted by the BA in the Permit.
Can the BA rely on the change in Government's position?
The BA argued that, because of the change in Government's own position to relocate the Central West Station, Government would no longer accept the surrender and dedication, and thus the conditions imposed under the Permit would not be satisfied. The BA was therefore correct to reject the Superstructure Plans which were submitted on the basis that the surrender/dedication under the Permit would be implemented.
The Court rejected this argument and held that, when the BA was faced with the Government's change in position regarding the Central West Station, the BA could have either:
- processed the Superstructure Plans in accordance with the Permit and left it to the Government or Long Winner to seek legal redress in terms of the execution of the documents for the surrender/dedication; or
- started the process of revocation before making its decision on the Structure Plans, if the BA considered that it had power to revoke the Permit (which would also involve revocation of the approved 2007 GBP).
The BA was therefore wrong to ignore the effect of the Permit on the modification of the plot ratio and site coverage in respect of the approved 2007 GBP without any revocation.
Can the BA revoke the modification/exemption granted in the Permit?
The Court indicated several times in the judgment that, if the Permit had been revoked before the BA made its decision to reject the Superstructure Plan, the present dispute would not have arisen. However, since both parties accepted that the Permit was still valid at the time of rejection of the Superstructure Plans, the Court was not required to make a decision as to whether the BA had the power to revoke the Permit.
The Court only mentioned that if the BA sought to revoke the Permit, the following issues could arise:
- whether the BA has power of revocation as a matter of law; and if so
- whether it is proper for the BA to exercise such power in the circumstances of the case as a matter of discretion.
This issue remains outstanding and it remains to be seen whether the BA, after losing this case, will attempt to revoke the Permit as an alternative way to stopping the proposed development in accordance with the approved 2007 GBP and the Superstructure Plans.