2 July, 2016
In the recent case of The Real Estate Developers Association of Hong Kong v Building Authority, FACV 19/2015, Hong Kong’s Court of Final Appeal held that the Building Authority has power under the Buildings Ordinance and Regulations made under it to refuse approval of building plans, where the applicant has not provided sufficient particulars of proof of ownership of or of a realistic prospect of control over the relevant site.
The Applicant, The Real Estate Developers Association of Hong Kong, challenged the lawfulness of the Building Authority’s disapproval of building plans on the basis that the developer did not own or have a realistic prospect of controlling the site of the proposed development shown on the plans. The Applicant argued that the Buildings Ordinance did not expressly or by implication require an applicant to be the owner or have a realistic prospect of control of the site and that any requirement by the Building Authority for proof of the same was ultra vires and unlawful. The Respondent Building Authority, contended that the concept of site was central to the regulation of the design of buildings and hence, of approval of building plans under the Buildings Ordinance and Regulations.
Decisions of Courts below
The Courts below considered themselves bound by the decision of the Privy Council in Attorney General v Cheng Yick Chi  1 HKC 14, that a site can only include land which an applicant owns or has a realistic prospect of controlling. The Court of First Instance dismissed the Applicant’s application for judicial review, and the Court of Appeal similarly dismissed their appeal. In its appeal to the Court of Final Appeal, the Applicant contended that Cheng Yick Chi was wrongly decided and that on a proper construction of the Buildings Ordinance and subsidiary legislation, a site is simply the physical area which an applicant chooses to put on the plan.
Question before the Court of Final Appeal
The question before the Court of Final Appeal was:
Does the Building Authority have an unqualified power in all cases, subject only to ordinary public law requirements (such as fairness and rationality), to:
- reject building plans submitted for approval under s.14(1) of the Buildings Ordinance on the basis that a developer does not own or have a realistic prospect of controlling the site shown on the plans, or
- require particulars of proof of ownership or realistic prospect of control of a site shown on building plans as pre-requisites for his approval of such plans under s.14(1) of the Buildings Ordinance?
Court of Final Appeal’s Ruling
The Court of Final Appeal answered the above questions in the affirmative. It first considered the proper construction of the Buildings Ordinance and held that “site” is the single most important determining factor in a building plan because depending on its classification, location, and size, the permissible building is determined. “Site”, should be interpreted, the Court of Final Appeal said, according to its context and purpose. It said the context was the approval of the plans and consent to commencement of building works and the purpose of the Buildings Ordinance could be gathered from its title, “To provide for the planning and design and construction of buildings”. The Court of Final Appeal said that building plans were required to be approved or disapproved within a tight time table, and it was not envisaged that a site could be hypothetical. It held that given that the site for which application for approval was made must be a site on which it was bona fide intended that the approved building would be built, the Building Authority was entitled to require particulars of ownership or realistic prospect of control of the site under section 16(1)
(i) of the Buildings Ordinance. It followed, the Court of Final Appeal said, that other provisions of the Buildings Ordinance were engaged, so, for example, under s.16(1)(a) the plans could be refused approval because they did not relate to such site.
Accordingly, in this case, the Respondent Building Authority had been entitled to require particulars of ownership or realistic prospects of control of the site. The Court of Final Appeal came to the same conclusion reached by the Privy Council in Cheng Yick Chi, with which it was in agreement and the Applicant’s appeal was unanimously dismissed.
Readers may wonder why the Real Estate Developers Association would have taken the case to the Court of Final Appeal. As appeared from the Association’s written case (which is also available on the Judiciary’s website), the main reason for a developer to apply for approval of building plans before it has become the owner of the site is that it wants to have more certainty in the development potential of the site in order to facilitate its negotiation with the existing owner and obtain finance.
After this Court of Final Appeal decision, the developer has to prove to the Building Authority that it has a realistic prospect of the control of the site before the Building Authority will entertain its application, which the developer may not be able to do at the early stages of acquiring a site. It might make project budgeting more difficult for developers.
Kwok Kit Cheung, Partner, Deacons