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Legal Update

"Broad brush" or "micro-management"? Can Town Planning Board impose specific restrictions on a particular building? The Court of First Instance says "yes"

24 November 2011
Mayer Brown JSM Legal Update

Abstract

On 21 November 2011, the Court of First Instance handed down a judgment in the case Turbo Top Limited v Town Planning Board (HCAL 23/2011 and HCAL 52/2011), where it held that the Town Planning Board ("TPB"), in exercising its powers under the Town Planning Ordinance ("TPO") to amend outline zoning plans ("OZP"), is entitled to impose specific restrictions on a particular building (which is commonly described as "spot zoning").

The facts

The site in question is Cheung Kong Center in Central owned by Turbo Top Ltd., a subsidiary of Cheung Kong (Holdings) Ltd.

Under the Government lease, Turbo Top is required to maintain at least 800 public parking spaces at the site. In June 2008, Turbo Top applied to the Lands Department for lease modification to allow conversion of 78 public parking spaces to a supermarket.

However, in June 2010, the TPB amended the OZP for the area where the site is situated and the amendments include re-zoning the site to "Commercial (1)" which requires, among other things, the provision of at least 800 public parking spaces.

Turbo Top submitted representations objecting to the OZP amendments. The TPB rejected Turbo Top's objections and maintained its decision to require a minimum of 800 public parking spaces at the site. The TPB only agreed to incorporate provision for minor relaxation of the minimum number restriction.

Judicial review to challenge the OZP amendments

Turbo Top applied for judicial review of the TPB's decision. The major grounds of challenge are summarised as follows:

  • According to TPO provisions, the TPB must adopt a "broad brush" approach to prepare/ amend OZP for the "layout" of areas of Hong Kong. The TPB's powers under the TPO do not allow the TPB to engage in the "micro-management" of a specific building.

  • Accordingly, the TPB cannot engage in "spot-zoning" by specifying some restrictions affecting only a particular building or site within a given area.

  • If the TPB were to engage in such "spot-zoning" or "micro-management" of a building, then it would usurp the role of the Building Authority ("BA"). This is because there is a distinction between the TPB's powers to draw up OZP for areas under the TPO and the BA's powers to accept or reject building plans under the Buildings Ordinance. The TPB's power must be "broad brush", while the BA's power is "building specific". An attempt by the TPB to regulate by the OZP what can or cannot be done in a particular building would be an unlawful extension of the TPB's jurisdiction and an encroachment upon BA's jurisdiction.

The Court's decisions

Mr. Justice Reyes of the Court of First Instance rejected Turbo Top's arguments and held that the TPB has power to impose site/building specific restrictions.

  • The TPB's amendments fall squarely within the functions defined in the TPO. For instance, the long title provides that the purpose of the TPO is to "promote the health, safety, convenience and general welfare of the community by making systematic preparation and approval of plans ...". To impose minimum number of parking spaces is for the "convenience and general welfare" of the community because it safeguarded future availability of public car parking at the site.

  • The proviso of s.4 of the TPO confers a wide power to the TPB to draw up OZP for the layout out of "any matter whatsoever may be shown or provided for or specified in or in respect of the plans by means of such ... notes or descriptive matter as the Board thinks appropriate". The imposition of minimum 800 public parking spaces is within such wide power.

  • It is not appropriate to label the OZP amendments as "micro-managing" a specific building. It is because what the TPB has actually done is only to impose a car parking restriction on an area. That there currently happens to be a single building in that area is only fortuitous. The amendments only concerned the imposition of a restriction on an area regardless of the building that may be standing there now or in future.

  • Zoning may place restrictions on the uses to which a property can be put but this does not constitute a deprivation of property. This is because when one acquires a land, there is an implied condition that, for public interest, the Government may by regulation (including OZP) limit the uses to which such land can be put in future.

Conclusion

This is the first time after the change of sovereignty in 1997 where the Court is required to determine the extent and scope of the TPB's power in discharging its "plan-making" function under the TPO.

Since 2007, the TPB has started a large-scale exercise to amend OZP in different areas in Hong Kong by imposing, among other things, maximum height restrictions on specific buildings (as opposed to broad height bands), set-back areas and building gaps. These amendments have been criticised as imposing "spot zoning" which unreasonably restrain an owner's flexibility in designing its developments. It was also criticised as contradicting the legislative intent of the TPO as the TPB is required to adopt a "broad brush" approach, as is emphasised by the title "outline zoning plan".

However, the Court in Turbo Top case confirmed the TPB's approach in making OZP amendments by introducing detailed and specific restrictions even on a particular building.

It remains to be seen whether Turbo Top will appeal to the Court of Appeal to challenge the Court of First Instance's decision.

For inquiries related to this Legal Update, please contact Alan Yip or your usual contacts with our firm.

Learn more about our Hong Kong office, Construction & Engineering, Litigation & Dispute Rsolution and Real Estate practices.

Visit us at www.mayerbrownjsm.com

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