Improving Land Administration Preventing Abuses of Leased Land Lydia Chan University of Cambridge Civic Exchange Summer 2004 Internship
Foreword: When I was first informed by Ms Christine Loh (Civic Exchange) about the possibility of working with Mr Mike Kilburn (Kadoorie Farm & Botanic Garden Corporation, “KFBGC”) on an environmental project I was somewhat anxious and amused. My initial thoughts were that I would be involved in some random campaign about some obscure environmental “crisis” in the New Territories that no one cares about, but I decided to keep an open mind and hoped to become a “greener” human being along the way. The weeks that followed were an incredible educational experience – I had the privilege of meeting and working closely with a number of knowledgeable and distinguished individuals, who both challenged and strengthened my convictions and understanding of the real world outside the classroom. This paper is merely a brief account of my work – it is by no means an extensive piece of research, but I hope to shed some light on this serious, yet virtually unknown environmental problem – my own understanding of the situation and how KFBGC, with the support of a host of Non-governmental Organisations, has taken the initiative to tackle the problem. As with many problems in society, one cannot fully comprehend their nature and existence until one examines them closely in person. I could not have appreciated my work without having first visited some trashed sites in the New Territories; it was then that I finally understood what environmental degradation really is – and it was a shocking revelation.
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The Problem Land-filling and other activities on private land cause environmental nuisance and upset the ecology of the land. Dumping 1 and site formation 2 on rural land is undesirable and extremely difficult to control under the current legislation and administrative practices. As a result, the agricultural, landscape and ecological value of rural land is regularly destroyed. The Legislative Council Panel on Planning, Lands and Works held a meeting on 23 March, 2004 to discuss this problem. It was acknowledged that the degradation-led development phenomenon in the New Territories was a very complex issue, involving various Government Departments. Dumping, bull dozing, site formation, and access road construction in preparation for “use for building purposes” are contrary to the restrictive covenant in the Block Government Lease; lessees are not allowed to “convert any ground hereby expressed to be demised as agricultural or garden ground into use for building purposes…”. Technically, these illegal activities can be prosecuted, but unfortunately, they are allowed to occur because no enforcement action is taken due to administrative or other perceived difficulties. Many lessees are choosing to seek planning gain or commercial advantage through improper means by exploiting the various loopholes in the legislation. They intentionally trash their land before applying for a Section 16 application for building or commercial purposes on rural land under the Town Planning Ordinance. Although the Town Planning Board is increasingly refusing applications made in this manner, this abuse of the law still remains a serious problem. Clearly, the Administration’s enforcement actions under the relevant legislation are ineffective and inadequate. KFBGC and its supporters believe that wilful degradation of the environment is a matter of overriding public welfare, and a strict liability approach should be adopted to address the seriousness of the problem. The Proposal After carrying out extensive research and seeking advice from various experts in the field of Hong Kong land administration, KFBGC has designed a legislative proposal to amend Part IV of the Land (Miscellaneous Provisions) Ordinance Cap. 28 to 1
Dumping means any depositing or disposal of any materials, with the exception of those required for continuation of cultivation of crops currently under cultivation, on either leased land or government land. 2 Site Formation means all activities that alter the level of the land. 2
address enforcement to leased land. It is hoped that the Housing, Planning and Lands Bureau will put forward this proposal to the Legislative Council. Under this proposal, the law would require the applicant to apply first for a permit from the Lands Department before carrying out site formation and related works. Dumping or site formation without a permit will be deemed to be works for building or other development purposes and hence a breach of the Block Government Lease. The permit will be granted subject to the ability of the applicant to demonstrate to the satisfaction of the Lands Department that the purpose of such works is consistent with the Block Government Lease, adhering to the guidelines for proper infrastructure, drainage and environmental protection. The permit will be revoked in case of non-compliance of permit conditions, and the landowner will be required to reinstate the land and pay a fine. The legal implication of this proposal is that the burden of satisfying the Lands Department of the intended purpose rests with the parties seeking the permit. It simply requires lessees to demonstrate compliance with the existing planning and lease intentions. KFBGC believes that lessee’ property rights remain unaffected, and if necessary, an appeal system can be established. Obviously, the design of the proposal is still at its early stages so not all operational mechanisms are in place yet. Ideally, provisions for setting conditions, monitoring, enforcement, and penalties will be included to act as a genuine deterrent. Also, a concurrent introduction of a rewards mechanism as an incentive to conserve or enhance the existing value of their land is expected. The Infamous Case Attorney General v Melhado Investment Ltd [1983] is often used to illustrate and explain the current attitude and action (or rather, the inaction) of the Administration. The government had contended that the lot was restricted to agricultural use under the Block Crown Lease while the land in question was being used for the storage of steel girders. The effect of the Court of Appeal’s decision was that land described as agricultural under the Block Crown Lease was not restricted to that use but could be used for any purpose that did not require a building. In effect, the government lost control of the use of agricultural land, which made up much of the rural land in the New Territories.
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As Mr Roger Nissim wrote: “the government did not appeal against the decision, and inexcusably did not plug the loophole with new statutory planning legislation for rural areas in the New Territories until 1991. This resulted in the proliferation of open storage and other unsightly uses in the flat areas of the NT…where large tracts of land are now used for container storage. These unplanned uses have caused much pollution and traffic chaos.” 3 When reading the appeal judgment of the case, I found it difficult to understand why the government never appealed to the Privy Council, especially when the judge handed them their winning ticket on a silver platter in his final paragraph: Sir Alan Huggins: “We must further make it clear that no issue was raised before us whether the storage of the steel might be “use for building purposes” on the basis suggested in Directors etc. of the London and South Western Railway Company v. Blackmore [1870] and that for that reason there was a breach of the restrictive covenant. We can readily conceive of circumstances in which building materials would be so closely associated with the work of construction as to constitute a building purpose. This aspect of the matter was not canvassed in the affidavits.” Since then, the government claims that the necessary legislation has been enacted which enables prosecution of such blatant abuses of leased land. Unfortunately this is not the case in reality, and the government’s continual inability to prosecute has inevitably encouraged more landowners to exploit these legal loopholes resulting in widespread environmental degradation. The case at She Shan Tsuen, Tai Po There are more than ten known cases of dumping on ecologically sensitive sites since 2000, and the recent case at She Shan Tsuen has aroused the most public concern. The land filling activity at the site has adversely affected the rural environment of the area and caused environmental nuisances, and increased the risk of flooding. The site concerned in under “Agriculture” zone, and the Administration has been asked to take legal action against the land filling activity so as to prevent the situation from deteriorating and to deter similar cases in the future. Unfortunately, after careful consideration of taking enforcement action under relevant Ordinances, it has been concluded that no prosecution action can be taken. At present, there is no sufficient evidence to instigate prosecution, mainly because the land filling itself does not 3
Roger Nissim, Land Administration and Practice in Hong Kong, Hong Kong University Press, 1998, p. 19 4
contravene the permitted use in “Agriculture” zone, and the landowner claims that the land filling is for future agricultural use. The Government’s Prosecution Policy The Department of Justice’s prosecution policy guidelines were published in the Statement of Prosecution Policy and Practice in 2002. The purpose of the Statement is to assist prosecutors in their work and to make their decision-making process more understandable to the public in general. Section 7.1 states: “The prosecutor must consider two issues in deciding whether to prosecute. First, is the evidence sufficient to justify the institution or continuation of proceedings? Second, if it is, does the public interest require a prosecution to be pursued?” Michael Thomas QC, Attorney General, further lists the factors to be taken into account when making a decision: “First, there must be enough evidence to prove all the ingredients of an offence. This is not always easy to determine, especially where an offence requires proof of a state of mind or an intention of which there is often little or not direct evidence. Even if there is evidence that tends to prove the necessary ingredients of an offence, a bare prima facie case is, generally speaking, not enough to warrant a prosecution. There must be a reasonable prospect of securing a conviction because it is not in the interests of public justice, nor indeed of the public purse, that weak, or borderline, cases should be prosecuted…the decision whether to prosecute ultimately depends on a broad view of the interests of justice.” In terms of the sufficiency of evidence, section 8.1 states: “When considering the institution or continuation of criminal proceedings the first question to be determined is the sufficiency of evidence. A prosecution should not be started or continued unless the prosecutor is satisfied that there is admissible, substantial and reliable evidence that a criminal offence known to the law has been committed by an identifiable person…” Once the prosecutor is satisfied that the evidence itself can justify proceedings in the sense that there is a reasonable prospect of obtaining a conviction, he or she must then consider whether the public interest requires a prosecution. Regard should be given to the availability or efficacy of any alternatives to prosecution. (Section 9.1) In other words, a bare prima facie case is not enough to justify a decision to prosecute; the proper test is whether there is a reasonable prospect of a conviction. This decision requires an evaluation of how strong the case is likely to be when presented at trial, so
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the prosecutor must be satisfied that there is no reasonable expectation of an ordered acquittal or a successful submission of no case to answer. Even with the above guidelines in mind, I could not understand why the Planning Department considered that there was insufficient evidence of a breach in She Shan Tsuen, given that there was bulk dumping of construction waste at the “Agriculture” site. Furthermore, since the present legislation has repeatedly failed over the years to fulfil its purpose, I was puzzled as to why nothing has been done to improve the worsening situation. I took my questions to Ms Peggy Lo, Government Counsel of the Department of Justice’s Prosecution Division, who gave me some useful insights into the prosecution system and explained the Administration’s point of view. After receiving a preliminary and informal introduction to KFBGC’s legislative proposal, she also helpfully provided a critical evaluation of the proposed provisions. I thought that it was necessary to obtain some initial feedback from the Department of Justice (and more specifically the Prosecution Division) to see if we were heading in the right direction. The proposal should enable the Department to prosecute these offenders more easily and successfully; if not, this would merely be a time and energy-consuming exercise with minimal effect. The Department of Justice’s Informal Response Ms Lo admitted that she was unaware of how widespread the abuse and exploitation problem was, as most cases are prosecuted by the individual Departments themselves (empowered by the Department of Justice) and rarely are any passed to them seeking legal advice. When discussing the current situation, Ms Lo demonstrated using the She Shan Tsuen case, that there may be situations where, despite the existence of relevant ordinances, no immediate enforcement action can be taken due to the limitations in the regulatory regime or lack of sufficient evidence. The main problems seem to be the vague and broad definition of an “Agriculture” zone, and the practical difficulties of collecting the essential evidence. Agricultural use encompasses a wide range of activities, including market garden, keeping of livestock, and plant nursery, that are permitted as of right in the zone. Currently, the main restriction in Block Government Leases is that no buildings are permitted on agricultural lots without prior consent, however, they do not contain conditions prohibiting land filling on agricultural land. Also, developments incidental to the permitted developments, and uses directly and ancillary to the permitted 6
developments are always allowed, so further consent is not required. In effect, it is extremely difficult to ascertain whether the dumping and site formation on a particular area of land are preparatory building works. Unless there is clear evidence that the land filling activity will lead to unauthorised developments, no legal action is possible. It is also important to note that the primary function of the land use planning system is to ensure the optimal use of land as planned. The lease enforcement system aims to ensure that the lessee will observe the contractual obligations as provided in the lease conditions. These systems are mainly land use oriented and are not designed to deal with environmental protection issues. In the absence of the relevant land lease conditions against environmental nuisances, Lands Department cannot take enforcement action against the landowner. In terms of the legislative proposal itself, Ms Lo commented that it is theoretically attractive and viable, and should be able to make prosecution easier, however, at present it seems far too simplistic and requires various complementary mechanisms in order for it to work effectively (e.g. subsidiary power to remove trash and notice to reinstate). Ms Lo expressed great unease over the proposed deeming provision: “Dumping, site formation, site clearance and creation of site access without a permit are deemed to be works for building or other development purposes, and hence in breach of the covenant of the Block Government Lease and current practice of the Administration.” Such an all-encompassing provision is rarely permitted and this strict liability approach is likely to face much opposition in the Legislative Council unless overwhelming public interest can be successfully proved. It is also questionable as to whether the Land (Miscellaneous Provisions) Ordinance (Cap. 28) is the suitable one to amend, as the long title of the Ordinance reads: “To provide for matters relating to Government land.” The scope of control under Part IV (i.e. “Summary remedy of breaches of Government leases and licences”) relates to unlawful structures and related matters only; it does not override any rights a lessee may have under the lease. There are also many other relevant Ordinances which could probably undergo similar treatment, e.g. Waste Disposal Ordinance (Cap. 354), Water Pollution Control Ordinance (Cap. 358) etc. Since these Ordinances apply to the whole territory, irrespective of their land status, the landowners of leased land must also abide by these laws.
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She believes that the proposal, as it stands at present, is not an effective solution as it fails to tackle the environmental abuse at its source. People who wish to trash their land will continue to do so, and the law abiding citizens, who compose the majority of the population, will be too heavily burdened by this extra requirement. KFBGC’s assumptions reflect the abnormal situation in which landowners choose to trash their land before applying for a Section 16 Permit under the Town Planning Ordinance. The Planning Department has the right to demand that developers follow proper procedures, apply first before proceeding with permitted works in a regulated manner subject to proper planning conditions. In this respect, the proposal seems to be a replica of our current Section 16 applications, and is therefore unnecessary and excessive. Furthermore, the government should avoid stringent control over activities that are legitimately carried out on rural land. Since dumping and site formation or clearance that do not involve any unauthorised structures do not necessarily breach the Block Government Lease, the proposed permit system may interfere with the private property rights of individual landowners, which is protected by Article 6 of the Basic Law. Ms Lo strongly advised us to approach the Town & Planning Dept and all other relevant Departments within the Hong Kong land management system to understand more in-depth about the real difficulties of evidential collection. Exploring ways to improve the collection of evidence (e.g. by allowing easier access for enforcement officials to search without warrant, and empowering the Town & Planning authorities to perform more investigations) may be a more practical and effective solution. Lacking both knowledge and experience, I must admit that I struggled at times to hold my ground during my discussion with Ms Lo, but I secretly vowed to return when well-armed with real “ammunition� for a re-match! The Controversial Issue of Property Rights During my discussions with various experts on promoting the proposal, I was repeatedly warned that it would generate a heated debate within the Legislative Council and the relevant Departments. The most controversial issue would be whether the proposed permit requirement intrudes into the private property rights of landowners, which is essentially a fundamental human right. Below is a brief discussion of various academic views on this fascinating subject.
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As Jeremy Waldron, Professor of Law at Cornell University, wrote: “Social policy is supposed to be oriented towards the well-being of the whole society and everyone in it. But since different people have different interests, policies for society as a whole often involved striking a balance between the interests and wishes of different individuals and groups. As we pursue goals like prosperity, order, economic growth and so on, we accept that some people will suffer losses while others benefit. Very few social goals can be pursued without cost, and often some people bear more of the costs than others.”4 Similarly, some may assert that a way of looking at the idea of human rights is that people who believe in rights believe that there are limits on the losses that any individual should have to bear in the pursuit of social policy. They believe that there are limits on the sacrifices that may reasonably be demanded of any person in society. In other words, we must abandon those social goals that require us to impose losses or harms that exceed those limits. Others may also argue that history shows that property rights have evolved over time. Our recognition of property rights has not been linear, but dynamic in nature. On one hand, society maintains strong property rights protection reflecting the firm belief that people should be able to do what they please with the property they own. On the other hand, there is an equally strong conviction that there is a public interest in how property is used, and at some point, the public’s interest outweighs the individual’s rights. The legal trend nowadays seems to suggest that the law of real property is based “as much on responsibilities as on rights, on human connectedness rather than on personal autonomy” (Eric Freygoyle, Context and Accommodation in Modern Property Law, 1988-89, 41 Stanford Law Review 1529 at 1530-1). For private owners in particular, they must realise that along with their inherent rights of private ownership, also comes a public obligation to uphold and protect the rights of other individuals. The common law’s most distinguishing hallmark is reliance an a system of case precedent, not restricted to judicial decisions generated within any single jurisdiction, but case law from all jurisdictions throughout the common law world. Article 84 of the Basic Law provides that the courts of the HKSAR may refer to the precedents of other common law jurisdictions. It is therefore appropriate to examine Declarations like the European Convention on Human Rights (“ECHR”), which strikes the uneasy balance between the interest of landowners and the interest of the community. 4
Jeremy Waldon, The Law, Routledge, 1990 p.96 9
Article 1 of Protocol 1 of the ECHR states: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.” Article 1 embodies three distinct yet interrelated rules: a general entitlement to peaceful enjoyment of possessions; a rule covering deprivation of possessions and subjecting it to certain conditions; and a rule covering the right of a state to control the use of property. Although it is a fundamental right to enjoy your property, interference with property rights may be justified in the public or general interest. In deciding what the public interest is a State enjoys a "margin of appreciation" in that the Court acknowledges that a State is in a better position to assess the economic needs of society and should therefore be allowed some discretion in setting its objectives. The Court must be satisfied that the means employed are “proportionate” to the aim sought to be realised, and a “fair balance” is struck between the demands of the general interest of the community and the requirements of the protection of individuals’ fundamental rights. In order to ensure that the deprived property owner would not suffer an excessive burden for the benefit of the community, the court would carefully weigh the competing factors, which include the provision for payment of compensation, the procedural safeguards allowing the property owner a reasonable opportunity of putting a case to the responsible authorities etc. As seen from the brief analysis above, it is clear that in circumstances where the public’s interest outweighs the individuals’ rights of private ownership, personal autonomy will have to give way to community welfare. Also, apart from understanding and exercising one’s rights in property ownership, one must also be aware of the responsibilities that go alongside those rights. The fundamental rights of property are still strongly upheld through the Constitution and Human Rights legislation, but much leeway is created for the control and deprivation of such rights to a certain extent, which safeguards the interests of communities of people in democratic societies.
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Striking the Balance: Economic Growth vs. Environmental Protection & Conservation During the Panel meeting in March, the Permanent Secretary for Housing, Planning and Lands pointed out that in considering the best approach for the regulatory regime, the Administration had to be mindful of striking a proper balance between sustaining economic activities and protecting the environment. During my visit to Kadoorie Farm, I was shown a land use zoning map of the New Territories. I was very surprised to find large areas of land zoned as “Agriculture” since the farming industry seems to be phased out in Hong Kong. Although the Government Policy continues to assert that farming remains an important economic and social activity, it is common knowledge that the industry has been struggling for years to compete with its mainland competitors and its prominence in our local economy has diminished dramatically. It is therefore difficult to understand why there is a need, in terms of economic development, for setting aside so much land for agriculture. I discussed my thoughts with Mr Roger Nissim, who explained to me the strange reality of the land use zoning system in the New Territories. Apparently, the Administration would “zone” an area of land for a particular use according to what was found on the land itself, and few changes have been made since the initial inspection decades ago, and few are to be expected in the near future. In this respect, it seems to me that our land use zoning system, being seriously flawed and outdated, is actually hindering proper economic development in the region. The current situation in the New Territories is that the law–abiding citizens have become the minority instead of the usual majority; hence widespread abuse and degradation have become a local natural phenomenon. It seems to me that in the long run, the only permanent and effective solution must be to update and improve the current land use zoning system. If drastic changes are not made, those who wish to trash their land will continue to do so, as they willingly challenge the law and risk prosecution to obtain the benefits of economic development. I wonder whether it would it be better to identify all the ecologically important sites in the territory, protect them properly by zoning and allow the remaining Agricultural land (though still valuable in terms of its agricultural, landscape and ecological value) to be gradually released and legitimately developed. A similar suggestion has been severely attacked by a large band of Green Groups, who objected very strongly in a 11
lengthy paper to the proposal to covert Agricultural Land to Other Specified Uses annotated Rural Use, OU(RU) by the Planning Department under their Review of Rural Land Uses in Northern New Territories of July 2001, and Review of Master Schedule of Notes to Statutory Plans of July 2002. They believe that the Planning Department is proposing to recognise and legitimise the degradation of the countryside, in particular the land currently zoned as Agricultural Land and reward its owners with a re-zoning to OU(RU), which means an ‘up-zoning’ to more profitable uses than agriculture, e.g. housing development land with increased density and Recreation Zoning. The Department is also proposing to facilitate conversion of Recreation Land to development of increased density low rise housing, specifically in the Northern New Territories. The Green Groups argued that the Department’s Review is “seriously flawed and should be rejected” citing reasons such as, it encourages increased development and degradation, and it fails to recognise the potential value of such Agricultural Land to the public as open natural space for conservation and potential country park extension. In short, they believe that those who stand to lose are the public at large who derive pleasure, profits, and health from free access to and enjoyment of the countryside. Intuitively, I guess that any form of “up-zoning” development, regardless of magnitude, will adversely affect the environment to varying extents, however, prohibiting such development any longer does not seem to be a feasible and sustainable option either. Though I am not familiar with all the technical details and implications of the Department’s proposal, I feel that it is theoretically sound. It may be worthwhile to debate the ideas more thoroughly before launching such an aggressive attack, and a well-balanced compromise may be achieved. Conclusion As stated above, it is hoped that KFBGC’s legislative proposal will be taken up by the Housing, Planning and Lands Bureau, however, their initial response has been most disappointing. It seems to me that the whole proposal was quickly demolished and dismissed by a bombardment of legalistic weaponry, and the very notion of working towards a viable solution was forgotten. Many have turned a blind eye on this environmental crisis either because they are unaware of the severity of the situation or that they simply do not care, and over the years the Administration has grown into a breeding ground for such ignorance and 12
indifference. Although the future may seem quite bleak, I am optimistic that through comprehensive public education and in-depth media coverage, KFBGC will be able to enlighten the masses and inspire action and support. KFBGC’s proposal is still at its early stages and there will undoubtedly be many more tough struggles ahead. I wish Mr Kilburn every success in his future battles.
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Acknowledgements: I would like to extend my heartfelt thanks to Ms Christine Loh (Civic Exchange) and Mr Mike Kilburn (KFBGC) for giving me this wonderful opportunity to work with you both, and Mr Roger Nissim (Sun Hung Kai Properties Ltd; RICS Asia Pacific), Mr Captain Wong (KFBGC), and Ms Peggy Lo (Department of Justice) for their help in answering my many questions and requests for information during my research.
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