Public Good and Judicial Review: Re Tai Hang Sai Estate Redevelopment

In Leung Ah Duen v The Hong Kong Settlers Housing Corporation Limited [2025] HKCFI 3715, Coleman J dismissed a judicial review challenge against two decisions made by the Hong Kong Settlers Housing Corporation Limited (“HKSHC”) concerning the Tai Hang Sai Estate (“THSE”) redevelopment project. The case centred on whether a private entity, such as HKSHC, could be regarded as performing a public function. The Court’s decision provides important guidance for practitioners on the limits of judicial review.

HKSHC, incorporated in 1952 as a private company limited by guarantee, was established to provide affordable housing for low-income families following the Shek Kip Mei Fire (§11). THSE is the only privately owned subsidised housing estate in Hong Kong (§1).

Since 2010, HKSHC began planning to demolish and redevelop THSE, which by then was more than 50 years old and in need of significant repairs (§18). In 2021, HKSHC entered into a Memorandum of Understanding with the Urban Renewal Authority on the redevelopment project (§28). Under the redevelopment plan, eligible residents would be rehoused during the redevelopment period and receive an ex gratia rental allowance sufficient to cover rent during the estimated five-year project (§§30, 32).

The Applicant, a resident of THSE, was in principle entitled to the ex gratia allowance (§4). However, dissatisfied with the arrangements, she commenced judicial review against two decisions made by HKSHC, namely (1) the decision to limit any rehousing arrangement to a one-off rental subsidy for the entire time that the THSE would be redeveloped (“Rehousing Arrangement Decision”), and (2) the decision to evict her from her flat (“Eviction Decision”). It was argued that the Decisions were (1) in breach of an alleged policy that proper rehousing arrangement is a precondition to the redevelopment of the THSE, (2) Wednesbury unreasonable, and (3) in breach of the Applicant’s substantive legitimate expectations (§62).

Coleman J dismissed the application in its entirety, principally on the basis that the Decisions were not amenable to judicial review. Even if the decisions were amenable, none of the grounds were made out. For present purposes, the analysis on amenability, Wednesbury unreasonableness, and breach of policy is of particular interest to practitioners.

The Court affirmed that only a decision made in the public law domain is amenable to judicial review, and the presence of public elements of sufficient significance in the decision-making process could turn an otherwise commercial decision into a public law decision (§64). In other words, a private body may still be subject to judicial review if it has been woven into the fabric of public regulation or into a system of governmental control, or is integrated into a system of statutory regulation, or is a surrogate organ of government, or but for its existence a governmental body would assume control (§65).

In the present case, the Court held that the Decisions were not amenable to judicial review as (1) HKSHC is a private company with its own constitution and decision-making body, (2) the Eviction Decision was based on the tenancy agreement between HKSHC and the tenant, (3) the Rehousing Arrangement Decision was “a classic exercise of power qua landowner – it owns the Lot, and it can decide whether it wishes to redevelop the THSE, and if so, on what conditions” (§66).

Coleman J further emphasised that:-

1. Even where an entity receives significant levels of public funding, this is not an indication that such a body or its functions are public, as many indisputably private bodies, such as many bodies whose activities are cultural, and many charities, receive public funding (§73(1)).
2. One school of thought may be that it is deeply unattractive to saddle organizations (especially non-profits) which are set up in the public good with judicial reviews, such that the organizations might think it preferable simply not to operate at all, with the consequence of the public losing substantial benefit (§73(2)).
3. The fact that a body provides a public good does not mean it should be subject to judicial review (§73(6)).
4. The mere fact that existence of the body is explicitly or implicitly recognised in legislation is insufficient to make the body reviewable (§73(7)).

All in all, the Court was satisfied that “the functions been performed by the HKSHC are simply those of a private owner of a large estate, albeit one seeking to manage it on a non-profit-making basis” (§73(4)).

The Court went on to address the Applicant’s unreasonableness challenge. The Court re-affirmed that the threshold of such a challenge is “necessarily high”, given that the Court is not to usurp the role of the decision-maker (§81). The Court is not concerned with the merits, wisdom or desirability of a policy or administrative decision (§81). Given that more than 95% of the THSE residents had accepted HKSHL’s rehousing plan, the Decisions are unlikely to be Wednesbury unreasonable (§§81-82).

The Applicant’s key complaint in the present case was that the ex gratia rental allowance might prove inadequate if redevelopment was delayed (§89). However, Coleman J accepted that this complaint was premature as the delay has not yet occurred, and may never occur (§91). In any event, it was sensible for HKSHC to adopt a case-by-case approach to deal with the rehousing issues flexibly and reasonably based on the circumstances prevailing (§93).

The Court held that the logically prior question is whether there was in fact a policy (§97(4)). For a policy to be enforceable in public law, the policy must be one that can readily be identified (§97(5)).

In this case, it is uncertain as to what “proper rehousing arrangement” meant. The Court reasoned that if there is considerable uncertainty as to what a “proper rehousing arrangement” is, then it suggests that this “policy” either does not exist, or it cannot be enforceable as a matter of public law because its contours are not readily identifiable (§97(7)). In any event, the Court was satisfied that HKSHC has enacted a proper rehousing arrangement (§97(8)).

This case provides an in-depth analysis of when decisions made by private entities are subject to judicial review. Significantly, the Court affirmed that the mere provision of a public good does not, without more, render a body’s decisions reviewable. This underscores the Court’s reluctance to interfere with the autonomy of private organisations.

The judgment also illustrates the high threshold that any judicial review applicant must meet. The Court reiterated that it will not second-guess policy choices, particularly where the impugned decisions have received broad support. Finally, the Court’s emphasis on the need for certainty in identifying enforceable “policies” ensures that vague or loosely framed statements would not be used to fetter the discretion of decision-makers.

Read the judgment here at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=171640&currpage=T

Mr Michael Lok and Mr Paul Law (led by Mr Jin Pao SC) acted for the Respondent in the judicial review.

Mr Patrick Fung SC (leading Mr Michael Lok and Mr Paul Law) acts for the Respondent in the underlying land proceedings.