TING KEY INVESTMENT LTD AND ANOTHER v. THE SECRETARY FOR TRANSPORT

Miscellaneous Reference Case No. 61 of 1992

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HEADNOTE

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Property law - Right of Way - Injurious Affection by Road Works - Petrol Filling Station - Disturbance Payment - Valuation of Compensation - Proof of Business Loss - Roads (Works, Use and Compensation) Ordinance, Cap. 370, s. 27(2) and Schedule thereto.

          The First Applicant is the owner of a petrol filling station ("the station"). The Second Applicant was the operator of the station. The station was situated on a plot of land a short distance from the western side of the Pok Wai section of Castle Peak Road, New Territories but was connected to the kerb by a strip of land held by the First Applicant under a short lease. After the station commenced business, the government constructed a dual two-way trunk road to replace the Castle Peak Road from Au Tau to Fairview Park as part of the New Territories Circular Road Improvements ("the NTCR Improvements"). The work took 9 stages each lasting for longer than 14 days. At or about the time the 4th stage of the work commenced, a Caltex petrol filling station ("the Caltex station") began operation. It is common ground that the Caltex station broke the monopoly of the CRC station. The Applicants complained that, from the 4th stage onwards, the station suffered loss of trade due to traffic diversion from and, on occasions, complete blockage of access to the station. The Applicants further alleged that they have suffered permanent loss of trade after the NTCR Improvements work was completed because motorists cannot readily access the station from the new expressway. There is unchallenged evidence that general improvements in road and traffic facilities in the immediate and surrounding areas have at least brought double the number of motorists who may patronize the station to its vicinity. However, the Applicants contended that Castle Peak would have absorbed the increased number of motorists in any event so the new expressway offerred no benefits to the station. By virtue of section 27(2) of the Ordinance, the Applicants claimed nominal mitigation expenses at $1,000 and disturbance payment of $2,256,881 and $2,740,323 as, respectively, temporary and permanent loss of profits for the First Applicant and $203,918 as temporary loss of profit for the Second Applicant. According to the Schedule to the Ordinance, "disturbance" means the interruption of or interference with a trade or business, temporary or permanent, "disturbance payment" means a sum equal to the loss of money actually and reasonably incurred or to be reasonably incurred and arising from the disturbance of the trade or business, and "no disturbance payment shall be payable in respect of any interference with a trade or business in any case in which such interference does not subsist for a period exceeding 14 days". The Applicants sought to prove loss of trade by general decline in purchase of fuel stock for the station from the 4th stage onwards.

          At issue was (1) whether the Applicants had a right of ingress and egress in relation to Castle Peak road or any trunk road for the station situated where it was, (2) what, if any, limitation applies to the Applicants' claim for disturbance payment, (3) the cause of the loss of trade to the station, (4) the quantum, if any, of disturbance payment to be awarded.

Held: (1) On account of the strip of land connecting the station to Castle Peak Road, there is no implied right of access attached to the main plot of land where the station was located in relation to Castle Peak Road. (2) Even if there is a right of ingress and egress, the right is not related to a specific trunk road of particular description and the right was not adversely affected by substituting Castle Peak Road by a new expressway linked to the station with a service road. (3) Right of ingress and egress is immaterial in the circumstances of this case because entitlement to com-pensation depends on interruption of or interference with trade or business, not on derogation of property rights. (4) On the true construction of Paragraph 4(2) in the Schedule to the Ordinance, in order to succeed in the claim for disturbance payment, the Applicants must prove substantial disturbance that existed for at least 14 days in a row; periods of disturbance each lasting less than 14 days cannot be added to form the basis of claim. (5) Even though the old Castle Peak Road could physically carry some more traffic, on expert evidence based on accepted technical standards, that road should be regarded as already saturated. The new expressway should be taken as bringing increased trade potential to the station. (6) Even with all the evidence presented, the Applicants failed to prove substantial disturbance or that each period of disturbance lasted for at least 14 days. Moreover, since the effect of the Caltex station competition has not been isolated or quantitatively identified, the Applicants failed to prove that the loss of trade, temporary or permanent, was due to disturbance by the work for the NTCR Improvements. (7) For want of sufficient proof, claim for disturbance payment dismissed. Mitigation expenses of $1,000 awarded.

Querae whether for the purposes of the compensation scheme under the Ordinance, betterment by way of increased property value or increased trade brought about by the road work complained of should be taken into account to reduce liability for disturbance payment.

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JUDGMENT

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          The First Applicant is the owner of a petrol filling station situated at Lot Nos. 3808 and 3809B in DD104 Yuen Long, along the western side of the Pok Wai section of Castle Peak Road, New Territories, ("the CRC station"). The Second Applicant was between 15th March 1990 and 31st March 1992 the operator of the CRC station by a licence agreement dated 26th February, 1990 between the two Applicants. On 23rd February, 1988 a notice was published in the Gazette under section 18 of the Roads (Works, Use and Compensation) Ordinance, Cap. 370 ("the Ordinance") for the closure and modification of roads associated with the construction of a dual two-way trunk road from Au Tau to Fairview Park as part of the New Territories Circular Road Improvements ("the NTCR Improvements"). The Pok Wai section of Castle Peak Road was affected by the NTCR Improvements. The NTCR Improvements work in the vicinity of the CRC station took 9 stages. It is the Applicants' case that, from the 4th stage onwards, the CRC station suffered loss of trade due to traffic diversion from and, on occasions, complete blockage of access to the CRC station. The First Applicant further alleges that the CRC station has suffered permanent loss of trade after the NTCR Improvements work was completed because motorists cannot readily access the CRC station from the new expressway. By virtue of section 27(2) of the Ordinance, the First and Second Applicants claim mitigation expenses and a disturbance payment as compensation for loss of trade. The amounts being claimed are hedged on a combination of assumptions and different scenarios. At the end of trial, an expert supports a figure of $2,256,881 as temporary loss of profit and $2,740,323 as permanent loss of profit for the First Applicant and $203,918 as temporary loss of profit for the Second Applicant. See Exhibit A1. In addition, counsel for the Applicants has suggested $1,000 as mitigation expenses.

2. It is common ground that before the NTCR Improvements commenced, the CRC station was on the western side of the Pok Wai section of Castle Peak Road so that northbound motorists could freely turn off from Castle Peak Road to enter the CRC station. At that stage, it should be noted, the Castle Peak Road was a single lane dual carriageway, i.e. one lane for each direction. The NTCR Improvements involved the construction of a new double lane dual carriageway of expressway standard to replace the old Castle Peak Road plus two 2-way service roads, one on each side of the expressway. The Pok Wai section of the old Castle Peak Road was reprovisioned to become one of the service roads. This service road now leaves the expressway and covers a distance of approximately 500 metres before reaching the CRC station. Further beyond along the same service road, about 250 metres from the CRC station, there is a Caltex petrol-filling station ("the Caltex station"). It is accepted by the Applicants that the Caltex station competed with the CRC station for business. Whilst there can be no serious dispute that the CRC station commenced business in 1988, there was at some stage controversy between the parties over when the Caltex station commenced business. None of the parties in this case has produced the business registration record of the Caltex station. The CRC station manager suggests that the Caltex station started business at the end of 1991 or beginning of 1992. See p. 409 of the Applicants' Bundle IV. Another witness for the Applicants merely says that the Caltex station was constructed and completed in 1991. See p. 424 of the Applicants' Bundle IV. One of these two witnesses also suggested in evidence in court that it was either in the middle or late 1991 that the Caltex station became operational. Neither witness seems to be sure of his recollection. On the basis of information from the Commissioner for Rating and Valuation, we can now safely say that the Caltex station commenced business some time in June but not later than 1st July, 1991. See p. 456 of the Applicants' Bundle IV.

3. According to a resident site engineer responsible for direct supervision of the NTCR Improvements work, traffic diversion in the vicinity of the CRC station for stage 4 of the work was implemented on 11st June 1991, stage 5 on 20th August 1991, stage 6 on 19th November 1991, stage 7 on 26th November 1991 and stage 8 on the 10th November 1992. The final stage which is also the new permanent traffic arrangement took effect on 16th January, 1993. See pp. 429-432 of the Applicants' Bundle 4. These various dates of implementation of traffic diversions cannot be seriously disputed. We, therefore, believe that the period during which disturbance to the business of the CRC station could have occurred falls between 11th June 1991 and 16th January 1993.

4. Although neither party has taken any point on procedure or jurisdiction, difficult issues arise in relation to liability and quantum of disturbance payment. For ease of reference, we set out below a number of relevant provisions in Part I of the Schedule to the Ordinance:-

Private Right of Access

5. Counsel for the parties have devoted much attention to the question of whether the CRC station had a private right of access from the main trunk road. The CRC station is in fact situated a distance from Castle Peak Road. The First Applicant have successively acquired two short tenancies to, inter alia, link the land on which the CRC stations is situated to the source of business - the Castle Peak Road which was the main trunk road. The two short tenancies were STT 926 and STT 1069 which replaced STT 926. STT 1069 expressly states that the First Applicant was "to have no right of ingress or egress" except on points marked for the service road. See pp. 38 of the Applicants' Bundle II. We think nothing turns on STT 1069 because it only gives a right of access to the service road following the NTCR Improvements. Mr. Merry, counsel for the Applicants, contends that notwithstanding and in addition to STT 1069, the Applicants are entitled to a right of ingress and egress between the main trunk road and the plot of land where the CRC station is located. But he has not been able to refer us to any express provision in the grant for the main plot of land concerning right of access to any trunk road. This is not surprising for otherwise there would have been no need for the First Applicant to take up the short tenancies. In the circumstances, we are unable to find an implied right of access in the grant for the main plot of land. Even if by some logic the Crown is bound to provide ingress and egress, we would put the obligation no higher than reasonable connection to a main trunk road of unspecific description. We also find that such reasonable connection was and is available except perhaps for a period of less than two weeks in late 1991 when the Applicants allege there was complete blockage.

6. However, our finding of the existence of reasonable connection does not defeat the Applicants' case. The definition of disturbance in Paragraph 2, Part I of the Schedule to the Ordinance is large and liberal enough. Apart from injurious affection on a right or interest in land, disturbance may be simply "interruption of or interference with a trade or business" without more. It follows that, to establish entitlement to compensation for disturbance, the Applicants only need to prove a direct causal connection between loss of trade or business and the road work under consideration.

Limitation

7. Neither party has expressly adverted to the significance of Paragraph 4(2) in Part I of the Schedule to the Ordinance which places a bar on any claim for disturbance payment where the interruption or interference does not subsist for a period exceeding 14 days. But we are bound to consider of this provision. The problem we see with Paragraph 4(2) in Part I of the Schedule to the Ordinance is whether short spells, being less than 14 days each, of disturbance spread over several months may be added together to form the basis of one claim that is not barred. Since the statutory bar has the effect of denying compensation which would otherwise have been available, we should be slow to adopt a restrictive, narrow construction. Otherwise, it is conceivable, disturbance in effect extending over many months may be punctuated at less than 14 days' intervals by suitable contrivance so as to bar any claim for disturbance. We think the possibility of contrivance to spike a claim is very remote because re-arranging work to break a disturbance period is rarely practical. Public works in Hong Kong are always on a tight time schedule. A civil engineering or construction project usually proceeds by stages, each dependent upon completion of an earlier one. Stoppage of work during a stage just to break a disturbance period would most probably delay the whole project with resulting penalties possibly in excess of any disturbance payment. Besides, one should not lightly attribute mala fides to public authorities who implement public works projects. Moreover, it may be argued that the bar against claims for disturbance for less than 14 days stems from the de minimis concept. When bouts of trivial disturbance are to be ignored by force of the law, they cannot be revived and clawed back into account.

8. In construing Paragraph 4(2) in Part I of the Schedule to the Ordinance, we derive the most compelling guidance from the word "subsist" therein. According to the Oxford English Dictionary, Second Edition, Volume XVII, "subsist" means "To preserve its existence or continue to exist; to remain in existence, use or force", "To continue in a condition or position", etc. and "subsisting" means "Existing substantially", "Abiding, lasting", "Existing at a specified or implied time", etc. It seems to us the use of the word "subsist" linked with a specified period is not an accident. The legislature clearly intended to exclude claims for disturbance of insignificant substance. Paragraph 4(2) requires not only that the disturbance must have existed for at least 14 days in a row, the interference on each of those days must be substantial.

Causation

9. In order to succeed, the Applicants must demonstrate loss of trade and by how much as a result of the NTCR Improvements and related road works. Mr. Merry says there can be no sensible doubt that disturbance did occur. But this is beside the point. Loss does not necessarily follow as a natural consequence of a disturbance. In general, proof of actual loss (including foreseeable future loss) is required to establish tortious liability. Disturbance payment too, according to Paragraph 2 in Part I of the Schedule, must be based on "loss of money actually and reasonably incurred or to be reasonably incurred". The question of how much loss goes not only to quantum, but to the fundamental issue of liability. Moreover, loss of trade not arising from the disturbance is not compensatable. We cannot ignore the wording "arising from the disturbance of the trade or business" in the definition of disturbance payment. The Applicants concede that the Caltex station did take away business from the CRC station. Both counsel and expert for the Applicants quite properly accept that the Respondent is liable to the Applicants for loss of trade on account of the NTCR Improvement work only; loss as the result of competition from the Caltex station must be disregarded.

10. Mr. Hague, chartered accountant from Price Waterhouse, expert for the Respondent, used 30% as the proportion of loss of trade caused by the Caltex station competition. See his report at p. 348 of the Applicants' Bundle IV. Mr. Merry says that the Tribunal must adopt this percentage as agreed by the parties. Mr. Houghton, counsel for the Respondent, on the other hand, contends that there cannot be agreement as such on this matter. The Tribunal is asked to note the following passage from Cross on Evidence at p. 494:-

Mr. Houghton adds that the Tribunal has often rejected expert opinion even when such opinion has not been contradicted. We take on board all these observations.

11. Assuming for argument's sake that both experts agree, it is no more than a consensus of opinion. The weight that should be attached to an expert opinion, even if it has the support of other experts, depends on his command of reason, knowledge and experience. Mr. Merry has quite rightly reminded us that neither Mr. Hague nor his counterpart is an expert on petrol stations and the effects of competition, nor is counsel, nor is the Tribunal. The effect of the Caltex station competition can be quantified with precision; it is a matter of fact to be proved. The Tribunal cannot relegate to experts the function to make findings of fact. We decide not to rely on Mr. Hague's opinion because it is a bare assertion. He has not shown a scientific basis for his coming to the 30% figure and we have nothing from our own resources that enables us to make an informed judgment on his recommendation or to find a better substitute for it. The problem of the Caltex station competition is, therefore, still at large.

12. There are other problems relating to the issue of causation in this case. But we think they can be more conveniently considered below.

Quantum

13. Two questions of principle or methodology touching upon quantification of loss should be disposed of first. The effects of infrastructure construction works on the business of the CRC station may not be all negative. We gather from the evidence of a government traffic engineer (pp. 436-437 of the Applicants' Bundle IV) that the openning of the Lok Ma Chau Vehicular Border Crossing in late 1989 and the expansion of cross border economic activities had brought about a marked rise in vehicular traffic in the vicinity of the CRC station. Statistics taken at the Lok Ma Chau Vehicular Border Crossing show an increase of over 30% of heavy goods vehicles (diesel burners) passing through Castle Peak Road. Counting Station No. 5016 installed by the Transport Department to monitor vehicular traffic one week every month in Castle Peak Road north of Au Tau recorded an increase of 23,880 vehicles in 1989 to 48, 170 vehicles in 1994, i.e. over 100% in general vehicular traffic for that section of Castle Peak Road heading towards the CRC station as a result of gradual overall road improvements in the areas leading to the Chinese border. Indeed, the Applicants' counsel and expert accept that there was 100% increase in general vehicular traffic in the direction of the CRC station from the start to stage 9 of the NTCR Improvements work. So, although road works on the one hand may have taken some potential customers away the CRC station and yet on the other hand they may have drawn more motorists to the station. Question, therefore, arises as to whether we should take into account what the Applicants have benefited from the NTCR Improvements and related road works at the public expense compared with the loss, if any, due to disturbance caused by the NTCR Improvements. The Ordinance is silent on this issue. Counsel for the parties have not referred us to any authority either.

14. Mr. Merry tries to short circuit the question by contending that the old Castle Peak Road could have absorbed the increased traffic flow so that the CRC station would have benefited anyway. In other words, the NTCR Improvements work has made no real contribution but posed interruption and interference. The traffic engineer called by the Respondent says that by accepted technical standards the old Castle Peak was already saturated; of course, more vehicles could use that road but there would be congestion and inefficiency. We think it would be perverse to disregard accepted technical standards.

15. We reserve our opinion on whether betterments brought about by related road work and infrastructure improvements further removed from the immediate vicinity of the CRC station should be taken into account. But we think fairness dictates that the Applicants cannot disregard benefits brought about by public work directly affecting the CRC station which happens also to have a deprecating effect, especially when both the benefits and the deprecation relate to the same account, in this case the number of potential customers for the CRC station. Whether we treat the benefits as reducing or eliminating loss, or as compensation in kind, the Applicants' entitlement to compensation should be appropriately adjusted. It may be different if, for instance, a public work project has the effect of improving public transport facilities to a claimant's property thereby enhancing its market value when on the other hand the completed project encroaches upon the right to light of the claimant's property.

16. Secondly, in as much as motorists who use the main trunk road passing by the CRC station are potential customers for the CRC station, calibration of the trade potential of the station with implications for quantum is no simple matter. We need not stress again the crucial factor of the Caltex station that broke the CRC station monopoly. The transient effects of traffic diversions caused by work for the NTCR Improvements may perhaps be better dealt with as a matter of evidence. We are here more concerned with the impact of the service road after completion of the expressway on the business of the CRC station. The service road does not draw motorists away from the station, it actually leads potential customers to it. From the Applicants' point of view, because the service road leaves the expressway several hundred metres ahead of the CRC station, some motorists may miss the advance turn off point or may be put off by the detour thus resulting in loss of customers to the station. So far as missing the turn off point is concerned, we think motorists are just as liable to miss a turn into an ingress right in front of the station. Suitable sign posts well ahead should serve to alert all motorists looking for the station to turn at the appropriate point. So far as detour is concerned, it is not a tenable complaint. The service road runs parallel with the expressway. Motorists do not waste any mileage by taking the service road. A reliable test for the effect of the service road would be to compare the percentage of motorists who leave the expressway after completion of the NTCR Improvements to pay custom to the CRC station with the percentage of motorists who turn off from Castle Peak Road before the NTCR Improvements to patronize the station, provided of course that the Caltex station competition factor is isolated first. In the absence of such test result or other convincing evidence, we find the so-called permanent loss claimed by the First Applicant no more than conjecture and unjustified.

The Evidence

17. At the trial, although the Applicants called a number of witnesses, their case is essentially built upon documentary evidence in 4 bundles. Two bundles contain in the main correspondences between various parties. One contains maps and work plans. Having studied these three bundles very carefully, we find that they do not really have any bearing on the issues before us. The last and fourth bundle containing records of complaints, expert reports and witness statements do provide some but, as will be seen, insufficient assistance.

18. In order to succeed, the Applicants must satisfy the Tribunal on the balance of probabilities that they suffered compensatable loss as a result of disturbance. According to the resident site engineer, following receipt of complaints during different stages of the work for the NTCR Improvements, he requested the contractor to improve the conditions of access and erect more direction signs on site and the contractor duly complied with those requests. See pp. 430 and 432 of the Applicants' Bundle IV. Indeed, pp. 26 - 153 of the Applicants' Bundle IV are records of complaints relating to the Pok Wai section traffic arrangements and the responses thereto. We are satisfied that measures were taken to ameliorate the inconvenience of the planned traffic arrangements during different stages of the work for the NTCR Improvements. These changes could very well break each stage into shorter periods of interruption or interference which do not qualify for disturbance payment under the Ordinance. The remedial arrangements might also render disturbance, even if lasted for more than 14 days, so trivial as to be not eligible for compensation under the Ordinance. It is worth noting from a letter by Messrs Robertson Double to the Highways Department, dated 24th June 1991 that the First Applicant alleged substantial reduction of business of the CRC station due to the government contractor placing traffic cones three months ago across the ingress to the station adversely affecting access, and that business had come to a standstill because the week before cones had been placed across the egress of the station. See p. 26 in the Applicants' Bundle IV. If blockage by the cones at the ingress lasted, and caused substantial disturbance for as long as three months, it is not borne out by evidence adduced by the Applicants showing normal fuel stock replenishments during that period. Either the injurious effect alleged by the First Applicant was exaggerated or the impediment at the ingress had been removed easily and soon enough by re-arranging the cones. In the premises, we cannot assume that whenever there was poor traffic access the CRC station suffered compensatable loss. We must, therefore, look for proof that the Applicants suffered from one or more periods of substantial disturbance to the business of the CRC station of not less than 14 days.

19. We are prepared to treat Mr. Lambert, solicitor for the Applicants, as an independent eye-witness of the traffic conditions when he visited the site. See pp. 390-405 of the Applicants' Bundle IV. But he made three visits, respectively on the 2nd August 1991, 11th February 1992 and 3rd February 1993 only. So his accounts are of no real help. The manager of the CRC station stated that "the total period in which either ingress or egress was inaccessible was over 14 months. Also, for a very short period of time, about 1 or 2 weeks, access to the station was totally sealed off ..... It was only later that a small gap was made ..... This gap, however, was so small that only private vehicles (sic) could use it." See pp. 407-408 of the Applicants' Bundle IV. We do not know when did the 14 months begin or end. We are left to assume that compensatable disturbance and loss occurred for the 14 months continuously; but we are baffled by "either ingress or egress was inaccessible." When there was no ingress, we might be ready to find that motorists could not use the CRC station even if they wanted to. But few, if any, motorists would check that egress was available before they enter a petrol station. So blockage of egress may result in no disturbance or loss to the CRC station. We should have categorical evidence as to when ingress was not available and when egress was cut off.

20. The assistant manager of the CRC station had only this to say, "I remember at one point, Castle Peak Road was not accessible by traffic. It was totally sealed off." See pp. 407-408 of the Applicants' Bundle IV. Another witness observed that, "During the course of the construction, traffic was from time to time diverted off the old Castle Peak Road taking a number of different routes, depending upon the contractors' needs to work on a particular part of the construction....." See pp. 418-419 of the Applicants' Bundle IV. The director of the First Applicant said that there was disruption for several months from the end of 1990 to the middle of 1991 and then there was total sealing of access to the station towards the end of 1991 for more than one week. See pp. 423-424 of the Applicants' Bundle IV. All these accounts leave us with only very vague and inconsistent pictures of what actually happened. And they do not tally with the case presented by Mr. Merry that adverse effects began to occur from stage 4, i.e. 11th June 1991 onwards. Of course, we are not holding counsel against his clients in these circumstances; but the case canvassed by counsel is in line with the work time table from the resident site engineer and evidence of fuel purchases by the CRC station.

21. In summary, we only have references to points of time by witnesses for the Applicants with a margin of error that can be months. There is no explanation from the Applicants as to why no effort was made to record, with a suitable time frame, when traffic diversions adversely affected the CRC station at each stage of the NTCR Improvements work. The only matter we can deduce from evidence for the Applicants is that during stage 6 of the traffic diversions, i.e. between 19th and 26th of November 1991, there was total traffic seal off for the CRC station; even this is disputed by the resident site engineer we have mentioned. In any event, the seal off period counts less than 14 days.

22. Mr. Merry suggests that it would be unrealistic and oppressive to demand detailed records or accounts of the disruption because it is inevitable that the victim of road work disturbance will have repetitive general complaints. With all due respects, we cannot ignore the 14 days statute bar already mentioned. There is nothing unrealistic or oppressive in requiring the Applicants to pin point precise dates when traffic diversions affected the business of the CRC station. They had advance notice of the NTCR Improvements work. The record shows that they had legal advice as earlier as June 1991. They had staff on site every day at all material times. Since their solicitor could do site visits to take photos and make detailed observations of the traffic arrangements and conditions, their own staff could have been instructed to do the same at, say, weekly intervals.

23. Even if we assume that, apart from stage 6, each stage of inconvenient traffic arrangement lasted more than 14 days without mitigation, we need proof of adverse effects of more than a trivial manner to the CRC station at each stage. Moreover, bearing in mind the Caltex station competition, it is incumbent upon the Applicants to furnish sufficient materials whereby the Tribunal may isolate the loss of trade suffered by the CRC station due to competition from the Caltex station and the loss of trade suffered by the CRC station due to inconvenience or blockage at different stages of the NTCR Improvements work. For both purposes, nothing can be more convincing than evidence showing decrease in fuel sales by the station. Such evidence may be either fuels sold by quantity or sales revenue broken down on weekly or, better still, daily basis. However, we are told that data of actual retail fuel sales for the relevant periods of the CRC station are simply not available. See p. 280 of the Applicants' Bundle IV. This is baffling. The Applicants must have kept such accounts for tax purposes. The CRC station is one of a chain. The First Applicant would in any event keep in view daily or weekly retail fuel sales for management control. The record shows that the Applicants had legal advice as earlier as June 1991. This is not a case where the need for proof was recognized after the evidence had been lost or discarded. There is no acceptable excuse for failing to collect and preserve necessary data.

24. Instead, Mr. Wardell, an accountant from Deloitte Touche Tohmatsu and expert for the Applicants, has to base his report on figures of fuel stock purchases by the CRC station between March 1988 and December 1993. We append below some figures taken from Appendix 4, p. 302 of the Applicants' Bundle IV, for ease of reference:-

25. The Applicants maintain that these purchase figures reflect the demand at the material times for fuel products sold by the CRC station. To a certain extent, this must be true. However, they are of little assistance in this case. In the first place, they are monthly rather than weekly or, better still, daily figures. They do not eliminate our concern with the 14 days statutory bar. In the second place, purchases by the CRC station go into the stock of the station, depending on the capacity of the fuel holding tanks at the station, there is room for the Applicants to arrange supplies to corroborate their claim for disturbance payment. In the third place, these figures do not help us to relate the business of the CRC station to the various factors that may cause loss of trade to the station. For instance, the uneven stage 7 figures would appear as a jagged curve when plotted on a graph, this may mean that the traffic arrangement for this stage did not have uniform effect throughout this stage, but if remedial measures had been taken to reduce the problem of access to the CRC station we do not understand how business for the station would drop again. Could there be some other adverse factor at play? From the figures for June 1991, there was indeed a great drop in fuel purchases upon the commencement of stage 4. However, the Caltex station also started business in that month. In the absence of other materials, we cannot determine by what proportion, if any, the loss of trade suffered by the CRC station can be attributed to the NTCR Improvements work.

26. Ideally, there should be evidence relating to the turnover of the Caltex station. Obviously, the Caltex people are reluctant to disclose their trade secrets. Apparently, the Respondent did try to obtain relevant data from some government department but was refused on the ground of need to preserve secrecy for the informant. The second best evidence, to provide some kind of usable reference, would be to keep count of number of vehicles that patronize the CRC station and the Caltex station respectively over the relevant periods. The Respondent could have arranged for this to be done. The Applicants probably expected and now argue that the Respondent should arrange to have that done, forgetting that they themselves have the burden of proof. For a claim for millions, it is also well worth the Applicants' while and outlay to gather necessary evidence. May be something was done in this regard, may be not. The Applicants have had solicitors acting for them since early 1991, we do not know what sort of legal advice they have been given. The problem remains that we now have to determine a claim for which crucial evidence is wanting. In view of the fact that the Applicants do not even produce fuel sales data, we wonder if there has been a deliberate attempt to gloss over weaknesses in the Applicants' case.

27. We have come to within a hair's width of conclusively dismissing the claim for disturbance payment even though we have not quite voiced our doubts in the Applicants' case during the course of the trial. We are aware of certain comments by the Court of Appeal (comprised of Nazareth V-P, Godfrey and Liu JJA) in CHU Man On v. TAM Yu Hung, Civil Appeal No. 248 of 1995 on the practice and procedure of the Tribunal:-

"This court has considered the judgment of the Presiding Officer with care, especially in the light of the fact that the tenant appeared before the Presiding Officer, and before us, in person. We have formed the view that the course which the trial seems to have taken was profoundly unsatisfactory. It was submitted to us, and so far as we can see the submission is borne out by the notes of the evidence, the suggestion that the story put forward by the landlord was not genuine was not put to the landlord or to his witnesses, either by the landlord or by the Presiding Officer himself. So the landlord may have suffered an injustice. On the other hand, it also seems to this court that the story told by the landlord is so extraordinary that it does merit proper investigation...."

In so saying, the Court of Appeal seems to direct that the Tribunal has a duty to investigate into any extraordinary account by a party and to make known its disbelief to any party whose case the Tribunal should find to be incredible.

28. The Lands Tribunal does not and cannot function like the Labour Tribunal or the Small Claims Tribunal. The ordinance constituting and governing the Lands Tribunal does not contain any provision like section 20(3) of the Labour Tribunal Ordinance, Cap. 25 or section 16(3) of the Small Claims Tribunal Ordinance. Cap. 338 which enables and obliges the tribunals concerned to investigate and inquire into any matter whether or not the matter has been raised by a party. Indeed, section 10(1) of the Lands Tribunal Ordinance, Cap. 17 provides that the Tribunal, as far as it thinks fit, may follow the practice and procedure of the High Court in the exercise of its civil jurisdiction. The Tribunal, despite its name, is a conventional court bound to conduct trials in the adversarial mode. In this respect, we should not lose sight of what Lord Denning has said in Jones v. National Coal Board [1957] 2 Q.B. 55 at pp. 63-64,

29. We would commit the error of descending into the arena by conducting an investigation or inquiry in any case as the Court of Appeal now seemingly desires us to do. Should we be obliged to investigate in this case, we would have to obtain missing crucial evidence about the effect of the Caltex station competition, consider whether the chemical composition of fuel products (e.g. the suphur content, lubricating or engine cleansing additives) offerred by different petrol stations and promotion devices like give-aways and bonus points may affect competitiveness and if so make further inquiries as to whether those factors were present at the material time. We do not have the power nor the resources to do so. Within the bounds of propriety, counsel can put to the other side anything on instructions from client. We cannot take instructions from any party. A judge taking the offensive for a party, whether that party is represented by counsel or not, may put the other party at a grave disadvantage even though that other party has the best counsel on its side.

30. As we understand the system of trial we should follow, it is at the end that the Tribunal should make up [its] mind where the truth lies. When still hearing evidence, we should not form an opinion, however tentative, at that pre-mature stage the strength of a party's case or whether a party's case is genuine or not. We cannot even think aloud as to any doubts we may have about the veracity of any witness whilst neither party has closed its case for that might, at the very least, invite criticism of jumping to conclusions and, worse still, amount to a hint to one party to take steps to strengthen its case to the unfair prejudice of the other party. In many cases, judgment is reserved, as happened in CHU Man On v. TAM Yu Hung and in the present case, to enable the Tribunal to consider all the evidence very carefully before coming to its decision. In these cases, we wonder if we should, before we pen the judgment for the case, gather all the parties in open court again and put to one that its case is extraordinarily incredible. If so, what purpose would it serve? So that either party may adduce more evidence or make another final submission to dispel our belief? The Applicants in this case, like the landlord in CHU Man On v. TAM Yu Hung, are legally represented. Those acting for the Applicants and the landlord in CHU Man On v. TAM Yu Hung conduct their clients' case and adduce all the evidence as they deem appropriate. Having seen to it that they have had the opportunity to do so, the Tribunal decides one way or the other on the basis of all the relevant evidence counsel have taken care to present. We hope it will not be considered unfair that we have not given warning to a party before coming to our decision.

31. In the premises, having considered all the evidence, without further ado, we find the claim for disturbance payment unsubstantiated. We allow the claim for mitigation expenses at $1,000 as put by counsel for the Applicants. Normally, costs follow the event. However, the Applicants have secured a nominal victory only. Trial certainly could have been avoided had the claim been limited to $1,000 for mitigation expenses. It is only fair in the peculiar circumstance of this case that each party should bear its own costs. Counsel for the Respondent has urged us to reserve the question of costs. We think it might save further costs for both parties if we make an order nisi in terms we have just indicated. We grant such order, to be made absolute unless application is filed within 21 days from the date of handing down of this judgment, to the contrary. Liberty to apply is also reserved for ancillary and consequential matters.

Dated: 11 July 1996

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