CHAN SHIU CHONG v. DIRECTOR OF LANDS

CAMP 54/2019
CAMP 55/2019
CAMP 56/2019
(Heard Together)

[2019] HKCA 758

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 54 OF 2019

(ON AN INTENDED APPEAL FROM LANDS RESUMPTION APPLICATION NO 1 OF 2012)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 55 OF 2019

(ON AN INTENDED APPEAL FROM LANDS RESUMPTION APPLICATION NO 2 OF 2012)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 56 OF 2019

(ON AN INTENDED APPEAL FROM LANDS RESUMPTION APPLICATION NO 3 OF 2012)

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(Heard Together)

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J U D G M E N T

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Hon Kwan VP:

1.  I agree with the judgment of Yuen JA.

Hon Yuen JA:

Introduction

2.  There are three applications for leave to appeal from the Lands Tribunal.  In

-   CAMP54 of 2019 (arising from Lands Resumption Application No.1 of 2012), the applicant was the owner of the ground floor and cockloft of No. 187A Hai Tan Street;

-   CAMP55 of 2019 (arising from Lands Resumption Application No.2 of 2012), the applicant was the owner of the ground floor of No. 248 Tung Chau Street; and

-   CAMP56 of 2019 (arising from Lands Resumption Application No.3 of 2012), the applicant was the owner of the ground floor and cockloft of No. 220 Hai Tan Street.

The properties are referred to collectively as “the Subject Properties”. 

Background

3.  The Subject Properties, in Sham Shui Po District, were situated in 5-storey buildings in a parade of old tenement buildings, the immediate vicinity of which was “dominated by out-moded low-rise commercial/residential buildings with ground floor shops devoted mainly to car repairing workshops, engineering workshops and retailing of engineering accessories”¹.

4.  The Subject Properties were resumed on 19 February 2011 (“Resumption Date”).  Claims for compensation under the Lands Resumption Ordinance Cap. 124 were made to the Tribunal. 

5.  The hearing before the Tribunal took place on 27 - 30 August 2018 and 7 November 2018, in the course of which a site inspection took place on 28 August 2018.  

6.  The claims were determined by the Tribunal in a Judgment given on 19 November 2018 (“the Judgment”). The Tribunal decided that compensation should be assessed by reference to the Subject Properties’ existing use value (“EUV”) only, and not redevelopment value (“RDV”).

7.  It was common ground at the hearing before the Tribunal that when considering whether RDV should be used in the assessment, the judgment of this court² in Siu Sau Kuen v Director of Lands³should be followed.  Put briefly, the test (“the Siu test”) was restated as follows⁴:

whether on a balance of probabilities, the evidence before the tribunal disclosed that redevelopment of the property was likely at the date of resumption, which may be demonstrated by:

(i)   actual proposals for redevelopment of the property⁵ (“Evidence Requirement (i)”); or

(ii)   evidence of redevelopment in the vicinity of the property which would support a finding that redevelopment⁶ was likely within a reasonably foreseeable time from the date of resumption (“Evidence Requirement (ii)”).  

8.  In the present case, the claimants’ case was not based on Evidence Requirement (i).  For reasons set out in the Judgment, the Tribunal found that they failed to satisfy Evidence Requirement (ii) as well.  Compensation was therefore awarded on the basis of EUV.

Applications for leave to appeal

9.1.   On 14 December 2018, the applicants applied for leave to appeal.  After considering written submissions from both sides, the Tribunal refused to grant leave for reasons given in its Decision dated 18 March 2019.

9.2.   On 1 April 2019, the applicants filed with this court their applications for leave to appeal.  On 2 April 2019, they filed summonses for leave to adduce fresh evidence, being an affirmation of their solicitor exhibiting certain land search records which will be discussed later in this Judgment⁷.

10.1.   Section 11AA(6) of the Lands Tribunal Ordinance Cap. 17 provides that leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success, or there is some other reason in the interests of justice why the appeal should be heard. 

10.2.   Section 11(2) provides that a party may only appeal to the Court of Appeal on the ground that the tribunal’s judgment is erroneous in point of law.

Discussion

11.  The applicants raised four grounds of appeal which will be dealt with in turn.

Ground (1)

12.1.   The applicants contend that the Tribunal erred in law in its application of the Siu test by elevating the standard of proof to beyond reasonable doubt.  Although the Tribunal did not refer to this higher standard of proof in the Judgment, the applicants say it can be inferred from the Tribunal’s following observation at §21: 

“During the site inspection on 28 August 2018, however, we observed that there are still parades of 5 or 6-storey buildings at Hai Tan Street or Yee Kuk Street not being redeveloped in 2018 even though they all appear in poor building condition. In our opinion, it cannot be true that any building with the same physical attributes of, and sharing the same town planning considerations as the Subject Properties shall all have redevelopment potential as at the Resumption Date ...”.

12.2.   The applicants say that this was tantamount to requiring them to prove why some other unspecified properties in the vicinity⁸ had not been redeveloped⁹, and this “effectively heightened the burden of proof to a higher threshold of beyond reasonable doubt”¹⁰.

12.3.   In this connection, the applicants seek leave to adduce fresh evidence in the form of land search records which show that at the time of inspection, the buildings at 223-225A Hai Tan Street were being acquired for redevelopment.  In June 2018, 18 out of 20 units in these buildings were assigned to a development company¹¹ and in February 2019, a Compulsory Sale Application LDCS3000/2019 was issued for the remaining two units.  The applicants submit that if the Tribunal had raised the above observation during the hearing, they would have done a land search and adduced the land search records. 

13.  The respondent has not objected to the applicants’ application to adduce these land search records, so we will take them into account.

14.  However I do not accept the applicants’ submission that it was for the Tribunal to raise the above observation during the hearing. 

-   First, it is not the applicants’ argument that the Tribunal was as a matter of law not entitled to take into account buildings in the vicinity of the Subject Properties during the inspection.  Nor is it suggested that its observation was factually incorrect.

-   Secondly, the burden was always on the applicants to prove, on a balance of probabilities, that there was redevelopment in the vicinity to support their claim that redevelopment of the Subject Properties was likely within a reasonably foreseeable time from the date of resumption.  

-   Thirdly, the applicants had tried to discharge that burden by relying on the redevelopments of The Prominence, Harbor Park and Park One.  In assessing the weight of the evidence provided by these redevelopments, the Tribunal was entitled to get the flavour of the vicinity by way of a site inspection.  The Tribunal noticed that seven years after the Resumption Date, there were still a number of un-redeveloped buildings in the vicinity of Hai Tan Street and Yee Kuk Street (not restricted to 223-225A Hai Tan Street)¹².

15.  Further, had the applicants been in possession of the land search records of 223-225A Hai Tan Street at the time of the hearing, their relevance would still be subject to the Tribunal’s determination whether the time element has been satisfied, in other words, whether acquisition activities of 223-225A Hai Tan Street in 2018 (even allowing some time for pre-acquisition negotiations) were sufficiently proximate to be regarded as proof of the likelihood of redevelopment of the Subject Properties within a reasonably foreseeable time of the Resumption Date in 2011 for the purposes of Evidence Requirement (ii).  

16.  More importantly, the applicants contend that the above observation somehow indicated that the Tribunal had raised the standard of proof of Evidence Requirement (ii) to the higher standard of beyond reasonable doubt.  I do not see any ground for this contention.  The Tribunal has in its discussion at §16 and §20 of the Judgment, expressly reiterated that the standard of proof is on the balance of probabilities.  It has not referred to the higher standard anywhere in the Judgment.  There is no material on which this court could infer that the Tribunal had applied the higher standard or had been “effectively asking for justification from the applicants as to why there were still buildings in the vicinity not redeveloped”.  The Tribunal was simply assessing the applicants’ case that redevelopment of The Prominence, Harbor Park and Park One showed that Evidence Requirement (ii) was satisfied for the Subject Properties.

17.  Nor is there anything in the argument based on the word “must” in §§21-22 of the Tribunal’s decision refusing leave to appeal.  The Tribunal was simply emphasizing the fact that the applicants’ entire case rested on the proposition that the Subject Properties shared similar physical attributes and town planning considerations as The Prominence, Harbor Park and Park One, and these were the only materials advanced by the applicants to support a claim based on RDV.

18.  For the reasons above, I take the view that Ground (1) has no reasonable prospect of success and there is no other reason in the interests of justice why the appeal should be heard.  

Ground (2)

19.  The applicants contend that the Tribunal erred in law in requiring them to adduce evidence that there were private developers interested in acquiring the Subject Properties.  They referred to §23 of the Judgment which reads as follows:

“In any event, the Applicants or Mr Lee [their expert] simply had no evidence to show that there was any interest from any private developer acquiring the Subject Properties either before February 2006, the month when URA announced the Development Scheme, or after that but before the Resumption Date. There was no sale and purchase transaction in any of the Subject Properties or their adjoining ones for over a long period of time”. (Emphasis added).

20.  It is clear from the italicized words that in that paragraph, (a) the Tribunal was addressing the time element rather than asserting that the applicants needed to adduce evidence of actual interest from private developers and (b) the Tribunal also examined the situation in regard to other properties and not only the Subject Properties. 

21.  Further the applicants contend that “when looking for evidence of interest in or before February 2006, as the Tribunal did in the Judgment, it was erroneously drawing the time line of assessment to 5 years before the Resumption Date”.  However, it is clear from the italicized words above that the Tribunal referred to “before” and “after” February 2006 until Resumption Date.

22.  Accordingly I take the view that there is also no reasonable prospect of success for Ground (2) and no other reason in the interests of justice why the appeal should be heard. 

Ground (3)

23.1.   This ground reads as follows:

“... the Tribunal erred in law in applying the Siu Sau Kuen test in that the Tribunal erroneously required the redevelopment scheme inclusive of the resumed property has to be the most realistic when the second limb of the Siu Sau Kuen test only requires a viable scheme”. (Emphasis added).

23.2.   In putting forward this ground, the applicants rely on §20 of the Judgment where the Tribunal said:

“... For instance, the site for redevelopment for either nos.187A or 187B Hai Tan Street is merely 92.13 sq m and the combined site area is 184.26 sq m which is still too small for a development like The Prominence, Harbor Park or Park One. Even Mr Lee was of the view that a merger of 4 to 6 adjoining lots would be more realistic”. (Emphasis added).

24.  In the first place, the applicants have misquoted the Tribunal in that it never referred to a “most realistic” scheme.  Secondly the Tribunal was clearly aware that the Siu test is couched in terms of a “viable” scheme, as it expressly referred to that in §16 and an earlier part of §20 of the Judgment.  In the passage quoted above, the Tribunal was not applying a different standard but was commenting on the likelihood of the applicants’ case of redevelopment of just 187A or 187B Hai Tan Street on its own or together.  In considering how likely it would be for the Subject Properties to be redeveloped in that way, the Tribunal was clearly entitled to consider the greater attractiveness of a larger site to developers.

25.  In my view, there is no prospect of success in this ground and no other reason in the interests of justice why the appeal should be heard.

Ground (4)

26.  Finally the applicants contend that the Tribunal erred in law in failing to consider some relevant factors¹³ and considered some irrelevant factors¹⁴.  The “irrelevant factors” are a repetition of Grounds 1 - 3 above.  The “relevant factors” comprised the applicants’ arguments as to what inferences they wanted the Tribunal to draw, and extracts of admissions or acknowledgments here and there from cross-examination of the experts. 

27.  The Tribunal is entitled to set out the main thrust of its decision in a judgment, without having to set out, discuss and then reject, each and every contention raised.  On top of that, it is a specialist tribunal.  Unless there were plainly obvious errors in respect of material factors which the Tribunal failed to take into account, it is not open to applicants to ask the Court of Appeal to re-hear all the arguments they had advanced before the Tribunal by dressing up the omission of the Tribunal to address each such argument as an error of law. 

28.  As I do not see any plainly obvious errors, there is no reasonable prospect of success in Ground (4) and no other reason in the interests of justice why the appeal should be heard. 

Order

29.  The applications for leave to appeal are dismissed with costs to the respondent which are assessed at $96,000.

30.  As these applications are totally without merit, there shall be a further order pursuant to Order 59 rule 2A(8) that no party may request under r2A(7) that this determination be reconsidered at an oral hearing inter partes.