CHANCEMORE LTD v. YEE ON ENTERPRISES LTD

LDCS 17000/2015

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE MAIN APPLICATION

NO. LDCS 17000 OF 2015

________________________

REASONS FOR DECISION

________________________

1.  On 31 July 2017, I delivered the judgment (“the Judgment”) on an application for compulsory sale of all the undivided shares of and in the Section Q and Section R of Inland Lot No 730 (collectively “the Lot”) for the purposes of redevelopment pursuant to section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 (“the Ordinance”).

2.  More particularly in the Judgment, I granted an order for sale of all the undivided shares in the Lot be made by auction pursuant to section 5(1)(a) of the Ordinance and inter alia, ordered Mr Ho Hing Choi Peter (何慶材) and Mr Yip Tung Sang (葉冬生), nominated by the applicant, be appointed trustees (“the Trustees”) to discharge the duties imposed on trustee under the Ordinance in relation to the Lot.

3.  On 14 September 2017, the applicant applied by summons (“the 1st Summons”) for the following orders:

(1) Paragraph 5 of the Judgment which appointed the Trustees be amended to appoint Mr Cheung Chi Yu Archie and Ms Yau Yuen Mei Connie as new trustees (“the New Trustees”) in substitution and the New Trustees be authorized to charge such remuneration for their services in accordance with the terms set out in the letter of Messrs Cheung & Co dated 12 September 2017;

(2) Messrs Edward C T Wong & Co be appointed as the solicitors for the New Trustees (“the New Trustees’ Solicitors”) to assist the New Trustees in discharging their duties imposed by the Ordinance in substitution for Messrs Michael Cheuk, Wong & Kee (“MCWK”) appointed under paragraph 6 of the Judgment and the New Trustees’ Solicitors be authorized to charge such remuneration for their services in accordance with the terms set out in the letter of Messrs Cheung & Co dated 12 September 2017.

4.  On 20 September 2017, the respondent applied by summons (“the 2nd Summons”) for a similar but different order comprising as follows:

(1) Mr Anthony W K Chow and Ms Anna S H Chow (“Messrs Chow”) of Guantao & Chow, Solicitors and Notaries be appointed trustees in substitution for the Trustees to discharge the duties imposed on under the Ordinance in relation to the Lot and Messrs Chow be authorized to charge such remuneration for their services in accordance with the terms set out in the letter from Guantao & Chow, Solicitors and Notaries dated 19 September 2017;

(2) Reed Smith Richards Butler (“RSRB”) be appointed as the solicitors in substitution for MCWK to assist Messrs Chow to assist in discharging their duties imposed by the Ordinance and RSRB be authorized to charge such remuneration for their services in accordance with the terms set out in the letter from RSRB dated 12 September 2017;

(3) The Trustees do disclose to the respondent and Messrs Chow within 7 days from the date of the Order to be made herein all documents and correspondence in their possession, custody or power in relation to any and all proposals received by them from one or more parties proposing to act as auctioneer for the sale of all the Lot by public auction pursuant to the Judgment, including but not limited to those from Savills Valuations and Professional Services Limited (“Savills”);

(4) C S Auctioneers Limited (“C S Auctioneers”) be appointed the new auctioneer in substitution for Savills;

(5) The sale of the Lot by public auction by Savills fixed for 29 September 2017 (“the Auction”) be cancelled;

(6) The Particulars and Conditions of Sale of the Lot be amended and submitted to the Tribunal for approval;

(7) The points of law arising from the applicant’s Summons filed on 14 September 2017 and this Summons be determined by the President or a presiding officer on a date to be fixed pursuant to section 9(6) of the Lands Tribunal Ordinance.

5.  I granted an order in terms of the 1st Summons but the respondent’s Summons (ie the 2nd Summons) was dismissed on the same date. I now hand down the reasons.

Background to the two Summons

6.  The background to the two Summons mentioned above can be discerned from the Affirmation of Kwan Long Yee Corrina, the partner of Messrs Ip, Kwan & Co (“IKC”) attached to the 2nd Summons.

7.  As per the Affirmation of Ko Ping Yin, the Property Manager (Project Management) of the applicant attached to the 1st Summons, the Trustees tendered their resignation following an allegation by IKC for the respondent that the Trustees were in a conflict of interest situation in that Messrs Mayer Brown JSM (“JSM” in which firm of solicitors the Trustees are partners) acted for Eminence Enterprise Limited, a listed company to which the applicant is a wholly owned subsidiary.

Respondent’s Submission

8.  Mark Strachan SC together with Jeffrey Chau (“Messrs Strachan and Chan”) elaborated the respondent’s position in their submission dated 22 September 2017.

Unseemly Haste in Pushing Forward the Auction

9.  According to Messrs Strachan and Chan, there was an unexplained delay on the part of the Trustees in convening the first meeting with the applicant and the respondent. Whereas the meeting was held on 25 August 2017 albeit that the Judgment had been delivered on 31 July 2017, the respondent was given the agenda for the hearing only late on 22 August 2017 whereby the Trustees pushed forward the Auction with unseemly haste with a view to completing the sale by 30 October 2017 on the excuse that section 5(4)(a) of the Ordinance requires that the Lot be “sold’ within the 3 months immediately following the date of the order.

10.  Messrs Strachan and Chan submit the assertion by MCWK that the word “sold” refers to completion of sale is incorrect because the plain wording in the Ordinance means “sold by auction” instead. Messrs Strachan and Chan plead §9 in Pacific Crown Enterprises Limited v Topbase International Limited, LDCS 32000/2011 (unreported, dated 13 December 2012) and §14 of the Minutes of the meeting of the Bills Committee on the Ordinance in support.

11.  Further, according to Clause 8(a) of the Particulars and Conditions of Sale approved by the Tribunal, the Lot is “sold” when it is sold in the Auction, that is “immediately on the fall of the hammer” when the Memorandum of Agreement is signed.

12.  As a result of the above misconception, Messrs Strachan and Chan submit, the Trustees imposed a speedy timetable which, among other things, did not afford the respondent sufficient time to consider and deal with various issues, including nominating 3 auctioneers by 28 August 2017, which had been proposed by the Trustees and which the respondent had wanted to do.

Appointing Savills as Auctioneer

13.  As a result of the time constraint, the respondent only managed to nominate one auctioneer, C S Auctioneers.

14.  In spite of the above, the Trustees appointed Savills as the auctioneer but Savills merely proposed to do the statutory minimum under Schedule 2 of the Ordinance, ie

“The public shall be given notice of the auction by means of an advertisement—

(a) published—

(i) in not less than 1 Chinese language newspaper (and in the Chinese language), and in not less than 1 English language newspaper (and in the English language), circulating generally in Hong Kong; and

(ii) not less than once in each of the 3 weeks immediately preceding the date on which the auction is to be held; and …”

15.  In comparison, the marketing and promoting proposals of C S Auctioneers were much more aggressive.

16.  IKC had requested MCWK to provide the respondent with all the auctioneers’ proposals which had been received by the Trustees of no avail. The respondent alleges that the Trustees had breached its fiduciary duties owed to the respondent, particularly when the respondent finds that Savills was recently engaged by Eminence as one of the 2 entities to handle the redevelopment value and the existing use value of the Lot for the purpose of Eminence’s “possible very substantial acquisition’ of the Lot. The other entity is Knight Frank Petty Limited (“Knight Frank”) which was initially proposed by the applicant as auctioneer but whose Mr Alnwick Chan had acted as the applicant’s expert witness in the present case.

Discovery of the Trustees’ Conflict of interest

17.  In JSM’s letter in respect of the Trusteed’ appointment, JSM claimed that “(they) are not aware of any conflict of interest in [Mr Ho and Mr Yip’s] appointment” as the Trustees.

18.  On or about 5 September 2017, IKC discovered that Eminence’s public announcement on 22 August 2017 stated that:

“…. The auctioneer will be selected by the trustees. Each of the trustees is a partner in a law firm which provides legal advice to [Eminence] but is otherwise a third party independent of [Eminence] and connected persons (as defined in the Listing Rules0 of [Eminence], its subsidiaries and their respective associates (as defined in the Listing Rules) ….”

19.  In a letter dated 6 September 2017, MCWK stated that:

“we are instructed that [Eminence] is not a client of [JSM]. To the contrary, [JSM] currently has a matter in which it is acting adverse to Eminence. To be clear, [JSM] has from time to time been instructed on matters on behalf of companies which, according to the information provided to then, are subsidiaries of, or relates to, Eminence (including the applicant, by whom [JSM] had previously been instructed, which matter has long concluded), all of which are unrelated to the above compulsory sale proceedings.”

20.  While IKC contested that this response from MCWK is plainly inconsistent with the said announcement, MCWK, in its letter dated 8 September 2017, refused to clarify the inconsistency on the basis that it was ‘otiose” to do so as the Trustees had tendered their resignation on 6 September 2017 “in order to ensure the expeditious carrying out of the terms of the Tribunal’s Order ….”

21.  The respondent has also recently discovered that JSM has handled financing matters for the applicant, Eminence and its subsidiaries, including the debenture and mortgage in 2016 in respect of the Lot.

22.  By reason of the foregoing, Messrs Strachan and Chan submit that the Trustees have a serious conflict of interest.

Proceeding with the Auction Despite the Trustees’ Resignation

23.  The respondent complains that despite all the aforesaid, the Trustees and MCWK or more probably the applicant, still insisted on proceeding with the Auction on 29 September 2017 with the New Trustees simply adopting the work done by the Trustees, MCWK and Savills.

24.  Firstly, the respondent regards the appointment of the New Trustees and the New Trustees’ Solicitors just a fig leaf with no substantive effect whatsoever. This is highly improper, particularly in light of (1) that the Trustees were acting in conflict of interest and (2) the questionable conduct of the Trustees and MCWK in handling the Auction, including the appointment of Savills as the auctioneer.

25.  Also, irrespective of the above, and on the applicant’s own case:

(1) The Notices of Auction, which have already been published in the newspapers, contain what has now become incorrect information as to the identity, address, contact person, etc of the Vendor’s Solicitors (MCWK) and (unless Savills remains as auctioneer) the identity, address, contact person, etc of the auctioneer (Savills);

(2) The Particulars and Conditions of Sale, which have been approved by the Tribunal and which the Notices of Auction have already invited the bidders to obtain, contain what has now become incorrect information as to the identity and address of the Trustees, the identity, address, etc of the Vendor’s Solicitors (MCWK) and (unless Savills remains as auctioneer) the identity, address, contact person, etc of the auctioneer (Savills);

26.  In consequence, the Notices of Auction will have to be amended and republished and the Particulars and Conditions of Sale will have to be amended and re-approved. The public will thereby be given, as is necessary, notice of the change of trustees, the change of trustees’ solicitors and (if any) the change of auctioneer.

27.  The respondent submits that the applicant’s suggestion of having MCWK and Ms Kitty Lam of that firm to continue to provide certain services after MCWK’s removal cannot work.

28.  Furthermore, the Notices of Auction have informed the public that persons intending to make bids at the Auction need to have registered with MCWK and to have left with MCWK a cashier order or a certified cheque for the sum of HK$10 million made payable to MCWK. Insofar as any such persons have registered with MCWK and/or have made out cheques to the MCWK (or will in due course do so), they will have registered with, and will have made cheques out to, the wrong solicitors.

Points of Law for Determination of the President/Presiding Officer

29.  Messrs Strachan and Chan submit that the following points of law arising in this matter should be determined by the President or a presiding officer pursuant to section 9(6) of the Lands Tribunal Ordinance:

(1) Whether the phrase “when the lot the subject of an order for sale is not sold … within 3 months” in section 5(4) of the Ordinance refers to the auction/ signing the Memorandum of Agreement having to take place within 3 months of the Order, or whether it refers to the completion of the sale having to take place within 3 months (“Question 1”);

(2) Whether the minority shareholder has the power to nominate new trustees under section 4(10) of the Ordinance (“Question 2”);

(3) Whether the Trustees owe fiduciary duties to the majority and minority owners of the Lot (“Question 3”);

(4) If Question 3 is answered in the affirmative;

(a) whether the Trustees were acting in conflict of interest (“Question 4”);

(b) whether the Trustees are required to disclose the auctioneers’ proposals to the respondent (“Question5”).

30.  The respondent submits that, the hearing of the 1^st Summons and the 2^nd Summons should be adjourned for the points of law to be argued. And because of the foregoing, the Auction cannot go ahead on 29 September 2017.

The Respondent’s Proposed Trustees, Solicitors and Auctioneers

31.  The respondent submits that its proposed trustees, solicitors and auctioneers are preferable to the applicant’s.

32.  In this regard, Messrs Strachan and Chan submit that a minority owner is entitled to nominate the new trustees in substitution of the Trustees pursuant to section 4(10) of the Ordinance. As the applicant has failed to reveal its connection with both the Trustees and Savills, it is submitted that this is a situation in which the Tribunal should appoint the respondent’s proposed new trustees as opposed to the candidates proposed by the applicant, unless the Tribunal comes to a conclusion that the respondent’s proposed candidates are unqualified to do so.

33.  The respondent further submits that even if the Tribunal were to appoint the new trustees proposed by the applicant, the Tribunal should still go on to decide whether the respondent’s proposed solicitors and auctioneers should be appointed.

The Trustees’ Submission

34.  Also on 22 September 2017, MCWK filed submissions prepared by Jin Pao (“Mr Pao”) on behalf of the Trustees who have become the Interest Parties in this hearing.

35.  Firstly, on the issue of substitution:

(1) It is common ground between all parties that there should be a substitution of the Trustees, and their solicitors, with new trustees and solicitors;

(2) The Trustees take a neutral position as to the identity of the new trustees and their solicitors;

(3) Subject to the question of identity of the new trustees and solicitors, there should be no difficulty in amending the order for sale under section 4(10) of the Ordinance to provide for the substitution of the Trustees;

(4) With a view to facilitating the proper conduct of the Auction, the current solicitors of the Trustees, ie MCWK are prepared to continue to act on behalf of the new trustees for a short period (say, one week) after 29 September 2017, before their appointment is transferred to the new solicitors.

36.  Secondly, on the issue of disclosure, without prejudice to the Trustees’ position that there is no legal obligation to make such disclosure, and to assist the Tribunal, the Trustees have now disclosed all auctioneer proposal received by them. Therefore, this is no longer a live issue which needs to concern the Tribunal.

37.  Thirdly, on the issue of the auctioneer:

(1) On 1 September 2017, after receiving nominations from the parties, the Trustees appointed Savills as the auctioneer for the public auction to be conducted for the sale of the Lot;

(2) Savills was not nominated by either the majority or minority owners and was independently appointed by the Trustees.

(3) The commission proposed by C S Auctioneers, nominated by the respondent, was 1% of the transaction price, with 0.5% payable by each of the vender and purchaser. This comes to a total of HK$4,410,000 even based on the minimum reserve price determined by the Tribunal. This commission would be payable in addition to an auction fee of HK$30,000. Therefore, the estimated total fees involved would become HK$4,440,000.

(4) In contrast, Savills proposed to charge a flat fee of HK$150,000 exclusive of all out-of-pocket marketing costs, which were estimated at HK$67,000. Therefore, the estimated total expenditure for Savills is approximately HK$217,000.

(5) Unlike C S Auctioneers, Savills did not propose to charge any commission. That is why the services of C S Auctioneers were many times more expensive than Savills and this was one of the reasons why it was not chosen by the Trustees. In fact, their proposal to charge a commission on the transaction price highlights their lack of experience in this field of work.

(6) The proposal by C S Auctioneers does not give any particulars of relevant substantial past experience in conducting public auction arising from compulsory sale of land cases. This is unlike the extensive experience, supported by clear particulars, stated by Savills in their proposal to the Trustees.

(7) There is simply no evidence to suggest that Savills is unable to fairly, properly and independently conduct its role as auctioneer in the Auction on 29 September 2017.

(8) That Savills signed off on an Annex to a Circular issued by Eminence dated 12 September 2017 regarding the valuation of the Lot does not assist the respondent. This took place after the granting of the compulsory sale order by the Lands Tribunal and their appointment as auctioneer by the Trustees on 1 September 2017, and the Trustees could not have been aware of this at that time. In any event, it is unclear how their involvement in the valuation of the Lot for the purpose as described in the Circular would affect their ability to conduct the Auction in any way.

38.  Fourth, on the issue of the Auction:

(1) The Trustees point out that there has been, and will be, proper compliance with section 5(1)(a) and Schedule 2 to the Ordinance as to the notice of the Auction by way of a number of newspaper advertisements.

(2) The first 2 sets of advertisements were published on 8 and 15 September 2017, with 2 further sets of advertisements due to be published on 22 and 28 September 2017.

(3) The Trustees independently decided to publish these advertisements in Sing Tao Daily and SCMP, newspapers of wide circulation in Hong Kong.

(4) There is no suggestion by the respondent that any of the statutory requirements in the Ordinance have not been complied with in relation to the Auction.

(5) It is unfair to say that Savills simply placed a newspaper advertisement with no other marketing activities. The marketing activities proposed by Savills were reasonably extensive, including introducing potential purchasers drawn from their client list and mailing brochures to select clients; See Sections 6-7, Scope of Services in Savills’ Marketing Proposal.

(6) Bearing in mind the 3-month time limit for the Lot to be “sold” under section 5(4) of the Ordinance, it is important to proceed expeditiously to conduct the Auction in accordance with the statutory requirements under the Ordinance.

39.  Fifth, in relation to the allegations of the respondent:

(1) On 5 September 2017, the minority owner made certain allegations of “conflict of interest’ against the Trustees. The Trustees do not accept this. These allegations are disputed by the Trustees and were replied to in MCWK’s letter dated 6 September 2017;

(2) As stated in MCWK’s letter dated 7 September 2017:

“…. our clients anticipate and are concerned that further allegations of “conflict of interest”, against our clients, which are denied, may delay the auction process and would be detrimental to the interests of the majority and minority owners. In the premises, our clients do hereby tender their resignation as trustees.”

40.  Therefore, the Trustees do not accept that there was any conflict of interest on their part in their appointment by the Tribunal. The Trustees strongly object to any attempt to persuade the Tribunal to make a finding that there was any conflict of interest when there is incomplete evidence on the matter and it is not the responsibility of the Tribunal to make such a determination on this occasion.

41.  Any such allegation, which is of a serious nature and impacts on professional reputation, should not be made lightly and, in view of its severity, requires cogent and compelling evidence for it to be established. In the premises, it would be manifestly inappropriate to delve into the details of the allegation in question at this hearing particularly where the evidence on the matter is incomplete.

42.  All that the Tribunal needs to be satisfied of under section 4(10) of the Ordinance is that it would be “expedient” to make an order for substitution. In the present case, it is clear that all relevant parties (ie the majority and minority owners and Trustees) agree that there should be an order for substitution made by the Tribunal. In view of the agreement by the parties, it is unnecessary and undesirable to deal with the allegations of conflict of interest in these proceedings.

View of Tribunal

43.  I think it is trite and without dispute that the Trustees owe fiduciary duties to the majority and minority owners of the Lot. That is, I answer Question 3 posed by the respondent in the affirmative. Having said that however, I agree with and accept the submission made by Mr Pao that it is unnecessary and undesirable to deal with the allegations of conflict of interest (ie Question 4) in these proceedings whereas all relevant parties (ie the majority and minority owners and Trustees) agree that there should be an order for substitution made by the Tribunal.

44.  Similarly, I also agree with Mr Pao that whether the Trustees are required to disclose the auctioneers’ proposals to the respondent (ie Question 5) is no longer an issue[1]. All that the Tribunal needs to be satisfied of under section 4(10) of the Ordinance is that it would be “expedient” to make an order for substitution.

45.  I accept the other submissions by Mr Pao. I also agree with the Trustees that the word “sold” in section 5(4) should mean the date of completion of sale, not the date of auction because the section does provide for other means of sale and default on payment by the purchaser of the lot. A sale by public auction is not necessarily the only possible means of sale under the Ordinance. If the interpretation is otherwise, the Ordinance does not provide for a completion date and it is unreasonable to expect that the Ordinance would allow, for instance, a completion of sale many months after the auction taking place. I answer Question 1 against the respondent.§9 in Pacific Crown Enterprises Limited v Topbase International Limited, LDCS 32000/2011 is distinguished as the word “sold” in the Ordinance was not an issue there.

46.  Even if I am wrong, I consider the time frame as proposed for the Auction still acceptable.

47.  Further it is conceded by the respondent that the marketing proposed by Savills has satisfied the statutory requirement, minimum or otherwise as supplemented by Mr Pao as recited in §38 above. In any event, it serves everyone’s interest that the public auction is arranged as soon as possible after an Order for Sale or the market conditions pertaining to the determination of the reserve price under paragraph 2 of Schedule 2 to the Ordinance might have changed.

48.  I do not agree that the respondent has suffered any time constraint in, inter alia, nominating an auctioneer. By §5 of the Judgment, the respondent had nearly agreed everything on 27 May 2017 save for the question of the updated RDV to fix the reserve price. At the beginning of the trial on 4 July 2017, the respondent also changed tack – it no longer challenged the RDV assessed by the applicant’s expert as being too high. Instead, it said the RDV assessed was too low. Therefore, it should be reasonably expected that the Order for Sale by the Tribunal would be forthcoming and the respondent should have plenty of time in sorting out the appropriate auctioneer if it wished.

49.  All the more, while the applicant’s solicitors, Messrs Edward Ko & Company (“EKC”) was preparing the draft Particulars and Conditions for Sale, IKC had made comments on 8 August 2017. The two solicitors fell out and that may explain the “delay” alleged by the respondent. Eventually on 16 August 2017, the Tribunal approved the Particulars and Conditions for Sale acceding to the respondent’s request for HK$10 million for the amount of the initial deposit. That a public auction would take place soon should be reasonably expected.

50.  I do not find the appointment of Savills questionable as submitted by the respondent. I accept the explanations by Mr Pao in his submissions. In any event, the advantage of having a public auction as per section 5 of the Ordinance as opposed to other means of sale is that the auction is open and would be conducted in the sun. The Lot would go to the highest bidder. I do not consider having another auctioneer proposed by the respondent would achieve a better result, bearing in mind in particular the tracked experience of Savills in arranging auctions of similar kind.

51.  In this regard, I would also refer to §25 of Bond Star Development Limited v Capital Well Limited, LDCS 2000/2001 (unreported, dated 20 April 2006):

“We however agree with the Applicant that JLL is more suitable to be appointed as auctioneer for the sale than Mr. Liu or his firm. JLL is a large and reputable firm. We do not think that JLL would be biased or show favour to the Applicant just because they have worked for the Applicant or its associated companies before. After all, an auctioneer is just to conduct the auction in accordance with the rules and procedure of the auction. It is inconceivable that the Applicant would be able to influence the result of the auction through JLL when appointed as auctioneer.”

I consider the same comments applicable to Savills.

52.  I also agree with Mr Pao that charging an additional commission of 1% of the transaction price as proposed by C S Auctioneers appears introverted and inexperienced in arranging sale pursuant to an order for sale under the Ordinance. The sale by auction in the present case is a procedural step to implement the Order of the Tribunal[2]. Whereas the order was made pursuant to an application by the majority owner(s) of a lot, there has never been any abortive sale in the past in respect of order for sale under the Ordinance.

53.  Likewise, that Eminence, which wholly owns the applicant, will bid at the Auction is neither here nor there as both the majority owner and the minority owner are always potential and eager bidders.

54.  On the other hand, the additional commission would eat into the proceeds available for distribution to the majority owner and minority owner.

55.  At this juncture, I note that in the Affirmation of Kwan Long Yee Corrina attached to the 2^nd Summons, IKC raised the issue whether the applicant would agree to exchange the title deeds with the respondent before the title deeds and documents were made available for public inspection after the Notice of Auction was adverted. IKC even made a request for a Title Report from the conveyancing department of another law firm in support of the respondent’s argument that the Auction was arranged in haste. I agree that such a request was properly refused by EKC because under section 8(1) of the Ordinance,

“Where the lot the subject of an order for sale is sold—

(a) immediately upon the purchaser of the lot becoming the owner of the lot all the rights of any prior owner (including the prior owner’s assigns or personal representatives) in or over the lot or any part thereof shall absolutely cease except to the extent, if any, specified in the order; …”

I consider the request by IKC misconceived.

56.  Returning to section 4(10) of the Ordinance which provides for the authority of the Tribunal to amend an order for sale by appointing a new trustee or trustees either in substitution for or in addition to any existing trustee or trustees under the order for sale, not only a minority owner is entitled to make a nomination because:

“The Tribunal may make an order amending ….

(a) upon the application of the trustees under the order for sale or the majority owner or minority owner of the lot; and

(b) if the Tribunal is of the opinion that it is expedient to do so.”

 (underline added)

57.  The provision does not set the criteria that any of the proposed candidates are unqualified or otherwise before the Tribunal comes to its decision save that the Tribunal is of the opinion that it is expedient to do so. In any event, there is no complaint that the New Trustees or Messrs Chow are unqualified in anyway.

58.  As regards the consequential amendments to the Particulars and Conditions of Sale and the Notices of Auction etc, I do not consider such a technical matter would impede the proceeding of the Auction on 29 September 2017; last minute amendments to the Particulars and Conditions of Sale or the Notices of Auction in public auctions are not unprecedented or uncommon.

59.  I am also informed by the applicant that:

(1) no one has registered with MCWK as potential bidders,

(2) no certified cheque or cashier order has been deposited with them in relation to the auction and

(3) no party and/or firm of solicitors have attended their office to inspect the title deeds.

60.  In this event, even the suggestion of Ms Kitty Lam of MCWK to continue to provide certain services after MCWK’s removal is not necessary.

Order

61.  Having reviewed the above, I made an Order in terms of paragraphs 1 & 2 in the Summons by the applicant dated 14 September 2017. Subject to the decision of the New Trustees, the Auction may proceed on 29 September 2017 as scheduled subject to the Particulars and Conditions of Sale having been amended as regards the particulars of the New Trustees and the New Trustees’ Solicitors and the amendment should be advertised in the public at least 1 day prior to the Auction.

62.  The Summons sought by the respondent dated 20 September 2017 was refused.

Costs

63.  In the circumstances of this case, I believe it is fair and reasonable to make no order as to costs.  Unless any party applies for variation of the costs order within 14 days from the date hereof, such costs order nisi shall become absolute.

Intending Appeal on Points of Law

64.  When I gave the decisions earlier in the morning, Messrs Strachan and Chan instantly applied for a leave to appeal, stating for instance, points of law are involved.

65.  Under section 11AA (6) of the Lands Tribunal Ordinance provides that:

“Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

66.  I agree with the submission by Mr Mok for the applicant and Mr Pao that I have made my decisions based on mainly the facts before me. In this regard, in accordance with section 11(1) of the Lands Tribunal Ordinance, the decision of the Tribunal is final. Therefore, the application for leave to appeal by the respondent is refused.

[1] See §36 above.

[2] §19 in LSY v HTF, FCMC 2978/2005 (unreported, dated 4 July 2013).