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LDCS 19000 of 2012
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
LAND COMPULSORY SALE MAIN APPLICATION
NO. 19000 OF 2012
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| BETWEEN |
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Super Fortune Investment Limited
(超運投資有限公司) |
Applicant |
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and |
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Keynote Enterprises Limited |
Respondent |
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| Before: |
Deputy Judge KOT, Presiding Officer, Lands Tribunal and Mr. W. K. LO, Member of the Lands Tribunal |
| Dates of Hearing: 30-31 May 2013, 3 & 5 June 2013 |
| Date of Judgment: 18 June 2013 |
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J U D G M E N T
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Background
1. This is an application made under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”) for an order of compulsory sale of all the undivided shares in 2 lots of land, namely :
(a) the Remaining Portion of Section K of Kowloon Inland Lot No. 1109 (“the 1st Lot”) and
(b) Sub-section 1 of Section K of Kowloon Inland Lot No. 1109 (“the 2nd Lot”).
2. The 1st Lot carries the postal address of No. 58 Ma Tau Kok Road whilst the 2nd Lot carries the postal address of No. 60 Ma Tau Kok Road, Hong Kong. The 2 lots are collectively called the Subject Lots in this judgment.
3. The existing building (“the Building”) on the Subject Lots is a pair of tenement blocks served by 2 common staircases. It comprises of 5 storeys from ground floor to 4th floor. The Ground Floor of each of the 2 blocks is for non-domestic use whilst the First to Fourth Floor of each block has 1 domestic unit. One undivided share is allotted to each of the units from ground floor to 4th floor, making a total of 10 undivided shares. The Occupation Permit of the Building was issued on 12 June 1956.
4. The applicant owned all the undivided shares in the Subject Lots save and except the one share of the ground floor shop at No. 58 Ma Tau Kok Road, which is owned by the respondent (“R’s Shop”). Thus, the applicant is the owner of 9 out of the 10 undivided shares in the Subject Lots representing 90% of all the undivided shares of the Subject Lots.
5. The Building is part of 12 contiguous tenement buildings in 6 pairs erected on No. 50-64 Ma Tau Kok Road and No. 162-168 Pau Chung Street forming an L-shaped site. The applicant had successfully acquired all the other 5 pairs of tenement building (“the Adjacent Lots”).
6. It is agreed at trial that :
(a) the applicant is entitled to make the present application by virtue of s. 3(2) of the Ordinance;
(b) as at 1 February 2012, the existing use value (“EUV”) of the R’s Shop is HK$27,965,000 and the EUV of the shop at No. 60 Ma Tau Kok Road (A’s Shop) is HK$27,277,000;
(c) the EUV of the domestic portion as at 1 February 2012 is HK$18,800,000;
(d) the total EUV of the Building is HK$74,042,000 and the entitlement of the respondent in the share of the sale proceeds upon a sale of the Subject Lots should be at 37.77%;
(e) the redevelopment value (“RDV”) of the Subject Lots as at 10 May 2013 taking into account only the redevelopment potential of the Subject Lots on their own is HK$113,810,000 which should be adopted as the Reserve Price for the sale of the Subject Lots by auction, should an order for sale be granted by the Tribunal.
7. The respondent is neutral as to whether redevelopment is justified due to age and state of repair. The issues remained to be determined by this Tribunal are :
(a) Whether redevelopment of the Subject Lots is justified under s.4(2)(a) of the Ordinance due to the age or state of repair of the Building;
(b) Whether the applicant has taken reasonable steps to acquire the R’s Shop and whether the offers made are fair and reasonable;
(c) Whether the Reserve Price should or should not reflect the potential of a composite site redevelopment for the Subject Lots with the Adjacent Lots;
(d) If answer to (c) above is in the affirmative, what should be the Reserve Price.
Section 4(2) of the Ordinance
8. In determining the application, Section 4(2) of the Ordinance empowered the Tribunal to make an order for sale unless, after hearing the objections of the respondent, it is satisfied that :
(a) the redevelopment is justified due to age or state of repair of the building; and
(b) the applicant has taken reasonable steps to acquire all the undivided shares in the lot (including negotiating for the purchase of the undivided shares owned by that minority owner on terms that are fair and reasonable).
Section 4(2)(a) - State of Repair of the Building
9. This Tribunal has taken into consideration the expert evidence of Mr. Benson Wong (“Mr. B Wong”) the Chartered Building Surveyor and Mr. Wong Chi Ming (“Mr. CM Wong”) the Structural Engineer adduced by the applicant.
10. Mr. CM Wong had conducted a structural assessment of the Building and prepared a report dated 27 September 2012. He found the following defects in the Building:
(a) cracks and spalling at 121 locations were observed during visual inspection;
(b) 94% of the steel reinforcement bars are suffering from mild to moderate corrosion with a further 6% suffering from severe corrosion;
(c) 100% of core samples of the structural element have either ‘considerable’ or numerous voids;
(d) Carbonation has reached concrete surrounding the steel reinforcement bars in all of the test samples;
(e) 20% of the core samples have a chloride content exceeding 0.40%;
(f) 20% of the samples are found to pose a ‘high’ risk of corrosion of the steel reinforcement bars whilst 80% of the bars are at ‘moderate’ risk;
(g) 14% of structural members are found to have concrete cover less than the design cover;
(h) the average cement content for the Building was calculated to be 222kg/m3, which is lower than the current standard of 290kg/m3;
(i) the condition of the concrete has been affected by the various plants found growing on the Building and the tree on the rear staircase;
(j) inside the Building, poor quality patch repairs in the common areas are indications of poor workmanship, both during the construction of the Building and during the previous repairs.
11. Based on the above findings, Mr. CM Wong concluded that the structural elements of the Building are in a poor condition. With respect to the durability of the structural elements, the conditions are inferior to the requirements stipulated in the current standards and has passed the end of its design working life of 50 years. The design and construction of the structural frames of the Building have become obsolete over time and the structure of the Building cannot meet the current safety standards. The corrosion of the reinforcement bars in the Building has already entered the propagation phase and extensive maintenance and repair works would be required in the near future. He recommended that hammer tapping works be carried out to all structural members and all revealed cracks and spalling should be patch repaired.
12. Mr. B Wong, in his Condition Survey Report dated 28 September 2012 stated that :
(a) the Building is in a very poor state of repair due to general wear and tear with neglect in minimum regular maintenance and periodic repairs;
(b) infrared thermographic survey carried out on the external rendering has revealed 96 hidden hollow spots scattered throughout the external walls on all elevations poses threats to public safety;
(c) the building envelope is not external seepage resistant with extensive damp penetrations through the external walls and the original mild steel windows;
(d) the 2 staircases are unsatisfactory means of fire escape for the upper floors;
(e) no improvement made to the fire resisting construction and fire service installation in the Building and fire service systems required to be added in compliance with the requirements of the Fire Safety (Buildings) Ordinance;
(f) unauthorized building works constructed at ground floor and cockloft of the Building and have to be demolished;
(g) the conditions of the internal finishes to the living rooms, bedrooms, bathrooms and kitchens are poor, the most common defects in the flats are dampness and spalling to the internal floors, walls and ceilings;
(h) sanitary fitments and fittings in the shop toilet are generally soiled and not in working order and need replacement;
(i) sanitary fitments and fittings in the bathrooms and cooking facilities in the kitchens are broken or otherwise defective requiring replacement;
(j) condition of the old mild steel windows in the flats is corroded and not watertight;
(k) internal electrical installations insider 8 flats have been haphazardly altered or are in poor condition which required replacement completely for safety reason;
(l) internal inspection of flats found equipotential bonding connections are not provided for metal parts inside the flats;
(m) fresh water supply to No. 60 has been terminated;
(n) flushing water supply system has been abandoned for quite some time and the 2 flushing water tanks and pipework need to be re-installed;
(o) condensate drainage system with drain inlets is not provided for all AC units and needs to be installed in order to avoid committing a summary offence;
(p) closed circuit television survey carried out to the underground drainage has revealed 1 broken manhole which should be repaired and 2 plastic drainpipes installed which is not permitted and should be replaced with cast iron pipes;
(q) defects in electrical installation that required repair and maintenance.
13. He assessed the total cost of immediate repair works to restore the Building to tenantable standard at $6,190,893 which is about 68% of the cost of constructing a new building similar to the Building. He came to the conclusion that the Building has deteriorated to a state which is beyond reasonable economic repair as signified by the high repair cost. Both his and Mr. CM Wong’s findings have demonstrated that most of the defects present are not superficial in nature which can be repaired effectively and economically. As more rapid deterioration will occur in the future, the necessary maintenance and repairs will inevitably be more frequent and extensive, making the continued occupation of the Building not economical and even unsafe, to both occupants and third party. He recommended the owners to redevelop rather than repair given the Building does not possess any historical value or architectural merit.
14. As the respondent did not challenge any of the evidence adduced by the applicant in this regard, we accept the applicant’s evidence in whole. In particular, we are satisfied that based on the evidence of Mr. CM Wong and Mr. B Wong, redevelopment of the Subject Lots is justified due to the state of repair of the Building which is in a very poor state of repair and indeed in unsafe condition.
Section 4(2)(a) - Age of the Building
15. Mr. B Wong also expressed the opinion that the Building is aged due to the following factors :
(a) many features and facilities which would nowadays be expected to be standard provisions in a residential/commercial composite building are missing or though provided, have not been improved to meet the upgraded construction standards and statutory requirement and have now become obsolete or outdated;
(b) the absence or the obsolescence of some features and facilities give rise to real safety concern;
(c) some of the key building components, finishes and service installations have already passed or are nearing the end of their useful lives;
(d) there has not been sufficient repair or renovation work over the years to maintain its structure frames, components, finishes and service installations in a tenantable condition.
16. As for the requirement of “the age” of the Building, this Tribunal agree with the observation by Judge Wong in the case of Top Sail International Limited V Cheng Kai Ming, executor of the estate of Chan Hue also know as Chan Sum Hiu, deceased LDCS 18000/2010, 15 November 2011 (unreported) that,
“we should not restrict our consideration to just the physical age of the Buildings… we are of the view that the absence of a specific physical age in the Ordinance indicates that the Tribunal has discretion to determine at what stage a building should be redeveloped after considering all the relevant factors concerning the age of the building in question.
The physical age of a building is clearly one of the considerations, but it would not be the only consideration. The physical conditions of a building and the amount that would be required to maintain the building are other factors that the Tribunal should consider, as they would affect the decision on whether the life of the building should be ended or prolonged. The obsolete design of a building should also be considered as it has an important impact on whether it is too old to serve a modern society”. (at paragraph 23-24)
17. Having considered the evidence, we are satisfied that redevelopment of the Subject Lot is also justified due to age because:
(a) The Building is more than 56 years old;
(b) Its design has become obsolete over time and failed to conform to modern construction and statutory standards and requirement;
(c) The Building is in serious disrepair and is not tenantable without very substantial repair both in extent and in costs which is not justified.
Section 4(2)(b) - Reasonable Steps Taken
18. The applicant is under an obligation to take reasonable steps to negotiate on terms that are fair and reasonable for the purchase of the R’s Shop under Section 4(2)(b) of the Ordinance.
19. It is not in dispute that prior to the filing of the Notice of Application (“the Application”) by the applicant on 7 February 2012, the applicant had made the following offers to the respondent :
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Date |
Offer Price |
Trial Bundle Ref |
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1st Offer |
28 July 2010 |
$15,600,000 |
B1/99-100 |
|
2nd Offer |
4 January 2012 |
$20,830,000 |
B1/101-105 |
|
3rd Offer |
20 January 2012 |
$20,830,000 |
B1/106-110 |
20. And after the Application had been filed, further offers were made as follows:
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Date |
Offer Price |
Trial Bundle Ref |
|
4th Offer |
9 October 2012 |
$35,566,000 |
B1/122-26 to 122-28 |
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5th Offer |
21 December 2012 |
$40,000,000 |
B1/122-29 to 122-30 |
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6th Offer |
16 May 2013 |
$40,000,000 |
B1/122-32 to 122-34 |
21. The respondent contends that :
(a) only pre-application offers should be considered by the Tribunal;
(b) the applicant had failed to make full and frank disclosure as to its ownership in the Adjacent Lots;
(c) All the offers made by the applicant, be it pre-application or post-application, are not fair and reasonable.
Only Pre-Application Offers were to be considered?
22. Mr. Cheung for the respondent, upon being made aware of a recent judgment (LDCS 42000/2011) handed down by this Tribunal on 31 May 2013, adopted the argument raised by the respondent in that case to argue that only Pre-Application offers should be considered.
23. Given the fact that Mr. Cheung had raised nothing new to supplement his argument, we opine that our judgment in Good Faith Properties Limited and others v Cibean Development Company Limited LDCS 42000/2011 on the same issue can be adopted to dispose of this contention which is copied herein:
“36. The question raised is essentially one of statutory construction. As has been pointed out by the Court of Final Appeal in HKSAR v Cheung Kwun Yin (supra),
“In interpreting a statute, the court’s task is to ascertain the intention of the legislature as expressed in the language of the statute… The modern approach is to adopt a purposive interpretation. The statutory language is construed, having regard to its context and purpose. Words are given their natural and ordinary meaning unless the context or purpose points to a different meaning. Context and purpose are considered when interpreting the words used and not only when an ambiguity may be thought to arise.” (at paragraph 11-12)
37. It is therefore necessary to look at the purpose of the Ordinance. Ribeiro PJ in the case of Capital Well (supra) had conducted a close examination of an application for compulsory sale under the Ordinance which is said to involve 4 distinct phases, namely the application, the Tribunal’s determination, the sale and the apportionment and application of the sale proceeds. It is found that :
“The objectives of the Ordinance underlying this four stage process are clear. On the one hand, the Ordinance aims to facilitate urban renewal in respect of old and dilapidated buildings by assisting private developers to complete their acquisition where they already own at least 90% of the lot in question and by preventing the indefinite obstruction of a redevelopment by any minority owners who may seek to extract a wholly unreasonable price or ‘ransom’ for permitting the redevelopment to proceed. On the other hand, it aims to ensure that the minority owner receives fair and reasonable compensation for his interest in the lot. Such compensation may be that which the minority owner agrees to accept or that which represents his share of the market value of the lot (reflecting its redevelopment value) as determined at a public auction, subject to a reserve price approved by the Tribunal.” (at para. 21)
38. From the ruling quoted above, it is apparent that as far as the minority owners are concerned, the purpose of the Ordinance is to protect their interests to ensure that they received fair and reasonable compensation in the sale of their minority interests, be it compulsory or voluntary. This is to be reflected not only in the reserve price to be determined by the Tribunal for the purpose of the public auction, but also in the compensation to be accepted by the minority owners in a sale as a result of negotiation with the majority owner. The protection for the minority owners is not confined to the compensation they got as a result of a compulsory sale, but also during the stage when the minority owner are negotiating to sell their interest to the majority owner.
39. To achieve this end, Section 4(2)(b) stipulated that the Tribunal shall not make an order for sale, unless it is satisfied, after hearing the case, that the majority owner has taken reasonable steps to acquire all the undivided shares in the lot, including negotiating for the purchase of the undivided shares of the minority owner on terms that are fair and reasonable.
40. On the face of it, Section 4(2)(b) had not specified whether pre-application and/or post-application reasonable steps should be considered but it required the Tribunal to consider, after hearing the objection from the minority owner, if the majority owner has taken reasonable steps before it can proceed to make the order for sale. The time for the Tribunal to be satisfied is at trial and not before. This plainly envisages that there can be offers made to acquire the minority interest even after the filing of the Application and all the steps taken up to the point an order for sale was to be made should be considered by the Tribunal. This is a safeguard rendered to the minorities to ensure that the compensation offered by the majority owner must be fair and reasonable before the majority owner is able to convince the Tribunal that an order for sale should be granted.
41. In the words of Judge Cruden in his book Land Compensation and Valuation Law in Hong Kong 3rd ed.,
“These statutory requirements reflect the legislative intent that the compulsory sale of an unwilling minority owner’s share should be a course of last resort … The statutory obligation of majority owners to take all reasonable steps to acquire minority shares voluntarily, is clearly important. It is further emphasised by the requirement that they negotiate on the basis of fair and reasonable terms. Those terms will necessarily include a fair and reasonable price. If this requirement is not strictly enforced the Ordinance could degenerate into a fast track procedure for developers unfairly using their majority powers to expropriate the shares of unwilling minority owners.”
In order to avoid the majority owner to expropriate the shares of the minority, it is imposed upon the majority owner the obligation to take all reasonable steps before an order is made by the Tribunal which is a last resort. To confine the reasonable steps to pre-application is apparently inconsistent with the intention of the legislation and deprived the minority owners the protection they are entitled under the Ordinance.
42. This is also in line with the objectives of the Ordinance, i.e. to ensure that the minority owners received compensation that is fair and reasonable during negotiations as well as at the public auction upon an order for sale. So, the requirement under Section 4(2)(b) must cover all steps taken by the majority owners both pre- and post-application.
43. This also explains the present perfect tense used in Section 4(2)(b) and we agree with the findings in Fully (supra) that :
“there is no indication in the Ordinance that the time for taking reasonable steps must be before the application. On the contrary, the phase ‘has taken reasonable steps’ is in present perfect tense and clearly refers to the present time ‘after hearing the objections’, which must be after the proceedings have commenced. So we are of the view that the offers made after the proceedings have commenced can be taken into account.”
44. We found no ambiguity or absurdity in the wordings of Section 4(2)(b) on a purposive interpretation of the Ordinance. On the contrary, if the contention of the respondent is accepted, i.e. only pre-Application offers were to be considered, this is inconsistent with the objective of the Ordinance and create absurdity in particular when the property market goes upwards after the Application. If only pre-Application steps were to be considered, the majority owner will have no obligation to negotiate with the minority owner or to offer terms that are fair and reasonable after an Application had been filed. Should the pre-Application steps be found to be fair and reasonable, the Tribunal is entitled to make an order for sale turning a blind eye to the fact that the majority owner had failed to take any reasonable steps after filing of the Application in view of the rising market trend. This is absurd and clearly not in the interests of the minority owners and defeat the intention of the Ordinance to protect the interests of the minority, up till the moment when the Tribunal makes an order for sale.
45. We do not agree that the Ordinance is in anyway modelled on Cap. 15 even though the wordings of the 2 provisions looked similar because the 2 ordinances are catered for different scenario. Section 15 of Cap. 15 empowered the Secretary for Planning, Environment and Lands (“the Secretary”) to recommend to the Chief Executive the resumption of land which the Corporation had been unable to acquire to implement a development proposal authorised under Cap. 15. The Secretary is not permitted to make the recommendation unless the three conditions set out in Section 15(4) have been satisfied including “unless he is satisfied that the Corporation has taken all reasonable steps to … acquire the land including negotiating for the purchase thereof on terms that are fair and reasonable”. The case of Wong Tak Woon relied upon by the respondent ruled that:
“As appears from section 15, the legislature plainly intended that the LDC and the landowner should, if possible, agree between themselves the terms on which the land within the development area is to be acquired, hence the requirement for all reasonable efforts at agreement and the making of a fair and reasonable offer… The Legislature, however, plainly also recognized in section 15 that it may not be possible to reach such agreement, however fair and reasonable the offer of purchase might be. To cater for such an inability to agree, the LDC is empowered (provided it has already made a fair and reasonable offer) to request the Secretary to recommend resumption to the CEIC.”
46. We accept that Section 15 of Cap. 15 required the Corporation to take reasonable steps before it made the request to the Secretary for the recommendation for land resumption. But the negotiation between the Corporation and the land owners should have ended and resulted in a failure before the Corporation can make the request to the Secretary. Once the Corporation had made such request, the Corporation is, technically “functus” in the sense that it can no longer engaged in any further negotiation with the land owner. There is no question of post-request offers or steps to be taken by the Corporation in a Section 15 scenario. This is totally different from any negotiation in a compulsory sale case. There is nothing to prevent a majority owner to make further offers to the minority owner even after the Application had been taken out.
47. Neither are we convinced that what Ribeiro PJ said in Capital Well Ltd (supra) about “appropriate efforts” connotes that reasonable steps should be taken by the majority owner to acquire the undivided share of a minority owner before it can invoke the provision of the Ordinance. We agree with the applicants that such an interpretation cannot sit comfortably with the provision under Section 3(1) of the Ordinance which reads:
“(1) Subject to subsection (5), the person or persons who owns or own, otherwise than as a mortgagee, not less than 90% of the undivided shares in a lot may make an application –
(a) accompanied by a valuation report as specified in Part 1 of Schedule 1; and
(b) to the Tribunal for an order to sell all the undivided shares in the lot for the purposes of the redevelopment of the lot.”
48. Section 3(1) stipulated the requirement for the majority owner to lodge the Application and nothing touched upon the requirement for taking reasonable steps before this is to be done. If the intention of the legislation is minded to impose such a requirement before application, this should have been specifically spelled out in Section 3(1). The missing out of such a requirement must be intentional and, to echo with Section 4(2)(b), must be intended not to confine the reasonable offers to pre-Application stage.
49. We found what Ribeiro PJ said is about the fact that the majority owner should make efforts to acquire the balance of the undivided shares before any application is to be lodged with the Lands Tribunal. This is consistent with the words of Judge Cruden quoted above that compulsory sale should be a course of last resort so it would only be sensible to require the majority owner to try to acquire the undivided shares of the minority owner before an application is being taken out.
50. Applying the principles enunciated by the House of Lords in Pepper v Hart and referred to by the Court of Final Appeal in HKSAR v Cheung Kwun Yin, the SPEL Statement relied upon by the respondent may be referred to as an aid to interpretation for the purpose of ascertaining the meaning of the statutory language, when the following three conditions are met :
“(a) The legislation is ambiguous or obscure or leads to an absurdity;
(b) The material relied upon consists of one or more statements by a Minister or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such statements and their effect;
(c) The statements relied upon are clear.”
51. Since it is our finding in paragraph 44 above that there is no ambiguity or absurdity in ascertaining the meaning of the words used in Section 4(2)(b), we found the first condition is not met.
52. Moreover, we are not satisfied that the SPEL Statement (recited at paragraph 28 above) are clear enough to carry the interpretation relied upon by the respondent. As rightly pointed out by counsel for the applicants, the SPEL Statement is made in answer to concern by the committee over the word “all reasonable steps” instead of the timing for the reasonable steps to be taken and to be considered by the Tribunal. This Tribunal had the benefit of reading through all the minutes of meeting produced by the parties concerning the discussion of the relevant Bill and we found no discussion on the time frame for reasonable steps to be taken.
53. Mr. Chang for the respondent had pointed out 2 other meetings of the committee in which reasonable steps before application had been mentioned. That is in the meeting on 17 February 1998 and 21 January 1998.
54. At the meeting on 17 February 1998, members are conducting a clause-by-clause examination of the Bill on compulsory sale. Under Clause 12 which is being discussed in conjunction with clause 4, the minutes of the meeting reads :
“8. Referring to clause 4(2)(c), members expressed concern over the meaning of ‘all reasonable steps’ which had to be taken by the majority owners to acquire the lot before making an application for a sale order. While agreeing that fair and reasonable terms should be offered, members were worried that the inclusion of the word ‘all’ would generate disputes and requested the Administration to consider deleting it.
9. PAS/PEL explained that … Whilst the Administration might list out the reasonable steps which had to be taken by the majority owners to acquire the lot, the list could by no means exhaustive. Ultimately it would rest with the Lands Tribunal to decide whether reasonable steps had been taken in a particular case. PAS/PEL agreed to consider deleting the word ‘all’ before ‘reasonable steps’.” (at page 3)
55. It is apparent from the minutes quoted above that the SPEL had never said in his statement that the reasonable steps had to be taken before making an application for a sale order. This was in fact raised by members only and never an issue discussed by the members or addressed by the SPEL. It is far from clear that it has been decided by the committee or stated in the statement of the SPEL that reasonable steps had to be taken before making the application or that only reasonable steps taken before Application should be considered by the Tribunal.
56. At the meeting on 21 January 1998, the SPEL made a statement for moving the Bill to be read for the Second time. The relevant minutes of the meeting shows that the SPEL had addressed the reason for taking out the Bill and had said, inter alia, the followings :
“The purpose of the Bill is to provide a solution to some problems which are often encountered in the course of land assembly for private property redevelopment … In order to address the above problems, the Bill provides a mechanism which enables the owner or owners of a building holding the vast majority of shares in a lot to file an application with the Lands Tribunal (the Tribunal) for an order for the sale of the whole lot when they are unable to acquire the remaining interests.” (at page 109)
57. Again, in the statement quoted above, the SPEL had never mentioned about reasonable steps had to be taken before the application or that only reasonable steps taken before Application should be considered by the Tribunal. All the SPEL had said is that the majority owner can file an application when they cannot acquire the minority interests. Nothing touched upon the fact that the majority owner had to take all reasonable steps to acquire before taking out the application.
58. Rather, in the speech that follows, the SPEL had said that :
“In making an order for sale, the Tribunal, after consideration of any objection from the minority owners, must be satisfied that … the majority owner has taken all reasonable steps to acquire the undivided shares in the lot.” (at page 110)
Again, there is nothing said by the SPEL that the reasonable steps had to be taken before the application.
59. The SPEL Statement relied upon by the respondent is the only part in the discussion by the SPEL that touched upon the timing of the reasonable offers to be made but it was in fact said to address a different issue, i.e. the requirement of all reasonable steps. The rest of the minutes showed that nothing had been discussed about the timing for the reasonable steps to be taken and to be considered. We cannot be satisfied that the SPEL Statement is clear enough to be relied upon in the interpretation of Section 4(2)(b).
60. Since there is no absurdity or ambiguity in the purposive interpretation of the Ordinance and the SPEL Statement is far from clear, we found that the Official Record should not be relied upon in the interpretation of the Ordinance.
61. To conclude, we do not agree with the respondent’s contention that only pre-Application steps should be considered by the Tribunal. With a purposive interpretation of Section 4(2)(b), all reasonable steps before the making of a sale order to acquire the minority owner’s share in the Lot should be considered, be it post- or pre-Application.”
Full and frank disclosure
24. Relying on the observation of Yeung JA in Bond Star Development Ltd v Capital Well Ltd (CACV 458/2002) [2004] 2 HKLRD 855 that:
“in deciding if the applicant has taken reasonable steps, including offering a fair and reasonable price to the respondent, it is necessary to look at all the surrounding circumstances” (at para. 40)
Mr. Cheung submitted that when considering whether the applicant has taken reasonable steps, the amount of the offer should not be the only consideration but all the circumstances of the case should be considered.
25. In this case, the Tribunal should take into consideration the failure of the applicant to make full and frank disclosure as to the fact that it had also acquired all the units in the Adjacent Lots and had already obtained approval of plans from the Building Department for a new building to be built on the L-shaped site consisting of the Subject Lots as well as the Adjacent Lots, i.e. a composite site of 12 lots of land.
26. Mr. Lau, director of the respondent testified that such information was only discovered by his former solicitor in February 2012. However in the 1st Offer, the applicant had indicated that the redevelopment was for the lots at No. 58-64 Ma Tau Kok Road and then changed to a redevelopment of the Subject Lots in the 2nd and 3rd Offer. It was only in the 4th to 6th Offer that the applicant had indicated that the redevelopment was for the Subject Lots together with the Adjacent Lots.
27. Ms. Lui, Senior Property Development Manager of the holding company of the applicant confirmed that the applicant had never informed the minority owners that the redevelopment involved the composite site of 12 lots of land. But Ms. Lui said that the applicant had never concealed such a fact and that’s why only the name of the applicant had been used in all the acquisitions. And in the 1st Offer, No. 58-64 Ma Tau Wai Road was mentioned but changed to No. 58-60 in the 2nd Offer because by that time, all minority interests in No. 58-64 except the R’s Shop had been successfully acquired. Given the application for compulsory sale is only required for the Subject Lots, only the RDV of the Subject Lots had been taken into consideration in the 2nd Offer. Furthermore, the public can have knowledge of the composite site development by the applicant as revealed in :
(a) the record kept in the Land Registry which will show that the properties in the composite site were all acquired by the applicant;
(b) the Annual Report of the applicant since December 2009 which had included the information about the composite site development of the 12 lots;
(c) the monthly Building Digest issued by the Building Department in November 2011 which had also revealed the approval of the General Building Plan for the composite site.
28. We found the contention by the respondent that to consider whether reasonable step has been taken, the Tribunal should look at more than the quantum of the offer unjustified.
29. Section 4(2)(b) of the Ordinance requires the majority owner :
“to take reasonable steps to acquire all the undivided shares in the lot (including, in the case of a minority owner whose whereabouts are known negotiating for the purchase of such of those shares as are owned by that minority owner on terms that are fair and reasonable.”
30. Ribeiro PJ, in Capital Well Ltd v Bond Star Development Ltd FACV 4/2005 (2005) 8 HKCFAR 578, had said the followings about the nature of the s.4(2)(b) requirement :
“As noted above, the Ordinance stipulates that before the Tribunal can make a compulsory order, the majority owner should try to reach agreement with the minority to purchase the latter’s interest on fair and reasonable terms” (at paragraph 32) and
“what the Tribunal must do is to consider whether, in the circumstances of each case, the offer falls within a band of what represents a fair and reasonable assessment of the value of the minority owner’s interest reflecting a proportionate share of the redevelopment value of the whole site.” (at paragraph 36)
31. It is apparent from the words of Ribeiro PJ that to satisfy the requirement under s.4(2)(b), the majority owner has to try to reach agreement with the minority owners in the acquisition of their interests at terms that are fair and reasonable. There is nothing to suggest that the majority owner has the duty to make full and frank disclosure as to its ownership of adjacent sites in the process of acquisition or negotiation. All the majority owner needs to do is to approach the minority owners for the acquisition of their interests. As for the terms of the offer, to consider whether it is fair and reasonable, it must be referred to the quantum of it, to see if it “falls within a band of what represents a fair and reasonable assessment of the value of the minority owner’s interest reflecting a proportionate share of the redevelopment value of the whole site”. Mr. Cheung’s contention that reasonable steps involved more than a quantitative assessment but the applicant’s duty to make full and frank disclosure has to be considered is apparently not supported by the findings of Ribeiro PJ.
32. And even though Yeung JA had talked about “all the surrounding circumstances”, there is no elaboration as to what this meant. Yet from the judgment of Yeung JA, one can see that the only element he referred to is the quantum of the offer and counter-offer by the parties in that case. We cannot see how the observation by Yeung JA can be interpreted as to cover the duty of full and frank disclosure.
33. We also agree with the observation by the Tribunal in Intelligent House Ltd v Chan Tung Shing & Ors LDCS 11000/2006 (unreported) that :
“to take “reasonable steps to acquire all the shares in the lot involves two elements:
(1) The reasonableness of the “steps”, in other words, the process of communicating to minority owners an indication of the majority owner’s willingness to purchase their shares; and
(2) The reasonableness of the terms of the offer.” (at paragraph 324)
This is consistent with the words of Ribeiro PJ above and neither of these 2 elements involved the duty to make full and frank disclosure on the part of the majority owner concerning its interest in the adjacent sites.
34. The surrounding circumstances that the Tribunal should consider must be the steps that had been taken by the majority owner in the process of communication with the minority owners as well as the quantum of the offer.
35. In any event, since it is our finding that the redevelopment potential of the composite site (including the Subject Lots and the Adjacent Lots) should not be considered (detailed reason to be stated in the relevant section below), this also supports our findings that the applicant has no duty to disclose its interests in Adjacent Lots or intended redevelopment of the composite site. The applicant’s failure to make full and frank disclosure in this regard is neither here nor there.
36. And we also accept Ms. Lui’s explanation about the reason for only including the Subject Lots in the 2nd Offer which is consistent with the findings of Rogers VP in Bond Star Development Ltd v Capital Well Ltd CACV 458/2002 [2004] 2 HKLRD 855 that any application for compulsory sale should not include any lot of land which the majority owner had 100% interest. The applicant should not be faulted in adopting such a practice and should not be treated as an act to conceal anything from the respondent.
37. We found the applicant had no obligation to make full and frank disclosure as to its ownership of the Adjacent Lots in the process of making reasonable offers to acquire the minority interest.
Are offers made fair and reasonable?
38. The respondent contended that none of the offers made by the applicant, be it pre- or post-application, is fair and reasonable.
39. It is not in dispute that in assessing the reasonableness of the offers, Ribeiro PJ had found in Capital Well Ltd that :
“the Tribunal is not conducting a valuation exercise. It does not need to adjudicate upon any disputes about the correct valuation principles to be applied. It does not itself arrive at any conclusion as to what figure represents the correct valuation. It merely needs to be satisfied that, on the evidence available, the offer falls within the range of what may broadly be regarded as fair and reasonable compensation for the interest in question.” (at paragraph 31)
This Tribunal should bear this in mind in assessing the reasonableness of each offer made by the applicant in this case.
40. Since it is our finding that the potential of the composite site redevelopment should not be considered in setting the Reserve Price (see reason below), by the same analogy, we also found that such consideration should not be taken into account in the assessment of the reasonableness of the offers.
1st to 3rd Offer
41. Mr. Cheung for the respondent submitted that the 1st to 3rd Offers are not fair and reasonable but had not demonstrated in what way this is so.
42. Mr. Fung for the applicant submitted that there was no counter offer from the respondent and there is no evidence from Mr. Lau or from cross-examination of Ms. Lui that these offers are not fair and reasonable.
43. We accept the contention of the applicant. There is utterly nothing before this Tribunal to even suggest that the 1st to 3rd Offers are not fair and reasonable, be it from factual witness or expert witness. Mr. Lau of the respondent had in his Supplemental Affirmation touched upon the unreasonableness of the 4th and 5th Offer but had been silent as to the 1st to 3rd Offer in both of his affirmations. And the first valuation report of the respondent only comes into the picture in September 2012.
44. There is no evidence before this Tribunal to demonstrate that the valuation assessment by Mr. Alnwick Chan (“Mr. Chan”), valuation expert for the applicant, can in any way be faulted. Neither is there any evidence to support the contention that the valuation conducted by Mr. Chan is in any way not based on professional valuation and should not be relied upon by the applicant. In Intelligent House Limited v Chan Tung Shing & Ors. (supra), the Tribunal is asked to rule on the reasonableness of the terms offered. The Tribunal in Intelligent House had said the followings :
“Savills is a reputable firm of valuers. In our view, it is also reasonable for Intelligent House to rely on Savills’ expert opinion to formulate the purchase prices offered to the minority owners. There is also no reason for us to believe, nor is there such evidence to suggest, that the advices from Savilles were not properly made based on professional valuation of the EUV and RDV of the minority owners’ units.”
We totally agree with such observation which should also be applicable to Knight Frank who is the valuer involved in this case.
45. The 1st to 3rd Offer made are in sums which are more than the entitlement of the respondent as assessed by Mr. Chan. We are satisfied that the 1st to 3rd Offer made by the applicant to the respondent to purchase the R’s Shop fall within the range of what may broadly be regarded as fair and reasonable.
4th Offer
46. When the 4th Offer was made on 9 October 2012, both parties had already filed their respective valuation reports which indicated a difference in the assessment of the RDV of the Subject Lots as follows.
| Assessment by Mr. Chan for the applicant |
Assessment by Mr. Lam for the respondent |
| Value as at |
RDV |
Value as at |
RDV |
| 3.10.2012 |
$80.5M |
15.09.2012 |
$94.47M |
47. As stated in Capital Well (supra), this Tribunal should not adjudicate upon disputes as to the correct valuation principles to be applied to assess the offer. Adopting the same approach used by Ribeiro PJ in Capital Well, the respondent’s proportionate share of the open market value of the Subject Lots at 37.77% came to be $35,681,319 (on the respondent’s evidence) and to $30,404,850 (on the applicant’s evidence). Even though the 4th Offer of $35,566,000 is at a figure less than Mr. Lam’s assessment, the difference (in the sum of $115,319) is minimal. We therefore find that the 4th Offer still falls within the range of what may broadly be regarded as fair and reasonable.
5th and 6th Offer
48. These 2 offers are in the same amount. But at the time when the 5th Offer was made, there is no updated valuation evidence apart from that stated in paragraph 46 above, and the next and last valuation evidence is available only in May 2013.
| Assessment by Mr. Chan for the applicant |
Assessment by Mr. Lam for the respondent |
| Value as at |
RDV |
Value as at |
RDV |
| 10.05.2013 |
$87M |
10.05.2013 |
$113.81M |
49. Even if we were to adopt the respondent’s assessment as of 15 September 2012, the 5th and 6th Offer of $40,000,000 is apparently fair and reasonable since it is far greater than the assessment of Mr. Lam.
50. If we were to adopt the respondent’s assessment as of 10 May 2013 which is accepted by the applicant, we find that the offer of $40,000,000 still falls within the range of what may broadly be regarded as fair and reasonable since it is only 7% less than the assessed amount which is at $42,986,037. It is not necessary for the offer to beat the valuation as if it were a payment into court. The applicant did rely upon expert opinion to formulate the purchase price offered and there is no contrary evidence to suggest that the expert evidence is not properly made.
51. Under such circumstances, we are still satisfied that the 5th and 6th Offer made by the applicant fall within the range of what may broadly be regarded as fair and reasonable.
Order for Sale
52. We are satisfied that redevelopment of the Subject Lots is justified both in terms of age and state of repair of the Building and the applicant has taken reasonable steps to acquire all the undivided shares of the Subject Lots and had negotiated for the purchase of the R’s Shop on terms that are fair and reasonable. Under such circumstances, we find that an order for sale should be granted in favour of the applicant.
Valuation issue to be decided by the Tribunal
53. The only issue remains to be determined is whether the Reserve Price should reflect the potential of joint redevelopment for the Subject Lots with the Adjacent Lots which are owned by the applicant.
54. Mr. Cheung for the respondent submitted that the Court of Appeal and the Court of Final Appeal in Bond Star Development Ltd v Capital Well Ltd had found nothing wrong with the assessment of the Lands Tribunal on a composite site approach. Neither the Court of Appeal nor the Court of Final Appeal had touched upon the issue as to whether redevelopment potential of the composite site should be taken into consideration in setting the Reserve Price.
55. It is also Mr. Cheung’s contention that Paragraph 2 Schedule 2 of the Ordinance allows the Tribunal a wide discretion in the determination of the Reserve Price, i.e. as long as it is one “approved by the Tribunal”. And the redevelopment potential of the Subject Lots on its own represents the minimum that the Tribunal should take into account. In the present case, since parties had all along been negotiating on the basis of a composite site approach, and with expert reports filed in this regard, such should be taken into consideration by the Tribunal in setting the Reserve Price.
56. Mr. Cheung also relied upon the case of Fairtex Development ltd v Tso Pee Hong and Ors LDCS 20000/2011, 12 September 2012 (unreported) to support his contention that the composite site approach should be considered.
57. Mr. Fung on the other hand contended that the wordings of Section 3(2), 4(1)(b), 5(1)(a) and Paragraph 2 Schedule 2 of the Ordinance specifically required a consideration of the redevelopment potential of the specific lot in the application on their own only which is also the subject of the auction. This cannot be equated to a consideration of a composite site redevelopment including the Subject Lots on its own as suggested by the respondent. And the Tribunal did not have the discretion as suggested by Mr. Cheung. The absolute discretion granted to the Tribunal under Section 5(1)(b) of the Ordinance is only applicable in the circumstances canvassed in that particular section and not for Paragraph 2 Schedule 2.
58. As for Bond Star (supra), it is submitted by Mr. Fung that the Court of Appeal held that the Ordinance did not apply to any lot which was 100% owned by the majority owner and after hearing the appeal, varied the order for sale made by the Tribunal to confine it to the subject lot which was co-owned by the majority owner and the minority owner. The Court of Final Appeal also affirmed the Court of Appeal’s order and found that :
“Plainly, the power coercively to order sale is confined to ordering the sale of a lot or lots in which a majority owner and a minority owner each hold a proprietary interest.” (at paragraph 41)
So the applicant must be right in not including the Adjacent Lots in this Application and the Tribunal should only consider the redevelopment potential of the Subject Lots in setting the Reserve Price.
59. This Tribunal accepts the contention of the applicant and do agree that in setting the Reserve Price, only the value of the Subject Lots should be considered and we should not adopt the composite site approach suggested by Mr. Cheung. This is apparent from the wordings of the Ordinance and also the findings of the Court of Appeal in Bond Star (supra)which had not been overruled by the Court of Final Appeal.
60. For easy reference, the relevant provisions of the Ordinance are copied herein :-
“Section 2 Interpretation
“lot” –
(a) means –
(i) any piece or parcel of ground the subject of a Government lease;
(ii) …
(b) includes a section and subsection of a lot.
Section 3 (2)
(2) Without prejudice to the operation of subsection (5), an application under subsection (1) may cover -
(a) 2 or more lots where the majority owner owns not less than the percentage specified in subsection (1) of the undivided shares in each lot; or
(b) 2 or more lots –
(i) on which one building is connected to another building by a staircase intended for common use by the occupiers of the buildings; …
Section 4 (1)
(1) Subject to subsection (2), the Tribunal shall determine an application under section 3(1) by -
(a) first –
(i) If any minority owner of the lot the subject of the application, disputes the value of any property as assessed in the application, hearing and determining the dispute;
(ii) …
(b) second –
(i) Making an order that all the undivided shares in the lot the subject of the application be sold for the purposes of the redevelopment of the lot;
(ii) …
Paragraph 2 Schedule 2
(2) The lot the subject of the auction shall be sold subject to a reserve price -
(a) which takes into account the redevelopment potential of the lot on its own (or, where 2 or more lots are the subject of the auction, on their own); and
(b) approved by the Tribunal.”
61. Section 3(2)(b) of the Ordinance does cover the situation in the present case, i.e. the Building on the Subject Lots is a pair of building connected to one another by a staircase intended for common use by the occupiers of the buildings. And the wordings of Section 4(1)(b)(i) provided for the Tribunal to make an order for sale concerning “all the undivided shares in the lot the subject of the application” (our emphasis). So the lot to be sold by auction should be the lot the subject of the application. The subject of the auction must refer to the subject of the application as well. Furthermore, Paragraph 2 of Schedule 2 is the provision concerning the reserve price which specifically required the Tribunal to consider “the redevelopment potential of the lot on its own or where 2 or more lots are the subject of the auction, on their own” (our emphasis).
62. From the wordings of these provisions, it is beyond argument that only the subject lot of the application itself should be considered when deciding on the reserve price as well as making an order for sale. The order for sale can only be made against the lot of land which is subject of the application. And in setting the reserve price for the auction, the redevelopment potential of the lot on its own and if there are 2 or more lots, the redevelopment potential of their own. The words “on its own” and “on their own” referred to the subject of the application and no more and no less.
63. The wordings of the existing legislation is plain and without ambiguity and leaves no room for the contention that in cases of attached rows of lots, redevelopment value of the other lots not being the subject of the application should also be considered as suggested by Mr. Cheung in his composite site approach. If Mr. Cheung’s approach was being accepted, one is not taking into account the potential of the Subject Lots on their own, but rather with the Adjacent Lots which are not subject of the Application before the Tribunal.
64. Mr. Cheung’s contention that this Tribunal has wide discretion in the setting of the reserve price is misconceived. We agree with Mr. Fung that the wide discretion under Section 5(1)(b) of the Ordinance is not applicable in the context of reserve price. And the wordings “approved by the Tribunal” in Paragraph 2(b) Schedule 2 of the Ordinance does not give the Tribunal any discretion as far as the setting of the reserve price is concerned since it has already been provided in Paragraph 2(a) Schedule 2 as to how the reserve price should be fixed. The approval by the Tribunal under Paragraph 2(b) is just a safeguard for the protection of the minority owners that the reserve price fixed or agreed is in line with the requirement under Paragraph 2(a), and not an addition of discretion to be exercised by the Tribunal.
65. And Mr. Cheung’s contention that the Court of Appeal had found nothing wrong with the composite site approach is not correct. In fact, Rogers VP had specifically found at paragraph 14 that even if the majority owner were to carry out a much greater scheme of redevelopment involving, not just the lots in question, but also some other adjacent sites wholly owned by it, the majority owner is not entitled to join them in the application. The rationale behind is to prevent a reserve price reflecting the larger size of the subject of the auction which may have the effect of swamping the minority owner and prevent it from bidding at the auction. To set a reserve price taking into account the composite site’s redevelopment potential is being found to be not appropriate.
66. And it is further said by Rogers VP that :
“No doubt there are practical difficulties which may face a developer, for example, in a situation where the applicant has put together a number of lots and wishes to redevelop them together. If such an applicant owns a number of adjacent lots that are intended to be developed together but is forced to make an application in respect of one lot alone, it may well arise that if that single lot were put up for auction an unrealistic price might be bid for that lot. The person bidding could in effect force the applicant to pay a premium because, unless the applicant were prepared to pay an unrealistic price for the particular lot, he might be deprived of that lot by reason of being out bid at the auction and thus would not be able to pursue his original development. Whilst that is true, it is also relevant to take into account of the fact that the majority owner might in such circumstances be forced to bid up to the full redevelopment value, thus benefitting the minority owner.” (at paragraph 17)
It is clearly in the judgment of Rogers VP that the Court of Appeal found that by not allowing the majority owner to include other lots in the application to make up a composite site might be to the benefit of the minority owners and not against the intention of the Ordinance.
67. The Court of Appeal’s decision above was not taken up at the Court of Final Appeal. However, the Court of Final Appeal had also found that the power to order sale is confined to the lot or lots in which both the majority owner and the minority owner had a proprietary interest and since the issue of composite site redevelopment was not argued before them, such issue was expressly left open for possible future consideration (at paragraph 41). So, the Court of Appeal decision is still valid and binding on this Tribunal.
68. Mr. Cheung also relied upon the case of Fairtex to support his contention that the Tribunal had allowed the potential for a composite site redevelopment to be reflected in the reserve price. We do not agree.
69. Fairtex is a case where the majority owner had included 4 lots of land in the application and :
“There are 2 pairs of 7-storey composite buildings, the 1st Building and the 2nd Building (‘the 1st pair Buildings’) and the 3rd Building and the 4th Building (‘the 2nd pair Buildings’) erected on the Lots. Each pair is served by 2 common staircases of its own. The 1st pair Buildings and the 2nd pair Buildings are not connected to each other.” (at paragraph 2)
70. The Tribunal in Fairtex found that each pair of Buildings is entitled to make an application under the Ordinance but the issue is whether the applicant in that case should issue 2 separate applications, each covering 1 pair Buildings and if so, should the Tribunal treat the application as 2 and give 2 sets of order and hence 2 separate auctions. The applicant in that case asks for the 2 pairs of Building to be put up for auction as one composite site. The Tribunal found that :
“But if the majority owner concedes the joint development issue and there is evidence to that effect, we could not turn a blind eye in fixing the reserve price. And when all the lots are subject of different applications, for good case management, the applications should be consolidated. And the subject lots of the auction should be the subject lots of the consolidated application. … Accordingly, we come to the conclusion that the Application herein should be treated as 2 applications, one for each pair Buildings, but consolidated into one application. For the order of sale, we would rule separately in respect of each pair Buildings. And if the Applicant could satisfy this Tribunal that order for sale of each pair Buildings should be granted, and they are to be developed as a composite site, we would direct an auction of the Lots together with a reserved price reflecting the redevelopment potential of the Lots as one composite site.” (at paragraph 40 and 43)
71. As can be seen from the passage quoted above, the Tribunal in the case of Fairtex is also well aware of the requirement for the lots to be included as the subject of the application, hence the subject of the auction. Since the 2 pairs of Buildings are before the Tribunal treated as subject of 2 applications being consolidated, the Tribunal found that the redevelopment potential of the composite site should be considered. The case of Fairtex can be distinguished. The Adjacent Sites in this case is neither covered by this Application, nor covered by another parallel application. Even though the applicant concedes that the redevelopment plan of the Subject Lots includes the Adjacent Lots, we fail to see how, when the Adjacent Lots are not subject of this Application or any application at all, this Tribunal can take into consideration the redevelopment potential of it together with the Subject Lots which is inconsistent with the provisions of the Ordinance.
72. To conclude, the answer to question (c) at paragraph 7 above must be answered in the negative and question (d) does not arise under such circumstances.
Conclusion
73. Having considered the above, this Tribunal is satisfied that the requirements and conditions as laid down in the Ordinance have been met and an order for compulsory sale sought by the applicant should be granted with the reserve price fixed to reflect the redevelopment potential of the Subject Lots on their own.
74. This Tribunal make the following orders :
(a) This Tribunal is satisfied that the value of the respondent’s Shop as assessed in this Application is fair and reasonable and is fair and reasonable when compared with the value of the applicant’s units;
(b) This Tribunal is satisfied that the redevelopment of the Subject Lots is justified due to the age or state of repair of the Building, and that the applicant has taken reasonable steps to acquire all the undivided shares in the Subject Lots including that of the respondent;
(c) All the undivided shares in the Subject Lots, the subject of the Application, be sold by way of public auction for the purposes of redevelopment of the Subject Lots;
(d) Mr. Chow Wing Kin Anthony (周永健) and Ms. Chow Suk Han (周淑嫻), nominated by the applicant and agreed by the respondent be appointed trustees (“the Trustees”) to discharge the duties imposed on trustee under the Ordinance in relation to the Subject Lots and the Trustees be authorized to charge such remuneration for their services in accordance with the terms set out in the letter from Messrs. Peter C Wong, Chow & Chow dated 30 April 2013;
(e) For the purposes of the sale of the Subject Lots by public auction :-
(i) The sale of the Subjects Lots be on the particulars and conditions of sale substantially the same as those in the draft Particulars and Conditions of Sale (as set out in page 122-129 to 122-153 of Bundle B2) to be initialed and approved by the Tribunal;
(ii) The reserve price be set at $113,810,000;
(iii) Subject to further extensions that the Tribunal may subsequently allow upon the application of the purchaser of the Subject Lots or its successor in title, the redevelopment of the Subject Lots and the Building shall be completed and made fit for occupation within a period of 6 years after the date on which the purchaser of the Subject Lots becomes the owner of the Subject Lots; and
(f) Liberty to the applicant, the respondent and the Trustees to apply to the Tribunal for further directions.
Costs
75. Costs order nisi that the respondent do pay costs of this case to the applicant with certificate for 1 counsel, to be taxed if not agreed on party and party basis at High Court Scale. Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.
|
Deputy Judge KOT |
Mr. W. K. LO |
|
Presiding Officer |
Member |
|
Lands Tribunal |
Lands Tribunal |
Mr Patrick Fung leading Ms Nancy Ngai, instructed by Messrs Lo & Lo, for the applicant
Mr Anthony P W Cheung, instructed by Messrs Kong & Chang, for the respondent
|