張萬成 v. 地政總署署長

LDMP 11 OF 2003

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS Application No. 11 of 2003

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D E C I S I O N

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1. With the consent of the parties, I deliver this decision in English.  This is an application for extension of time to appeal against the Government’s refusal to exempt Lot No. 700 in D. D. 434 in Tsuen Wan from Government rent pursuant to section 4 of the Government Rent (Assessment and Collection) Ordinance, Cap. 515.  In order to consider whether time should be extended for the Applicant, I have to consider whether he has any chance of success in his proposed appeal. 

2. The Applicant is the son of Mr. Cheung Wai Ming, deceased and Lot No. 700 (hereinafter called “the New Lot”) is registered in the deceased’s name.  The grant of the New Lot can be traced back to the Remaining Portion of Section A of Lot No. 84 in D. D. 434 (hereinafter called “the Old Lot”). 

3. The Old Lot used to be owned by one Cheung Ki Wai, the grandfather of the Applicant.  Mr. Cheung Ki Wai passed away on about 3^rd April 1948.  An application under the then section 17 of the New Territories Ordinance for succession to his properties was made on 30^th June 1977.  His properties included the Old Lot.  The application stated that Cheung Ki Wai had 4 sons and 1 daughter.  The 4 sons were Cheung Tam, Cheung Tim, Cheung Kau and Cheung Ping Hung (hereinafter called “the 4 Cheungs”).  Mr. Cheung Wai Ming was not included. 

4. The 4 Cheungs and the daughter who were named in the application for succession made a written Chinese declaration also on 30^th July 1977 declaring that Cheung Wai Ming was not included in the application because problems over his document of identity and promised that once the succession procedure was completed, they would give Cheung Wai Ming his ¹/₅ due share. 

5. On 3^rd July 1980, the 4 Cheungs executed a deed of surrender in respect of the Old Lot surrendering it to the government in exchange for the future grant of a resite house to be built by the government.  The letter containing the government’s promise said that the resite house would not be completed until about June 1984. 

6. On 8^th August 1980, the 4 Cheungs made a declaration of trust at Messrs. Lau & Co. declaring that they were trustees holding the Old Lot for and on behalf of Cheung Wai Ming and they had surrendered this lot to the government on 3^rd July 1980.  They further declared that they held all the rights and interest and compensation in the surrender memorial in respect of the Old Lot as trustees for and on behalf of Cheung Wai Ming.  This trust deed and the written Chinese declaration mentioned above were not registered at the Land Registry. 

7. The New Lot together with a new resite house thereon was not granted to the 4 Cheungs in about June 1984 as stated in the letter of promise, but was only granted to them on 3^rd April 1985.  The 4 Cheungs also executed a memorandum of release for the government on the same date.  They then assigned the same to Cheung Wai Ming on 5^th July 1985.  This assignment was prepared by the Tsuen Wan District Land Office for them.  However, the assignment did not say that it was for discharge of the trust.  Instead, it stated that it was made for “certain good causes”.

8. The government opposed this application for extension of time on the ground that the Applicant has no chance of success.  The government initially attacked the authenticity of the declaration of trust which was not registered.  It also took various other grounds to argue that Cheung Wai Ming was not entitled to exemption.  However, on a without admission basis, the government in the last hearing accepted that if the 4 Cheungs were still the registered owner of the New Lot, they would have been entitled to exemption of government rent. 

9. I then raised several questions for the government to consider.  As I see it, if the declarations of trust are genuine, Cheung Wai Ming would have owned the equitable interest in the New Lot.  If the 4 Cheungs would have entitled to the exemption had they not assigned the New Lot to Cheung Wai Ming, the assignment by way of discharge of the trust would not have placed Cheung Wai Ming to a less advantageous position in relation to the exemption.  In fact, section 2 of the said Ordinance defines “interest” for exemption to mean a legal or equitable interest in a lot.  Prior to the assignment to him, Cheung Wai Ming was the equitable owner.  After the assignment, he became the legal owner.

10. However, this morning, Mr. Chow for the government presented a clearer analysis of the meaning and effect of section 4 of the Ordinance which regulated exemption.  Section 4 provides: -

“	(1)	Subject to other provisions of this section, an exemption from liability to pay Government rent applies to an interest held under-
		(a)	an applicable lease of a rural holding that an indigenous villager held on 30 June 1984;
		(b)	a small house grant made to an indigenous villager after 30 June 1984; or
		(c)	a resite house grant-
			(i)	held by an indigenous villager on 30 June 1984;
			(ii)	made to an indigenous villager to replace an applicable lease of a rural holding that the indigenous villager held on 30 June 1984; or
			(iii)	made to an indigenous villager to replace a small house grant made to the indigenous villager after 30 June 1984,”

11. The New Lot is not a rural holding or a small house grant, hence, sub-section 1(a) and (b) are inapplicable.  It is a resite house and sub-section 1(c) should be considered. 

12. Of the 3 scenarios in this sub-section, the first one is inapplicable as neither the 4 Cheungs nor Cheung Wai Ming held the New Lot on 30^th June 1984.  The New Lot was only granted to the 4 Cheungs on 3^rd April 1985. 

13. The second scenario is also inapplicable because it refers to a resite house grant made to an indigenous villager to replace an applicable lease of a rural holding that the indigenous villager held on 30^th June 1984.  The Old Lot was held by the 4 Cheungs only up to 3^rd July 1980.  If Cheung Wai Ming should have an equitable interest in the Old Lot, such interest also ceased on the same date.  Neither the 4 Cheungs nor Cheung Wai Ming held any interest in the Old Lot on 30^th June 1984.  They only had the right under the government’s promise of a future grant of a resite house to be built by the government.  However, the promise of the government was not an interest for the purpose of this Ordinance.  Section 2 defines interest as: -

“	‘interest’ means a legal or equitable interest in a lot, a section of a lot or an undivided share in a lot or section, but does not include an interest in the nature of an easement, wayleave, tenancy or sub-lease;”

14. The third scenario is also not applicable because it refers to a resite house grant made to an indigenous villager to replace a small house grant made to the indigenous villager after 30^th June 1984.  In this case, there was no small house grant made to any of the Cheungs after 30^th June 1984 which was replaced by the resite house grant. 

15. The Applicant Mr. Cheung pointed out that if the government should have granted the New Lot to the 4 Cheungs on or before 30^th June 1984, the 4 Cheungs and hence Cheung Wai Ming would have been entitled to the exemption under the first scenario.  Mr. Chow for the government accepts this to be the case, however, the New Lot was only granted on 3^rd April 1985 and unfortunately, the exemption does not apply.  It is indeed unfair that Cheung Wai Ming cannot enjoy the exemption of the government rent simply because the government’s failure to let the 4 Cheungs have the resite house in about June 1984 as stated in the letter of promise.  However, there is nothing I can do about it.

16. If sub-section 1(c)(ii) should have been worded: -

“(ii) made to an indigenous villager to replace an applicable lease of a rural holding that the indigenous villager held on or before 30 June 1984”

this case and other cases which are on all fours as this one will be entitled to exemption and the unfairness removed.   I therefore suggest that the government should consider whether this section should be so amended. 

17. In the premises, I have no choice but to dismiss Mr. Cheung’s application as I cannot see how he can succeed in the proposed appeal.  But I will not make any order of costs as the government has only adopted the correct position this morning.