LDCS 8000/2009
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
LANDS COMPULSORY SALE APPLICATION NO. 8000 OF 2009
_______________
BETWEEN
WEALRISE INVESTMENTS LIMITED
Applicant
and
LEUNG CHI KEUNG
Respondent
_______________
Coram: Deputy Judge Lui, Presiding Officer of the Lands Tribunal
Date of Hearing: 27 October 2010
Date of Judgment: 3 December 2010
________________
JUDGMENT
________________
The Application
1. This is an Application made underthe Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”) for an order of compulsory sale of all the undivided shares of and in : -
(1) Sub-section 1 of Section B of Sub-section 1 of Section A of Inland Lot No. 905, the Remaining Portion of Section A of Sub-section 3 of Section A of Inland Lot No. 905, Section A of Sub-section 1 of Section A of Inland Lot No. 905 and the Remaining Portion of Sub-section 2 of Section A of Inland Lot No. 905 (No. 1 Kwan Yick Street, Kennedy Town, Hong Kong) (“the 1st Lot”); and
(2) Remaining Portion of Section E of Sub-section 1 of Section A of Inland Lot No. 905, the Remaining Portion of Sub-section 5 of Section A of Inland Lot No. 905, the Remaining Portion of Section B of Sub-section 1 of Section A of Inland Lot No. 905 and the Remaining Portion of Sub-section 3 of Section A of Inland Lot No. 905 (No. 2 Kwan Yick Street, Kennedy Town, Hong Kong) (“the 2nd Lot”).
2. There were 2 buildings erected on the 2 lots respectively with the building at No. 1 Kwan Yick Street sharing a common staircase with the building at No. 2 Kwan Yick Street. There was 1 domestic unit on each of the first floor to fifth Floor with the ground floor unit in each building for retail use, making a total of 10 domestic units (each given 1 undivided share) and 2 ground floor retail units (with ground floor No. 1 Kwan Yick Street given 1 undivided share and ground floor No. 2 Kwan Yick Street given 2 undivided shares). The 2 buildings were about 54 years old.
3. The Applicant was the registered owner of all the undivided shares of the 2 lots with exclusive right to use all the units of the buildings (“the Applicant’s Units”), except 1 undivided shares (out of 13) of the 2nd Lot held by the Respondent with exclusive right to use the domestic unit at 2nd Floor of No. 2 Kwan Yick Street (“the Respondent’s Unit”).
4. The average of Applicant’s undivided shares of the 1st and 2nd Lots was 92.86%. I was satisfied that the Applicant was entitled to make this Application pursuant to section 3(1) of the Ordinance.
The Respondent’s Opposition
5. The Respondent initially filed a Notice of Opposition on 30 December 2009 with an intention to oppose the Application. Subsequently, pursuant to the Tribunal’s directions, the Respondent filed a Witness Statement on 21 September 2010 expressing his intention that he no longer raised any objection to the Application but only disputed the redevelopment value, which was used for setting the auction reserve price, suggested by the Applicant in the valuation report dated 18 August 2010 for $62,500,000.
6. During the hearing, the Applicant adduced a further valuation report dated 26 October 2010 to show this Tribunal a more up-to-date expert opinion on the redevelopment value of the 2 lots. According to Mr. Alnwick Chan, FRICS, FHKIS, Chartered Valuation Surveyor, who prepared both the 18 August 2010 and the 26 October 2010 reports, he took consideration of the latest properties transactions and adjusted his opinion upwards for the redevelopment value of the 2 lots to $68,100,000. Mr. Chan therefore suggested that this should be adopted for setting the auction reserve price. The Respondent was still not satisfied with this more up-to-date opinion of Mr. Chan. He was of the view that Mr. Chan’s valuation was not too low.
7. The Respondent told this Tribunal that he had a valuation expert advising him that the redevelopment value of the 2 lots should be in the region of $130,000,000. However when this expert was asked formally to prepare a valuation report in support of Respondent’s objection, he only gave an opinion that the 2 lots worth $81,000,000.00. The Respondent alleged that his own expert was dishonest and therefore did not adduce his expert’s report as evidence before this Tribunal in support of his objection to the Application. This was a deliberate choice of the Respondent for not adducing the expert report and I therefore say no more about this, except that for the present proceeding, there was no expert evidence from the Respondent to challenged the view of Mr. Chan.
8. The Applicant intended to rely on this latest report of Mr. Chan, namely the 26 October 2010 report, to support its argument for this Tribunal to adopt the same for the auction reserve price. In fact, this report suggested the most favourable outcome, amongst the previous reports, for the Respondent. However, without any expert evidence himself, he still objected the introduction of this 26 October 2010 report.
9. The Respondent complained that he did not time to read and understand the report as this was only adduced at the beginning of the hearing. For this reason, I therefore granted a short adjournment for the Respondent to read and consider the report. After the short adjournment, the Respondent asked for more time because he said that he needed to consult a valuation expert for the report. He therefore asked for the adjournment of the hearing on that day. I rejected that immediately. The reason was simple. If the Respondent decided not to engage any valuation expert for giving him assistance in conducting the hearing, in my judgment, it would be unfair to the Applicant if this Tribunal were to grant further adjournment for the Respondent to consult a valuation expert every time when he encountered difficulties in understanding the expert evidence. For this Application, the Respondent knew or ought to have known that valuation expert evidence would be crucial for determination of the matter. If it was his choice not to engage any expert for giving him assistance during the hearing, it would not be right to give him a second chance at the expense of delay of the whole proceeding. Further, this latest report dated 26 October 2010 was the same as the 18 August 2010 report except that some of the information was more up-to-date. And the Respondent never suggested that he had any difficulty in understanding the 18 August 2010 report before. In a rising market, a more up-to-date report would be more favourable to the Respondent. For reasons mentioned above, I therefore allowed the report to be adduced for this Tribunal’s consideration and marked as Exhibit “A1”.
10. Besides objecting to the admission of the 26 October 2010 report, the Respondent also intended to challenge the contents of this report. Upon the Tribunal’s request, the Respondent then prepared a list of issues (in Chinese) to identify the areas of dispute. The Respondent raised the following issues:-
(1) “The developer had already obtained approval for building plans from the Buildings Department for plot ratio of 10 to build a residential and commercial composite building of over 13,000 sq. m. The intention of the developer for redevelopment was clear. But when the developer applied for compulsory sale, only a small portion of the whole development site was included. Using this small site to formulate a very low efficient building, the developer had tried hard to suppress the redevelopment value of the site.”
(2) “Measured by the approved building plans of the Buildings Department, the Respondent’s share of the area of the redevelopment should be more than 1,800 sq. ft. Calculated according to the sale price of the new development in the same district (Harbour One) at $18,000 per sq. ft., the Respondent’s share of the developer’s future sale revenue should be more than $30,000,000. But the developer now only offered about 1/6 of this acquisition price. It was difficult to say that the offer was fair and reasonable.”
(3) In choosing the “Adopted Unit Rate”, the Applicant only selected a few second-hand property transactions and made a tiny upward “Adjustment”. This was very misleading. Everyone knew that prices of new development and second-hand properties always had a 20% to 40% difference. Therefore the Respondent questioned the correctness of the “Adopted Unit Rate” of $ 136,000 per sq.m. and $ 115,000 per sq.m.
(4) When calculating the GDV, the Applicant deliberately converted the sale price per square foot on gross floor area basis to saleable area basis. The object of doing so was to make use of the super low efficiency of the building and hence suppressed the redevelopment value of the site.
(5) According to the Respondent, the calculation of the redevelopment value of the 2 lots should be:-
GDV
=
HK$18,000/ sq.ft. X 2,388 sq.ft. X 10
=
HK$420,840,000.00
Development Cost (includes all costs)
=
HK$ 2,000 / sq.ft. X 2,338 sq.ft. X 10
=
HK$ 46,760,000.00
Developer Profit is 15% of GDV
=
HK$ 420,840,000.00 x 0.15
=
HK$ 63,126,000.00
Therefore
RDV
=
HK $420,840,000.00 – HK$ 46,760,000.00 – HK$ 63,126,000.00
=
HK$ 310,954,000.00
11. All in all, despite the Respondent had expressly said that he would not object to the Application for an order of compulsory sale, inconsistent with his stance, he kept challenging that the offers made by the Applicant at various stages of the acquisition process were not fair and reasonable. Since the Applicant had the burden of proof to show that the offers made to the Respondent were fair and reasonable in the circumstances, I took the view that, the Respondent in fact objected to the Application on the ground that it failed to take reasonable steps to acquire the Respondent’s interest in the 2 lots.
Valuation of the Existing Use Values (“EUV”) as per Part 1 of the Schedule 1 of the Ordinance
12. Under section 4(1)(a) of the Ordinance, the first determination by the Tribunal would have been the determination of dispute, if any, on the EUV valuations undertaken in the application valuation report filed pursuant to section 3(1)(a) of the Ordinance. However, since the Respondent had withdrawn his oppositions to the valuation of the EUV, there was no dispute by any minority owner of any EUV as assessed in the application valuation report. I therefore accept that the EUVs as set out in the application report dated 4 December 2009 prepared by Mr. Charles C. K. Chan, FRICS FHKIS, Chartered Valuation Surveyor, be adopted without any determination as follows:-
Floor
Existing Use Values as at 5 October 2009
No. 1 Kwan Yick Streetst Lot)
No. 2 Kwan Yick Streetnd Lot)
G/F
$ 4,340,000
$ 4,460,000
1/F
$ 2,730,000
$ 3,030,000
2/F
$ 2,980,000
$ 2,970,000
3/F
$ 2,920,000
$ 3,060,000
4/F
$ 3,010,000
$ 2,860,000
5/F
$ 2,800,000
$ 2,770,000
Total
EUVs
$ 37,930,000
13. According to the above, the total EUVs was $ 37,930,000 and the EUV of the Respondent’s Unit was $2,970,000. Hence, it represented 7.83% of total EUVs of the 2 lots.
Justification for Redevelopment and Reasonable Steps Taken
14. The second determination under section 4(1)(b) of the Ordinance is whether the order of compulsory sale shall be made. According to section 4(2) of the Ordinance, this would involve 2 statutory requirements, namely:-
(1) Was the redevelopment of the 1st and 2nd Lots justified due to age or state of repair of the existing buildings; and
(2) Had the Applicant taken reasonable steps to acquire all the undivided shares in 1st and 2nd Lots.
15. If the Applicant failed to satisfy this Tribunal that the above statutory requirements are met, despite the fact that the Respondent did not adduce any evidence to contest the same, an order for sale ought not be granted.
16. For requirement (1) above, I have taken into consideration of the expert opinion of :- (a) Mr. Raymond Y. M. Chan, FRICS FHKIS, a Chartered Building Surveyor and an Authorized Person as stated in his witness statement dated 18 August 2010 and his report of the same date; and (b) of Dr. James C. W. Lau, a Registered Structural Engineer and Authorized Person as stated in his witness statement dated 18 August 2010 and his report of the same date. The experts were of the view that that the existing buildings were in poor and dilapidated condition, namely :-
(1) The beams and slabs at some of the flats in the upper floors were very poor. The corrosion of the reinforcement was at an advanced stage;
(2) The lower portion of 2 columns in the ground floor shop at No. 2 Kwan Yick Street and the beam above the columns in ground floor shop at No. 1 Kwan Yick Street, all of which were the main load-bearing elements of the existing building, showed severe cracks and spalling;
(3) The top part of the foundation was affected by the corrosion of the of the reinforcement;
(4) Unauthorized structures on the roof have weakened the water proofing system;
(5) Water seepage, mould growth cracks and concrete spalling were found on the external walls;
(6) The presence of a number of unauthorized building works caused concern for the safety of the structure;
(7) The common staircases did not meet current requirements under the Building Ordinance, Cap. 123 (e.g. the width was less than 1050mm, no artificial lighting backed up by emergency lighting system and no protected lobbies). The sub-standard staircases will imposed potential dangers to the residents using it especially in case of fire as the it was the only available means of escape; and
(8) Electrical cables and devices were housed in the staircases without protection by fire resisting enclosures;
17. Mr. Li Counsel for the Applicant, submitted that the existing buildings were 54 years old. It was not only dilapidated but also in a state of disrepair and being dangerous structurally. Further, many building repair orders against the buildings were not complied with. I agree with Mr. Li. Further, one may argue that although extensive repair works could extend the existing buildings’ life span, I accept that the continuous maintenance costs would be high. Most of the building components and finishes were at the end of their effective life span and without substantial repairs, the existing buildings were not up to tenantable standard. The experts’ views were that the buildings were structurally dangerous and the only sensible solution was to rebuild the same.
18. Apart from the professional opinions of the experts, I also look at the primary evidence supporting the opinions including:- the photographs, the survey records and the various tests and surveys results (including:- carbonation test, covermeter survey, Uniaxial compression test, surface hardness test and chloride content test) in coming my decision. I accept that the expert opinions were sound and supported by the facts.
19. Further, in consideration of the evidence above, I am entitled to look at all of the above collectively to see if redevelopment was justified, even though when each of them, if considered alone, was insufficient to do so. I am satisfied that the evidence showed that the existing buildings on the 2 lots were structurally dangerous and liable to collapse. Dr. Lau in fact recommended that temporary supporting frames should put up immediately. Since the existing buildings were unsafe and unreasonable high costs may have to be incurred to restore them into an acceptable standard but no evidence seemed to suggest that any reasonable owners would do so, I am therefore satisfied that the redevelopment of the 1st and 2nd Lots was justified due to age and state of repair of the existing buildings.
20. In Intelligent House Ltd v Chan Tung Shing & Others Fineway Property Ltd v Sin Ho Yuen Victor Intelligent House
21. For requirement (2) above, according to the Respondent, he no longer took any issue after filing his Witness Statement on 21 September 2010. However, if I understand the Respondent’s position correctly, he still maintained his view that all the offers (including the latest offer of $ 5,500,000) were unreasonable and therefore refused to accept any of them. The List of Issues (in particular, Issue No.2) submitted by the Respondent seemed to suggest the reason for his objection. He was of the view that none of the offers made to him were fair and reasonable as they did not reflect the real redevelopment potential of the 2 lots. According to the Respondent, he should be offered for at least $30,000,000. He complained that the latest offer was only 1/6 of this and he therefore refused to accept it. He also disagreed with Mr. Chan’s latest view that the redevelopment value of the 2 lots was only $68,100,000.
22. Despite his express statement that he would not object the granting of the order of compulsory sale, the Respondent in fact put up a ground of opposition against this Tribunal for doing so. In view of the Respondent’s inconsistent stances, I will treat the Respondent, as if, still objected to the Application on the ground that the Applicant failed to make reasonable offers to the Respondent to acquire the Respondent’s undivided shares in the 2 lots.
23. According to the Respondent, he was of the view that the redevelopment potential of the 2 lots was much higher than now disclosed by the Applicant in this Application. In Issue No. (1) of the Respondent’s List of Issues, he alleged that there had been an approval by the Buildings Department for a redevelopment scheme involving the 2 lots with plot ratio 10. According to the Issue No. (2), his fair share of the value of this approved redevelopment scheme should be more than $30,000,000. In coming to this figure, he assumed that he would be entitled to 1,800 sq.ft. of the future development scheme and if each square foot worth about $18,000, the fair and reasonable value of his interest in the 2 lots would be more than $30,000,000. He therefore submitted that the latest offer of only $5,500,000, which was only 1/6 of this valuation, must be unfair and unreasonable.
24. First of all, there was no evidence adduced by the Respondent to prove that there was a much greater redevelopment scheme involving the 2 lots in question with a plot ratio of 10. I simply do not accept the Respondent’s mere assertion at all. Secondly, even if I were wrong that the Respondent in fact was able to prove that there was a much greater scheme of redevelopment with a plot ratio of 10 involving the 2 lots in question, it was still irrelevant to the present case. It was decided by the Court of Final Appeal that even if the Applicant were to carry out a much greater scheme of redevelopment involving, not just the 2 lots in question, but also some other adjacent sites, this Tribunal is entitled not take this extra redevelopment potential, generated from merging the 2 lots in question with these adjacent sites, into consideration. In Capital Well Ltd v Bond Star Development Ltd
25. For Issue No. (3), the Respondent criticised Mr. Alnwick Chan that he was wrong, in coming to his view for the “Adopted Unit Rate” in his valuation, by taking into consideration of the transactions of second-hand properties instead of new developments for sale. Although Mr. Chan agreed that new developments for sale would have been better comparables, he was unable to find any suitable ones within the same locality. He therefore turned to use the transactions of second-hand properties of only a few years of age within the same locality. He explained that although the transactions of those developments were all completed a few years ago, namely they were not newly completed, in coming to his opinion for the redevelopment value, he made allowance for the difference in age by making upwards adjustments for 8% to 20%. However, the Respondent did not accept that. He argued that one should look to other areas in Hong Kong for comparables if no such transactions existed within the same locality. Further, if one must use these second-hand properties transactions as comparables, the adjustments should be in the range of 20% to 40%. The Respondent submitted that the difference in prices for 20% to 40% between the second-hand properties and the new developments were well known to everyone and it was unnecessary to rely on expert knowledge.
26. In my judgment, I find it difficult to accept the Respondent’s submissions. I accept that Mr. Alnwick Chan was an expert in property valuation and his expert opinions were reasonable in the circumstances. On the other hand, there was no expert evidence supporting the Respondent’s submissions, except his brief account of some expert opinion that he received previously. The Respondent, however, chose not to rely on the opinion because he was of the view that the opinion was not honestly made. As I have no sight of the Respondent’s expert report, I am unable to make any further comment on it, save to say that no weight should be attached to this “undisclosed” expert’s opinion to the Respondent.
27. I disagree with the Respondent that new developments in other locations should be used for comparison instead of the second-hand properties within the same location. It was indeed difficult to compare properties in different locations and to make suitable adjustments. I accept what Mr. Alnwick Chan had done was reasonable. I also disagree with the Respondent that the difference in prices between the second-hand properties and the new developments were just common sense and it was unnecessary to rely on expert’s knowledge. I accept that everyone (including the Respondent himself) might have a view of what the difference in price would be but it was entirely irrelevant. Mr. Chan’s view was his independent professional judgment based on his training and experience as a Chartered Valuation Surveyor. In the absence of any expert evidence to the contrary, I do not see why Mr. Chan’s view should not be accepted. I find that the criticism from the Respondent was unfounded.
28. For Issue No. (4), the Respondent further criticised Mr. Alnwick Chan that, by using saleable areas in his valuation instead of gross floor areas, he was deliberately making use of the “super low efficiency” of the future development scheme so that the redevelopment value could be further suppressed. Mr. Chan explained that it was common practice for surveyors to use saleable area as basis for analysis in residual valuation. This could avoid unnecessary subjective adjustment being made for the comparables when different development having different efficiency ratios were being compared. Although I agree that the efficiency ratio of the development was on the low side, it was probably due to the small size of the site and was unrelated to the saleable areas being used as the basis of analysis. I accept Mr. Chan’s explanation and reject the Respondent’s submission in Issue No. (4).
29. For Issue No. (5), the Respondent gave his own opinion of how the redevelopment value of the 2 lots should be calculated. Same as above, no valuation expert evidence was adduced to support the Respondent’s submission. Apart from some reference was made to a new development called “Harbour One”, no explanation as to how and why a unit rate of $ 18,000 p sq.ft. was used. Further, no explanation as to why a plot ratio of 10 was used in the calculation. Mr. Alnwick Chan criticised that the gross development value, namely the GDV, was unreasonable as it was not discounted for the development period and no account was made for the marketing cost. I accept that the criticism was validly made. No evidence was adduced as to why and on what basis that the development costs was $2,000 per sq.ft. No provisions were made for the demolition costs, professional fees and the time taken for the demolition and construction. Mr. Chan expressed difficulties in understanding the Respondent’s calculation and I share the same feeling. In my judgment, a valuation for the redevelopment value of the 2 lots should be carried out by valuation experts. Valuations prepared by laymen without proper training and/or experience were completely useless and unhelpful for this Tribunal. I therefore reject the valuation prepared by the Respondent as described in Issue No. (5) being unprofessional, unreliable and unhelpful.
30. Although the matters raised in the Respondent’s List of Issues are all rejected, this is not the end of the matter. This Tribunal is entitled to look at the valuations submitted by the Applicant to decide whether, or not, the offers made to the Respondent were reasonable. If this Tribunal is not satisfied that the offers were fair and reasonable, the order of compulsory sale still ought not be granted. I have carefully reviewed the valuation in the 26 October 2010 report. Mr. Alnwick Chan gave his professional opinion that the redevelopment value of the 2 lots, as at 22 October 2010, was $68,100,000. In carrying out the valuation, Mr. Chan used the residual valuation method and was of the view that the optimum hypothetical development should be a composite commercial and residential scheme. I had carefully considered and reviewed the steps taken, assumptions made and comparables used by Mr. Chan in the valuation and accepted that they were reasonable in the circumstances. I was satisfied that $68,100,000 was the open market value of the 2 lots reflecting their redevelopment potential, on their own.
31. The Applicant had offered to purchase the Respondent’s Unit at $4,900,000 and $5,100,000 on 2 October 2009 and 14 October 2009 respectively but the Respondent refused to accept any of them. Then the Applicant on 2 November 2009 made a further attempt by making another offer to the Respondent at $5,500,000 but was rejected again for being unreasonable. Given my determination of the redevelopment value, $68,100,000, for the 2 lots (as at 22 October 2010) was reasonable, the proportionate value of the Respondent’s Unit (calculated according to the statutory formula at the Respondent’s pro rata interest of the development at 7.83%) was $5,332,230. In my judgment, the latest offer in the sum of $5,500,00 made on 2 November 2009 clearly represented a fair and reasonable share of the redevelopment potential of the 1st and 2nd Lots.
32. In coming to my decision, I also take into consideration of the offers made to other owners of the 2 lots previously. For offers made to the ground floor shops’ owners, I noticed that, for Nos. 1 and 2 Kwan Yick Street, the acquisition prices were $5,000,000 and $4,000,000 respectively. These transactions took place on 15 October 2009 and 13 April 2006 respectively. For offers made to the upper floors domestic units, except for the first floor unit at No. 1 Kwan Yick Street which was sold to the Applicant at $2,000,000, all units with the exception of Respondent’s Unit (which was also a domestic unit), were sold to the Applicant at $3,500,000 each in October 2009. I find that the latest offer in the sum of $5,500,000 made to the Respondent in fact was the highest, amongst these others.
33. All in all, I reject that the submissions of the Respondent that the offers made to him were too low and unreasonable in the circumstances. I accept the offers were fair and reasonable and in particular, they reflected a fair share of the redevelopment potential of the 1st and 2nd Lots. In fact, the latest offer for the Respondent was the highest amongst other accepted offers by other owners of the existing buildings. I therefore find that the Applicant had taken reasonable steps to acquire all the undivided shares in 1st and 2nd Lots by making offers which were fair and reasonable but failed to acquire the Respondent’s Unit.
34. By reasons of the above, I am satisfied that the order of compulsory sale ought to be made.
Auction Reserved Price for the Auction
35. Given my determination of the redevelopment value of the 1st and 2nd Lots above, I therefore accept Mr. Chan’s opinion and approved that the reserve price for the auction shall be $68,100,000.
Costs
36. Since this is a contested application and the Applicant succeeded, in my judgment, costs should follow the event. The Respondent, however, argued that even if the Application is successful, he should not be responsible for all the costs because he, in fact, did not object to the order being made. This was not entirely correct and I do not accept that submission. The Respondent filed a Notice of Opposition on 30 December 2009 and opposed the Application entirely. Only in the Witness Statement filed on 21 September 2010, which was 9 months later when the Application was ready for trial, the Respondent purported to withdraw his opposition but still reserved his right to contest the auction reserve price. First of all, I find that the withdrawal was too late and secondly it later turned out to be not a withdrawal at all, in substance. During the hearing, he unambiguously expressed his intention to challenge the reasonableness of the offers made to him. This, in essence, meant that if this was successful, the entire Application ought not be granted. In other words, despite the Respondent’s expressed intention to withdraw his opposition, he did not in substance do so. He was still of the view that the offers made to him were unreasonable. However, given my findings above that the offers were fair and reasonable and this Application could be avoided entirely but for his refusal to accept them, I do not see why the Respondent should not bear costs of this Application. I therefore order that the Applicant is entitled to costs of this Application. I also order that it is justified to be taxed on High Court Scale and is suitable to be appeared by Counsel.
The Order for Sale
37. I therefore make an order of compulsory sale in the following terms:-
(1) The Tribunal is satisfied that the EUV of each unit as set out in the valuation report filed for this Application is fair and reasonable and is fair and reasonable when compared with EUVs of the Applicant’s Units;
(2) Having considered the evidence adduced in the Tribunal that redevelopment of the 1st and 2nd Lots is justified due to the age and state of repair of the existing buildings on the 2 lots, and that the Applicant has taken reasonable steps to acquire all the undivided shares in the 2 lots including that of the Respondent;
(3) All the undivided shares in the 1st and 2nd Lots, the subject of the Application, be sold by way of a public auction for the purposes of redevelopment of the 2 lots under section 4(1)(b) of the Ordinance;
(4) Ms. Chow Pui Wa Carol and Ms. Fung Wan Yiu Agnes, nominated by the Applicant, be appointed trustees (“the Trustees”) to discharge the duties imposed on trustees under the Ordinance in relation to the 1st and 2nd 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. Vincent T. K. Cheung, Yap & Co., Solicitors & Notaries dated 18 October 2010;
(5) For the purpose of a sale of the 1st and 2nd Lots by public auction under s.5(1)(a) of the Ordinance:-
(a) The sale of the 2 lots be on the particulars and conditions substantially the same as those in the draft Particulars and Conditions of Sale (see Hearing Bundle pp. 1662 – 1693) initialed and approved by the Tribunal;
(b) The reserve price be set at $68,100,000;
(c) Subject to further extensions that the Tribunal may subsequently allow upon the application of the purchaser of the 1st and 2nd Lots or its successor in title, the redevelopment of the 2 lots shall be completed and made fit for occupation within a period of 6 years after the date on which the purchaser of the 2 lots becomes the owner of the 2 lots;
(6) Liberty to the Applicant, the Respondent and the Trustees to apply to the Tribunal for further directions; and
(7) The Respondent do pay costs of this Application to the Applicant, to be taxed on High Court Scale if not agreed, with Certificate for Counsel.
Deputy Judge Lui
Mr. C.Y. Li instructed by M/S So, Lung & Associates, for the Applicant, present.
In person, the Respondent, present.
Please refer to HCMP119/2011 for the relevant appeal(s) to the Court of Appeal.