XCHRX WING TUNG YICK INVESTMENT CO. LTD. and Others v. ATTORNEY GENERAL

1995 No. MP 2557

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. On 5th January 1994, three lots of agricultural land in Tai Lam Chung were resumed by the Crown. A dispute arose over to whom 3/5 of the compensation payable under the Crown Lands Resumption Ordinance (Cap. 124) ("the CLRO") by the Director of Lands was to be paid. Proceedings were brought in the High Court to resolve that issue. On 8th December 1995, I declared that it was to the 1st Plaintiff that the Director of Lands was obliged to pay that compensation.

2. The difficulty which has arisen is that I added that the compensation was payable "with interest thereon". I did not identify the rate of interest because I was not asked to do so. Indeed, the Plaintiffs' Originating Summons had simply claimed interest on the compensation payable to the Plaintiffs. As a result, a further dispute subsequently arose as to whether the interest was payable at the rate provided for by section 48 of the Supreme Court Ordinance (Cap. 4) ("the SCO") as the 1st Plaintiff contended, or whether it was payable at the rate provided for by section 17(3A) of the CLRO, which was the rate (if interest was payable at all) offered by the Director of Lands.

3. However, there is a twist in the story. The twist is that although the issue as to whom the statutory compensation is payable has now been decided, there has been no agreement or determination as to what that compensation should be. Prior to the hearing before me, both the Plaintiffs and the Director of Lands had assumed that the amount of compensation would be based on the rate the compensation had been calculated for the 2/5 statutory compensation which had already been paid. That was the basis on which, after the hearing, the Director of Lands offered to pay compensation of $2,038,583.25. He also offered to pay interest on that sum at the rate provided for by the CLRO. I do not read those offers as being divisable. By that, I mean that I do not think that it was open to the 1st Plaintiff to accept one part of the offer and reject the other part. The rejection by the 1st Plaintiff of the part of the offer relating to interest (as it wanted the interest to be calculated on the rate provided for by the SCO which is higher) meant that the Director's offer as a whole was being rejected. The upshot was that the Director of Lands withdrew his initial offer, and the only offer which he was at that stage prepared to make was an offer to pay the sum of $2,038,583.25 without interest. Even that offer has now being withdrawn. Whether it was fair for the Director to do that is a matter which I need not address.

4. It is against that background that the 1st Plaintiff filed a summons under Ord. 20 r. 11 seeking clarification of the order which I made relating to the payment of interest. That is the summons before me today. What the 1st Plaintiff wants me to do is to declare that the interest payable on the statutory compensation should be at the rate provided for by the SCO. That is because the rate provided for by section 17(3A) of the CLRO only applies in two circumstances. The first is where the amount of compensation has been determined by the Lands Tribunal. The second is where the amount is payable under an agreement of the kind to which section 4A of the CLRO relates, i.e. where the Crown agrees to buy the land prior to the reversion of the land to the Crown. Since neither of those events has taken place, Mr. K.M. Chong for the 1st Plaintiff argues that the rate of interest cannot be the rate provided for by section 17(3A) of the CLRO. The only rate it can be, he submits, is the rate provided for by the SCO.

5. I agree with Mr. Chong about the two circumstances in which section 17(3A) of the CLRO applies. However, I reject his argument that that means that interest is payable at the rate provided for by the SCO. That rate is the one rate which cannot be appropriate. The rate provided for by the SCO only applies when judgment for a sum of money is given on a claim for the recovery of a debt or for damages. No such judgment was given by me. The only judgment I gave was for a declaration, because Mr. Chong told me that if I granted the relief which I did, no other relief would be sought. The fact that the declaration was a declaration that the Director of Lands was obliged to pay statutory compensation to the 1st Plaintiff did not convert the declaration into a money judgment for whatever the statutory compensation was. That is especially so as the only remedy relating to the amount of compensation, and therefore the amount of interest, lay in the making of an application to the Lands Tribunal.

6. If interest is not payable at the rate provided for by the SCO, the only rate at which it can be payable is the rate provided for by the CLRO. But since the rate provided for by the CLRO is only payable in certain circumstances, it follows that there may be cases where no interest is payable at all. Such cases are cases where an agreement has been reached between the Director of Lands and an applicant for compensation for the payment of a sum representing the statutory compensation due under the CLRO. At present, therefore, because neither of the events which give rise to the payment of interest under the CLRO have occurred, no question of the payment of such interest arises in this case.

7. There is an alternative form of relief sought in the 1st Plaintiff's summons. The 1st Plaintiff seeks an order for damages to be assessed, if not agreed, for the failure of the Director of Lands to pay the statutory compensation hitherto. The basis of that claim is that the 1st Plaintiff's claim for damages in the Originating Summons would not have been abandoned by Mr. Chong if he had not believed that the 1st Plaintiff would have been able to obtain interest from the Director of Lands equivalent to the damages suffered by it. In my judgment, this claim is misconceived. The CLRO provides the remedy for a failure on the part of the Director of Lands to pay the statutory compensation due promptly. The remedy is the award of interest provided for by section 17(3A) in those circumstances in which such interest is payable.

8. Accordingly, the order which I make on the 1st Plaintiff's summons is that the declaration I made on 8th December 1995 be varied so that it reads as follows:

"It is declared that the Director of Lands is obliged to pay to the 1st Plaintiff the balance of the compensation payable in respect of the resumption by the Crown of Lots 299A, 300 and 302 in Demarcation District No. 384, Tuen Mun, in such amount as may be agreed between the 1st Plaintiff and the Director of Lands or as may be determined by the Lands Tribunal, with interest thereon at the rate provided for by section 17(3A) of the Crown Lands Resumption Ordinance (Cap. 124) in the event of the amount of such compensation being determined by the Lands Tribunal."

(Brian Keith)

Judge of the High Court