VICTORY SUPER LTD v. LOI WAI YUNG AND OTHERS

LDCS 2000/2023

[2026] HKLdT 8

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE MAIN APPLICATION NO 2000 OF 2023

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DECISION
(Leave to Appeal)

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Introduction and Background

1.  There was an application for a compulsory sale order under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 (“the Ordinance”) (hereinafter referred to as “the Application”) to sell all the undivided shares of The Remaining Section of Aplichau Inland Lot No 44 (“the Lot”) on which a 8-storey tenement building (“the Building”) known as Sun Ming Building is erected. The Building, which occupies a corner site, has a street address of Nos 16, 18, 20, 22 & 24 Shan Ming Street and Nos 41 and 43 San Shi Street, Ap Lei Chau, Hong Kong.

2.  Pursuant to a judgment handed down by the Tribunal on 30 September 2025 ie [2025] HKLdT 55 (“the Judgment”), the Application was refused on the ground that the Applicant had failed to take reasonable steps to acquire all the undivided shares in the Lot in terms of the offers made to the 2nd named 1st Respondent (“2^nd named R1”), 2nd Respondent (“R2”) and 3rd Respondent (“R3”). In addition, being the majority owner of the Building since 2019, the Applicant had not taken the necessary steps during acquisition of all the undivided shares in the Lot for maintaining reasonable management of the Building. This latter included, for instance, no application by the Applicant to the Tribunal for the appointment of an administrator under section 31 of the Building Management Ordinance[1]^.

3.  On 27 October 2025, the Applicant took out a summons seeking leave to appeal against the Judgment (“the Summons”). All legally represented Respondents (ie the 2^nd named R1, R4, R5 and R6) had indicated that they adopted a neutral position on the Summons and their attendance were excused on the hearing scheduled on 12 December 2025.

4.  There was then an Order dated 12 December 2025 by the Tribunal that:-

(1)  The Applicant shall file and serve its skeleton argument within 14 days from the date hereof;

(2)  The 2^nd named R1, R2, R3 , R4 , R5 and R6 shall file and serve their skeleton arguments in opposition, if any, within 14 days thereafter;

(3)  The Applicant shall file and serve its skeleton argument in reply within 14 days thereafter; and

(4)  Costs of the Summons and today’s hearing be reserved.

5.  On 29 December 2025, the Applicant filed its submission which set out its grounds of appeal as follows:

(1)  The Tribunal erred in law in deciding the requirement under section 4(2)(b) as a valuation exercise (“Ground 1”);

(2)  The Tribunal erred in law in relying on various purported practices and matters (“Ground 2”);

(3)  The Tribunal erred in law in comparing the Tribunal’s EUV with the Applicant’s EUV (“Ground 3”);

(4)  The Tribunal erred in law in deciding that an offer price must not be less than the Tribunal’s EUV (“Ground 4”); and

(5)  The Tribunal took into account irrelevant and unsustainable considerations (“Ground 5”).

6.  None of the Respondent filed any arguments in opposition.

Discussions on Grounds 1, 2 & 3

7.  Under section 4(2) of the Ordinance, the Tribunal shall not make an order for sale unless, after hearing the objections, if any, of the minority owners of the lot the subject of the application under section 3(1) concerned, the Tribunal is satisfied that—

“(a)  …

  (b)  the majority owner has taken 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).”

8.  In Capital Well Limited v Bond Star Development Limited [2005] 4 HKLRD 363, (2005) 8 HKCFAR 578, the Tribunal had made its finding on the basis of valuation evidence filed by both sides as to the open market value of all the six lots concerned, taking account of the composite site’s redevelopment potential. The minority owner in that case owned half share of a tenement unit on 3/F of one of the buildings that had been demolished. The Tribunal assessed the value of its half-share in the tenement unit as 50% of $1,186,000, or $593,000. The appellant’s interest was then calculated to be 2.16% of the whole, applying by analogy the section 3(1) report methodology of identifying a minority owner’s percentage share in the original development. On that basis, the appellant’s proportionate share of the open market value of the overall site, came to $2,289,600 (on the respondent’s evidence) and to $2,457,000 (on the appellant’s evidence), both of which were of course much higher than $593,000. The majority owner’s offer of $2.5 million was therefore higher than each of those assessments and was accepted by the Tribunal to be fair and reasonable for the purposes of the section. This was upheld in the Court of Appeal.

9.  When the minority owner appealed to the Court of Final Appeal against the above background, Ribeiro PJ ruled on behalf of the Court of Final Appeal at §33 that in making the assessment on whether the majority owner’s offer was fair and reasonable,

“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. It is obviously necessary to recognize that there will often be differences of opinion on that matter. If duly satisfied that the rejected offer was fair and reasonable, the Tribunal may make the order, leaving the value and level of compensation to be determined by the public auction.”

10.  In face of the argument by the appellant’s that the Tribunal had to decide first what the correct valuation was before assessing the fairness and reasonableness of the majority owner’s offer, Ribeiro PJ ruled further at §35 that the Tribunal was not required to perform any such task. Ribeiro PJ continued at §36 as follows:

“The Tribunal was fully entitled to find that the majority owner’s offer which exceeded both sides’ assessment of the value of the appellant’s proportionate share of the developable site, taking its redevelopment value into account, fell within the range of what was fair and reasonable. We are of course not suggesting that it is necessary for the offer to “beat” the valuation as if it were a payment into court. 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. The Tribunal in the present case was entitled to find that the hurdle of s 4(2)(b) had been crossed and entitled to make the order for sale.” (underline added)

11.  In the present case, however, as presented by the table at §240 of the Judgment, the majority owner’s offers even did not exceed both sides’ assessment of the value of the minority owners’ EUV, not to mention the Lot’s redevelopment potential. For example, the majority owner’s offers to R1 at $10,560,000, while higher than the majority owner’s assessed EUV at $8,730,000 or $8,990,000 as the case may be as at 30 November 2022[2], it fell significantly short of the assessment by the minority owner’s expert at $13,037,000 by as much as 19%. On the face of this evidence, the Tribunal was unable to tell whether “the offer falls within the range of what may broadly be regarded as fair and reasonable compensation for the interest in question.”  There was a considerable difference between both the valuation experts’ approaches and the valuation figures.

12.  Following from §36 of Capital Well Limited, supra, the Tribunal was therefore required 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.” 

13.  In performing the above exercise, the Tribunal recognised at §244 of the Judgment that “valuation is seldom as exact science” and “there have been a range of figures which the reasonable valuer might have put forward.” In such regard, the Tribunal had to decide the range on the face of evidence available. In Good Faith Properties Limited & Others v Cibean Development Limited [2014] 5 HKLRD 534, the Court of Appeal recognised at §17(b) that “(i)n many cases, the expert opinions put forward by one side had to be calibrated in the wake of the opinions from another expert.”

14.  What the Tribunal did at §§240-242 of the Judgment therefore was to determine that range but found the assessments by the majority owner’s expert for Shop C, Shop D and Shop F on G/F that belong to R1, R2 and R3 respectively fell outside the band of what could be represented as fair and reasonable assessments of the value of the minority owner’s interest.

15.  At §17 of the Applicant’s submission, the Applicant argued that so long as the Applicant had made offers based on the expert opinion of a reputable valuer, it should be regarded as having taken reasonable steps to acquire the minority’s interest by making offers based on such expert valuation. Nevertheless, as the Applicant rightly submitted, the above might be true if there were no “serious faults” or evidence that the valuation was “unreliable”. The Tribunal had pointed out at §239 of the Judgment that “(r)elying on values of EUV and RDV being so close to each other to make an offer to the minority owners, the applicant risked a great chance of error by not compensating the minority owners the market value of their interests in the Lot.”

16.  For instance, the Tribunal had noted at §22 of the Judgment that the Applicant’s valuation expert stated she had not assigned any value to the various unauthorized building works that existed in the shop premises. The Tribunal then pointed out at §24 of the Judgment that this assumption or practice was incorrect pursuant to section 1(a) of Part 1A of Schedule 1 to the Ordinance when “market value of each property” had to be determined.

17.  The Tribunal continued at §§25-28, 34-50 of the Judgment, citing many authorities which proved that the Applicant’s valuation expert’s assumption or practice was incorrect when “market value” is not qualified by any statutory restriction and “property” is defined under section 2 of the Ordinance to mean “immovable property”.

18.  Most appropriate among the authorities, the Court of Final Appeal in Director of Lands v Yin Shuen Enterprises Ltd & Another [2003] 2 HKLRD 399, (2003) 6 HKCFAR 1 expressed at §14 as follows[3]:

“Purchasers are often willing to pay more for land than its intrinsic value would justify. Thus the land may be used for an illegal or non-conforming purpose. In a free market purchasers may be willing to buy such land in the hope or expectation that the current use will continue to be tolerated. Such purchasers may be prepared to pay a higher price than would otherwise be justified. On resuming the land, however, the Government obviously ought not to be required to pay compensation on this basis. Sections 11(3)(a) and 12(b) accordingly preclude the assessment of compensation on the basis of the current use where it is illegal or not in conformity with the terms of the lease under which it is held.…” (underline added)

19.  Under section 24(1) of the Buildings Ordinance, where there has been unauthorized structures, the Building Authority may by order in writing require -

(a)  the demolition of the ..... building works,

(b)  .........

(c)  such alteration of the building, building works.... as may be necessary to cause the same to comply with the provisions of the Ordinance, or otherwise to put an end to the contraventions thereof.....

20.  Section 24(2) requires an order made under subsection (1) to be served upon the owner of the building or of the building works.

21.  In the present case where the EUV had to be assessed as at 30 November 2022, more particularly as at 29 August 2025 when the closing submissions were submitted, no order or “other instrument in writing” was made by the Building Authority that had been registered against the property under the provisions of section 5 of the Land Registration Ordinance, Cap 128.

22.  A real life example was described by the Tribunal at §39 of the Judgment. In Welland Resources Limited v Mega Joyful Limited, LDCS 6000/2022 (unreported, 12 September 2023), a substantial yard amounting to 26.5 sq m was covered and enclosed as part of the unit on ground floor. A Building Notice requiring demolition of the unauthorized coverage and enclosure was issued on 3 January 2011. When the Building Notice was discovered, the sale and purchase of the G/F unit proceeded in June 2011 though the then solicitors acting on behalf of the purchaser only requested a deduction of $40,000 from the purchase price agreed at $7,380,000 (ie a deduction of 0.5%). And notwithstanding the Building Notice, the purchaser, after completing the purchase, fitted out the yard nicely to become “an integral and undistinguishable part of the rest of the office/studio/shop on G/F. Aesthetically, the yard also has a “see-through” design alongside with other parts of the unit.”[4] The Building Authority took no further action at least till the end of 2023, ie a lapse of 12 years when the Tribunal adopted one valuation expert’s opinion that its unit value should be 1/8 of the subject G/F unit. If this assessment was also correct in June 2011, the value of the yard as at June 2011 would be

which was substantially higher than the $40,000 deducted from the agreed purchase price.

23.  Likewise in the present case, as stated by the Tribunal at §31 of the Judgment, Mr T K Hui for R3 gave evidence that the Buildings Department had inspected the unauthorized yard at Shop F after the issuance of the Building Notice against the shop dated 30 April 2008 and that the Building Authority had then taken no further action. Then at §§32-33 of the Judgment, the Tribunal stated the following:

“32. Mr T K Hui’s evidence was not challenged and taking judicial notices of the practice of the Buildings Department, I believe he was telling the truth. I also accept the submissions by Mr T K Hui and counsel for the respondents that when the officials from the Buildings Department inspected the shop, they should have observed and realized there was an unauthorized cockloft at Shop F as well as those inside the adjoining shops which, because of the mode of operations of the owners/occupiers thereat, were open to be looked upon by outsiders.

33. The above refutes the opinion of Ms Chow that “(t)he self-erected cocklofts were noted to be in dilapidated condition” and “potential purchasers in the market would not pay extra price for self-erected cocklofts” when the existing occupier can be regarded as one of the hypothetical purchasers.”

24.  Here, it is important to bear in mind that section 10(6) of the Lands Tribunal Ordinance provides the following:

“The Tribunal may admit in evidence any statement, document, information or matter, whether or not it would otherwise be admissible in evidence and attach such weight to it as may be appropriate in the circumstances.”

25.  The Applicant’s suggestion that there are proposed amendments to the Buildings Ordinance for the purposes of tackling unauthorized structures is neither here nor there. On the one hand, the particulars of amendments have not yet been confirmed and how well any enforcement in future would be effected is unknown. More importantly, as at 30 November 2022 when the EUV of the respective shop units had to be assessed, there was no sight of the proposed amendments. These amendments were only promulgated in December 2024 in response to the discovery of “egregious” unauthorized building works at Redhill Peninsula in September 2023. In any event, the Tribunal stated at §55 of the Judgment as follows:

“While it may be doubtful if the UBWs in the Building are “serious” so as to affect people’s daily lives, insofar when Ms Chow or Mr C K Lau had not assigned any value to the unauthorized structures, I follow the opinion of Mr Patrick Lai and adopt the effective areas as proposed by him.”

26.  I am also surprised that the Applicant tried to argue that it only came to know of the Tribunal’s intention to take judicial notice of the practice of the Buildings’ Department and to rely on “market value” as decided by the so many authorities. Certainly if the Applicant itself had no such idea, its appointed valuation experts should have realized such authorities or judicial notice had been adopted and applied in many precedent compulsory sale application cases.

27.  Similarly, in addition to the issue on the value of the unauthorized structures, as rightly pointed out by the Applicant, its valuation expert relied on 3 comparables which had been discredited or discarded by the Tribunal as being unreasonably low in an earlier case, New Merit Limited v Lau So, LDCS 3000/2022 (unreported, dated 19 September 2023). Although the earlier decision of Tribunal was not binding, bearing that in mind, the valuation expert on behalf of the Applicant should be prepared to take the burden to prove otherwise to the Tribunal; in any event, the valuation expert on behalf of the Applicant should have taken a cautious approach in formulating her assessments, particularly when she found that based on her opinion, the offer to the minority owners taking into account of the Lot’s redevelopment potential was very close to the EUV of the corresponding unit.

28.  The Applicant was also not happy about the Tribunal deciding to adopt primarily the unit rate of comparable EG1. However, the Tribunal may even accept a single transaction for direct comparison purpose. For example, in Mobil Oil Hong Kong Limited v Commissioner of Rating and Valuation [1993] HKDLR 77, in the determination of the rateable value as at 1 July 1990, the Tribunal could not find any useful comparable evidence save an earlier agreement (“the BP Agreement”) in respect of 36.7% of the subject tenement some 3 years earlier. While the Tribunal recorded the danger of relying on only one comparable, it held that it was desirable, at least as a check.

29.  In Forsyth v Banbury Investments Ltd [2000] 3 HKLRD 834 where the Tribunal was tasked to determine the prevailing market rent under Part IV of the Landlord and Tenant (Consolidation) Ordinance, it decided at 838 as follows:

“In the present application, although the parties had before them only one actual rental transaction, it nevertheless should be analysed and relied upon in the assessment of the prevailing market rent for the Premises. I accept that for valuation by direct comparison method, this is not the ideal situation.”

30.  In Able Luck Development Limited & Others v Public Global Investments Limited & Others, LDCS 7000/2014 (unreported, dated 6 October 2017), the Tribunal accepted the only comparable transaction at Fun Tower which was “built to the current day standard of finishes which duly reflects the marketable quality industrial building in the current market” rather than transactions in industrial buildings all built more than 20 years ago.

31.  More recently, in Kerzner International Mauritius Holdings Ltd v Assessment Review Committee & Another (Mauritius) [2021] UKPC 18, [2023] RVR 79 where the Assessment Review Committee of Mauritius (“ARC”), in reviewing the assessment of open market value of a property by Registrar General of Mauritius, adopted only one comparable. The appellant appealed, inter alia, on the ground that the ARC was wrong to treat the only comparable as a starting-point for its valuation. For instance, the appellant submitted that the fact that the valuation of the comparable ended up being discounted by around 65% showed that it was not a proper comparable. The appeal was dismissed by the Privy Council whose last remark was that: “Which comparable to use and what adjustments should be made were matters for the ARC to determine. It has not been shown that their decision on these matters was perverse, irrational or “erroneous in law”.”

32.  Indeed, in Tai Ping Restaurant Limited v Director of Lands, LDLR 1/2013 (unreported, dated 8 December 2014), the Tribunal had made the following remark at §22:

“… I agree it is generally not a good approach to carry out any valuation by direct comparison method using a single comparable. I also agree quality of the comparables is more important than quantity of the comparables. It is a matter of valuation that the backgrounds and availability of objective evidence would determine the number of comparables to be adopted in a particular valuation. Different cases would have different backgrounds and evidence, and therefore may have different number of comparables in the respective assessments. There is no fixed valuation rule in this regard.”

33.  And in the decision on review in Supreme Honour Development Limited v Director of Lands, LDMT 1/2001 (unreported, 19 December 2008), the Tribunal had the following remark at §17:

“… I agree with this submission particularly when the valuation was also carried out using the Comparison Method in the first instant, albeit using only one comparable but that was due to the shortage of market evidence of good comparables, nothing this Tribunal or any other Court could overcome.”

34.  It is also erroneous for the Applicant to complain that was not the approach advocated by the two valuation experts. However, the Lands Tribunal is not bound to accept the submission of any party and may rely upon its own experience in determining the dispute under section 4(1)(a) of the Ordinance[5]. And in Lingrade Development Limited v Secretary for the Environment, Transport and Works (2011) 14 HKCFAR 439, the Court of Final Appeal had the following view on the duty of the Tribunal:

“20. … about the exercise which the Tribunal was required to undertake. It had to form the most accurate view it could about what apartments built according to the original scheme would have fetched ...

21. …

22. …

23. I should briefly deal with Mr Houghton’s other two complaints about the assessment of loss of sales proceeds. One was that the claim should have been dismissed because the Tribunal did not accept Mr Wong’s comparables. There is nothing in this point. The question is not whether Mr Wong’s evidence was accepted or rejected but whether there was evidence to support the decision of the Tribunal. They had before them the evidence of the sales of apartments by Lingrade and the index which they thought appropriate. There is no challenge to the methodology which they, as an expert specialist tribunal, chose to adopt.” (underline added)

35.  Whereas the Applicant emphasised that the Court of Final Appeal affirmed as afore-stated that whether the particular offer falls within the range of what was fair and reasonable depends on “the evidence available” and “the circumstances of each case, the present one was exactly the case where the Tribunal had to find out the range. While the Applicant admitted that there can be no absolute or universal benchmark in terms of % for fairness and reasonableness, a benchmark has to be found somewhere on “the evidence available”.

36.  At last, I find the arguments by the Applicant have no merits when it conceded at §44 of its submission that:

“…the proper comparison ought to be between (a) the apportioned RDV as calculated if the Tribunal’s EUV were to be adopted; and (b) the actual offer prices (which were based on the apportioned RDV calculated on the basis of the Applicant’s EUV).”

37.  This is consistent with what the Tribunal had done as shown in §§241-242 of the Judgment. The comparison tables showed that the “actual offer prices” for Shop C, Shop D and Shop F by the Applicant on 12 January 2023 (which were based on the apportioned RDV calculated on the basis of the Applicant’s EUV) fell short of the Tribunal’s EUV as at 30 November 2022 by -7.81%, -12.62% and -11.94% respectively. It was a pity that the apportioned RDV as calculated by the Applicant’s valuation expert had already been reflected in the offer prices.

38.  By simple mathematics, when the Tribunal had arrived at the  EUV for the corresponding shops which were higher than the EUV assessed by the Applicant’s valuation expert while the EUV for the other units remaining the same, the apportionments of the RDV for the corresponding shops should only be higher than those suggested by the Applicant’s valuation expert. As a result, the shortfall of the Applicant’s offers (because of the lowered apportionments of the RDV) would only be higher. Therefore, the Tribunal stated at §245 of the Judgment:

“That is, the offers by the applicant for the respective shops on 12 January 2023 even fell below the market values of the respective shops even without taking into account the redevelopment potential of their property or the Lot.”

Discussions on Ground 4

39.  Under Ground 4, the Applicant alleged that the Tribunal erred in law in deciding that an offer price must not be less than the EUV.

40.  I am afraid that the Applicant’s assertion must be wrong.

41.  In Good Faith Properties Limited & Others v Cibean Development Limited, supra, the Court of Appeal confirmed at §17(a) that the Ordinance compels, by granting an order for sale, a sale against the will of the minority owner. Then at §17(c), the Court of Appeal recognised the purpose of the minority owner adducing expert evidence to support his opposition is to examine whether there is sufficient ground to override his constitutionally guaranteed right to private ownership of his property.

42.  Then at §§19 & 20, the Court of Appeal emphasised the following:

“19. … the fair and reasonable compensation to the minority owner if an order for sale is to be made against his will. In the context of the present appeal, the following observations by Bokhary PJ in Sin Ho Yuen v Fineway Properties Ltd, supra, at para 7 are pertinent:

“…One of the objectives of the [Ordinance] is, as Mr Justice Ribeiro PJ said in Capital Well Ltd v Bond Star Development Ltd at para 21, ‘to ensure that the minority owner receive fair and reasonable compensation for his interests in the lot’ …”

20. To the same effect is what was said by Litton NPJ at para 25:

“In order that the entrenched right of private ownership of property in Articles 6 and 105 of the Basic Law be not infringed, the protection of minority interest under the Ordinance becomes therefore a key factor. In turn, it behoves the tribunal, in carrying out the scheme of the Ordinance, to ensure that such protection be not diminished …”

43.  Talking about the constitutionally guaranteed right to private ownership of his property, it must also be referring to the entrenched right of private ownership of property in Articles 6 and 105 of the Basic Law.

44.  Article 105 of the Basic Law states as follows:

"The Hong Kong Special Administrative Region shall, in accordance with law, protect the rights of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property.

Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay."

45.  In respect of the latter, the Court of Final Appeal in Director of Lands v Yin Shuen Enterprises Limited & Another, supra, confirmed at §56 that “(i)n general, property is worth what it will fetch, and its open market value reflects its real value.”

46.  Here, the Court of Appeal in Good Faith Properties Limited & Others v Cibean Development Limited, supra, expected at §21 that “on top of the EUV, the redevelopment value would be taken into account in the setting of the reserve price.”

47.  With respect, I am entirely surprised by the Applicant’s assertion that the Tribunal erred in law in deciding that an offer price must not be less than the Tribunal’s EUV. If this suggestion by the Applicant were correct, the entrenched right of private ownership of property in Article 105 of the Basic Law would be infringed. At least, the Court of Appeal in Good Faith Properties Limited & Others v Cibean Development Limited, supra, remarked at §25 as follows:

“We do not understand Mr Mok to be arguing that the fair and reasonable compensation for the interest of the minority owner should be confined to the EUV. Such a proposition is clearly wrong.”

48.  In the Applicant’s submission at §47(2), the Applicant tried to suggest that:

“The EUV and the RDV at a particular date are matters of valuation dictated by prevalent market conditions. They are beyond the control of the majority owner…”

49.  With respect, the Applicant had either misconceived or tried to be misleading. The tables as presented in §§240-242 were comparing the offers by the Applicant to the EUV of the minority owners as evidenced on the same date(s). On the other hand, when the Applicant compared at §47(5) “the EUV ($284,474,000) ultimately assessed by the Tribunal” with the RDV ($238,000,000), it was comparing the EUV as at 30 November 2022 and the RDV as determined by the Tribunal on 30 September 2025. It must be wrong when the two dates were nearly three years apart.

Discussions on Ground 5

50.  Nevertheless, the Tribunal’s analysis did not end at §245 of the Judgment.

51.  At §246 that followed, the Tribunal referred to the observations of Lord Nicholls in Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111 at 125:

“…

Land may, of course, have a special value to a claimant over and above the price it would fetch if sold in the open market. Fair compensation requires that he should be paid for the value of the land to him, not its value generally or its value to the acquiring authority. As already noted, this is well established. If he is using the land to carry on a business, the value of the land to him will include the value of his being able to conduct his business there without disturbance. Compensation should cover this disturbance loss as well as the market of the land itself.” (underline added)

52.  The Tribunal continued at §248 of the Judgment, stating the following:

“In the present case, both R2 and R3 are still conducting their businesses at their shop premises.’

53.  In regard of the above, under Ground 5, the Applicant alleged that the Tribunal had taken into account irrelevant and unsustainable considerations.

54.  Firstly, the Applicant referred to §248 of the Judgment where the Tribunal found from the evidence from R2 and R3, which were collaborated by the joint site inspection on 6 May 2025 that they were then conducting their businesses at their shop premises.

55.  Then the Applicant tried to argue that the observations of Lord Nicholls in Director of Buildings and Lands v Shun Fung Ironworks Ltd, supra, were made in the context of assessment of compensation under a different statutory regime, ie section 10 of Lands Resumption Ordinance, Cap 124 and therefore irrelevant.

56.  With respect, the Applicant’s argument above has totally overlooked what the Court of Appeal decided in Good Faith Properties Limited & Others v Cibean Development Limited, supra, at §§33-36:

“33.  At the same time, it must be recognised that in common with compulsory acquisition by the government or other public authorities, a sale ordered by the Tribunal under the LCSRO is the compulsory deprivation of the minority owner’s private ownership of property. Though there could be debate as to the applicability of Article 105 of the Basic Law in light of the expression “徵用” in the Chinese version, there is no doubt that Article 6 of the Basic Law is engaged. As observed by Litton NPJ in Sin Ho Yuen v Fineway Properties Ltd, supra, the deprivation of private ownership without fair and reasonable compensation is an infringement of the constitutional right of the minority owner. Thus, even though Mr Mok sought to argue otherwise, we have no doubt that the principle of equivalence is as much engaged in LCSRO proceedings as in resumption cases notwithstanding the absence of specific provisions like ss 6(2A),8(4) and 10(2)(e)(ii) of the Lands Resumption Ordinance.

34.  Like the case of a landowner in the context of compulsory acquisition, the minority owner in LCSRO proceedings does not wish to dispose of his private property. The whole process, including the proceedings in the Lands Tribunal, is instigated by the majority owner. To the extent that the exercise of the discretion should be informed by the principle that he who caused the litigation should pay for it, the consideration in proceedings under the LCSRO and resumption cases is the same. In Emslie & Simpson Ltd v Aberdeen District Council (No 2), supra, Lord Hope said at p.164:

“It seems to me that the underlying principle in these cases is that the acquiring authority is liable to pay compensation to the owner or occupier of the lands taken. The expenses of determining the amount of disputed compensation may be seen to be part of the reasonable and necessary expense which is attributable to the taking of the lands compulsorily by the acquiring authority. The principle which applies to litigation … is that the cost of litigation should fall on him who caused it. The cost of determining the amount of the disputed compensation would seem, according to this principle, to fall on the acquiring authority without whose resort to the use of compulsory powers there would have been no need for the owner or occupier to be compensated. That seems to me to be the proper starting point for an examination of the question of expenses in these cases.”

35.  As regards the wider scope of LCSRO proceedings in terms of the onus on the applicant to satisfy the Tribunal of the statutory criteria, for reasons we have already canvassed in the overview of the LCSRO regime, the right of the minority owner to raise objections is an important element in the process. Without such right, the determination by the Lands Tribunal would not have the legitimacy which provides the necessary justification for the interference with the constitutional right of private ownership. Viewed thus, the observation by Lord Morison in Emslie & Simpson Ltd v Aberdeen District Council (No 2), supra, at p.162 is equally apposite in the context of compulsory sale:

“… A person whose interest in land is under threat of compulsory acquisition is in an unenviable position. He is compelled either to accede to the acquisition or to take the steps provided by the legislature to oppose it. If the order is confirmed he has no option but to comply with it and to have the amount of compensation determined either by agreement, if he can secure it, or if not, by a reference to the tribunal within the statutory framework which is laid down for that purpose. In these respects it appears to me that he is in a different position from that of the ordinary litigant and my understanding is that, if a person unsuccessfully opposes confirmation of the compulsory purchase order, he is not ordinarily found liable for the expenses of the statutory procedures which are laid down for the hearing of his objection.”

36.  In our judgment, the fact that the majority owner may not be the purchaser is not significant. Even putting aside the scenario where the majority owner is a developer who had successfully acquired 90% of the interest in the land in question, it is no less a compulsory deprivation of private ownership of the minority if the majority owners are simply a large majority of the existing owners. In the rather unusual (or maybe even unreal) situation where a group of majority owners combined together to make an application under the LCSRO, they are seeking to utilise the procedure of the statute to impose their will to sell the whole lot (as opposed to their individual units in it) on the unwilling minority owners. The above analysis as to the need to safeguard the constitutional right of private ownership of the minority owners is equally applicable.”

57.  Secondly, under Ground 5, the Applicant was not satisfied that the Tribunal at §§262-263 & 267 of the Judgment took into account the fact that, for a period of 5 years (ie from mid-2019 and until 14 February 2023 when the Application was commenced) where the Applicant had left the common parts of the Building in disrepair. The Applicant suggested there was no basis to attribute the fault of the mismanagement of the common parts of the Building to the Applicant. The Applicant submitted that this is irrelevant to section 4(2)(b) of the Ordinance which only concerns “reasonable steps to acquire all the undivided shares in the lot”.

58.  While it is true that “reasonable” or “reasonable steps” under section 4(2)(b) of the Ordinance is not defined, courts are regularly required to decide questions of reasonableness on the basis of what have been called in the cases “entirely objective” criteria. The usual examples are a duty to take reasonable care, or the fixing of a reasonable price, or of a reasonable time: see Socimer International Bank Ltd (in liquidation) v Standard Bank Ltd [2008] EWCA Civ 116, [2008] Bus LR 1304 at [66] per Rix LJ, Lehman Brothers Special Financing Inc v National Power Corporation [2018] EWHC 487 (Comm), [2019] 3 All ER 53 at [63] per Robin Knowles J.

59.  It is a question of balancing the competing interests and considering what is reasonable in the overall circumstances of the case. Also, though Sutton London Borough Council v Davis (No 2) [1994] 2 FLR 569 was a case concerning whether a costs order had to be made, the remark by Wilson J (as he then was) is relevant when he stated at §26: “the conduct of a party has been reprehensible or the party's stance has been beyond the band of what is reasonable”.

60.  Indeed, the Tribunal referred at §259 of the Judgment to the Supplemental Closing Submission of the Applicant’s then counsel who, in the Tribunal’s opinion, rightly conceded that it had never been the Applicant’s contention that the Tribunal was confined to/ should:

(i)  Looking at “formal” and “legalistic offers”;

(ii)  only consider “money offers of purchase” in terms of dollar sign and to ignore the rest of the reality/ conduct;

(iii)  only consider the “solicitors” offer letter where the applicant is strictly considered as the “offeror”; or

(iv)  limit its scope to “formal” offers and their face value, and discard all other “negotiations” at the same time.

61.  The management issue did not arise from nowhere. Mr Hui Wang Leuk (“Mr Hui”), being the Manager of the Applicant, conceded that he was only involved in the acquisition of the Building since mid-2022. Notwithstanding that, Mr Adrian But (“Mr But”), who acted for the 2nd named R1, referred Mr Hui to various land search of the units in the Building, including that for Flat B on 1/F which showed that the Applicant signed the Agreement for Sale and Purchase with the former owner on 21 June 2019 and completed the acquisition on 30 August 2019[6]. Mr But also pointed out to Mr Hui that according to the usual practice of the Applicant, the latter would enter into a provisional sale and purchase agreement with the former owners in the first place before the corresponding formal Agreements for Sale and Purchase were signed[7].

62.  The following show the dates of acquisition of the various units of the Building by the Applicant (whereas the dates of the corresponding agreement for sale and purchase are showed in parenthesis):

	Unit A	Unit B	Unit C	Unit D	Unit E	Unit F
G/F	30 Apr 21 (18 Mar 21)	28 Sep 21 (6 Aug 21)	R1	R2	30 Apr 21 (18 Mar 21)	R3
1/F	8 Oct 20 (28 Jul 20)	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	16 Jan 20 (18 Nov 19)	22 Jan 22 (22 Oct 21)	8 Oct 20 (28 Jul 20)
2/F	8 Oct 20 (28 Jul 20)	19 Apr 21 (28 Jul 20)	30 Aug 19 (21 Jun 19)	R4	30 Nov 20 (30 Sep 20)	9 Dec 19 (11 Oct 19)
3/F	8 Oct 20 (28 Jul 20)	30 Nov 20 (30 Sep 20)	10 Jan 20 (23 Oct 19)	R5	8 Oct 20 (28 Jul 20)	16 Jan 20 (23 Oct 19)
4/F	30 Aug 19 (21 Jun 19)	8 Oct 20 (28 Jul 20)	8 Oct 20 (28 Jul 20)	8 Oct 20 (28 Jul 20)	30 Nov 20 (30 Sep 20)	30 Aug 19 (21 Jun 19)
5/F	16 Jan 20 (16 Oct 19)	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	26 Sep 19 (1 Aug 19)	8 Oct 20 (28 Jul 20)	17 Mar 20  (13 Jan 20)
6/F	23 Apr 20 (27 Feb 20)	30 Aug 19 (21 Jun 19)	23 Apr 20 (27 Feb 20)	26 Sep 19 (1 Aug 19)	26 Sep 19 (1 Aug 19)	8 Oct 20 (28 Jul 20)
7/F	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	R6	R6	30 Aug 19 (21 Jun 19)
Roof	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	30 Aug 19 (21 Jun 19)	R6	R6	30 Aug 19 (21 Jun 19)

63.  Then Mr But referred Mr Hui to the witness statement of R4 dated 20 March 2024 which stated at §§5-6 that since mid-2021 when the all units owned by the management committee had sold their units to the Applicant, the management of the Building deteriorated[8]. By then, R4 and R5 had taken up the responsibility of the cleaning and replacing the fluorescent lamps in the common parts. Mr But questioned Mr Hui whether the Applicant had taken any initiative or participated in the incorporated owners’ affairs. Mr Hui’s reply was that the Applicant had taken in-house legal advice but was informed that the Applicant, then being the majority owners of the Building, should not do anything to avoid the conflict of interest[9].

64.  In the similar regard, the Tribunal was entitled to refer to the “acquisition blight” complained by the 2nd named R1 at §260:

“4.4 Before 2019, site-assembly acquisitions of units of the Building commenced. Many former owners signed onto sale and purchase agreements (“S&P”).

4.5 Since in or about mid-2019, many of S&Ps entered into by the previous owners of the Building became executed in favour of the Applicant. Completion gradually took place afterwards whereby units were gradually acquired by the Applicants.

4.6 By reason of the assignment of interest, many of the previous office bearers of the management committee of IO had left office or resigned. As the management committee was no longer quorate, the IO had become dysfunctional and could not operate. The regular maintenance and repairs to the common parts become adversely affected.

4.7 By 31^st August 2021, the IO became completely defunct after the resignation of its chairperson and secretary. Since then:-

4.7.1 By reason of the defunct IO, management fees were no longer collected from the owners of the Building since in or about June 2021.

4.7.2 The Applicant did not and were unwilling to participate in the affairs of the IO. No office bearer in the management committee were re-elected.

4.7.3 All repair/maintenance to the common parts and other services of the Building completely ceased due to the defunct IO. As a result, the conditions of common building facilities deteriorated very quickly.”

65.  Then the Tribunal came to the view at §267 of the Judgment that “the applicant has not, like the majority owner in Kelly Court or those in Far Union Investment, applied to the Tribunal for dissolution of the management committee of the Building and for appointment of an administrator under section 31 of the Building Management Ordinance, Cap 344.” In retrospect, interestingly, the Government was doing the same thing by initiating a section 31 application in Secretary for Home and Youth Affairs v The Incorporated Owners of Wang Fuk Court & Others, LDBM 193/2025 for the management of Wang Fuk Court resulting from the tragic fire on 26 November 2025.

66.  In the Applicant’s submission at §60, the Applicant tried to defend the above by stating that it only acquired Unit E on 1/F of the Building in January 2022 to complete the ownership of 80%. With respect, by reference to §4 of the Judgment, the ownership table as shown in §62 above demonstrates that by the end of 2019, the Applicant already owned 20 out of 60 (ie 1/3rd) equal and undivided shares of the Lot. Whereas those shares for Flat D on 1/F, Flat C on 3/F, Flat F on 3/F and Flat A on 5/F were also forthcoming as their respective agreements for sale and purchase had been signed in 2019, the Applicant’s ownership of the Building had increased to 40%.

67.  Latest by the end of 2020, the Applicant had become the majority owner of the Building though it had not yet met the threshold of making a compulsory sale application under section 3(1) of the Ordinance.

68.  Furthermore, the Applicant tried to argue that according to the witness statement of 2^nd named R1 (which has been repeated above at §64), “the IO became completely defunct” only by 31 August 2021, but completely forgetting that “the management committee was no longer quorate” as stated earlier. If the Applicant’s argument were correct, it might be doubtful if the Government should intervene in the management affairs of Wang Fuk Court when its management committee was extant.

69.  Again, what is reasonable is a question of fact and degree depending on all the circumstances.

70.  Also under Ground 5, the Applicant referred to §271 of the Judgment where the Tribunal took issue on the window of a unit having been under control of the Applicant having been opened all the time so that rainwater coming in. The Applicant argued that this is irrelevant to whether the Applicant had taken “reasonable steps to acquire all the undivided shares in the lot.”

71.  With respect, the Applicant must have missed the preceding paragraph 270 where the Tribunal said it agreed with the remark in Far Union Investment Limited & Others v Ever Legend (H K) Limited & Others, LDCS 21000/2020 (unreported, dated 17 November 2023) at §304 that:

“While we note that the applicants acquired the units for redevelopment, the way how they handle the internal condition could well be different from an owner who acquired a property for residency or letting out. The consideration is they should not do anything to their units to affect the enjoyment of the Building by the other owners.” (underline added)

72.  Indeed, Far Union Investment Limited, supra, was not the only decision of the court on similar issue. In Born Chief Co trading as Beijing Restaurant v Tsai George & Tsai Mary [1996] 2 HKLR 188, the Court of Appeal had the following to say:

“6. The 12-inch opening left in the sliding door was different. Anyone in Hong Kong would close windows on leaving his property unattended. Where, as here, a sliding door was left ajar, the absentee owner must have realised the possibility of flooding in heavy rainfall in Hong Kong. Such foreseeability of the potential for harm to one's neighbours would cast a duty or responsibility upon the defendants to keep their sliding door shut. All in this territory would expect such a precaution to be taken against the possibility of flooding caused by inclement weather ... The cause of the flooding was unidentified. Flooding has not been shown to be an Act of God. According to "the ordinary usages of mankind living in (our) society", the possibility of flooding of Flat C and consequential water damage to other premises in the same building should reasonably have been foreseen. Nuisance was, in my view, established before the judge.

7.   In addition, were the defendants negligent by leaving their sliding door open by 12 inches? The defendants were responsible for opening and keeping open that sliding door. For the reasons I have given, there was reasonable foreseeability of harm to the plaintiff as an occupier of premises below in the same building. Clearly, the defendants owed a duty of care to their neighbour, the plaintiff. The defendants must have foreseen that for a variety of reasons, flooding might be caused with an open door to their flat roof. The possibility of flooding in heavy rainfall must be or should reasonably have been within the knowledge, as the judge rightly put it, of "anyone living in Hong Kong". They were negligent.”

73.  More recently in Tollemache Company Limited & Others v Raymond Lun Kwok Pao, CAMP 38/2025 (unreported, 21 August 2025), the Court of Appeal affirmed at §25 that the paragraphs cited above are matters of common sense.

74.  Then at §271 of the Judgment, it was stated that “there is evidence by reference to the photographs taken in different periods of time that the applicant, having full control of its units through its “patrol team”, left opened the windows.” For example, the windows that were opened were inside Flat B on 1/F[10], Flat A on 2/F[11], Flat E on 2/F[12], Flat B on 3/F[13] and Flat B on 6/F[14] and the photographs thereto showed damp patches below the opened windows on the floor.

75.  In particular, Mr But pointed out that most of the above photos were taken on 10 October 2023, immediately after the heavy rainfall on 9 October 2023.

76.  In spite of the above evidence, the Applicant’s submission even suggested that “the photographs taken in different periods of time” as stated in §271 of the Judgment came from the expert reports when there might be a chance that it was the experts or members of their survey team who opened the windows. With respect, the one who drafted the Applicant’s submission might not have attended the trial on 7 May 2025, was not careful enough to read the transcript of the hearing or not bother to read the exhibits produced by the respondents.

77.  There were other photographs that proved the windows were left opened when nobody else was supposed to be conducting the inspection. These photographs came from Google Map taken randomly at different times including those taken in July 2023 and February 2024[15]. The photographs spoke for themselves and defeated Mr Hui’s evidence that the Applicant’s survey team would always close the windows of the Applicant’s units if they were found to be opened. Mr Hui then denied having knowledge about the matter.

78.  Similarly, the Applicant submitted that its failing to deal with the plant on the roof was irrelevant to whether it had taken “reasonable steps to acquire all the undivided shares in the lot”. Again, what is reasonable is a question of fact and degree depending on all the circumstances. In the present case, what the Tribunal did was to take account of the state of the Building as it existed as at the relevant time of the Application. See §43 of Whole Grand Limited v The Incorporated Owners of Bo Fung Building [2024] 3 HKLRD 725.

79.  The Applicant also argued that only Mr Philip So, the structural engineer giving evidence on behalf of the Applicant, gave the answer that the roots of the plant might have penetrated the concrete through the crack. Yes, only Mr Philip So who replaced the late Mr So Kin Shing could recognize the devastation effect of the 細葉榕, ie ficus microcarpa (also known as Chinese banyan) growing some 3 metres high on Roof A and Roof C. The other experts only gave it a short shrift. For instance, Mr Benson Wong, the building surveyor on behalf of the Applicant, only stated in his Condition Survey Report dated 30 June 2023 at §5.3.5 that the defects which were immediately apparent on the external walls around the elevations by our visual inspection included “vegetation growth”[16]. Nevertheless, when Mr Benson Wong was cross-examined by Mr But, he answered that the plant was “入侵物”[17] which means “invasive”. This latter word was indeed adopted by the Tribunal in describing the situation of the plant in §91 of the Judgment.

80.  Similarly, Mr John Lau, the building surveyor for the respondents, only stated in his Rebuttal Report dated 2 February 2024 at §170(f) that there was “plant growth on wall and flooring”[18].

81.  On the other hand, the Tribunal had presented its observation in §§212-213 of the Judgment:

“212. …, the ficus microcarpa or its similar species appear to have cause significant damage to the Building. Severe corrosion had been found on slab samples near the top floor with reinforcement bars having loss of cross-section around 15% above. In addition, by reference to the Drone High Resolution Photographic Survey, the top floor facing San Shi Street had exhibited a series of cracks. Incidentally, concrete spalling was found on the ceiling in bathroom of Flat B, 5/F near its window, on the ceiling in kitchen of Flat B, 6/F over its window, and on the ceiling in bathroom of Flat B, 7/F over its window despite those units are now owned by the applicant. Apparently, these cracks or spallings have been caused by the ficus tree roots growing downwards all the way from the roof. See photo at Appendix 2.

213. At trial, I had questioned Mr John Lau on how to deal with the problem but he shrugged it off by saying that the ficus tree roots could be pulled off easily from the walls. Mr Philip So stated otherwise because the tree roots might have penetrated into the concrete.  While Mr Philip So’s answer made more sense to me, none of the experts had particularly addressed the issue in their expert reports, not to mention about the costs as a result thereto.

214. In addition, contrary to Mr John Lau’s allegation, no core samples were taken from the concrete behind the ficus roots. The tree roots might also act as screening objects which would result in under-estimation of the actual hollow spots behind.[19]” (underline added)

82.  In view of the above, the Applicant cannot accuse the Tribunal of accepting the evidence of Mr Philip So if the other experts had limited knowledge on this issue and said otherwise. The finding by the Tribunal that “(t)he roots of such ficus trees are invasive and can expand up to three times the tree’s canopy, damaging the concrete, particularly the waterproofing membrane underneath” is common sense based on evidence available, not to mention that the Tribunal is an expert specialist tribunal.

83.  Next, the Applicant took issue on the Tribunal’s finding at §287 of the Judgment that “I am persuaded that either the applicant or its agent had misled R2’s family into signing the Agreement for Sale and Purchase for Shop B and Shop D together but in the event the applicant was content to purchase Shop B only.” The Applicant however directed its attention only to the witness statement of R2 that was recited by the Tribunal at §§285-286 of the Judgment without referring to the finding as stated at the beginning of §287 that:

“During the joint inspection on 6 May 2025, I found that the only access to the unauthorized cockloft in Shop D is through the ground floor of Shop B. I accept that R2’s family would not have sold Shop B if Shop D would not be sold at the same time.”

84.  The Applicant also disputed that it was plainly not R2’s case that “R2’s family would not have sold Shop B if Shop D would not be sold at the same time.” However, R2’s representative, ie his brother, Mr Lo Chiu Ming (羅超明) did give evidence at 14:35 on 7 May 2025 saying something otherwise as follows:

“…… 當日個 terms 係一樣嘅時候佢跨咗入去[20]， 噉就 …… 而當時喺 ……而呢個係 verbal …… 而高僑當日嘅 agent 黃先生當著我哥哥羅超文、我細佬羅超傑講嘅呢係， 佢已經喺後面得到大老板嘅 indication 其實會過嘞， 你張兩份簽咗啤我啦， 我返去入一入咁就簽返俾你就定嘞 ……”

85.  There was no cross-examination of Mr Lo Chiu Ming by the Applicant’s counsel.

86.  Lastly, the Applicant alleged that the Tribunal erred in saying at §§288 & 289 of the Judgment that the Applicant had acted unreasonably by making its offer to R2 “subject to contract”. With respect, the Applicant’s allegation was misconceived. What the Tribunal stated at §289 was that R2’s concern was justified because of his unpleasant experience with the Applicant’s agent:

“289. I am surprised that at this late stage of the Application, the offer by the applicant was still subject to contract. I agree that R2 has rightly raised his concern. Even if he had signified his acceptance, the applicant may once again adopt a wait-and-see attitude to see if the judgment of the Tribunal turns out in its favour or otherwise before it proceeds to complete the purchase.”

Leave to Appeal

87.  Section 11(2) of the Lands Tribunal Ordinance provides that any appeal against a decision of the Tribunal shall be on the ground that such decision is erroneous in point of law. It appears the above issues now sought to be appealed against are points of law. Section 11AA(6) of the Lands Tribunal Ordinance further stipulates:

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

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

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

88.  The “reasonable prospect of success test” is the same as that stated in section 14AA(4) of the High Court Ordinance, Cap 4. It is stated in paragraph 59/2A/4 of Hong Kong Civil Procedure (2026) Vol. 1 the following:

“... In SMSE v KL [2009] 4 HKLRD 125 at §17, Le Pichon JA observed:

“... The relevant test appears in section 14AA(4) of the High Court Ordinance. In granting leave, the judge must have considered that the test set out in section 14AA(4) had been met. The section requires that the court be satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard before granting leave. Reasonable prospects of success involves the notion that the prospects of succeeding must be ‘reasonable’ and therefore more than ‘fanciful’, without having to be ‘probable’.”

In Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515, Chu J (as she then was) observed that:

“The adoption of the ‘reasonable prospect of success’ test, as opposed to the ‘real prospect of success’ test, in our legislation is not accidental. In the Interim Report of the Chief Justice’s Working Party on Civil Justice Reform (2001), the proposal was to adopt the ‘real prospect of success’ test as the threshold for granting leave to appeal: Proposal 44 and paras 535-539. In the Final Report (2004), however, the Working Party decided to adopt as the test for granting leave a requirement that the appeal has reasonable prospects of success, as conveying the notion that the prospects of succeeding in the appeal must be ‘reasonable’ and therefore more than ‘not fanciful’, without having to be ‘probable’: recommendation 115 and para 656 ...

To meet the ‘reasonable prospect of success’ test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed.” (Emphasis added)

89.  The Tribunal will adopt the test referred to in the afore-said two cases. In the Tribunal’s judgment, after reading the grounds set out in the notices of appeal, it really cannot be said that the cases now launched by the Applicants are arguable or have merits that deserve to be heard on appeal.

90.  In the last paragraph of 59/2A/4 (p 1279) Hong Kong Civil Procedure Vol 1 (2026), however, it stated that the Court of Appeal may also grant leave if the question is one of general principles, decided for the first time or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage. In the present case, the clarification of section 4(2)(b) of the Ordinance as regards whether “the majority owner has taken reasonable steps to acquire all the undivided shares in the lot” would help address concerns of both the majority owners and minority owners. More importantly, the minority owners whose properties are being compulsorily acquired against their will through no fault of their own, as to whether or not they have been properly compensated. Their property rights are constitutionally protected.

91.  Nevertheless, save for the scenario as stated in §8 above the provision have never been considered by the Court of Appeal. In the Tribunal’s judgment the true construction of section 4(2)(b) of the Ordinance as regards what might be “reasonable steps” is a matter of great public importance and concern. Although this Tribunal considers not to grant leave to appeal under the first limb of s.11AA(6) of the Lands Tribunal Ordinance, the Tribunal is going to grant leave under the “in the interests of justice” limb.

92.  By reason of the above, this Tribunal hereby grant leave to appeal to the Applicant in respect of the grounds more particularly set out in its submission for leave to appeal dated 29 December 2025.

Costs

93.  As this decision is made on papers without a hearing, I make no order as to costs.