Pacific China Development Ltd and Another v. The Personal Representative of Chu Tak Hing, Deceased, Administratrix of the Estate of Yu Kei Ming, Deceased and Another

LDCS 10000 / 2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE APPLICATION NO. 10000 OF 2014

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J U D G M E N T

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Background

1.This is an application pursuant to Section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”) for compulsory sale of all the undivided shares in the Remaining Portion of Section V of Inland Lot No 1366 (“Lot 1”) and Sub-section 1 of Section V of Inland Lot No 1366 (“Lot 2”) (which are hereinafter referred to collectively as “the Lots”) for the purposes of the redevelopment (“the Application”).

2.Erected on the Lots are a pair of 4-storey tenement buildings (“the Buildings”) known as Nos 17 & 19 Jupiter Street, Hong Kong respectively.  According to a set of building plans of reference no 2/3924/52 approved by the Building Authority, the Buildings accommodate 2 symmetrical units on each floor from Ground Floor to 3rd Floor sharing a common staircase.  Domestic Permit (Permit No 336) for the Buildings was issued on 30 October 1953 wherein permission was granted to occupy and use the Buildings for domestic purposes.  Thus, the Buildings are aged more than 50 years before the Application was commenced on 19 August 2014.

3.When the Application was first taken out, it was also for the undivided shares of and in the Remaining Portion and the Remaining Portion of Section W of Inland Lot 1366 with another pair of 4-storey building thereon known as Nos 21-23 Jupiter Street.  There were then two respondents.

4.By an order dated 15 April 2015, the Application was amended to substitute the personal representative and the Administrator of the 1st and 2nd respondents who were then deceased as the 1st and 2nd respondents respectively.

5.The Application was re-amended on 18 September 2015 so that only the order for sale of the Lots is in issue after the applicants discontinued their application on 31 July 2015 against the 2nd respondent whose interests concerned 2^nd Floor, No 23 Jupiter Street.

6.The 1st respondent who owns the domestic unit on 1^st Floor of No 19 Jupiter Street remains but Ms Gekko S Y Lan (“Ms Lan”), counsel for the applicants, submits that the owner is missing.

7.Whereas each unit in Lot 1 or Lot 2 comprises 1 equal and undivided share of and in the corresponding lot, the undivided interests of the respective units of the Buildings sharing each of the Lots as well as their corresponding ownerships when the applicants commenced the present proceedings on 19 August 2014 are shown in the table below:

Floor	17 Jupiter Street (Ownership)	19 Jupiter Street (Ownership)
Ground Floor	1 (1st applicant)	1 (2nd applicant)
1st Floor	1 (2nd applicant)	1 (1st respondent)
2nd Floor	1 (2nd applicant)	1 (2nd applicant)
3rd Floor & Roof	1 (1st applicant)	1 (2nd applicant)
Total	4	4

8.Thus as at the date of the Application, the applicants collectively owned 100% equal undivided  parts or shares in Lot 1 and  75% equal undivided parts or shares in Lot 2.  The average of the percentage of the undivided shares owned was 87.5% pursuant to Section 3(2) of the Ordinance.  They then owned not less than 80% of the undivided shares in the Lots and were entitled to make the present application by virtue of the Land (Compulsory Sale for Redevelopment (Specification of Lower Percentage) Notice under Section 3(5) of the Ordinance (“the Notice”)[1].

9.As no Notice of Opposition or any other evidence on behalf of the 1st respondent has been filed, Ms Lan simply called the witnesses to prove the applicants’ case.  The applicants contend that all the requirements of the Ordinance have been satisfied and ask for an order for sale in terms of the draft order submitted. 

Section 3 of the Ordinance – Ownership of the Applicants

10.Section 3(1) of the Ordinance requires the Applicants to have not less than 90% of the undivided shares in a lot before it can make an application. 

11.Section 3(5) of the Ordinance also states that the Chief Executive in Council may, by notice in the Gazette, specify a percentage lower than the percentage mentioned in subsection (1) in respect of a lot belonging to a class of lots specified in the notice.

12.Pursuant to Section 3(5) of the Ordinance, the Notice was gazetted on 22 January 2010 and came into operation on 1 April 2010 (“the Notice”). Section 3 of the Notice lowered the threshold for compulsory sale, insofar as it is applicable, from 90% to 80%.  Section 4(1) of the Notice specified, for the purposes of Section 3:

“(a) a lot with each of the units on the lot representing more than 10% of all the undivided shares in the lot;

(b) a lot with each of the buildings erected on the lot issued with an occupation permit at least 50 years before the relevant date; and

(c) …”

13.By reference to §§2 & 4 above, the Lots are therefore covered by the Notice and the applicable percentage is 80%.

Determination of the existing use values (“EUV”) of all units in theBuildings

14.Pursuant to section 3 of the Ordinance, the Application was accompanied by a valuation report (“Application Report”) dated 6 August 2014 prepared by Mr Charles C K Chan of Savills Valuation and Professional Services Limited (“Mr C Chan”), the applicants’ valuation expert witness, containing the assessments of the values of all units (which are conveniently termed as the existing use values, the “EUV” of all units) in the Buildings on the Lots as at 16 June 2014.

15.It comes to my notice that subsequent to the preparation of the Application Report, Mr C Chan’s membership with the Hong Kong Institute of Surveyors (“HKIS”) was suspended for 1 year as from 20 August 2015 (“Suspension”) by reason of a finding of the Disciplinary Board of HKIS.[2]  According to the then Constitution and the Bye-Laws of HKIS, the Suspension only prevented Mr C Chan from casting any vote at meetings or to hold any office in HKIS or to have or exercise any of the other rights or privileges of membership during the period of his suspension.  More particularly, “he shall be entitled to receive the publications of the Institute and use the appropriate abbreviated designation after his name”[3].

16.Despite the Suspension and the aforesaid consequences, Mr C Chan remains a member of the Royal Institution of Chartered Surveyors, the membership of which is recognized as an alternative qualification for registration as a Registered Professional Surveyor under the Surveyors Registration Ordinance, Cap 417.

17.The Tribunal has recently discussed Mr C Chan’s expert status in light of the above in Harvest Treasure Limited & Others v Cheung Fat Enterprises Limited, LDCS 8000 of 2014 (unreported, dated 31 December 2014).  The Tribunal was satisfied that Mr C Chan still possesses the qualification to act as a valuation expert.[4] I see no reason to depart and more particularly, by virtue of section 10(6) of the Lands Tribunal Ordinance:

“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.”

I am satisfied that Mr C Chan can give valuation evidence in the present proceedings.

18.Under section 4(1)(a)(ii) of the Ordinance, in the case of any minority owner of the Lots who cannot be found, for instance, the 1st  respondent as submitted by Ms Lan, the majority owner of the Lots is required to satisfy the Tribunal that the value of the minority owner’s property as assessed in the application is “(A) not less than fair and reasonable; and (B) not less than fair and reasonable when compared with the value of the majority owner’s property as assessed in the application.”

19.In the Application Report of 6 August 2014, Mr C Chan explained the method of valuation and the process of his assessment to arrive at the EUV of each unit of the Buildings.

20.In his valuation of the EUV of the domestic units of the Buildings, Mr C Chan adopted the following methodology :

(a) He selected 2^nd Floor, No 19 Jupiter Street (“the Reference Residential Unit”), which is situated on the middle floor of the domestic portion as the reference unit for the purpose of valuing its unit price. 

(b) The unit price of the Reference Residential Unit was first assessed by making reference to market comparables.  He took into account 7 comparable transactions in 6 different buildings nearby.  After making what he regarded as the necessary adjustments (for time, location/environment, floor, age, size, physical condition & building management, layout, view, lighting & ventilation and noise etc) for all these comparable transactions, he discarded 3 of them as purchases likely made by special purchasers and took the average of the adjusted unit rates of the remainders to come to the unit price of the Reference Residential Unit.

(c) He further considered the floor difference, size, layout, lighting & ventilation and internal conditions of the Reference Residential Unit and the remaining residential units within the Buildings and made adjustments to arrive at the EUV of all the residential units.

21.For the Flat Roofs and Roofs of the Buildings, Mr C Chan converted their saleable areas of the Flat Roofs and Roofs as domestic by using a conversion factor of 1:6 and 1:8 respectively.

22.In the process, Mr C Chan noted from the occupation permit issued on 30 October 1953 that the Buildings were for “domestic purposes” but at least one of the two units on Ground Floor ie No 19 was occupied as shops.  Pursuant to his further observation of the locality, Mr C Chan realised that the ground floor premises in the locality are predominated by retail shops.  He therefore opined that shop use is the optimum use of the ground floor units of the Building.

23.Mr C Chan was further advised by Mr Benson Wong (“Mr B Wong”), a building surveyor and Authorised Person, that conversion of the ground floor domestic units to shops would likely be approved by the Building Authority upon submission of necessary plans for alteration and additions of building works (“A & A plans”).  In the circumstances, Mr C Chan assessed therefore the ground floor units according to their optimum use as shops.

24.The same issue was considered by the Tribunal in a number of recent cases, eg Many Gain Investment Limited v Chan Fai Ho and Others, LDCS 28000 of 2012 (unreported, dated 18 June 2014), Worldman Development Limited v The Personal Representatives of Chan Chau Ling, deceased, LDCS 8000 of 2013 (unreported, dated 21 July 2014), Ultra Alpha Limited v The Personal Representatives of Chan Ping Chiu, deceased, LDCS 3000 of 2014 (unreported, dated 17 October 2014) and Cheer Capital Limited v Unibase Investment Limited as Trustee for Kam Yee Wai Andrew, Lam Yin Ming Lawrence and Lam Hon Keung Keith, LDCS 5000 & 6000 of 2013 (unreported, dated 12 June 2015). In all these cases, the Tribunal had accepted that assessment of the EUV of ground floor units on the basis of shop use despite its non-conforming use when compared with that provided in the occupation permit.  I agree with Ms Lan’s submission that there is no reason to depart.

25.Then, in assessing the EUV of the 2 Ground Floor units, Mr C Chan adopted the following methodology:-

(a) He selected Ground Floor, No 19 Jupiter Street as the reference unit (“the Reference Shop Unit”).  He then took into account 10 comparable retail transactions in 8 different buildings nearby. After making what he regarded as the necessary adjustments (for time, location, building age, size, layout, frontage/depth, return frontage, headroom etc) for all these comparable transactions, he took the average of the adjusted unit rate of the comparables to come to the unit price of the Reference Shop Unit.

(b) He then used the unit rate of the Reference Shop Unit to assess the other ground floor unit at No 17 Jupiter Street.

(c) He further gave a discount of 2.5% for conversion in order to reflect the time and costs required for these units to be legally converted into shop uses.

26.Mr C Chan updated the Application Report by a supplemental report dated 15 October 2015 (“Supplemental Report”) in which he revised the EUV of all the units in the Buildings after inspecting Ground Floor, No 17 Jupiter Street in addition and taking into consideration the updated property index prepared by the Rating and Valuation Department.

27.What is more, Mr C Chan took into consideration the Tribunal’s judgments in Main Light Limited v Chow Chiao Shing Tseng, LDCS 40000/2012 (unreported, dated 30 June 2014) and LDCS 3000/2013 (unreported, dated 31 October 2014) in which the Tribunal commented that adjustments for frontage and depth should be made separately.

28.In the Supplemental Report, Mr C Chan also referred to Cheer Capital Limited, supra, in which the Tribunal agreed with the expert’s opinion that the mere change of use from domestic to retail purpose might not need a discount on value to allow for the time and cost for the conversion when “market realities should dictate”.  In giving evidence on trial, Mr C Chan conceded that this latter decision conforms with market practice where investors of such properties would not allow such a discount on conversion from domestic to retail purpose and he had revised on valuation on this basis in the Supplemental Report.

29.The EUV of all units in the Buildings, including the 1st respondent’s unit, as at the relevant date of valuation of 16 June 2014, based on the above revisions. are as shown in the Supplemental Report of Mr C Chan: see the table at Bundle D/ 59 which is reproduced below:

Floor	No 17 Jupiter Street	No 19 Jupiter Street
Ground Floor	$22,740,000	$22,740,000
1st Floor	$7,520,000	$7,520,000
2nd Floor	$7,370,000	$7,370,000
3rd Floor & Roof	$7,680,000	$7,660,000
Total	$90,600,000

30.I am satisfied, insofar as it is necessary, that the value of the 1st respondent’s unit as assessed by Mr C Chan is not less than fair and reasonable and not less than fair and reasonable when compared with the value of the applicant’s properties:

(a) the 1st respondent’s unit - assessed at $7,520,000 (representing 8.3% of the total EUV of all units); and

(b) the total EUV of all units - assessed at $90,600,000.

Section 4(2) of the Ordinance - Justification and Reasonable Steps

31.The second determination under Section 4(1)(b) of the Ordinance is whether an order of sale should be made.  According to Section 4(2) of the Ordinance, this would involve 2 considerations, namely :-

(a) is the redevelopment justified due to age or state of repair of the Buildings; and

(b) has the Applicant taken reasonable steps to acquire all the undivided shares in the Lot.

32.The applicants have to satisfy this Tribunal that the above statutory requirements were met, otherwise, an order of compulsory sale ought not be granted. 

33.Firstly, for the requirement under (a) above, I have taken into consideration the expert evidence of Mr B Wong, the building surveyor referred to in §23 above, and Mr Wong Chi Ming (“Mr C M Wong”), the structural engineer adduced by the applicants. 

34.Mr C M Wong had conducted a structural assessment of the Buildings and prepared a report dated 15 October 2015. He found the following defects in the Buildings:

(a) visual inspections of 6 units and common area showed cracks, spalling and severe water stains at 33 locations, the number of which may be lower than the actual number;

(b) of the 12 concrete samples tested, 6 (50%) of the concrete cores were considered to have inadequate concrete strength where 2 (17%) of the samples have concrete strength of doubtful adequacy;

(c) 100% of the steel reinforcement bars samples are suffering from a different degree of corrosion, 97% of which are notably suffering from mild to severe corrosion;

(d) carbonation has reached the concrete cover of 100% of the test samples of slabs, beams and columns rendering the steel reinforcement bars susceptible to corrosion as it has destroyed the passive alkaline layer of protection provided by the concrete cover;

(e) 8% of the core samples have a chloride content exceeding 0.4%, ie the corrosion risk for these samples is classified as “moderate” or “high”;

(f) the reduced pH caused by carbonation, along with the effect of chloride ions within the concrete, means that the concrete is likely to have passed the initial phase of deterioration and entered propagation phase, whereby the concrete is likely to suffer from more defects and the steel reinforcement bars will lose its strength as it becomes more corroded;

(g) the average cement content for the Buildings was calculated to be 190 kg/m³ which is lower than the current standard of 290 kg/m³ as specified in the Code of Practice for Structural Use of Concrete 2013.

35.Based on the above findings, Mr C M Wong concluded that the structural elements of the Buildings are in a poor condition and irreparable problems such as high carbonation depth and high chloride content might cause the condition of the Buildings to further deteriorate quickly in the near future.  Having regard to the age of the Buildings, which were 62 years old, Mr C M Wong considered the structural elements had passed the end of their design working life.  With the corrosion of the reinforcement bars having entered the propagation phase, extensive maintenance and repair works would be required in the near future in order for the building structure to meet the current standards.

36.Further, although the Buildings had been designed for wind forces, the magnitude of the wind forces used in the original design is less than that in the current code. On the other hand, ductility and robustness were not considered in those days when the Buildings were designed. Thus, the structure of the Buildings cannot meet the current safety standards.

37.Based on the aforementioned problems, Mr C M Wong recommended that hammer tapping should be carried out to find the extent of spalling and cracking in the structural members, and all revealed cracks and spalling should be patch repaired.  He estimated the costs of repair to be $137,480 but his does not include the dealing with problems such as severe carbonation and high chloride content because such repair would be both technically and financially impracticable and would cause extensive disturbance during the repair works.

38.Mr B Wong, in his Condition Survey Report dated 15 October 2015 stated that the Buildings are aged because:

(a) the design and construction of the structural frames of the Buildingshave become inferior to current requirements over time;

(b) there is no manual fire alarm system provided in the Buildings to meet the relevant requirements of the Code of Practice for Minimum Fire Service Installations and Equipment 1994 (“FSI Code 1994”);

(c) there is no fire hydrant/hose reel system provided in the Buildings for firefighting as required under the FSI Code 1994;

(d) there is no emergency lighting system provided to the staircase which is a fire escape route required by the Code of Practice for the Provision of Means of Escape in Case of Fire 1996.

(e) the flat entrance doors are just ordinary wooden doors which are not up to the standard of certified fire resisting doors required by the Code of Practice for Fire Resisting Construction 1996 (“FRC Code”) and as a result, the fire resistance of the staircase is undermined.

(f) the electrical installations and wirings installed in the staircase are not enclosed with fire resisting enclosures to protect the staircase from outbreak of fire and smoke endangering the use of the staircase as fire escape route.

(g) the lack of a proper refuse disposal system in the Buildings has caused unacceptable fire risks with bags of domestic refuse placed in refuse bins on staircase landings for manually collection daily causing obstruction to the use of staircase as fire escape route and contravening the requirement of the FRC Code.

(h) there is no equipotential boding system installed in the Buildings providing equipotential bonding connections for metal fixtures such as windows and water pipes inside the flats for safety protection as required by the Code of Practice for the Electricity (Wiring) Regulations.

(i) there is no lighting protection system provided on the roof of the Buildings to protect occupants and building parts from lightening strikes..

39.In respect of the state of repair of the Buildings, Mr B Wongcommented that:

(a) the Buildings are aged as many features and facilities which would nowadays be expected to be standard provisions in a residential/commercial composite building are missing or become obsolete and not improved to meet the upgraded construction standards and statutory requirements;

(b) the Buildings are in a poor state of repair due to general wear and tear, noticeable in the external rendering as well as the lack of improvements in fire service installation;

(c) infrared thermographic survey carried out on the external rendering has revealed 88 hollow spots the presence of which is potentially dangerous to public safety in the event that loosened rendering falling off from the external wall;

(d) asbestos materials as identified by the asbestos consultant should be removed according to the procedure specified in the Air Pollution Control Ordinance;

(e) the original waterproofing membrane to the roof of the Buildings is defective and approaching the end of its useful life as evidenced by seepages through the roof slabs and the age of the Buildings;

(f) the only common staircase is a unsatisfactory means of fire escape for the upper floors which also have defective floor, wall and ceiling finishes;

(g) unauthorized internal flat sub-divisions and unauthorized metal gates swinging out onto the fire escape route raise fire safety concerns;

(h) the conditions of the internal doors, finishes, bathrooms and kitchens fitments in the flats are poor; they have deteriorated badly from general neglect which could not be made good by simple and economic repairs; the most common defects in the flats are missing or defective bathroom and kitchen doors, cracks and spalled finishes to the internal floors, walls and ceilings;

(i) sanitary fitments in the bathrooms and cooking facilities in the kitchens generally are broken or otherwise defective requiring replacement;

(j) internal electrical installations and wirings in the 5 flats inspected have been haphazardly altered and are in poor condition;

(k) internal inspection of flats found equipotential bonding connections are not provided for exposed and extraneous conductive parts;

(l) lockable cabinets have not been provided to house the individual fresh water supply stop valves and meters in order to protect them from vandalism and comply with the relevant water supply regulations;

(m) the original galvanized iron water pipes have rusted externally and would leak if allowed to deteriorate further; such galvanized iron pipes are also vulnerable to internal pipe rusting which would cause water contamination and as such have been banned from use as fresh water pipe by the Water Authority;

(n) flushing water supply system for the Buildings have been put out of use with the flushing water tanks abandoned;

(o) condensate drainage system with drain inlets provided for all AC units needs to be installed in order to avoid creating water dripping nuisance;

(p) CCTV survey carried out to the underground drainage system was unsuccessful as all the manholes as shown on the approved Drainage Plan had been either blocked or concealed by concrete floors and complete replacement is necessary to provide manhole access for maintenance of the underground drainage system.

40.Mr B Wongassessed the total cost of immediate repair works to restore the Buildings to tenantable standard at $7,040,053 which amounts to some 57.3% of the construction cost of a new similar superstructure.  He came to the conclusion that the Buildings have deteriorated to a state which is beyond reasonable economic repair as signified by the high repair cost.  As more rapid deterioration will occur in the future, the necessary maintenance and repairs will inevitably be more frequent and extensive, making the continued occupation of the Buildings not economical and even unsafe, to both occupants and third parties.  He recommended the owners to redevelop rather than repair given the Buildings do not possess any historical value or architectural merit. 

41.There is no contrary expert evidence andI accept the applicants’ evidence in whole.  In particular, I am satisfied that based on the evidence of Mr C M Wong and Mr B Wong, redevelopment of the Lots is justified due to the age and the state of repair of the Buildings which are in a very poor state of repair.

Reasonable Steps to Acquire All the Undivided Shares in the Lots

42.The applicantsare under an obligation to negotiate on terms that are fair and reasonable in a situation when the whereabouts of a minority owner are known.  According to Lui Wing Yan (“Ms Lui”) , who is a manager of the applicants, the applicants had made the following three offers to the 1st respondent through their solicitors for the purpose of acquiring the 1st respondent’s interest in the Lots:

Date of Offer	Amount Offered
28 August 2012	$11,000,000
8 July 2014	$14,081,000
28 July 2014	$14,114,000

43.In her Witness Statement dated 16 October 2015, Ms Lui said that the 2^nd and 3^rd offers were based on the redevelopment value (“RDV”) of the merged site of Nos 13-15, 17-19 (ie the Lots) and 21-23 Jupiter Street instead of the Lots on their own. In addition, a 5% premium was added.

44.Subsequently, the applicants were informed by their solicitors that the respondent had passed away but service on the personal representative of the Estate of the Deceased was unsuccessful.  According to the applicants, therefore, where the personal representative of the Estate of the Deceased could not be located, the applicants have not been able to negotiate with the 1st respondent on the intended acquisition of his premises.

45.In light of the above, I am satisfied that the applicants have taken reasonable steps to acquire all the undivided shares in the Lots including the 1st respondent’s interest. 

Reserved Price for the Auction

46.The applicants submit that the reserve price for the auction of the Lots should be fixed at $197,000,000, based on the assessment by Mr C Chan of the RDV of the Lots in his valuation report of 31 December 2015.

47.I have considered Mr C Chan’s valuation.  I agree with him that the residual method has to be employed as the method of assessment of the RDV of the Lots.  This is done by deducting development costs (including construction costs, professional fees, finance costs etc) and developer’s profit from the estimated gross development value of the completed development.

48.Mr C Chan opined that the optimum development on the Lots comprised a 25-storey office building with retail shops on Ground Floor. The details of the hypothetical development and residual valuation were set out in Appendix III of his RDV valuation report. The details of the comparables for shop and office with adjustments were set out in Appendix V and Appendix VII respectively.  I have gone through his valuation in details.  I am satisfied with his valuation, including the valuation assumptions he has adopted, the values and the costs parameters that he has used in his valuation. 

49.Based on Mr C Chan’s valuation and in the absence of evidence to the contrary, I decide that the reserve price for the auction of the Lots should be HK$197,000,000.

Trustees

50.The Applicants proposed to appoint Mr Chow Wing Kin Anthony and Ms Chow Suk Han Anna, who are partner and consultant respectively of Messrs Peter C Wong, Chow & Chow, as the sale trustees.  I am satisfied that they are proper persons to be appointed and I also approve the remuneration package proposed in the letter dated 13 October 2015 from their firm.

Particulars and conditions of sale of the Lots

51.Ms Lan has submitted a set of draft particulars and conditions of sale by public auction for my consideration.  I understand these are the usual terms used for compulsory sale and I approve them.

Conclusion and Order

52.By reasons of the aforesaid, I am satisfied that the redevelopment of the Lots is justified due to the age and state of repair of the Buildings; and the applicants have taken reasonable steps to acquire the undivided shares of the Lots. This Tribunal is also satisfied that the value of the single minority owner’s unit as assessed in the Application is not less than fair and reasonable, and not less than fair and reasonable when compared with the value of the applicants’ properties as assessed in the Application. This Tribunal now makes the following orders:

(1) All the undivided shares in the Lots, the subject of the Application, be sold by way of public auction for the purposes of redevelopment of the Lots under the Ordinance;

(2) Mr Chow Wing Kin Anthony and Ms Chow Suk Han Anna nominated by the applicants, be appointed trustees (“the Trustees”) to discharge the duties imposed on trustee under the Ordinance in relation to the Lot and the Trustees be authorized to charge such remuneration for their services in accordance with the terms set out in the letter from Messrs Peter C Wong, Chow & Chow dated 13 October 2015;

(3) For the purposes of the sale of the Lots by public auction :-

(a) The sale of the Lots be on the particulars and conditions of sale the same or substantially the same as those in the draft Particulars and Conditions of Sale (as set out on page 209-233 of Bundle A) initialed and approved by the Tribunal;

(b) The reserve price of the Lots be set at HK$197,000,000;

(c) Subject to further extensions that the Tribunal may subsequently allow upon the application of the purchaser of the Lots or its successor in title, the redevelopment of the Lots be completed and made fit for occupation within a period of 6 years after the date on which the purchaser of the Lots becomes the owner of the Lots; and

(4) There be liberty to the applicants, the 1st respondent and the Trustees to apply to the Tribunal for further directions.

Costs

53.The applicants do not ask for costs. I make a costs order nisi that there be no order as to costs between the parties.  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.

Ms Gekko S Y Lan, instructed by Messrs Zhong Lun Law Firm, for the Applicants

The 1st Respondent, absent