China Step Corporation Ltd and Others v. Grace Yuk Lung Yuen
Read the full judgment text of LDCS 3000/2018 on BabelCite. This LDCS judgment was delivered on 4 March 2019.
1. This is an application for a compulsory sale order to sell all the undivided shares in the Remaining Portion of Kowloon Inland Lot No. 1329 (“the Lot”) with a 9-storey commercial/residential composite building erected thereon known as Nos. 13-13A Liberty Avenue, Kowloon, Hong Kong (“the Building”)for the purposes of redevelopment pursuant to Section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”).
Cites 4 cases
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LDCS3000/2018 [2019] HKLdT 14 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE APPLICATION NO. 3000 OF 2018 ___________________________________
___________________________________ Before : Mr Lawrence PANG, Member of Lands Tribunal Dates of Hearing : 21, 23 & 28 January 2019 Date of Inspection : 22 January 2019 Date of Judgment : 4 March 2019 ______________ J U D G M E N T ______________ BACKGROUND 1.This is an application for a compulsory sale order to sell all the undivided shares in the Remaining Portion of Kowloon Inland Lot No. 1329 (“the Lot”) with a 9-storey commercial/residential composite building erected thereon known as Nos. 13-13A Liberty Avenue, Kowloon, Hong Kong (“the Building”)for the purposes of redevelopment pursuant to Section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”). 2.The Building, situated at the junction of Liberty Avenue and Victoria Avenue, consists of a 8-storey residential block over a ground floor with 7 shops fronting Liberty Avenue and Victoria Avenue. 3.According to an occupation permit (Permit No K292/64) issued on 22 June 1964, the Building comprised 2 shops on G/F for non-domestic use, 2 flats per floor on 1/F to 7/F for domestic use and 1 flat on 8/F for domestic use. In a subsequent Deed of Covenant (M/N: UB606210) dated 1 December 1967 (“the DMC”) and Deed Poll (M/N: UB744365) dated 16 May 1970 (“the Deed Poll”), the two shops on G/F have been subdivided into 6 retail units which are so registered in the Land Registry. 4.The Lot has been allotted 21 equal and undivided shares as follows:
THE APPLICATION 5.When the applicants commenced the present proceedings on 11 January 2018 (“the Application”), they altogether owned 95.238% of the undivided shares of the Lot save for the only respondent who owns 4/F of Nos 13A with 1/21 undivided share. Originally the respondent and George Tze-Hwa Liu were registered owners (as joint tenants) but the latter passed away on 2 February 2010 thereby rendering the respondent as sole surviving joint tenants. ISSUE TO BE DETERMINED BY TRIBUNAL 6.The core disputes lie in the valuation. The respondent does not take issue on the age and state of repair of the Building or the reasonable steps taken by the applicants. Nor does the respondent oppose a sale order. FACTUAL/EXPERT EVIDENCE 7.The applicants filed the following evidence:
8.The respondent filed the following evidence:
9.Subsequently Mr Chan and Ms Sat filed the following Joint Statements on valuation:
10.The applicants are represented by Mr Jonathan Lee (“Mr Lee”) instructed by Messrs Mayer Brown whereas the respondent is represented by Mr Enzo WH Chow instructed by Messrs Stevenson, Wong & Co. SECTION 3 OF THE ORDINANCE – OWNERSHIP OF THE APPLICANTS 11.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. 12.Section 3(5) of the Ordinance 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. 13.Pursuant to Section 3(5) of the Ordinance, the Notice was gazetted on 22 January 2010 and tabled at the Legislative Council meeting on 27 January 2010. It came into operation on 1 April 2010. Section 3 of the Notice lowered the threshold for compulsory sale, insofar as it is applicable, from 90% to 80%. Section 4(1)(b) of the Notice specified one of the classes for the purposes of Section 3 as “a lot with each of the building erected on the lot issued with an occupation permit at least 50 years before the relevant date (which is the date of the Application)”. The occupation permit in respect of the Building was issued on 22 June1964, which is more than 50 years as at the date of Application. The Building is therefore covered by the Notice and the applicable percentage is 80%. 14.When the applicants commenced the present proceedings on 11 January 2018, it owned 95.238% of the undivided shares in the Lot. The applicants were therefore entitled to make the Application under section 3(2)(b) of the Ordinance. DETERMINATION OF THE EUV OF ALL UNITS IN THE BUILDING 15.Under section 4(1)(a)(i), if there is a dispute between the parties on the EUV of the units in the Building on the Lot, the Tribunal has to determine the values. 16.Although both valuation experts adopt the direct comparison method and similar process of valuation of the EUV of each unit of the Building, they arrived at different valuation results:
EUV for G/F 17.In their valuation of the EUV of the ground floor shops, while the two valuers agree to adopt Shop F as the reference unit, they have the following agreements or disagreements:[2]
18.The two valuation experts agree to adopt the following as comparables:[3]
19.Also, the adjustments proposed by Mr C Chan are shown in the following table (while those by Ms Sat are in parenthesis if they are different):[4]
20.Initially Ms Sat did not adopt A4 as comparable as it was dated; she only made her concession at trial after hearing Mr A Chan’s evidence that this is the best comparable in terms of location. 21.Notwithstanding the above, and as shown in the table, the 2 experts have no dispute on the adjustments for time, location, age and layout. That being the case, therefore, I would only adjudicate on the other adjustment factors disputed by the parties. Adjustment for Size 22.I am facing two competing proposals for size adjustment: Mr C Chan’s 1% per 10 sq m difference vis-à-vis Ms Sat’s 1% per 3 sq m difference. That is, Ms Sat considers the value of shops in this vicinity is more sensitive to size differences. 23.Mr C Chan holds the view that the locality of the Building is not a prime retail area and therefore the unit rate of retail shops would not be very high and the unit rate of the retail portion would not be sensitive to size. 24.But recently in Asia Hero (H.K.) Limited & Others v Prime Way Investment Co Ltd & Another, LDCS 4000/2016 (ie [2018] HKLdT 21) in respect of assessment of the market value of shop premises in the quieter part of Mong Kok, an area just separated by the railway embankment on the other side of the captioned, one expert adopted a size adjustment of 2% for every 10m2 difference whereas another adopted 3% for every 10m2 difference. The Tribunal then adopted 3% for every 10m2 difference generally unless the difference was within 10 m2. 25.Here, I note that Shop F, ie the reference shop unit, has an agreed saleable area of 34.8 sq m which is relatively small. 1% per 10 sq m is insufficient to reflect the market’s sensitivity to size. As explained by Ms Sat, the unit rate for these smaller shops is higher because a smaller lump-sum will be required to be paid by a purchaser to become an owner of a shop unit. I also note that the subject ground floor has been divided into 7 units instead of the original two units. I agree therefore in this locality, shops of small sizes are in better demand and therefore it should be more sensitive to the size difference. I prefer to adopt Ms Sat’s 1% per 3 sq m difference. Adjustment for Frontage 26.Again, the 2 experts have different opinions on the adjustment for frontage: Mr C Chan’s 2% per 1 m difference vis-à-vis Ms Sat’s 3% per 1 m difference. 27.Mr C Chan’s explanation is largely the same as what he testified in justifying the size adjustment, referring to the locality of the Building. Ms Sat also agreed in cross-examination that locality is more relevant in frontage adjustment than size. In her opinion, the locality has average commercial potential and pedestrian flow. 28.In the present case, I note the six shops have the following frontages agreed by the 2 experts:[5]
29.However, on site, Shop A is further divided into Shop A and Shop A1 of equal frontage to Liberty Avenue. This demonstrates that even dividing the frontage by half would not significantly affect the value. Also, I note the frontage difference between Shop E and Shop F is significant. If the shop value here is so sensitive to frontage, the original owner might not have so divided Shop E and Shop F, rendering the frontage of Shop E becoming so narrow. I consider an adjustment based on 2% per 1 m difference more appropriate. Adjustment for Return Frontage 30.For return frontage, Mr C Chan just applies +15% for Shop A but -5% for Comparable A2 on the ground that the latter’s return frontage was obstructed by a low voltage distribution box in the front on the pavement. However, upon our joint inspection or even by reference to the photograph in the inspection bundle, the obstruction is not so serious. I therefore consider -10% would be more appropriate. 31.On the other hand, Ms Sat adopts the same formula of 3% per 1m difference for return frontage adjustment. The Tribunal had commented at §58 of Asia Hero (H.K.) Limited, supra,that such a mechanical application of frontage formula was wrong in principle:
32.Although Ms Sat arrives at a similar result of -10.5% by her formula of 3% per 1 m difference, this dispute on the obstruction of frontage demonstrates that such a mechanical application of frontage formula is not desirable. Adjustment for Headroom 33.Again, the two experts adopt different formulae for headroom: Mr C Chan uses 4% per 1 m difference while Ms Sat uses 2% per 1 m difference. 34.In examination-in-chief, Mr C Chan explained that his formula is justified because some of the comparables have much higher headroom which might accommodate a cockloft. For instance, Shop F has a headroom of 3 m but comparables A3 and A4 have headrooms of 5.6 m and 4.4 m respectively. I accept Mr C Chan’s explanation in this case but this again demonstrates that a mechanical application of a headroom formula is not always desirable. 35.Based on the above analysis, my assessment of the EUV of Shop F is as follows:
36.Applying the similar adjustment factors to $454,971, the assessments of the EUV of the units on G/F are as follows:
37.The 2 experts consider Shop A as a whole and therefore have not applied any location adjustment. But if Shop A is treated as two units as sub-divided on site, I consider an adjustment of -5% appropriate. 38.As said, Mr C Chan applies a return frontage adjustment of 15% to Shop A but Ms Sat applies 9% based on her formula of 3% per 1 m difference. I consider an adjustment of 12% more appropriate. 39.The total EUV for the G/F shops is $75,261,000. EUV for Upper Floors 40.As regards the assessment of the EUV for the upper floors, the 2 experts agree to adopt 4/F, 13 Liberty Avenue as the reference unit and arrive at $117,000 and $122,000 respectively. 41.They have dispute however on the choice of 3, ie B2, B4 and B10 out of the following comparables:[6]
42.While the 2 experts agree that the comparables are all 3-bedroom units like the subject, Ms Sat did not adopt the 3 comparables because she considered they are much larger than the “range” of the domestic units in the Building: 57.4 sq m (for 13A Liberty Avenue) & 71.4 sq m (for 13 Liberty Avenue). During cross-examination, when it was pointed out that the reference unit has a saleable area of 71.4 sq m, Ms Sat conceded that comparable B10 should also be adopted. 43.I appreciate Ms Sat’s concern that units of different sizes may belong to different markets where the supply and demand conditions can be different. I agree with Ms Sat that the range of sizes should be considered in the circumstances. In this regard, I agree with Ms Sat that comparable B2 and B4 should be discarded; B2 is 53% larger than the reference unit and B4 is also 29% larger. That these comparables are all 3-bedroom units on plan should not be an important consideration as an owner is free to carry out conversion and repartition, rendering say a 3-bedroom unit to 2-bedroom unit or 4-bedroom unit. 44.Thus, the adjustments proposed by Mr C Chan are shown in the following table (while those by Ms Sat are in parenthesis if they are different):[7]
45.As can be seen from the table, there is disagreement between the 2 experts on the adjustment for size: Mr C Chan adopts 1% per 10 sq m whereas Ms Sat adopts 2% per 10 sq m. To the extent to distinguish the importance of size differences among the comparables probably in different markets, I prefer to adopt Ms Sat’s 2% per 10 sq m. 46.As regards the noise adjustment, Mr C Chan considers the reference unit facing Victory Avenue and therefore suffering from traffic noise. However, comparables B5 and B8 face an inner yard and are surrounded by other domestic units, therefore sheltered from traffic noise. He also explained during examination-in-chief that comparable B10 also warrants a -5% adjustment as it is located at the back of the building away from the street. I agree with Mr C Chan explanations and adopts his noise adjustment for comparables B5 and B8. 47.Lastly, Mr C Chan allows an adjustment for internal condition for all comparables when he considers the reference unit is in poor internal condition. Ms Sat has not made such an allowance on the ground that there be no opportunity to inspect these comparables for verification. However, so long as we all agree that the reference unit is in poor internal condition, I consider the allowance for such is reasonable because it would usually be the case that properties available for sale in the market are in fair tenantable condition commensurate with their ages. 48.Thus, my assessment of the EUV of the reference unit is as follows:
49.While applying the adjusted result of the reference unit to assess the EUV of the other units in the Building, the 2 experts have further dispute on the adjustment for lighting and ventilation. Although they agree there should be downward adjustments for units at 13A Liberty Avenue because all units at 13 Liberty Avenue are corner units facing both Liberty Avenue and Victory Avenue, Mr C Chan adopts -5% while Ms Sat adopts -2%. The latter explained, by reference to the ground floor plan of the Building, there is a service lane and open yard between units at 13A Liberty Avenue and the adjoining building at 5A-D Victory Avenue (which is now demolished). The distance in between is more than 20 feet (6.1m). I accept that the adjustment should be -2%. 50.Similarly, the 2 experts have dispute on the adjustment for view because of the corner location for units at 13 Liberty Avenue: Mr C Chan made no view adjustment while Ms Sat adopts -2% for 1/F, -1% for 2/F to 7/F. I consider Ms Sat’s adjustments reasonable and do not consider this having been taken into account by the floor adjustments. 51.The last major disagreement between the 2 expert is the internal condition of 3 domestic units of the Building: 1/F of 13 Liberty Avenue, 2/F of 13A Liberty Avenue and 6/F of 13A Liberty Avenue. Mr C Chan assesses them as “poor” whereas Ms Sat assesses them as “very poor” although they agree that the applicable standards are as follows:
52.During the joint inspection on 22 January 2019, I note the reference unit as well as these 3 units under dispute are suffering from serious degrees of water seepage especially on the rear side (ie away from Victory Avenue). For 6/F of 13A Liberty Avenue, in particular, its kitchen has the reinforcement bar exposed on the ceiling as well. However, I cannot agree that the conditions of these units are substantially below tenantable standard. I agree with Mr Lee on behalf of the applicant that the valuation date is 21 November 2017 and the internal conditions may well have deteriorated over the past year. The internal conditions of these 3 units should thus be classified as “poor” like the reference unit. 53.My assessments of the EUV of all the upper floor domestic units are shown as follows:
54.Thus, I arrive at a total EUV for the domestic units of the Building at $112,696,000. EUV of the Building 55.The total EUV of the Building is therefore:
and the pro rata share of the respondent unit is $6,790,000/$187,957,000 = 3.6125%. SECTION 4(2) OF THE ORDINANCE - JUSTIFICATION AND REASONABLE STEPS 56.Under Section 4(1)(b) of the Ordinance the second determination is whether an order of sale should be made. Section 4(2) of the Ordinance provides that there are basically 2 considerations, namely:-
57.The applicants have to satisfy this Tribunal that the above statutory requirements were met; otherwise, an order for compulsory sale would not be granted. 58.For the age and state of repair requirements, I have taken into consideration the expert evidence of Mr B Wong, an Authorised Person and the building surveyor and Dr Sammy Yin Nin Chan (“Dr S Chan”), the structural engineer adduced by the applicants. 59.Dr S Chan conducted a structural assessment and prepared a report dated 19 July 2018. He identified the following defects in the Building:
60.Based on the above findings, Dr S Chan concluded that the structural elements are in a degraded condition caused by the corrosion of reinforcement due to carbonation, which could result in, for instance, reduced bearing capacity or bonding reliability of structures. Extensive repair and maintenance will be required in the years to come. Moreover, the structural capacity of the Building cannot meet the current safety standard in terms of wind load and robustness. The provisions for durability and fire resistance of the Building do not meet the current statutory requirement. While the Building is over 50 years old, it exhibits signs that its structural frames have deteriorated to the final stages of its designed working life. The deterioration will continue steadily due to extensive carbonation of the concrete. It is inevitable that new defects will occur and previous defects, though repaired, will recur readily, requiring substantial repairs or even partial demolition and re-construction of some defective structural members in the future. Repair works need be carried out regularly in future and such repairs will be more and more extensive. It is his view that although the costs of repair may be relatively modest, such costs will escalate in future as the extent and seriousness of the deterioration of the structural members increases with age. He recommended that hammer tapping works be carried out to all structural members with a view to finding out the full extent of defects to be repaired as a matter of urgency. 61.Mr B Wong, in his Condition Survey Report dated 18 July 2018 stated that:
62.Mr B Wong estimated that the total costs of immediate repair work to restore the Building to tenantable standard came to $12,412,384 which was about 54% of the cost of constructing new similar buildings. He concluded that the Building has deteriorated to a state which is beyond reasonable economic repair. As more rapid deterioration would occur in the future, the necessary maintenance and repairs would inevitably be more frequent and extensive making the continued occupation of the Building uneconomical and even unsafe, to both occupants and third parties. He recommended the owners to redevelop rather than repair given that the Building does not possess any historical value or architectural merit. 63.Then respondent has not filed any evidence to challenge the applicants’ evidence and I accept therefore the applicants’ evidence in whole. In particular, I am satisfied that based on the evidence of Dr S Chan and Mr B Wong, redevelopment of the Lot is justified due to the age and the state of repair of the Building:
REASONABLE STEPS TO ACQUIRE ALL THE UNDIVIDED SHARES IN THE LOT 64.The applicants submit that reasonable steps have been taken to acquire the respondent’s unit. 65.For instance, mediation took place on 13 April 2018 but was unsuccessful. 66.In addition, the applicants made the following 2 offers, none of which was accepted by the respondent:
67.In particular, Mr Lee for the applicants have pointed out that the applicants’ offer of $9,000,000 is:
68.In view of the above, I am satisfied that the applicants have taken reasonable steps to acquire the respondent’s unit. RESERVE PRICE FOR THE AUCTION 69.Both valuers adopt the residual method to assess the RDV, ie gross sale price of a completed optimal/hypothetical development minus development cost and profit. 70.Mr C Chan’s assessment as at 19 December 2018 was $227,000,000. His hypothetical model is a 22-storey building with lobby, shops and plant room on G/F and 1/F, clubhouse and plant room on 2/F and residential units on 3/F to 21/F (2 typical residential units per floor). The total gross floor area of the hypothetical building is 2,044.25 sq m. 71.Ms Sat’s assessment as at 19 December 2018 was $245,000,000[9]. Her hypothetical model is nearly the same as that of Mr C Chan except that the top floor has 2 special residential units with roof. Another difference is that while Mr C Chan’s model has 5 shops (including 1 corner shop) on G/F, Ms Sat model has 4 shops (including 1 corner shop) on G/F. 72.At this juncture, I note that based on Ms Sat’s assessment of RDV and her assessed pro rata share of the respondent’s unit about 3.7%, the amount payable to the respondent for acquiring her unit would be $9,065,000 which is only marginally above the latest offer by the applicants at $9,000,000. By reference to section 10(1)(b) of the Ordinance, if an order for sale by auction is granted:
73.By section 11(1) of the Ordinance:
74.At the beginning of the trial, I have pointed this out to the parties and have even adjourned the hearing for their consideration and negotiation. Regrettably, the parties could not come to a settlement. 75.Notwithstanding the above, the 2 experts have agreed most parameters of the hypothetical development model, including the saleable area, marketing cost, interest rate, professional fee, demolition cost, demolition period and construction period. 76.The unit rate of the domestic portion is agreed at $281,000 per sq m. 77.That said, the following key aspects of the hypothetical development model are disagreed:
Retail Comparables & Adjustments 78.Another key disagreement in the RDV assessment also lied in the choice of retail comparables and adjustments. 79.Similar to the assessment of the EUV for G/F, the 2 experts agree to adopt comparables A1-3 but Ms Sat initially did not agree to adopt comparable A4. It was only after hearing Mr C Chan’s evidence at trial Ms Sat agreed to adopt comparable A4. 80.While the 2 experts agree that the saleable retail area at G/F of the hypothetical model is 170.14, I agree with Mr C Chan’s adoption of 5 shops, ie an average size of 34 sq m, which is more comparable with the relatively small sizes of the existing shops at the Building. 81.Thus, adopting the similar adjustment factors as discussed in the assessment of EUV for G/F of the Building, the gross sale value of the G/F portion (assuming a typical shop with an average size of 34 sq m) is assessed as follows:
82.Assuming a corner shop with a return frontage of +15%, the gross sale value of the 5 shops on G/F of the hypothetical model is:
Value of 1/F 83.As regards the value of 1/F, I consider Ms Sat’s 30% more appropriate or a unit rate about $203,000. Special Top Floor Units 84.I also agree with Ms Sat that the top floor should have 2 special residential units. Mr C Chan has explained that the Lot has a relatively small site area of 227.14 sq m (2,445 sq ft); applying a maximum site coverage of 37.5% for a Class B site, the top floor would have maximum floor area of 85.17 sq m the size of half of which (assuming 2 units on this top floor) might be too small. After accommodating the lift shaft, water tank etc on the roof, Mr C Chan considers the space left behind is difficult to provide for exclusive use of the top-floor occupier. I am not convinced. As explained by Ms Sat in her evidence, developers can get around the problem of limited space on the roof by, for instance, putting the water tank on top of the machine room or stairhood. And even if this is not desirable, the top floor can accommodate 1 special unit instead of 2. I also consider Ms Sat’s addition of 15% reasonable for such a special unit(s). Construction Cost 85.In respect of the construction cost, Ms Sat voluntarily concedes that she agrees with Mr C Chan’s explanation (in his examination-in-chief) that there is no need to apply a discount of 20% for the cost of appliances. Ms Sat has withdrawn her previous view that the discount is necessary because the proposed model has a flat size of 28.69 sq m while the high to very high quality appliances in the RLB construction cost data refer to flats of 75 to 150 sq m. 86.Ms Sat’s concession must be right. From the RLB construction cost data relied on by both experts, Mr C Chan explained that a flat of 28.69 sq m may increase (rather than decrease) construction cost. This is because the RLB data provides the average cost per sq m of GFA of the proposed residential building (not flat). For instance, for the similar number of flat units to be provided (each accommodating the similar appliances), the unit cost for smaller flat may have to be increased. Developer’s Profit 87.In respect of the developer’s profit, as for any business undertaking, the developer who takes the trouble to assemble a piece of land for redevelopment would seek to make a profit in return. In Hong Kong it is usual to assume that the developer seeks a capital profit expressed as a percentage of the total development cost (including interest) but such a percentage can never be a constant. “The target levels of profit will depend on the nature of development and allied risks, the competition for development schemes in the market, the period of the development and the general optimism in relation to that form of development.”[10] 88.Both experts have increased their percentages in the past month or so. Mr C Chan has increased from 15% to 20% (ie 33%) while Ms Sat has increased from 12% to 15% (ie 25%). 89.In the examination-in-chief, Mr C Chan explained that the market sentiment and forecast of price movement primarily dictate developer’s profit. From the residential price indices, prices have dropped in the last quarter. Most developers expect a falling market. In 2017, there was an upward trend, but since the outbreak of the Sino-America trade-war in mid-2018 (along with interest rates hike), the market sentiment worsened. Developers need a higher profit margin to cover the potential loss. 90.When the market was vigorous, I believe it was correct to adopt 10% for commercial/residential development. I agree that there are signs that the property market was either stagnant or weakening but I do not consider that market is bleak or pessimistic. The government has from time to time emphasised that land for development of residential units is short in supply. I consider it more reasonable to revert to 15% especially when the scale of development is small; the developer can thus expect a quicker return. The 20% later adjusted by Mr C Chan appears to be excessive. 91.Mr Lee, in his closing submission, referred to Fortress Jet Limited & Others v Tang Hoi Yip & Others, LDCS 3000/2015 (unreported, dated 11 August 2017) where the Tribunal agreed with Ms Sat’s adoption of 15% as developer’s profit because the “market sentiment is now better”. This is misconceived. The hypothetical development in Fortress Jet was a Ginza type commercial development which is usually regarded as more speculative and riskier. 92.In the premises, I adopt Ms Sat’s 15% for the commercial/residential development in the present case. RDV Determination 93.Having resolved the differences between the 2 experts, I arrive at a RDV of $249,100,000 as shown at Appendix A. 94.I shall adopt the estimated RDV of $249,100,000 (ie an accommodation value of $121,854/sq m) as the Reserve Price for the auction of the Lot. TRUSTEES 95.The applicants propose to appoint Mr Ma Ho Fai and Ms Tsang May Ping who are partners of Messrs Woo Kwan Lee & Lo as the sale trustees. Based on the information on their letter dated 7 January 2019, the proposed trustees also intend to appoint Messrs Michael Cheuk, Wong & Kee to act as the solicitors of the trustees/vendors in the sale of the Lot for handling the sale and discharging the duties imposed on the trustees under the Ordinance. I am satisfied that Mr Ma Ho Fai and Ms Tsang May Ping are proper persons to be appointed. Their proposed remuneration at the rate of $5,800 per hour (exclusive of disbursements and fees payable to consultants) as mentioned in the letter dated 7 January 2019 is also reasonable and hereby allowed. PARTICULARS AND CONDITIONS OF SALE OF THE LOT 96.Mr Lee has submitted a set of draft particulars and conditions of sale by public auction upon the hearing of the closing submission on 28 January 2019 for my consideration. While I understand these are the usual terms used for compulsory sale, I approve the draft particulars and conditions of sale accordingly. CONCLUSION AND ORDERS 97.By reasons of the aforesaid, I am satisfied that the redevelopment of the Lot is justified due to the age and state of repair of the Building; and the applicants have taken reasonable steps to acquire the undivided shares of the Lot. 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:
COSTS 98.Mr Lee submits that in accordance with the compensation approach as determined by the Court of Appeal in Good Faith Properties Ltd and Others v Cibean Development Co Ltd [2014] 5 HKLRD 534, the applicants do not object to paying the respondent’s costs in these proceedings on High Court scale with certificate for counsel, including any costs reserved, to be taxed if not agreed. I make such a costs order accordingly.
Mr Jonathan Lee, instructed by Mayer Brown, for the 1st, 2nd, 3rd and 4th Applicants Mr Enzo WH Chow, instructed by Stevenson, Wong & Co, for the Respondent Appendix A
[1] After the trial, Ms Sat has revised her assessments of the EUV to $7,190,000 and $196,920,000 respectively, resulting in a pro rata share of 3.651%. [2] See B1/168. [3] See B1/170. [4] See B1/171. [5] See B1/167. [6] See B1/174. [7] See B1/176. [8] According to Mr Lee, at a meeting between the parties on 2 January 2019, the respondent counter-offered at $13,800,000 which was rejected by the applicants. A letter from Messrs Mayer Brown dated 7 January 2019 rejecting the counter-offer is at Bundle A4/1. [9] See B1/253. [10] Eric Shapiro, David Mackmin and Gary Sams, Modern Methods of Valuation, 11th Edition, 2013, p150. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment