Pacific Base Holdings Ltd and Others v. Lee Hop Biu and Others
Read the full judgment text of LDCS 14000/2017 on BabelCite. This LDCS judgment.
1. On 19 December 2017, the applicants filed the Notice of Application to the Tribunal seeking, inter alia, an order for a joint auction sale of all the undivided shares in the following lots (“the Subject Lots”) in Tsim Sha Tsui, Kowloon, Hong Kong (“the Application”) for the purposes of redevelopment pursuant to Section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”).
Cites 5 cases
|
LDCS 14000/2017 [2020] HKLdT 19 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE MAIN APPLICATION NO 14000 OF 2017 ___________________ BETWEEN
_____________________________ Before : His Honour Judge S Lo, Presiding Officer of the Lands Tribunal, and Mr Lawrence Pang, Member of the Lands Tribunal Date of Hearing and Decision : 7 August 2019 Date of Written Reasons for Decision : 4 June 2020 ___________________________________ R E A S O N S F O R D E C I S I O N ___________________________________ Background 1.On 19 December 2017, the applicants filed the Notice of Application to the Tribunal seeking, inter alia, an order for a joint auction sale of all the undivided shares in the following lots (“the Subject Lots”) in Tsim Sha Tsui, Kowloon, Hong Kong (“the Application”) for the purposes of redevelopment pursuant to Section 3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”).
2.Whereas the lots on which Nos 61 and 63 Granville Road stand are wholly owned by the applicants, the lots covered by the Application for a compulsory sale order only include those with the buildings erected thereon at Nos 65, 67, 69, 71 and 73 Granville Road. See Capital Well Ltd v Bond Star Development Ltd [2005] 4 HKLRD 363. 3.By reference to the valuation report attached to the Notice of Application prepared by Mr Alnwick Chan of Knight Frank Petty Limited pursuant to section 3(1) of the Ordinance (“the Valuation Report”),
4.More particularly, No 59 Granville Road and No 75 Granville Road are not included in the Application. 5.On 1 August 2019, the 4th respondent (“R4”) filed the following interlocutory application and inter-partes summons:
6.After hearing the parties’ submission on 7 August 2019, we allowed the Amendment Application and granted leave to amend R4’s Notice of Opposition (subject to no further expert evidence to be adduced by R4) but dismissed the Intended Intervener’s Summons. We also made a costs order that the above-named Intended Intervener do pay the applicants, the 1st respondent, the 2nd respondent and the 3rd respondent the costs of the hearing of the Amendment Application and Intended Intervener’s Summons on a party to party basis on the High Court scale to be summarily assessed. 7.Whereas we delivered the reasons for decision orally pursuant to rule 28 (1) of the Land Tribunal Rules (“LTR”) at the hearing on 7 August 2019, as R4 applies for leave to appeal against the decision concerning the Intended Intervener’s Summons, the Tribunal now records the oral decision into writing pursuant to rule 28 (2) LTR as follows. R4’s Submission on the Amendment Application and the Intended Intervener’s Summons 8.According to submission by Ms Anna Chow (“Ms Chow”), counsel for R4 (also acting for the Intended Intervener), dated 6 August 2019, the Notice of Application failed to state that “the existing building on No 73 Granville Road and No 75 Granville Road (“the Existing Building”) is one single building straddling No 73 Granville Road and No 75 Granville Road, with two common staircases intended for common use by the occupiers thereof.” 9.Similarly, Ms Chow submitted that: “There is also no explanation or indication in the Valuation Report … that the ‘5-storey commercial/residential building’ on No 73 Granville Road is a part of a single building which straddles No 73 Granville Road and No 75 Granville Road, save that there is a brief description at paragraph 5.2.1 of the Valuation Report that No 73 Granville Road was ‘a 5-storey commercial/residential building, with its common staircases shared with No 75 Granville Road’.” 10.Because of the above, Ms Chow suggested, when R4 filed the Notice of Opposition on 28 May 2018, the latter failed to realise that Kowloon Inland Lot 10162 on which the remaining half of the Existing Building at No 75 Granville Road is not included in the Application which, if approved by the Tribunal, would necessitate the dissection/cutting up of the Existing Building along the dividing line between No 73 Granville Road and No 75 Granville Road. R4 complained that the Notice of Application did not contain sufficient information for the other party to know the nature of the applicants’ case so that a reasoned response can be made and the fact that proceedings are in the Lands Tribunal does not reduce the requirement for proper particularisation. 11.Ms Chow referred to a structural assessment expert report dated 2 June 2019 prepared by Ir Lo Kwok Kay (“Ir Lo”) for R4 that the demolition of the portion of the Existing Building on No 73 Granville Road would pose structural safety threat to the remaining portion of the Existing Building on No 75 Granville Road since the Existing Building was built as a single integrated beam-column frame structure and there is no supporting column along the non-structural partition wall dividing Nos 73 and 75 Granville Road to provide structural support if the building at 73 Granville Road is to be demolished. 12.Although the structural assessment expert for the applicants, Ir Chan Hei-leung Thomson (“Ir Chan”) put forward a schematic idea to support the current non-structural partition wall dividing Nos 73 and 75 Granville Road, R4 was concerned about the admission of Ir Chan in the Joint Statement with Ir Lo that “the … building at Nos 73 and 75 Granville Road was designed and constructed as one single building with a single frame structure …” 13.Thus, the amendments to R4’s Notice of Opposition were proposed as follows for the purpose of determining the question in controversy between the applicants and R4:
14.Ms Chow refers to O15 r6(2) of the Rules of the High Court which states that:
15.Ms Chow stated that the object of O15 r6(2)(b) is to ensure that all relevant matters in dispute in the action can be effectively adjudicated upon by the court and that all relevant parties are before it. O15 r6(2)(b) requires some interest in the matter by the would-be intervener which is directly related to the subject matter of the action. All persons who have a legitimate legal or financial interest in the outcome of the matter in dispute are relevant parties. Thus, where the proprietary or pecuniary rights of a person are affected, this is enough. 16.For reason stated in paragraph 9 above, R4 applied to join as an intervener in her capacity as the registered owner of the Affected Unit, otherwise the occupiers of the upper floor units on No 75 Granville Road would be prejudiced since both circulation access as well as required/emergency access to their units would be cut off as a result of the demolition of the portion of the required staircase and the circulation staircase located within the No 73 Granville Road portion of the Existing Building upon redevelopment. 17.Ms Chow also submitted that there is no remedial proposal in the Application to ensure that proper circulation access as well as emergency access for the occupants of the upper floor units on No 75 Granville Road would be maintained if the building at No 73 Granville Road is to be demolished for redevelopment. 1st Respondent’s Reply 18.While Mr Albert Chan, counsel for the 2nd and 3rd respondent took a neutral stance, Mr C Y Li SC (“Mr Li”) leading Mr Adrian But for the 1st respondent opposed both the Amendment Application and the Intended Intervener’s Summons raising concern that milestone dates for the trial which would commence on 9 September 2019 should not be jeopardized. 19.Mr Li also complained that R4’s 2 applications were very late as she filed her Notice of Opposition more than one year ago and she had been under legal advice all the time. If R4 tried to explain her lateness because she only had the structural assessment report of Ir Lo, such purported explanation was far from acceptable because she, being the owner of the Affected Unit, would have idea as to whether Nos 73 and 75 Granville Road did or did not make up one building as alleged. 20.Besides, Mr Li had grave reservation on the validity of the Intended Intervener’s Summons as R4 is already a party to the action. Her alleged concern that the sale of the Subject Lots would lead to a redevelopment which may affect the structural stability and safety of No 75 Granville Road may not be a legal interest in the present action which is on the sole question of whether the ownership of the Subject Lots (and not No 75 Granville Road or including No 75 Granville Road) should be sold and not on how the Subject Lots should be redeveloped. Even if it is, submitted by Mr Li, the same would be protected by R4 being an existing party in the action who can take the same point whether or not R4 would be joined again superficially as an intervener. 21.Lastly, Mr Li posed 3 questions:
The Applicants’ Reply 22.Mr Mok Yeuk Chi (“Mr Mok”), counsel for the 1st to 17th applicants, associated with Mr Li’s submission in opposing both the Amendment Application and the Intended Intervener’s Summons. 23.In respect of R4’s proposed amendments to raise the point that the Tribunal lacks jurisdiction (and appropriateness) under section 3(1) and (2) (and section 4(2)) of the Ordinance to grant the Application, Mr Mok added the following responses:
24.In respect of the first group of proposed amendments, ie (aal)(i) in paragraph 13 above, Mr Mok submitted it is clear that the criteria set out in section 3(1) and (2)(a) to give the Tribunal jurisdiction to entertain an application for a compulsory sale order are satisfied (notwithstanding Nos 73 and 75 Granville Road share 2 common staircases) and accordingly the amendments to aver that the Tribunal lacks jurisdiction (and appropriateness) to grant a compulsory sale order of the lot of No 73 Granville Road when it shares 2 common staircases with No 75 Granville Road is without merit and should be refused. 25.For instance, section 3(1) of the Ordinance only refers to “…not less than 90% of the undivided shares in a lot may make an application” rather than mentioning of the word “building”. Accordingly, the Tribunal is given jurisdiction by section 3(1) when an applicant has the required percentage of undivided share in a lot, whether there is a building standing on it or not. In Capital Well Ltd v Bond Star Development Ltd, supra, the Court of Final Appeal affirmed that the Ordinance applied to a clear site. Section 4(2)(a)(i) contrasted the original building with the proposed building. 26.Similarly, section 3(2)(a) of the Ordinance only refers to “2 or more lots where the majority owner owns not less than the percentage specified in subsection (1) of the undivided shares in each lot; or” (underline added) 27.Thus, Mr Mok submitted that section 3(1) and/or section 3(2)(a) of the Ordinance give(s) jurisdiction to the Tribunal to make a compulsory sale order over No 73 Granville Road which is standing on its own lot with its own undivided share regime. This arrangement was made at the time when Nos 73 and 75 Granville Road were first developed for each to have its own lot and with a separate DMC (and undivided share regime). All the owners of No 73 Granville Road have always had the proprietary right to unilaterally redevelop No 73 Granville Road (and the same applied to No 75 Granville Road) as long as the common staircases are retained. The majority owner of No 73 Granville Road is not required to satisfy both section 3(1) and/or section 3(2)(a) on the one hand and section 3(2)(b) on the other where the word “or” was used to separate section 3(2)(a) and (b). 28.Notwithstanding the above, Mr Mok continued to remark on section 3(2)(b) and section 4(2)(a)(i) of the Ordinance. Whereas section 3(2)(b) adopts the word “building” when it refers to 2 or more lots on which one building is connected to another building by a common staircase, the word “building” may not be confined to a building within the meaning of structural construction and the word “building” does not feature in section 4(2)(a)(i). 29.“Building” is defined in section 2 of the Ordinance to mean “a building within the meaning of the Buildings Ordinance, Cap 123 (“BO”)” which is very wide. It “includes the whole, or any part, of any domestic or public building …” (underline added). The fact that a part of a building can come within the definition of being a building within the meaning of the BO shows that even in the BO a building is not to be defined by its structural construction. 30.Tenement houses with a common staircase shared by two blocks used to be the common type of existing developments in Hong Kong and it is common occurrence that while one block has been redeveloped, the other block and the common staircase(s) are left behind. The Tribunal is only to be satisfied under section 4(2)(a)(i) before granting a compulsory sale order: is “redevelopment of the lot is justified … due to the age or state of repair of the existing development on the lot” (and not “existing building”). This choice of the term “existing development” supports the submission that the concept of what is a building from the structural construction perspective is not engaged in the context of section 3(1) and (2) and section 4(2)(a)(i) of the Ordinance. 31.Following from the above, Mr Mok submitted, the proposed amendments to aver that section 3(1) and (2) does not provide jurisdiction to the Tribunal to grant a compulsory sale order of No 73 Granville Road (without including No 75 Granville Road, with which there are 2 common staircases) is without merit, unarguable and should be refused. 32.As regards the second proposed amendment, ie there is no or no adequate remedial measures included in the Application to address the structural stability and safety of No 75 Granville Road upon the demolition of No 73 Granville Road, Mr Mok on the one hand submitted that the applicants satisfied the requirements of section 3(1) and 3(2)(a) of the Ordinance and neither of them engage the concept of what constitutes a building from the structural construction perspective. 33.On the other hand, Mr Mok submitted section 3(1)(b) provides the alternative requirements to make applications only; it has to be read together with section 4(2)(a)(i) under which the Tribunal has to be satisfied that “the development of the lot is justified (and whether or not the majority owner proposes to or is capable of undertaking the redevelopment) — due to the age or state of repair of the existing development on the lot”. (underline added) 34.When the question of whether the majority owner is proposing or is capable of undertaking the redevelopment is excluded from the examination of the Tribunal when considering the question of whether redevelopment of the lot of No 73 Granville Road is justified, clearly section 4(2)(a) does not require the applicants to establish that there is a remedial measure that would likely lead to the Building Authority (“BA”) approving the demolition of No 73 Granville Road. 35.Mr Mok submitted the following time line that has been established by the Ordinance and the question of whether the safety and stability of No 75 Granville Road would be affected by the demolition of No 73 Granville Road is not going to take place until sometime in the future after the auction sale pursuant to the compulsory sale order, if granted, and when the purchaser of the lot(s) should decide to make applications to the BA for the redevelopment of the lot(s):
36.In respect of the Intended Intervener’s Summons, Mr Mok submitted that from R4’s 4th affirmation, the ground would only appear in paragraph 26 that “there is an issue to be determined between the Applicants and me, in the capacity as the registered owner of the Affected Unit [in No 75] which is directly related or connected with the subject matter of the present Compulsory Sale Application and it would be just and convenient for the Tribunal to determine the disputes between all parties in the same action”. 37.But O15 r6 requires R4, in her capacity as owner of the Affected Unit, to show (1) her interest in the matters in dispute of the proceedings or (2) the issue to be determined between her and the applicants. Mr Mok submitted that neither the Intended Intervener’s Summons nor the supporting affirmation provide a clear formulation of:
38.More importantly, section 4(1) and (2) of the Ordinance confer locus to be heard by the Tribunal only to the majority and minority owners on the present proceedings. For instance, in Pacific Crown Enterprises Ltd v Man Yu On & Anor [2013] 4 HKC 544, tenants were excluded. In Group Leader Ltd & Ors v Hui Sun Fat [2016] 2 HKLRD 625:
39.Mr Mok repeated the timeline above and submitted that there can be no existing live issue between the applicants and R4 in her capacity as owner of the Affected Unit, on the safety and stability of No 75 Granville Road upon the future event of the demolition of No 73 Granville Road; the granting of the compulsory sale order of No 73 Granville Road and the auction will not put the stability and safety of No 75 Granville Road at risk. It is beyond dispute that the BA will not approve the demolition of No 73 Granville Road until the BA is satisfied that it will not affect the stability and safety of No 75 Granville Road. Reasons for Decision 40.We allowed the Amendment Application as Ms Chow for R4 confirmed no further expert evidence to be adduced by her and the trial will not be disturbed. The Tribunal considers that the legal issues raised by R4 shall be considered in the judgment after trial. 41.For the Intended Intervener’s Summons, we find that as per the Group Leader Ltd’s case, the Intended Intervener has no locus standi to intervene as a party under the Ordinance as the Application does not include No 75 Granville Road or the lot upon which it stands. 42.Indeed, the alleged concern of the Intended Intervener involving questions of “dissection of a building” or “structural stability” upon redevelopment is misconceived because the question posed by section 4(2) of the Ordinance is whether the Tribunal is satisfied that:
43.We must emphasise that whether or not the majority owner proposes to or is capable of undertaking the redevelopment or likewise how the Subject Lots would be redeveloped is a non-issue. 44.To the extent that Ms Chow cited Supergoal Investment Ltd v Five F Ming House Ltd [2014] 1 HKLRD 286 which discussed the legislative history of the Ordinance, we tend to disagree that the word “building” can be implied in section 3(1) or (2) of the Ordinance so that it prevents the Tribunal to make a compulsory sale order over No 73 Granville Road only. As well there is no point for R4 to intervene in her capacity as the registered owner of the Affected Unit when leave has been granted to amend her Notice of Opposition so as to include all these arguments which will be dealt with in the judgment after trial. 45.Further, as R4 filed her Notice of Opposition more than one year ago and had been under legal advice throughout, the Tribunal cannot accept her explanation regarding her lateness in making the Intended Intervener’s Summons and hence, we exercise the residual discretion[2] to dismiss the same even if she has locus standi to intervene as a party under the Ordinance. Costs 46.As we had dismissed the Intended Intervener’s Summons, she is basically the loser and has to pay costs to the applicants and the 1st respondent who had successfully opposed the Intended Intervener’s Summons. Although the 2nd and 3rd respondents took a neutral stance, they should have incurred costs in order to set out their response. It is implicit that such parties, who were being put to that time and expense, were prima facie entitled to their costs of so doing.[3] 47.We ordered, therefore, the Intended Intervener do pay the applicants, the 1st respondent, the 2nd respondent and 3rd respondent the costs of the Intended Intervener’s Summons on a party to party basis on the High Court scale to be summarily assessed.
Mr Mok Yeuk Chi, instructed by So, Lung & Associates, for the 1st to 17th applicants Mr C Y Li SC leading Mr Adrian But, instructed by Vincent T K Cheung, Yap & Co, for the 1st respondent Mr Albert Chan, instructed by Tang & So and Woo, Kwan, Lee & Lo, for the 2nd and 3rd respondents Ms Anna Chow, instructed by Hoosenally & Neo, for the 4th respondent and the intended intervener |
Cases cited in this judgment
Further hearings and rulings under LDCS 14000/2017