Read the full judgment text of CACV 000521/2001 on BabelCite. This Court of Appeal judgment was delivered on 6 November 2001 before Le Pichon JA, Cheung JA and Burrell J.
Land compensation – resumption under Railways Ordinance (Cap. 519) – assessment of compensation under Lands Resumption Ordinance (Cap. 124) s.10(2)(d) – wholesaler of foodstuff, farming medicine and feeds – verbal agreement for rebuilding works in return for fixed monthly rent in perpetuity – total extinguishment basis – loss of goodwill – wages and salary cost approach and rental value approach rejected as unaccepted methods – loss of profit rent – assessment on per square metre basis across whole 1,375 sq. m. – whether applicant knew property extended beyond Wong On's land – loss on forced sale of furniture and fittings, motor vehicles and stock – whether recovery limited to proportion of business on resumed lot or available for whole loss – Chan Kwok Lam and Lee Chun reconciled on causation basis – construction and site improvement costs of $120,000 – whether recoverable under s.12(b) LRO – second negative covenant in Block Crown Lease – blanket prohibition on any building or structure without prior approval – no exception for agricultural use – 1996 agreement conferring no proprietary interest – causation point – cross-appeal on profit rent – Tribunal's approach upheld – appeal allowed in part – full loss of $774,047.40 substituted for the Tribunal's 36.145% award – goodwill and construction costs claims rejected – cross-appeal dismissed – costs to applicant.
Legal issues: Whether the wages and salary cost approach or the rental value approach should be adopted to value loss of goodwill · Whether compensation for loss on forced sale of furniture, fittings, motor vehicles and stock should be limited to the proportion of business carried on the resumed lot · Whether compensation is payable for construction and site improvement costs under section 12(b) of the LRO · Whether the Tribunal erred in assessing loss of profit rent on a per square metre basis across the whole 1,375 square metres
Outcome: Appeal allowed in part; cross-appeal dismissed. The Tribunal's award of $279,782.50 for loss on forced sale of furniture and fittings, motor vehicles and stock was set aside and the full sum of $774,047.40 was substituted. The Tribunal's refusal to award loss of goodwill and its refusal to award compensation for construction and site improvement costs were upheld.
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