Apex Intelligence Ltd v. Chan Hoi Kuen and Others
Read the full judgment text of LDCS 5000/2019 on BabelCite. This LDCS judgment was delivered on 19 October 2022.
1. This is 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 following lots (collectively referred to as “the Lots”) located at Nos 163 to 169 Yee Kuk Street, Sham Shui Po, Kowloon:
Cited by 6 cases · Cites 6 cases
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LDCS 5000/2019 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE MAIN APPLICATION NO 5000 OF 2019 __________________________
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_________________ J U D G M E N T _________________ 1.This is 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 following lots (collectively referred to as “the Lots”) located at Nos 163 to 169 Yee Kuk Street, Sham Shui Po, Kowloon:
2.Standing thereon are two pairs of tenement buildings (collectively referred to as “the Buildings”), the 1st pair being of 6 storeys sharing only one common staircase whereas the 2nd pair, though being of 5 storeys, is served by two common staircases, one fronting onto Yee Kuk Street and the other fronting the rear lane. 3.The occupation permit of the 1st pair of Buildings, Permit No K39/57, was issued on 19 June 1957 pursuant to the then Buildings Ordinance of 1955 permitting the ground floor for non-domestic use and the upper floors of domestic use. 4.The occupation permit of the 2nd pair of Buildings, Permit No D558/55, was issued on 30 November 1955 pursuant to the then Building Ordinance of 1950 permitting the Buildings for domestic use. Under this 1950 Edition, there were the following significant differences to the current issue of the Buildings Ordinance:
5.As per the land search obtained from the Land Registry, the 1st pair of Buildings at 163 and 165 Yee Kuk Street each comprises one ground floor unit. The building at 163 Yee Kuk Street comprises one unit on each upper floor from 1/F to 5/F, whilst the building at 165 Yee Kuk Street comprises one unit on 1/F, three units (namely Portions/Flats A, B and C) on 2/F, one unit on 3/F, two units (namely Front Portion and Rear Portion) on 4/F, and also three units (namely Portions/Flats A, B and C) on 5/F. 6.On the other hand, the 2nd pair of Buildings at 167 and 169 Yee Kuk Street each comprise one unit per floor. 7.Also according to the land search obtained from the Land Registry on 29 January 2019, the ownership of the respective units is as follows:[1]
8.From the above, at the commencement of the Application on 14 March 2019, the applicant owned the following number of undivided shares in the Lots:
9.Then after the commencement of the Application, the applicant successfully acquired the undivided shares previously owned by R1 and R3. Proceedings against them have been discontinued. The applicant now owns 91.67% of the 1st pair of Lots and 90% of the 2nd pair of Lots. 10.The 1st named R2, ie Chan Hoi Kuen, is the registered owner of R2’s property. The 2nd named R2, ie Chan Yuk Lun and 3rd named R2, ie Chan Yuk Keung, are the beneficial owners of the same property. However, all the three named R2 above could not be found. Substituted service of the Application on them was effected on 16 December 2019 pursuant to para 5 of an Order of H H Judge M Wong of the Tribunal dated 5 December 2019. After expiration of the 21-day’s period as specified in the substituted service notices, none of the three named R2 appeared. Pursuant to para 7 of the same Order, service of subsequent documents on R2 was dispensed with. 11.Madam Leung Hong Wah, ie R4, is the registered owner of R4’s property. She passed away on 9 January 2019. The title of R4 was therefore amended to the Personal Representatives of Leung Hong Wah, deceased, pursuant to the above-mentioned order of the Tribunal dated 5 December 2019. Pursuant to the same Order, substituted service of the Application on R4 was also effected on 16 December 2019. After expiration of the 21-day’s period as specified in the substituted service notices, R4 has not appeared and pursuant to para 6 and 7 of the said Order, all persons claiming to be the minority owners of the Lots shall be bound by the proceedings as if they have been duly served with the Application in accordance with section 3(3) of the Ordinance and service of subsequent documents on R4 was dispensed with. 12.Meanwhile, in about September 2019, the applicant’s solicitor learned from Messrs Hau, Lau, Li & Yeung, Solicitors that its client at that time, Madam Liang Tunghua also known as Leung Tung Wah (“Madam Liang”), claimed as the executrix of the estate of the late Madam Leung Hong Wah.[2] 13.Then there was a Summons taken out on 15 May 2020 by Messrs Tai, Tang & Chong, Solicitors, applying for the joinder of R5, ie the personal representative of Madam Chan Ngan Ping, deceased, who was believed to have beneficial interest in R4’s property. Whereas Madam Chan Ngan Ping passed away on 24 April 2002, she left the following surviving children:
14.Mr Francis Leung and his sister, Ms Winnie Ng were subsequently appointed by the Order of H H Judge M Wong dated 23 October 2020 to jointly represent the estate of R5, deceased, for the purpose of the present proceedings. To facilitate taking instructions, Messrs Cheung & Yeung was jointly engaged by Mr Francis Leung via Messrs Tai, Tang & Chong, Solicitors and by Ms Winnie Ng via Messrs Hau, Lau, Li & Yeung, Solicitors. 15.On the other hand, legal proceedings in HCA 138/2007, HCA 745/2011 and HCA 2239/2017 registered against R4’ Property in the Land Registry were noted. The main parties in the legal proceedings are in fact the siblings and/or family members of the late Madam Leung Hong Wah and Madam Liang. 16.According to the applicant, its solicitors continued to carry out probate searches on 12 April 2021, 26 July 2022 and 27 July 2022 but found no grant of probate or letter of administration in respect of R4’s estate. However, Mr Francis Leung entered the following Caveats against R4’s estate:
17.Then by a letter dated 18 May 2022 from Messrs Tai, Tang & Chong, Solicitor, the latter informed Messrs Cheung & Yeung that Messrs Tai, Tang & Chong, Solicitors, no longer acted for Mr Francis Leung and further instruction should be taken from Messrs Wong Shum & Co on the part of Mr Francis Leung. 18.And on 26 July 2022[3], there was then an application by Messrs Cheung & Yeung, Solicitors for ceasing to act for R5. In the Affidavit filed by Mr Yeung Wai Hon, partner of Messrs Cheung & Yeung of even date, Mr Yeung explained that since or about 15 April 2021, both Mr Francis Leung and Ms Winnie Ng failed to pay further costs on account so as to proceed with the preparation of surveyor report. Also no further instructions were received from either Mr Francis Leung or Ms Winnie Ng. 19.Further on 9 August 2022, a Summons was taken out by Messrs Wong Shum & Co on behalf of Mr Francis Leung seeking to remove Ms Winnie Ng from her office as one of R5’s representatives and have Mr Francis Leung appointed to solely represent the estate of Madam Chan Ngan Ping, deceased. In the Affidavit filed by Mr Wong Tak Shing (“Mr Wong”) of Messrs Cheung & Yeung of even date[4], Mr Wong explained that Mr Francis Leung has agreed with Ms Winnie Ng that the cost on account of R5 payable to Messrs Cheung & Yeung shall be paid by Mr Francis Leung and Ms Winnie Ng on equal basis. Even up to 1 August 2022 when the Tribunal granted on Order for Messrs Cheung & Yeung to cease to act, Mr Francis Leung still maintained a credit balance with Messrs Cheung & Yeung whilst Ms Winnie Ng had refused to make up her part of contribution. Mr Wong further explained the difficulty of Ms Winnie Ng failing to give her instructions to the possible settlement offers and/or engagement of Counsel. 20.On 2 September 2022, after the trial commenced on 1 September 2022, Ms Winnie Ng applied for an Order to appoint her as the representative of R5 in substitution of Mr Francis Leung. On 5 September 2022, the Tribunal refused to remove Mr Francis Leung from the office of representative but resurrected Ms Winnie Ng’s office of co-representative to represent the estate of Madam Chan Ngan Ping, deceased, jointly with Mr Francis Leung for the purpose of the subject main compulsory sale application proceedings. 21.At trial, Ms Nancy Ngai (“Ms Ngai”) acted on behalf of the applicant while Mr Vincent Shum (“Mr Shum”) acted on behalf of Mr Francis Leung, the 1st named R5. 22.Ms Winnie Ng, the 2nd named R5, joined the trial on 5 September 2022 and was acting in person. The Issues in the Application 23.Ms Ngai submitted in her opening the following issues for determination by the Tribunal at the trial:
24.R5 has no objection to the Orders for sale of, inter alia, R4’s property and agrees that the redevelopment of, inter alia, R4’s property, is justified. The Evidence 25.The applicant has filed the following documents in support of the Application:
Whether the Applicant is entitled to make the Application 26.Section 3(1) of the Ordinance requires an applicant to have not less than 90% of the undivided shares in a lot before he can make an application. 27.Section 3(2) of the Ordinance provides that without prejudice to the operation of subsection (5), an application under subsection (1) may cover—
28.Section 3(5) of the Ordinance provides that the Chief Executive in Council may, by notice in the Gazette, specify a percentage lower than the percentage mentioned in section 3(1) in respect of a lot belonging to a class of lots specified in the notice. 29.The Land (Compulsory Sale for Redevelopment (Specification of Lower Percentage) 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 in respect of the classes of lots specified in the Notice from 90% to 80%. Those classes of lots include a lot with each of the building erected on the lot issued with an occupation permit at least 50 years before the relevant date (ie the date of the Application under the Ordinance). 30.Insofar as the occupation permits for the Buildings were issued on 19 June 1957 and 30 November 1955, ie not less than 60 years before the date of the Application, the Notice is applicable and the threshold percentage should be 80%. 31.However, soon after the parties had presented their closing submissions in person on 14 September 2022, the Tribunal (which was differently constituted by a presiding officer and another member) handed down its decision in Max Win Development (HK) Limited v Gain Excel Limited, LDCS 37000/2019 (unreported, dated 30 September 2022) dismissing the application for compulsory sale under the Ordinance. Among the grounds of its decision, the Tribunal cast doubt on whether an applicant owning 100% of a lot on which one building is connected to another building on an adjoining lot by a staircase intended for common use by the occupiers of the buildings could make an application under the Ordinance despite the average of—
is not less than the percentage specified in subsection (1). 32.In that case, the Tribunal cited the legislative history of the Ordinance. Particularly, paragraphs 12-13 of the Minutes for the Bills Committee dated 12 March 1998 were recorded as follows:
33.Then in the Minutes for the Bills Committee dated 24 March 1998 at §24, the following was further recorded:
34.The Paper for the House Committee meeting on 27 March 1998 - Report of the Bills Committee on Land (Compulsory Sale for Redevelopment) Bill summarized the provision for special consideration for buildings connected to one another by a staircase which is intended for common use by their occupiers as follows:
35.Thus while The Bills Committee accepted that the minimum acquisition percentage should apply to a lot per se, there is an exception: the minimum acquisition level should be an average of 90% of the undivided shares in the lots on which buildings connected to one another by a staircase respectively stand. The corresponding proposed amendments were set out in Appendix III of that Paper and it was this Clause 3 amendment that introduced the current version of section 3(2) of the Ordinance. 36.Again, on 7 April 1998, the Provisional Legislative Council resumed Second Reading debate of the Bill. On the scope of the Bill, the Chairman of the Bills Committee, Mr. Ronald Arculli said that: -
37.In respect of the proposed amendments to clause 3 of the Bill (ie current version of section 3(2)(a) and (b) of the Ordinance), the Secretary for Planning, Environment and Lands said that: -
38.On the same day, the Committee passed the Bill with the amendments as proposed. The Bill was read a third time and passed by the Provisional Legislative Council. 39.The Tribunal in Max Win Development, supra, was concerned about what the Court of Appeal stated in Bond Star Development Limited v Capital Well Limited [2004] 2 HKLRD 855 which was an application under section 3(1)(b) of the Ordinance for redevelopment of premises situated at 24, 26, 28, 30 and 32 of Ming Yuen Western Street:[7]
40.At §16 of Bond Star Development, supra, the Court of Appeal addressed as follows:
41.Whereas in the present case, the Tribunal is dealing with the Application under section 3(2)(b) which is an exception providing the minimum acquisition level should be an average of 90% of the undivided shares in the lots on which buildings connected to one another by a staircase respectively stand, the Court of Appeal did not, with respect, at §16 above, distinguish between section 3(2)(a) and section 3(2)(b) the latter of which was specifically added to tackle for lots on which one building is connected to another building by a staircase intended for common use by the occupiers of the buildings. 42.It is however of interest to note the conclusion of the judgment where the Court of Appeal stated at §35 as follows:
43.That is, the Court of Appeal had left out the question on section 3(2)(b) on the basis that the building on one lot had been connected to an adjacent building on another lot by a staircase for common use. Thus, the decision of the Court of Appeal in Bond Star Development, supra, is not binding on the Tribunal in the present case. 44.In the present case, the 1st Pair of lots on which the 2 buildings stand are connected by a staircase for common use and the Application is certainly under section 3(2)(b) of the Ordinance where the provision is re-stated as follows where an application under subsection (1) may cover:
45.“Majority owner” is defined at section 2 of the Ordinance to mean the person or persons who has or have made an application under section 3(1) which covers now 2 or more lots as a result of the legislative amendment in the Bills stage. Thus, in my opinion, the words “majority owner” in section 3(2)(b)(ii) must mean the majority owner of the 2 or more lots on which one building is connected to another building by a staircase intended for common use by the occupiers of the buildings especially when it refers to “the majority owner in the lot or lots” where the average percentage specified in subsection (1) is of paramount importance. 46.In the present case, therefore, the applicant, owning then an average of 83.34% of the 1st pair of Lots and an average of 80% of the 2nd pair of Lots at the time of the Application, was entitled to file the Application under section 3(2)(b) of the Ordinance. EUV as at 18 December 2018 Assessment of EUV of G/F Units 47.Pursuant to Part 1 of Schedule 1 to the Ordinance, a valuation report, prepared not earlier than 3 months before the date on which the application under section 3(1) of the Ordinance is made, is required in setting out the assessed market value of each property on the lot—
This was what had been done by Mr Alnwick Chan in his Application Report dated 14 February 2019. 48.In his Supplemental Report dated 22 July 2021, Mr Alnwick Chan assessed the EUV of the Buildings as at 18 December 2018 as follows:[8]
49.Mr Patrick Lai was not called to give evidence. Mr Shum, however, insisted that 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.[9] 50.At this juncture, it is noted that the EUV as assessed by Mr Alnwick Chan in section 6 of his Supplemental Report dated 22 July 2021 would result in R2 and R4 each receiving more compensation for the sale of their properties than those assessed by Mr Patrick Lai:
51.This is the case because Mr Patrick Lai assessed the EUV of the G/F premises higher than that of Mr Alnwick Chan by more than 20%. In other words, Mr Patrick Lai’s assessments in respect of the domestic units of the Buildings, including those that are owned by R2 and R4, are lower than that of Mr Alnwick Chan:[10]
52.While Mr Patrick Lai had some comments in his Rebuttal Report dated 19 August 2021 on the G/F assessment, I do not think Mr Shum was going so far as to challenge Mr Alnwick Chan’s valuation for the ground floor premises. 53.As I explained to Ms Winnie Ng on the date of closing submission, the purpose of assessing the EUV of the respective units is to determine the apportionment of proceeds of sale of the Lots, if an order for sale be granted, on a pro rata basis pursuant to Part 3 in Schedule 1 to the Ordinance. The relative assessments are more important than the absolute value of the assessments. 54.In fact, Mr Shum took issue on the statement below in para 6.5 of Mr Alnwick Chan’s Supplemental Report dated 22 July 2021 after he had set out his EUV assessments as stated above:[11]
55.While the above statement is quite self-explanatory, I fail to understand, with respect, why Mr Shum had taken the view that Mr Alnwick Chan had not been holding a strong view that the actual condition of R4’s property as “Poor”. 56.As explained by Ms Ngai, this specific instruction given to Mr Alnwick Chan was only for the applicant to consider increasing the offer to R4, if possible. Indeed, such kind of special assumption is quite common in property valuations and is provided for in VS8 of the HKIS Valuation Standards 2020 or its earlier version:
57.As a matter of fact, as pointed out by Ms Ngai, Mr Patrick Lai also described the internal condition of R4’s property as “Poor”[12] which is exactly the same basis as adopted by Mr Alnwick Chan. And by reference to the photographs taken by Mr Patrick Lai[13], R4’s property appears to have been subdivided as defined under section 120AA of the Landlord and Tenant (Consolidation) Ordinance Cap 7. 58.In any event, Mr Shum confirmed in his closing submission that he had no dispute on the adoption of the pro rata ratio as assessed by Mr Alnwick Chan. Whether Redevelopment of the Lot is Justified on “Age” or “State of Repair” 59.Section 4(2)(a) of the Ordinance stipulates that the Tribunal shall not make an order for sale unless it is satisfied that redevelopment of the Lots due to the “age or state of repair” of the Buildings is justified. Experts’ Evidence 60.On this issue, the applicant adduced the Condition Survey Report dated 26 July 2019 by Mr Calvin Chan, the Building Surveyor and the Structural Assessment Report dated 18 July 2019 by Dr Lau, the Structural Engineer. 61.In the Structural Survey Report, Dr Lau concluded as follows:[14]
62.In the Condition Survey Report, Mr Calvin Chan concluded that the condition for the external walls, the staircase, the roof, the domestic flats and the common areas were poor. He was of the view that no matter how good the internal areas are in terms of decoration, if the basic structure is not in a satisfactory condition, the Buildings would not be fit for occupation. Mr Calvin Chan further concluded that the Buildings are not up to tenantable standards.[15] 63.Mr Calvin Chan also found that the Buildings had not been provided with sufficient and up-to-date provisions and services installations including proper means of escape, fire resisting construction, fire services installations, building facilities to protect life and properties of building occupants and users in case of emergency.[16] 64.Mr Calvin Chan estimated the initial repair costs to restore the Buildings to a tenantable condition at $53,726,370 which is about 108% of the unit cost of building a new similar building while the long term maintenance costs are expected to grow and become more frequent. 65.No one took issue over the question as to whether redevelopment of the Lots is justified. In the absence of evidence to the contrary, I am satisfied that redevelopment of the Buildings is justified due to the age and state of repair. Section 4(2)(b) – Whether Applicant has taken reasonable steps 66.The applicant is under an obligation to take reasonable steps to negotiate on terms that are fair and reasonable for the purchase of the interests of the respondents under section 4(2)(b) of the Ordinance. 67.Ms Ngai submitted that despite the applicant had commenced the Application on 14 March 2019, it continued to negotiate with the respondents where available. The applicant has indeed successfully acquired the undivided shares previously owned by R1 and R3 by negotiation. 68.Ms Ngai also submitted that the applicant had not been able to acquire R2’s property solely because all the 3 named R2 are missing. There has been no way to carry out negotiation with them at all. 69.As regards R4’s property, Ms Ngai submitted that the applicant had not been able to purchase the interest because of the following facts:
70.Despite Ms Winnie Ng trying to suggest otherwise in her closing submission, on the evidence available, I am satisfied that the applicant has taken reasonable steps to acquire all the undivided shares in the Lots. 71.Indeed, I agree with Ms Ngai that this Application serves a good example to demonstrate that the Ordinance achieves its objective to provide a solution to the problem of property acquisition for redevelopment due to defective titles, untraceable owners, owners who had died intestate etc as stated in the first meeting of the Bills Committee of the Provisional Legislative Council on the Land (Compulsory Sale for Redevelopment) Bill (before the Ordinance was enacted) on 10 February 1998.[17] RDV of the Lots Hypothetical Development Model 72.Mr Alnwick Chan resorted to the residual valuation method in determining the RDV. This can be done by deducting development cost (including construction costs, professional fees, finance costs etc) and developer’s profit from the estimated gross development value (“GDV”) of the completed optimum development. 73.As stated in §25(d)(v) above, Mr Alnwick Chan had prepared an Updated Report dated 27 July 2022 on RDV of the Lots on 11 July 2022. On the other hand, Mr Patrick Lai was not instructed to provide any valuation evidence on the up-to-date RDV of the Lots. 74.The Lots have a site area of 402.17 sq m. It is sandwiched between a commercial/ residential composite development named Hey Home, which was completed in 2008, and a service lane next to another older commercial/ residential composite building at the corner of Yee Kuk Street and Pei Ho Street. Because of the Building (Planning) Regulations’ requirement, some 10.81 sq m at the rear has to be set back. Mr Patrick Lai, by reference to his Valuation Report dated 2 July 2021, had no dispute on it[18]. The net developable area becomes 391.36 sq m. 75.Mr Alnwick Chan, in his Updated Report dated 27 July 2022, proposed a 24-storey commercial/residential composite development with ground floor going to accommodate 3 shops together with the entrance lobby of the domestic portion above. A retail shop will be connected by internal staircases to the 1/F which will also accommodate a club house. The domestic portion above will be from 2/F to 23/F with 4 units per floor. The upper floors would be served by two lifts and two common staircases. The hypothetical development will comprise a total gross floor area of 3,302.10 sq m or a plot ratio of 8.4375.[19] 76.However, in his Rebuttal Report of 19 August 2021, Mr Patrick Lai expressed his reservation on a G/F setback proposed by Mr Alnwick Chan at the side for “Access passage for Transformer (3m)” for the reason that a new development at No 164 Hai Tan Street has no provision for transformer room[20]. However, in my view, this comparison is not appropriate as this new development at No 164 Hai Tan Street is a single block development comprising 6 storeys only. 77.A Code of Practice 101 for Distribution Substation Design Version 15 was issued by CLP Power Hong Kong Limited on 30 June 2020 to provide the details of the general principles to be applied to the design of distribution substations, including substations located at ground floor, basement, upper floor level including at high level in high rise building and outdoor areas.[21] In particular para 5.12 and 5.1.4 state as follows:
78.In the absence of further evidence to the contrary, I accept Mr Alnwick Chan’s set back proposal. GDV for Shops 79.In his Updated Report dated 27 July 2022, Mr Alnwick Chan adopted 7 shop transactions as comparables in assessing the GDV for his proposed shops:[22]
80.Mr Shum proposed to include for consideration those comparables adopted by Mr Patrick Lai in his Valuation Report dated 2 July 2021, ie those dated more than 1 year ago. Save for the comparable at G/F, 174 Yee Kuk Street above, ie Comparable 7, Mr Patrick Lai adopted transactions from 28 October 2019 to 27 November 2020[23]. 81.Although these comparables adopted by Mr Patrick Lai were dated, Mr Shum suggested that adjustments could be made by reference to the price index published, for instance, by the Rating and Valuation Department (“RVD”). However, the Private Retail Price Index published by RVD is a territory wide index and, like every other index, is more or less an averaging exercise and there is no guarantee that the price trend for the subject location or property necessarily follows the index. This is particularly the case for shop premises where a slight variation in location would lead to significant difference in value. Therefore, the larger the extent of the adjustment, the higher probability of error would ensue. 82.In fact, initially I have hesitation in accepting the transaction of at G/F, 174 Yee Kuk Street above, ie Comparable 7, as a comparable but I find this to be the best comparable in terms of location. I am not going to adopt any of the other comparables adopted by Mr Patrick Lai as they were dated. 83.The locality of the Lots is a residential area where developments comprise mainly aged tenement blocks with retail shops on G/F intermixed with high-rise commercial/residential composite developments. Majority of the ground floor premises are occupied by ironmongers, traders of second hand electrical appliances, old-style salons, etc. Also, towards the opposite side of the street around the corner of Yee Kuk Street and Pei Ho Street is a public refuse collection station. This comparable 7 is situated on the other side of Pei Ho Street where minimum or nil adjustment was proposed by Mr Alnwick Chan. I agree this is reasonable. 84.On the other hand, Comparable 1 is situated far away from the locality and in a better location where trades mixes are varied. Mr Alnwick Chan proposed an adjustment for location at -10% which appears to be reasonable as well. 85.Comparable 2 comprises a corner shop at the junction of Nam Cheong Street and Tai Nan Street. Again, Mr Alnwick Chan proposed an adjustment for location at -10% which appears to be reasonable as well. 86.Comparables 3 and 4 are occupied by an engineering company and a shop selling construction materials within the same section of Tai Nan Street. Tai Nan Street used to be a home to a lot of factories that produced leather, fabrics and accessories. In recent years, a lot of boutique cafés, stores, leather shops, terrarium shops and even indie music, and more are relocated there offering a more elegant and clean environment. Again, Mr Alnwick Chan proposed an adjustment for location at -10% which appears to be reasonable as well. 87.Comparable 5 is occupied by a coffee shop at Ki Lung Street. Ki Lung Street used to be known colloquially as ‘button street’ due to the amount of wholesale vendors selling different types of garment fasteners. Aside from buttons, zippers and clasps, there are stores here that sell ready-to-wear pieces, as well as various textiles. In fact, Ki Lung Street is also home to a fabric market that is frequented by local designers. But like Tai Nan Street, its environment is changing to pace way for more elegant and clean environment. Mr Alnwick Chan also proposed an adjustment for location at -10% which appears to be reasonable as well. 88.Also on Ki Lung Street, Comparable 6 is occupied by a company selling a variety of fabrics. However, there are a continuous row of fixed pitched hawkers along this side of the street. This limits the view of this comparable from vehicles passing by, if any and pedestrian across the street. For this reason, Mr Alnwick Chan had proposed an adjustment for location of -5% instead of -10%. I agree this is reasonable. 89.Applying various other adjustments like time, age, frontage, headroom, size and layout etc, Mr Alnwick Chan arrived at a unit rate of about $222,000 per sq m. In the absence of further evidence to the contrary, I agree with Mr Alnwick Chan though he proceeded to derive from this $222,000 per sq m the values of the two remaining hypothetical shop, arriving at an overall average of $219,000 per sq m. In respect of the latter, I do not find it necessary since the proposed redevelopment was only presented to the Tribunal on a conceptual level with a high degree of generality. In the absence of further dispute, there is no requirement on the parties to submit a detailed redevelopment plan at this stage. 90.In respect of Mr Shum’s suggestion that the distance between the Lots and the Sham Shui Po MTR station exit located at the junction of Ap Liu Street and Pei Ho Street is close, with respect, I cannot agree. 91.Indeed, as explained earlier, both Tai Nan Street and Ki Lung Street are more popular streets. They are streets that are worth the introduction by the Hong Kong Tourist Board. 92.As regards the GDV of the upper floor domestic units, Mr Alnwick Chan relied on transactions all in 2022 in the following developments and arrived at an average unit rate of $223,000 per sq m:[24]
93.Mr Shum noted that Mr Alnwick Chan had relied on more transactions in the same developments in his earlier Valuation Report dated 22 July 2021 in which he got an average of about $227,000 per sq m[25]. This is however neither here or there as those transactions all took place in early 2021. They were dated. 94.Indeed, in Gain Union Limited v Leung Chi Man, LDCS 5000/2021, ie another compulsory sale application in a similar locality, the judgment of which was handed down on 6 September 2022, the valuation expert in that case arrived at a unit rate of $223,000 per sq m. Other Parameters in Residual Valuations 95.I have reviewed the other parameters adopted by Mr Alnwick Chan in his residual valuation and found that they are in par with Gain Union, supra.[26] Residual Valuation 96.I determine the RDV of $260,000,000 (ie an accommodation value of $78,737 per sq m) instead of Mr Alnwick Chan’s $259,400,000. Thus, I am prepared to set the reserve price for the auction of the Lots in one go at $260,000,000. Other Incidental Matters 97.The applicant proposed to appoint Mr Cheung Wood Keung and Ms Chan Pui Kwan Bonny, being principals of Messrs Lo & Lo, Solicitors & Notaries Public as the sale trustees. Based on the information on their background and experience as set out in their letter dated 9 August 2022[27], I are satisfied that they are proper persons to be appointed as trustees to discharge the duties imposed on trustees under the Ordinance. The remuneration package proposed in the said letter appears reasonable. 98.Section 8 of the Ordinance provides as follows:
99.The applicant has prepared a set of draft Particulars and Conditions of Sale of the Lots[28]. Subject to any amendment that may become necessary as a result of my ruling on the arrangement of auction above, the particulars and conditions of sale of the Lots by public auction submitted by the applicant are also reasonable. Order 100.This Tribunal make the following orders:
101.Since R2 and R4 are missing, the applicant do publish notices once in a Chinese language newspaper (and in the Chinese language) once in an English newspaper (and in the English language) circulating generally in Hong Kong within 7 days from the date of the sealed judgment to be made herein by the Tribunal informing R2 and R4 and all persons claiming to the owners of the Lots;
Costs 102.Whereas 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, I agree with Ms Ngai that Mr Francis Leung’s application on 9 August 2022 for the removal of Ms Winnie Ng from her office of co-representative was an indoor affair between Mr Francis Leung and Ms Winnie Ng arising out of and incidental to the conduct of Ms Winnie Ng and/or the communication breakdown between Mr Francis Leung and Ms Winnie Ng, which was not caused by the applicant and was beyond the applicant’s control. At the hearing of Mr Francis Leung’s application on 15 August 2022 and on the hearing of Ms Winnie Ng’s application on 5 September 2022, the applicant took a neutral stance and therefore should not be responsible for the costs in relation to Mr Francis Leung’s application for removal of Ms Winnie Ng from her office of co-representative by the Summons filed on 9 August 2022. 103.Also, I agree with Ms Ngai that in the period between 2 August 2022 and 14 August 2022, both Mr Francis Leung and Ms Winnie Ng were not in the position to represent R5 unless they acted jointly. On the evidence available, in the particular the Notice to Act for Mr Francis Leung alone filed by Messrs Wong Shum & Co on 5 August 2022 and the Affirmation of Wong Tak Shing filed by Messrs Wong Shum & Co of even date, Mr Francis Leung and Ms Winnie Ng were not working hand in hand with each other in representing R5 between 2 August 2022 and 14 August 2022. During the said period, as Messrs Wong Shum & Co had expressly stated in the Notice to Act filed on 5 August 2022, they were merely the solicitors for Mr Francis Leung but not R5. 104.I therefore order that:
105.Last but not least, the Tribunal thank Counsel for their assistance.
Mr Nancy Ngai, instructed by Messrs Guantao & Chow, solicitors for the Applicant Mr Vincent Shum, instructed by Messrs Wong Shum & Co on behalf of Mr Leung Wu-hon Francis, the 1st named 5th Respondent Ms Winnie Ng, the 2nd named 5th Respondent, acting in person Appendix
[1] See Bundle C1/22-23. [2] But by its letter dated 8 September 2020, Messrs Hau, Lau, Li & Yeung, Solicitors informed the applicant’s solicitor that they ceased to represent Madam Liang in the application for grant of probate in respect of the estate of the late Madam Leung Hong Wah. [3] See Bundle A2/292-300. [4] See Bundle A2/285-290. [5] Committee stage amendments. [6] Senior Assistant Law Draftsman. [7] See §10 of the Tribunal decision in Bond Star Development, LDCS 2000/2001 (unreported, 5 December 2002) [8] See Bundle C2/281-282. [9] Section 10(6) of the Lands Tribunal Ordinance, Cap 17. [10] See Bundle C2/435. [11] See Bundle C2/283. [12] See Bundle C3/619. [13] See Bundle C2/480-484. [14] Bundle E/54-55. [15] See Bundle D1/56. [16] See Bundle D1/57. [17] https://www.legco.gov.hk/yr97-98/english/bc/bc06/minutes/bc061002.htm [18] See Bundle C3/620. [19] See Bundle C2/401 [20] See Bundle C3/663. [21] See Exhibit A5. [22] See Exhibit A7. [23] See Bundle C3/622. [24] See Bundle C2/393-394. [25] See Bundle C2/261-262. [26] Exhibit A7. [27] See Bundle A/252-254. [28] See Bundle A/255-280. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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