Winmark Properties Ltd and Another v. Prime Way Investment Co Ltd

LDCS 4000/2020

[2022] HKLdT 62

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE MAIN APPLICATION NO 4000 OF 2020

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BETWEEN

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DECISION

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1.This is the determination of 2 preliminary issues raised by 1st respondent. I first set out the background.

2.By the application filed on 15 May 2020, the applicants apply for an order under Cap. 545 that the following lots be put on sale by public auction. The lots (collectively “the Lots”) include –

a. IL 3071 RP (“Lot 1”);

b. IL 3072 RP (“Lot 2”);

c. IL 3073 RP (“Lot 3”); and

d. IL 3074 RP (“Lot 4”)

3.There are 2 buildings erected on the Lots. One is erected upon Lot 1 and Lot 2 known as 11 & 13 Lyndhurst Terrace, Hong Kong (“the 1st Building”). Another is erected upon Lot 3 and Lot 4 known as 15 & 17 Lyndhurst Terrace, Hong Kong (“the 2nd Building”).

4.The 1st Building has 7 storeys and is served by 1 common staircase. The 2nd Building has 6 storeys and is served by 1 common staircase. The 1st and 2nd Buildings are not connected by common staircase.

5.When this application was taken out, there were 4 respondents. For the 1st Building, the 1st applicant owned 62.5% of the undivided shares in Lot 1, and 100% of Lot 2. For the 2nd Building, the applicants own 92.86% of the undivided shares in Lot 3 and Lot 4 (as the 2nd Building has one DMC covering both Lot 3 and Lot 4).

6.After commencement of the application, the applicants have acquired the interest of the 2^nd, 3^rd and 4^th respondents in the Lots. As a result, the applicants own 75% of Lot 1, and 100% of Lot 2, Lot 3 and Lot 4. The 1st respondent is the remaining respondent. He is the owner of 2 equal undivided shares of and in Lot 1 together with the sole and exclusive right and privilege to hold use occupy and enjoy G/F and Cockloft of No. 11 Lyndhurst Terrace, part of the 1st Building.

7.By a summons dated 17 October 2022, the 1st respondent applies to amend the Notice of Opposition to argue that the applicants are not entitled to bring these proceedings, or continue the proceedings after having becoming the 100% owners of Lot 2, Lot 3, and Lot 4. And further, they only have 75% of Lot 1, they are not entitled to bring the application under Cap.545 for compulsory sale of Lot 1 alone. This shall be determined by Ruling of Preliminary Issues. And if the ruling is in their favour, the application should be dismissed.

8.On 20 October 2022, leave has been granted to the 1st respondent to amend the Notice of Opposition. Order was granted for the following Preliminary Issues be determined –

(i) On the agreed facts that the applicants own 100% of the undivided shares of Lot 2, Lot 3 and Lot 4, whether the applicants’ application is properly constituted by included Lot 2, Lot 3 and Lot 4 under section 3 of Cap. 545; and if not, whether the applicants satisfy the statutory requirements for commencing a compulsory sale application in relation to Lot 1; and

(ii) Alternatively, on the agreed facts that 1st Building and the 2nd Building are not connected by a common staircase, whether the application is properly constituted by including Lot 3 and Lot 4 for compulsory sale.

9.Mr. Li, senior counsel for the 1st respondent refers to the judgment given by the Court of Appeal in Bond Star Development Ltd v Capital Well Ltd [2004] 2 HKLRD 855 and the recent judgment of this Tribunal given in Max Win Development (HK) Limited v Lam Ngok Hing & Ors [2022] HKLdT 51. He submits that –

“(i) As held in Bond Star and as later applied in Max Win …., on the proper interpretation of Cap. 545, where there is only one single owner of undivided shares in a lot, no dispute could have been arisen which warrants the application of Cap. 545 and Cap. 545 is not intended to permit an application where there is no minority owner of the lot. Any lot which is 100% owned cannot form a proper subject of a Cap. 545 application even though the lot was not 100% owned at the time of commencement of the application.

(ii) [after commencement of application, the applicants own 100% of Lot 2, Lot 3 and Lot 4.]

(iii) It follows from the decision in Bond Star and Max Win that Lot 2, Lot 3 and Lot 4 are out of the scope of Cap. 545. As such, the applicants’ ownership of any undivided shares [in these 3 lots] has to be disregarded for the purpose of determining whether applicants satisfy the statutory requirement under section 3(1) of Cap. 545, which provides for the percentage of undivided shares in a lot which an applicant has to own for a Cap. 545 application.

(iv) It is further without dispute that applicants only owns 75% of Lot 1.

(v) In the premises, the applicants at all material times did not and do not have the requisite percentage of undivided shares of [Lot 1] as prescribed under s 3 (1) Cap. 545 (i.e. 80%) for a Cap. 545 application.”

10.It is helpful to set out section 3(1) and 3(2) at this juncture –

“(1) Subject to subsection (5), the person or persons who owns or own, otherwise than as a mortgagee, not less than 90% of the undivided shares in a lot may make an application—

(a) accompanied by a valuation report as specified in Part 1 of Schedule 1; and

(b) to the Tribunal for an order to sell all the undivided shares in the lot for the purposes of the redevelopment of the lot.

(2) Without prejudice to the operation of subsection (5), an application under subsection (1) may cover—

(a) 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

(b) 2 or more lots—

(i) on which one building is connected to another building by a staircase intended for common use by the occupiers of the buildings; and

(ii) where the average of—

(A) the percentage of the undivided shares owned by the majority owner in the lot or lots on which one of the buildings stands; and

(B) the percentage of the undivided shares owned by the majority owner in the lot or lots on which the other of the buildings stands,

is not less than the percentage specified in subsection (1).”

11.It is also important to set out the background fact of Bond Star before we come to the Court of Appeal judgment. I refer to judgment given by this Tribunal in Bond Star on 5 December 2002. The applicant is the owner of Nos. 24-32 of Ming Yuen Western Street save the unit held by the respondent at No. 28. 5 lots of land were involved. The applicant owns 100% of Nos. 24, 26, 30 and 32. The applicant asked for an order for sale of all the lots.

12.One of the objection raised by the respondent is that the subject matter of the application must be only No. 28. There is no need to seek an order for sale for the other lots, as the applicant is the sole owner. This Tribunal ruled that section 3(2)(a) applies to include lots solely owned by the applicant and granted an order for sale of all the 5 lots. The ruling is mainly on section 3(2)(a) as this Tribunal considered section 3(2)(b) did not apply in that case. The respondent appealed against the decision.

13.I refer to the judgment of the Court of Appeal given in Bond Star on 19 September 2003. To properly understand the ruling, one has to look at the main point of appeal which has been set out in paragraph 4 of the judgment. I think only point 1 is relevant to our case. And point 1 reads –

1. Whether [Cap. 545] applies to land in respect of which the applicant is already the full owner? If so, how should the Tribunal approach an application in which the applicant asks for an order for sale to include land which the applicant already owns?

14.On the above issue, the Court of Appeal said at paragraph 12 that “whether the Ordinance applies to land that the applicant already owns, is answered by reference to the Ordinance itself. Starting first with section 3(2), it will be noted that this was a provision that was not contained in the Bill as originally published.” The Court of Appeal set out section 3(2) which I do not repeat.

15.At paragraph 13, the Court of Appeal continue to say that “it seems to me that the purpose of section 3(2) is to provide for two situations. The first is where there are two lots in respect of which the applicant does not own all the undivided shares. The other is where there is one building connected to another by a common staircase and the two buildings straddle two lots. There is the safeguard that the overall average percentage of undivided shares which the applicant owns must still satisfy the 90% rule.”

16.It had been submitted to the Court of Appeal that there is no specific wording in section 3(2)(a) that precludes an application being made by an applicant who owns the entirety of a lot. A purposive approach has been adopted by the Court of Appeal in reading section 3(2)(a). The Court of Appeal comes to the conclusion that the purpose of the Ordinance is to enable the majority owner to obtain the last portion of a lot. There is no purpose in an owner of a lot asking for an order to put up the lot for auction if he already owns all the shares in that lot. He could do so without an order (see paragraphs 14 & 15 of the judgment.)

17.The difficult part is whether this discussion in paragraphs 14 and 15 is referring to section 3(2)(a) only, or section 3(2). Mr. Li submits that it applies to section 3(2). Mr. Yuen, counsel for the applicants submits that the judgment only concerns section 3(2)(a).

18.It is true that only section 3(2)(a) has been mentioned in paragraph 14 of the judgment and the ruling of Tribunal is also on section 3(2)(a). Yet paragraph 16 of the judgment of the Court of Appeal reads –

“16. It would put a considerable strain on the construction of the Ordinance if section 3(2) were to be construed in such a way as to permit an application to be made in respect of a number of lots where the applicant already was the full owner of one or more of those lots. As was pointed out in the course of argument, "minority owner" is defined in section 2 as follows "in relation to a lot which is the subject of an application under section 3(1) means the person or persons who owns or own undivided shares in the lot...". If section 3(2) were to be construed as permitting a single application which comprised a lot in respect of which the applicant was not the full owner together with one or more other lots in respect of which the applicant was the full owner, the definition of minority owner would have to be construed as if the words "or one of the lots" were inserted after the word "lot" in both places where the word appeared. This difficulty of construction would exist despite the fact that section 3(2) does not contain reference to the minority owner.”

19.By this paragraph, one may argue that the Court of Appeal is of the view that section 3(2) (include both scenarios under (a) and (b)) would not apply when there is no minority owner. Mr. Li argues that section 3(2) would not apply to any lot when the applicant is the sole owner in any application under section 3(2)(a) or (b). But I also refer to paragraphs 35 & 36 of the judgment, they reads –

“35. Whereas, as I have already indicated, I consider that the application should not have been made in respect of those lots of which the applicant was the full owner, I do not consider that there would be any prejudice if the application were treated as relating simply to Remaining Portion of Section 8 of Section B of Inland Lot in No. 897 (i.e. No. 28). The issues which the Tribunal has decided in relation to that lot have not been challenged. The Tribunal has reserved for further consideration the matters that are set out in paragraph (3) of its order. In those circumstances, the matter can be remitted to the Tribunal for consideration of those matters in respect of that lot. The only question which might arise is as to whether the applicant was entitled to make an application under section 3(2)(b) on the basis that the building on No. 28 Ming Yuen Western Street had been connected to an adjacent building by a staircase for common use. This point has not been argued as such.

36. I would therefore dismiss this appeal in so far as it relates to 28 Ming Yuen Western Street, namely the Remaining Portion of Sub-section 8 of section B of Inland Lot No. 897. The parties should be at liberty to apply in relation to the proper form of order having regard to whether the Tribunal should treat the application as relating to an adjacent lot. I would make an order nisi that one half of the costs of this appeal be to the applicant. Since the Tribunal has not, as yet, made any order as to costs, no order is required in that respect.” [my emphasis]

20.Reading from these paragraphs, which set out the conclusion and order of the Court of Appeal, it is obvious that the Court of Appeal has not ruled out the possibility that the application, as far as Nos. 28 & 30 where the buildings thereon were connected by a common staircase, may be covered by section 3(2)(b). If otherwise, the case would not have been remitted to this Tribunal to consider the matter. And it is clear from the facts set out in the judgment that the applicant is the sole owner of No. 30.

21.I hope I have not misread the judgment and I would refer to a decision given by HH Judge Chan (as he then was) on the hearing of an application for stay after the case has been remitted to the Lands Tribunal. HH Judge Chan set out the history which explained the order of the Court of Appeal in his decision given on 2 September 2004, at paragraph 3 –

“3. The Respondent appealed against the Tribunal's decision. The Court of Appeal on 19th September, 2003 held that Bond Star's Application should not have been made in respect of those lots of which it was the full owner. However, the Court of Appeal also took the view that there would be no prejudice if the application before the Tribunal were treated as simply relating to No. 28 Ming Yuen Western Street and the issues decided by the Tribunal relating to that lot had not been successfully challenged. The Court of Appeal also remitted the matters reserved in paragraph 3 of the Tribunal's order but only in relation to No. 28 to the Tribunal. The question of whether the Applicant was entitled to make an application on the basis that No. 28 was connected to an adjacent building (No. 30) by a staircase for common use was also remitted to the Tribunal. This latter point had not been argued before the Tribunal.” [my emphasis]

22.I could not find any application in Bond Star under section 3(2)(b) after the case had been remitted to this Tribunal. In the last decision given by this Tribunal on 20 April 2006 (after the judgment on appeal to Court of Final Appeal has been handed down), this Tribunal gave further directions on auction, trustee and related matters for sale of No. 28, which has been reserved for further direction in the original order.

23.I believe it is clear that the application before this Tribunal in Bond Star is under section 3(2)(a) and the appeal is only against the ruling on section 3(2)(a). The ruling by the Court of Appeal must then only cover section 3(2)(a).

24.And with the above ruling, the Court of Appeal has not answered directly the said Point 1 on appeal, namely whether Cap. 545 applies to lands 100% owned by the applicants. The ruling/discussion is as set out above. I must assume that there is good reason and one I could image is that section 3(2)(b) has not been argued (as mentioned by Mr. Justice Rogers) and it is not preferable to give a direct ruling on Point 1 which covers all provisions of Cap. 545.

25.Assuming there is some discussion on section 3(2), Mr. Justice Rogers (as he then was) states, (as above mentioned), “section 3(2)(b) has not been argued”. And if the Court of Appeal have concluded that section 3(2)(b) is not arguable as the applicant wholly owns No. 30, I fail to see why the case has been remitted to this Tribunal to rule on this point. I believe the matter has been left open for further consideration.

26.I believe after the submission, Mr. Li still considers that the discussion in paragraph 14 and 15 is covering section 3(2), while accepting that the appeal is on section 3(2)(a). And he adds that there is no reason why the same rationale should not apply to section 3(2)(b).

27.I refer to the recent judgment from Court of Appeal given in Pacific Base Holdings Limited & Ors v Lee Hop Biu & Ors [2021] HKCA 780. There is some discussion on section 3(2)(b) which is enlightening. Mr Li reminds me that the judgment is on whether the Tribunal has to consider feasibility of the redevelopment before giving an order for sale. I do not refer to the discussion on feasibility issue.

28.In Pacific Base, the Court of Appeal has some discussion on section 3(2). I refer first to the following paragraphs –

“52. Construing the statutory provision in such context, it would appear that Section 3(2) is a permissible variant of an application under Section 3(1) making it clear that an application can cover more than one lots.

53. Section 3(2) spells out how the minimum percentage of ownership should be applied in respect of an application covering more than one lot. Section 3(2)(a) is the provision which applies generally to all such cases other than the situation provided for under Section 3(2)(b). The general requirement is that 90% ownership has to be satisfied in respect of each lot individually.” [my emphasis]

29.It is clear that Cap. 545 is proceeded on lot basis. But there are 2 exceptions set out in section 3(2) when more than one lot may be the subject matter under the same application. Under section 3(2)(a), for application in respect of more than one lot, the applicant(s) has to satisfy the requirement of having 90% of the undivided shares in respect of each lot individually. But it applies to all such cases other than the situation provided by section 3(2)(b). And for section 3(2)(b), I refer to paragraph 54 of the judgment –

“54. Section 3(2)(b) provides for an exception when the application is in respect of 2 or more lots on which one building is connected to another building by a common staircase. In that particular type of situation, the 90% minimum can be satisfied by way of averaging between the ownership in the lot(s) on which one of the buildings stand and the ownership in the lot(s) on which the other building(s) stand.” [my emphasis]

30.I accept what Mr Li said, the section is to set how the percentage shall be assessed in multiple lot situation, if the application falls under the exceptions under section 3(2). It is clear that for the scenario under section 3(2)(b), how the percentage is assessed would be looser than the requirement under section 3(2)(a). The percentage of ownership is taken, as provided by the Ordinance and as explained in Pacific Base, to be the average of the 2 lots, provided the building thereon is connected by a common staircase. And I further refer to paragraph 58 of Pacific Base –

“58. Our reading of this passage is that by enacting Section 3(2)(b), a less stringent minimum requirement (by averaging the percentage of the two lots) is provided for those who wish to make an application in respect of the two lots together on which two buildings are connected by a common staircase. But it does not rule out the possibility of an application in respect of one of the lots only.” [my emphasis]

31.The question is whether, the applicant under section 3(2)(b) shall be regarded as majority owner to the 2 lots notwithstanding that he may own 100% of one lot.

32.Mr. Li argues that following the judgment given in Bond Star, the same rationale in excluding lots solely owned by the applicant for application under section 3(2)(a) shall be adopted when interpreting section 3(2)(b).

33.Mr. Li also refers to the judgment given by another panel of this Tribunal in Max Win Development (HK) Limited v Lam Ngok Hing and ors [2022] HKLdT 51. This Tribunal has set out the legislative history of Cap. 545. In conclusion, it was held that “the focus of the scheme of compulsory sale is ‘lot-based’ as opposed to ‘building-based’ or ‘redevelopment area/site based’.” I refer to paragraph 29 of the judgment –

“29. As revealed by the legislative history of the Ordinance mentioned above, we accept Mr Ho’s submissions that the focus of the scheme of compulsory sale is "lot-based" as opposed to “building-based” or “redevelopment area/site-based”. At its inception, the Bill was drafted to apply only to a “single lot”. Despite deputations from interested bodies, such as REDA and HKIS, to expand the scope of the Bill to enable the minimum percentage threshold to be applied by average to multiple or contiguous lots, such calls for expansion were not accepted save and except where there is a common staircase connecting two buildings straddling 2 or more lots. Apart from the common-staircase exception, the Ordinance maintains the adoption of a lot-based approach and the requirement of applying the minimum threshold to each of the lot(s).”

34.I agree that the lot-based approach is reflected in Cap. 545. But section 3(2)(a) is a clear exception and section 3(2)(b) is a further exception for 2 lots with buildings thereon connected by common staircase and with the percentage of undivided shares assessed by the average holding in the 2 lots as explained in Pacific Base.

35.I also refer to paragraph 33 of the judgment in Max Win. I agree that section 3(2) is a permissive provision when multiple or contiguous lots may be applied together under Cap. 545. I refer to paragraph 35 of the judgment, and I have no disagreement that the dispute to be resolved is one between majority owner(s) and minority owner(s). I note the comment by the Tribunal that “where there is only one single owner of undivided shares in a lot, no dispute could have arisen that warrants the application of [Cap. 545].” I agree as far as it is on a single lot. But I have reservation on application under section 3(a) and (b) which are the 2 exceptions to the single lot application in section 3(1).

36.Max Win has also considered Pacific Base in paragraph 38 and I repeat part of the paragraph –

“38. …The general requirement is that 90% ownership has to be satisfied in respect of each lot individually. Section 3(2)(b) provides for an exception when the application is in respect of 2 or more lots on which one building is connected to another building by a common staircase. In that particular type of situation, the 90% minimum can be satisfied by way of averaging between the ownership in the lot(s) on which one of the buildings stand and the ownership in the lot(s) on which the other building(s) stand.”

37.Relying on Pacific Base, Max Win come to the view that when section 3(2)(b) applies, the 90% minimum can be satisfied by way of averaging the shares owned by the applicant in the lots. I agree. In gist, I agree with the legal analysis in Max Win. But we have some difference in how to apply the principle to the situation when one lot is 100% owned by the applicant.

38.Paragraphs 48 & 49 of the judgment reads –

“48. Although the 1st Building is a single building, the applicant may be able to argue that the definition of “building” in section 3(2)(b) of the Ordinance is equivocal and covers part of a building (as pointed out in Pacific Base). Thus, it may be possible for the applicant to rely on section 3(2)(b) of the Ordinance to make the application in respect of the 1st Building by saying that the part of the 1st Building erected on the 1st and the 2nd Lots is one building and the other part of the 1st Building on the 3rd and the 4th Lots is another building, and these 2 “buildings” are connected by common staircases.

49. However, when we interpret the 1st Building in this way, then the applicant is the 100% owner of the “building” on the 1st and the 2nd Lots. By the same rationale of Bond Star, the 1st and the 2nd Lots cannot be made the subject lots of the present application.”

39.I believe Max Win used the rationale of Bond Star to consider how section 3(2)(b) is to be applied. Hence they come to the conclusion that the lot(s) solely owned by the applicant should not be taken into account in assessing whether the applicant is entitled to bring the action under section 3(2)(b). And with the greatest respect, I beg to defer from the approach adopted by my learned brothers.

40.As Mr Justice Rogers said in Bond Star, we start the interpretation of a section by the meaning of the wordings of the relevant section. I do not think we should disregard a lot 100% owned by the applicant before considering the average percentage under section 3(2)(b). The wordings do not rule out this when the applicant may be the 100% owner of one lot when the building thereon is connected to the building of the adjacent lot by common staircase.

41.When Mr Justice Rogers concludes that for a lot solely owned by the applicant, purposive interpretation has been adopted. If I go back to paragraph 14 of the judgment again –

“14. As pointed out in the course of argument by Mr Tong SC, who appeared for the applicant, there is no specific wording in s. 3(2)(a) that precludes an application being made by an applicant who owns the entirety of a lot that the subject of an application. Nevertheless, there would be no purpose in permitting an applicant to join, in an application in respect of one lot, a number of other lots where no order for sale is needed. It is clear from s.4(2) that the legislature envisaged there would be minority owner “of the lot the subject of the application.” If one were to apply a purposive construction to the Ordinance, it would be clear that such a course would not lead to a construction which would enable an applicant to so apply. …”

42.But there must be a different purpose for having section 3(2)(b), or we do not need to have the sub-section at all. The connected building(s) straddle over 2 or more lots, and technically it must be easier to develop the lots together. Hence, applying a purposive interpretation, there is no reasons to exclude an applicant who is an owner who owns 100% of a lot, but 95% of the other lot, and there are building(s) erected on the lots connected by common staircase, to rely on section 3(2)(b) to apply for an order for sale. His shareholding in the lots is the average of the 2 lots. Technically, he should be treated as not having 100% ownership in either lot.

43.Mr. Li seeks to argue that in section 3(2)(b), the average of undivided shares is by reference to the percentage of undivided shares owned by ‘the majority owner’ in the lots on which one building stands and ‘the majority owner’ in the other lot where the other building stands. But one has to look at the definition given to majority owner in Cap. 545.

44.Section 2(1) of Cap. 545 provides that ‘majority owner’ means “the person or persons who has or have made an application under section 3(1) in respect of the lot.” As said by Mr. Justice Rogers in Bond Star, “a person who makes application under section 3(1) is defined under the Ordinance as being the ‘majority owner’.” (paragraph 8 of the judgment). And section 3(1) has to be read with section 3(2). And if an applicant takes out an application under section 3(1) relying on section 3(2), he is a majority owner under Cap. 545.

45.As mentioned above, Bond Star has remitted the case back to the Lands Tribunal to consider whether the applicant is entitled to make an application under section 3(2)(b). The applicant’s right to bring the action under section 3(2)(b) has not been dismissed by the Court of Appeal notwithstanding that he owns 100% of the adjacent lot, No. 30. This reinforces my view that a separate interpretation shall be considered for section 3(2)(b).

46.Hence, having considered the ruling from Bond Star, I first conclude that the Court of Appeal only determine the interpretation of section 3(2)(a) only. And the principle in Bond Star should not apply directly to section 3(2)(b). The 2 sub-sections cover 2 different exceptions/scenarios. The shareholding in the 2 lots under section 3(2)(b) shall be determined by averaging his holdings in the 2 lots.

47.With these conclusions on law, I come to consider the Preliminary Issues.

48.In respect of the 1st Preliminary Issue, the application has been properly constituted when the application was taken out. By then, the applicants own 62.5% of Lot 1, 100% of Lot 2, 92.86% of Lot 3 and Lot 4. Lot 1 and Lot 2 are connected and by section 3(2)(b), the applicants own 81.25%, just over the statutory requirement. And it is permissible under section 3(2)(a) for the applicants to put the Lots together under the same application.

49.Still on the 1st Preliminary Point, the applicants have acquired further interest in the Lots. As at today, they are 100% owners of Lot 3 and 4. They now own 75% of Lot 1 and the average ownership in Lot 1 and Lot 2 is 87.5%. Given the change in ownership, the applicants own 100% of Lot 3 and Lot 4 under both section 3(2)(a) & (b). There is no purpose in granting an order for sale according to the ruling of Bond Star. And according to the provision of section 3(2)(b), the applicants may continue with the application for an order for sale of Lot 1 and Lot 2.

50.Mr. Yuen seeks to argue that the applicants are qualified to bring the proceedings when the application is filed. There is no reason why upon compliance with the statutory requirement to acquire the remaining shares from minority owners, the applicants shall be deprived of the right of action. Change in circumstance is a matter to be taken into account. If, for example, after commencing the application, the applicant lost the ownership of some shares in the Lots, it would not be qualified for an order for sale. That may be a cruel fact. But that is the law and we have to comply.

51.Mr. Yuen also argues that this Tribunal has discretion under section 4(6)(a). I do not agree.

52.Mr Li submits that the whole application should be dismissed and for the applicants to start a fresh action on Lot 1 and Lot 2.

53.I should also note that while the Court of Appeal in Bond Star allowed part of the appeal, they retained the order for sale in respect of No. 28. They are of the view that the application could be treated as application covering No. 28 and there is no prejudice to the respondent. I believe the same rationale shall be adopted. The major part of the evidence could be retained. I understand that there may be fresh directions of expert evidence on RDV. I am prepared to hear submission after concluding this matter.

54.On the 2nd Preliminary Issue, I accept that the 1^st Building is not connected to the 2^nd Building. Hence section 3(2)(b) would not assist to connect all the Lots for an application.

55.In summing up, I would dismiss the part of the application for an order for sale of Lot 3 and Lot 4. The applicant may proceed with the application for an order for sale of Lot 1 and Lot 2 and there be liberty to apply for directions.

56.I shall adjourn the question of costs to be disposed of by paper application, if parties could not have agreement. If there is no agreement, the 1st respondent shall lodge and serve the written submission on costs within 14 days. The applicants shall lodge and serve the written submission in opposition within 14 days thereafter. A written ruling shall be handed down 28 days thereafter.

Mr Ross MY Yuen and Ms Valerie Tang, instructed by Chow, Griffiths & Chan, for the 1^st and 2^nd applicants

Mr C Y  Li SC and Ms Ann Lee, instructed by Anthony Chiang & Partners, for the 1^st respondent