Keenrich Trading Ltd v. The Director of Lands
Read the full judgment text of LDLR 1/2022 on BabelCite. This Lands Tribunal judgment was delivered on 31 January 2024.
1. This is an application by the Applicants for determination of the amount of compensation payable by the Respondent for land resumed under the Lands Resumption Ordinance, Cap 124 (“the Ordinance”).
Cites 11 cases
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LDLR 1 /2022 [2024] HKLdT 11 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LANDS RESUMPTION APPLICATION NO 1 OF 2022 ___________________ BETWEEN
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__________________ J U D G M E N T __________________ Introduction and Background 1.This is an application by the Applicants for determination of the amount of compensation payable by the Respondent for land resumed under the Lands Resumption Ordinance, Cap 124 (“the Ordinance”). 2.The applicant was the former registered owner of Ground Floor, No 89 Oak Street, Kowloon, Hong Kong (“the Subject Property”), being 1/10th equal and undivided share of and in Kowloon Inland Lot No 10422 on which a 10-storey tenement building (“the Building”) was erected. 3.By a notice of resumption dated 4 September 2020 and published in Gazette Notice No 4979 (“the Notice”), the Government informed the applicant that the Subject Property would be resumed for the implementation of the Urban Renewal Authority Development Project YTM-011 at Oak Street/ Ivy Street, Tai Kok Tsui, Kowloon on the expiration of three months from the date of affixing of the Notice to the Subject Property. The Notice was affixed to the Subject Property on 4 September 2020 and the date of reversion would be the midnight of 4 December 2020 (ie 5 December 2020). Hence, the latter should be the date of valuation. 4.On 16 May 2022, the applicant filed a Notice of Application to Determine Compensation for Land Resumed under the Ordinance, requesting the Lands Tribunal to determine the amount of compensation payable in respect of the resumption of the Subject Property. The Subject Property 5.The Subject Property comprised a shop unit on the ground floor of the Building which was built on 15 September 1965. It was situated on the northwestern side of Oak Street some 32 metres from its junctions with Ivy Street to the northeast but further distance away from its junction with Anchor Street to the southwest in the Tai Kok Tsui district. Developments in the vicinity comprise a mixture of similar old tenement buildings built in the 1950s to 1960s, high-rise commercial/residential composite buildings, a secondary office building intermingled with some government/ educational institutions. While the general area is served by a variety of trades including convenience stores, supermarkets, restaurants and others selling the daily necessities to the residents, the immediate surroundings are predominated by trades selling building materials and metalware products. 6.At my request on the first day of trial, the parties, particularly the respondent had provided photographs of the premises prior to the resumption. The occupancy of the respective units included in the resumption scheme as at 2011 and 2016 was as follows:[1]
7.Across the corner of Oak Street and Ivy Street is a relatively new composite commercial/ residential development, Park Ivy, which comprises some 113 domestic units built in 2014. 8.The particulars of the Subject Property had been agreed by the valuation expert of the applicant, Mr Kenneth C Y Cheung (“Mr Cheung”) and the valuation expert of the respondent, Ms Ng Hung Mui (“Ms Ng”):[2]
9.According to Ms Ng, the Subject Property was as at the relevant date occupied with a trading name of “健富貿易公司”, ie the applicant. 10.On the 2nd day of trial, the applicant tendered the witness statement of Mr Chu Wa Hung (“Mr Chu”) who claimed to be a clerk of the applicant in charge of the property investment business of the company. Mr Chu was called to the witness box on that day. He said that he was employed by the applicant since around 2012 when the Subject Property was occupied by “滿豪鋼閘公司” as tenant. Subsequently the Subject Property had fallen into vacant. Then in July 2015 came the operator of “興發小廚” who rented G/F of 95 Oat Street as well as the Subject Property. G/F, 95 Oat Street was situated much closer to the junction of Ivy Street and Oat Street. According to Mr Chu’s understanding, the restaurant business including the kitchen was conducted only at G/F of 95 Oat Street but used the Subject Property only as the dining hall for customers. He agreed that there was even no placard or signage mounted at the Subject Property. He had also no idea if the restaurant operator got a restaurant licence for the Subject Property or otherwise. The tenancy was renewed once in July 2017 for a further term of 2 years but when it expired in July 2019, the negotiation for renewal broke down and the applicant then took over the Subject Property as its office for its property holding and investment business. Thereafter the shop front was not even open for the public. 11.While “興發小廚” continued its restaurant business at G/F, 95 Oat Street until the resumption, I am not persuaded that Subject Property could be used as a standalone eatery. The Valuation 12.Under sections 10(2)(a) and 12(d) of the Ordinance, the two valuation experts agreed that the basis of compensation should be the market value of the Subject Property as at the date of resumption, ie 5 December 2020, on the basis of vacant possession. 13.While Mr Cheung and Ms Ng both resorted to the Direct Comparison Approach in valuing the market value of the Subject Property, Mr Cheung arrived at $20,350,000 when Ms Ng arrived at $14,594,000. Apparently, their differences in opinion were resulted from the selection of comparables and the adjustments for the following factors:
The Comparables 14.Initially Mr Cheung had relied on the following four comparables[3] for the purpose of the captioned valuation:
15.However, Ms Ng only adopted the last three of the above as comparables, being RE-C6, RE-C7 and RE-C8 respectively. There are thus three common comparables. In addition, Ms Ng relied on the following three comparables. (Mr Cheung only agreed to include them as comparables after the joint site inspection on 6 November 2023 but applying significant location adjustments):
Selection of Comparables and Adjustment for Location 16.Valuation usually proceeds by way of comparison where the valuer looks for a market transaction that is as close as possible to that which he has to value. He then works on the premise that if the subject matter of his valuation were to be the subject of a similar transaction, it would command the same value as the comparable. Since the comparable will never be identical to the subject matter of the valuation, the valuer will have to make adjustments to the value revealed by the comparable in order to reflect the differences between the comparable and the subject matter of his own valuation. 17.In the similar vein, Land Compensation & Valuation Law in Hong Kong, 4th edition, 2017, Lexis Nexis authored by Gordon N Cruden and Liza Jane Cruden stated at [23.26] at p 706 as follows:
18.Comparable AE-1 is only adopted by Mr Cheung. It is located on the southern side of Anchor Street close to its junctions with Fuk Tsun Street and Tong Mi Road, the latter being a local distributor and trunk road in the vicinity. Although this property is situated within 3 minutes’ walking distance from the Subject Property, I agree with Ms Ng that it has different locational character which is reflected by a more variety of trades, enjoying much heavier pedestrian flow because of its proximity to the street junction and the pedestrian crossings there. For instance, the comparable itself is occupied as a real estate agency. Next to it are a convenience store, a bakery, an eatery, a mobile phone parts retail shop and an automobile shop. None of such shops exists next to the Subject Property on Oak Street. As well, the shop front of this comparable shop can be seen from a far distance even on Fuk Tsun Street. In addition, its saleable area comprises only 22.96 sq m which is less than half the size of the Subject Property. Such a huge difference in size cannot be readily compensated by any size adjustment, not to mention Mr Cheung’s proposal of mere -3.4%. I agree with Ms Ng that this transaction should be disregarded as comparable. 19.Comparable AE-2 or Comparable RE-C6 is one of the three common comparables adopted by both valuation experts. This comparable is situated on the southwestern side of Bedford Road at its junction with Fir Street. And perhaps because of its corner location, it is occupied as a fast food restaurant which is quite different from other trades along Bedford Road which are predominated by engineering workshops. Mr Cheung’s location adjustment was -10% but he subsequently followed Ms Ng’s -5%. While I consider Fir Street a more busy street and because of the comparable’s proximity to the crosswalk on Tong Mi Road, I prefer a location adjustment of -10%.[4] I also agree with Mr Cheung that a -15% adjustment is applicable for the return frontage on Fir Street. 20.Comparable AE-3 or Comparable RE-C7 is another common comparables adopted by both valuation experts. The ground floor premises in the vicinity along Cheung Wong Road are predominated by trades resembling those of a local wet market. For instance, this comparable is occupied as a fruit shop while its neighbouring shop to the right is a “siu mei” shop selling for example barbecue meats etc. While I had pointed out the above to the valuation experts during the course of inspection, both Mr Cheung and Ms Ng agreed to drop it as comparable. 21.Comparable AE-4 or Comparable RE-C8 is also a common comparables adopted by both valuation experts. This comparable is a ground floor shop of Evernew Commercial Centre, the only commercial building in the vicinity that happens to be situated behind the Subject Property. While this Evernew Commercial Centre occupies the forefront of Pine Street at its the junction with Ivy Street, the ground floor of this commercial building accommodates for instance, a snack shop “香江美食”, estate agencies and a video game centre which is the occupier of this comparable. The latter just lies at about 12 metres from the street junction of Ivy Street and Pine Street. Opposite this commercial building across Pine Street is a relatively new composite commercial/ residential development known at Park Summit. Completed in 2012, this development comprises some 462 domestic units but most of its shop accommodation on the ground floor do not abut Pine Street but on Ivy Street and Beech Street further down the road. And next to Evernew Commercial Centre further down Pine Street is another new composite commercial/ residential development, ie L Living 23, which comprises some 142 domestic units built in 2021, ie after the relevant dated of 5 December 2020[5]. Whereas this comparable is situated next to the entrance of Evernew Commercial Centre, it lies in proximity to the street junction of Pine Street and Ivy Street, the latter being a busy artery in the vicinity. I am of the view that Ms Ng’s location adjustment at 0% is more reasonable than that of Mr Cheung at +10%. As this comparable lies at the entrance of an office building. I am not persuaded by the submission of Mr Francis Chung (“Mr Chung”) on behalf of the applicant that pedestrian flow during office hours would be even lower. 22.Comparable RE-C1 is a comparable adopted by Ms Ng only. But after the joint site inspection, Mr Cheung agreed to adopt it as a comparable, which became Comparable AE-5. It is situated at the middle of the street between its junctions with Lime Street and Fir Street where Comparable AE-2 or RE-C6 as described above is located. While there are some industrial buildings along Bedford Road, this section of the street has only one at the junction of Lime Street and Bedford Road, ie Nam Wah Factory Building. Mr Chung argued that more industrial workshops are scattered around the vicinity. For instance, this comparable is now used as a metalware retail shop. Right next to it is an industrial/engineering workshop. Also, as I pointed out on site, the developer of a relatively new composite commercial/ residential development called I-home which was completed in 2009 preferred to have the main entrance and shop accommodation on Larch Street, leaving the refuse collection point on Bedford Road. However, I consider Mr Cheung’s proposed adjustment of as much as +70% (or his later revision of +50%) unrealistic. On the other hand, I prefer a positive location adjustment of 25% to Mr Ng’s 15%. 23.Comparable RE-C2 is a comparable adopted by Ms Ng only. But after the joint site inspection, Mr Cheung agreed to adopt it as a comparable, which became Comparable AE-6. This comparable is occupied as a metalware retail shop and is situated just some 7 metres from the street junction of Larch Street and Lime Street opposite to which was the subject of a compulsory sale application in Top Harmony Limited v Cheung Yuet Sheung & Others, LDCS 39000/2018 the judgment of which was handed down on 15 October 2020, ie less than two months before the relevant date of 5 December 2020. There was erected thereon the site a 9-storey commercial/ residential tenement buildings served by 2 common staircases. At §33 of the judgment, the area was described as “a location of mixed characters with a range of old industrial developments on the west and generally out-moded tenement buildings in the proximity, though some of the latter have recently been redeveloped into high-rise residential/ commercial composite buildings. Ground floor units in the immediate vicinity are predominated by a range of grocery stores, hardware shops and car repairing workshops as well as certain restaurants at the corner locations.” This corner of Larch Street and Lime Street is occupied by a few eateries and restaurants. I consider Mr Cheung’s location adjustment +60% contradictory to his revised location adjustment of +50% for Comparable RE-C1 when this comparable is obviously situated at a better location. While the locational character of this comparable is a little inferior than that of the Subject Property, I prefer a location adjustment of +15% instead of Ms Ng’s +10%. 24.Comparable RE-C5 is a comparable adopted by Ms Ng only. But after the joint site inspection, Mr Cheung agreed to adopt it as a comparable, which became Comparable AE-9. It is situated towards of end of Larch Street, ie the same street as Comparable RE-C2, but close to its junction with Tong Mi Road. Opposite to it is a relatively new composite commercial/ residential development, Lime Stardom, which was built in 2011 comprising some 377 domestic units. However, this development does not provide any shop accommodation that faces Larch Street as a result of which this section of the street is relatively quiet. Notwithstanding this, a bar has been opened right next to the comparable. According to the signage there, this bar only opens from evening to midnight. Notwithstanding this, it is unrealistic for Mr Cheung to suggest a location adjustment of +50%. Again, I prefer a location adjustment of +15% instead of Ms Ng’s +10%. Other Adjustment Factors 25.By their joint statement dated 27 April 2023, Mr Cheung and Ms Ng had the following agreements/ disagreement on the other adjustment factors that may be applicable to the captioned case:[6]
Adjustment for Size/Quantum 26.In effect, Mr Cheung proposed a less sensitive adjustment for sizes between the Subject Property and the comparables. For instance, he proposed an adjustment of -3.4% for Comparable AE-1 which appears unrealistic when its saleable area is less than half the size of the Subject Property. Indeed, I have chosen to disregard this Comparable AE-1 for this being one of the reasons. But for other comparables AE-2, AE-3 and AE-4, such adjustments as small as -2.1%, -2.1% and -0.5% proposed by him respectively are also unrealistic. 27.Mr Chung had referred to Top Harmony, supra when the Tribunal adopted a size adjustment also at 1% per 10 sq m difference. However Mr Cheung himself considered Comparable RE-C2 being situated at a much inferior location and proposed a location adjustment as much as +60%. 28.I prefer therefore the 1% per 4 sq m difference proposed by Ms Ng. 29.Having said that, I find the same formula of 1% per 4 sq m difference is also applicable to Comparable RE-C1, RE-C2 and RE-C5 which result in adjustments of 5.6%, -1.0% and 7.9% respectively. Adjustment for Frontage 30.There is indeed no difference in adjustment between Mr Cheung and Ms Ng when the frontage difference is within 5 m. Adjustment for Return Frontage 31.As stated in §19 above, I consider Mr Cheung’s proposed -15% adjustment is applicable for the return frontage for Comparable AE-2. I agree with Mr Chung’s submission that as a general principle, the adjustment for frontage should reflect the effects of the frontage onto one street and should not be mixed up with the adjustment for frontage onto another street. Thus, in comparison, Ms Ng adopted a more tortuous route by taking the total frontage of 6.57 m + 5.33 m = 11.9 m and applying her frontage adjustment of 2% per 1 m difference to the first 5 m difference plus then 1% per 1 m difference for longer difference than 5 m, thereby obtaining a total frontage adjustment of -13.1%. She then applied an adjustment for return frontage at -5%, yielding a total adjustment for both frontages at -18.1%:
32.However, the Tribunal has on many occasions stated that there shall not be any adjustment for frontage “unless the frontage in consideration is clearly superior or inferior to the norm that the benefits or disabilities which the frontage produces are clearly evident.”[7] That means the Tribunal has been of the view that the frontage adjustment should be minimal when the shop front is of normal range. Here, Ms Ng had artificially increased the frontage to an abnormal size to justify a significant adjustment and then apply a nominal or subjective adjustment for the return frontage. Although Mr Ng may want such adjustments to be more scientific, her adjustments were in fact based essentially on intuition, impression or more euphemistically called professional judgments that require a lot of assumptions:
33.From the above, it is obvious that Ms Ng had made twice the number of assumptions or judgments than Mr Cheung while any of these assumptions or judgments is subject to error in market sense. Mr Ng explained her approach by referring to what she had done the same in Tse Chai Fai & Another v Director of Lands, LDLR 10/2018 (unreported, dated 5 November 2020) for a comparable with return frontage at Reclamation Street. In that case, however, Ms Ng and the other valuation expert agreed an adjustment for return frontage at -5% which the Tribunal considered too low. In such regard, the Tribunal then agreed to Ms Ng’s approach of applying frontage adjustment based on both streets so as to deduce a further deduction[8]. But in the present case, Mr Cheung and Ms Ng had no agreement on the adjustment for the return frontage for this Comparable AE-2 or Comparable RE-C6. I prefer therefore Mr Cheung’s adjustment which is more straight forward and more transparent to the extent that such approach might better reflect market reality; I doubt if a prospective buyer would take such a tortuous approach by Ms Ng in evaluating a shop when the adjustment would be more or less intuitive on many occasions. Adjustment for Headroom 34.Mr Cheung adopted 1% adjustment for every 1 metre difference in headroom while Ms Ng applied 2%. Mr Chung referred to Chan Kai Yuen & Another v Director of Lands, LDLR 8/1999 (unreported, dated 1 September 2000) where the premises concerned had a full headroom about 5 metres. The Tribunal then observed that a normal headroom of a G/F would be around 10 feet or 3 metres and in the present case, the headroom of the Subject Property has been agreed at 3.25 m which, in my opinion, is bare minimum to support a cockloft, if any. And in that case, for instance, the Tribunal adopted an enhancement of 5% to the adjusted unit rate in assessing the G/F area with an extra 2.1m of headroom (ie about 2.38% per 1 m). 35.In the above regard, I agree with Ms Ng that the 1% per 1m proposed by Mr Cheung cannot fully reflect the headroom difference for a shop. Adjustment for Layout/ Rear Exit 36.The rear portion of Comparable AE-3 or Comparable RE-C7 is relatively narrow and of an awkward shape. Both Mr Cheung and Ms Ng agreed an adjustment of +5% to reflect this. I agree the same is applicable for Comparable AE-6 or Comparable RE-C2. However, Mr Cheung proposed a further +5% to reflect the advantage of the Subject Property having a rear exit to the scavenging lane. Mr Cheung tried to explain that the presence of such rear exit would enhance value of a shop for the reason that it can facilitate the application of a restaurant licence. Ms Ng made no such allowance. 37.By reference to para 2.4.2 of the “Quick Reference Guide To Application for Restaurant Licenses” published by the Food and Environmental Hygiene Department in March 2023, there is indeed major concern about the building safety requirements by the Buildings Department. However, it states “For premises on the ground floor having direct access to a street, there would normally be no major problem on means of escape provision.” 38.For instance, during the course of the joint site inspection, I observed that all the ground floor units of Kamga Mansion at Nos 2-16 Pine Street are all (save the one at the corner of Pine Street and Anchor Street) occupied by restaurants. As illustrated by the Alterations and Additions plan approved by the Building Authority on 14 September 1995, all these restaurants do not have a rear exit. 39.In any event, Mr Cheung’s argument may only be relevant if the highest and best use of the Subject Property was an eatery restaurant but I am not persuaded it had such a highest and best use, being somewhere in the middle of the street predominated by hardware shops. 40.In such regard, I do not agree that there should be any additional adjustment for the presence of rear exit possessed by the Subject Property particularly when it had never been occupied as a licensed restaurant other than as a dining hall. Adjustment for Building Age 41.Ms Ng considered that age factor is less significant to the value of a shop for retail purpose. However, there might be concern for repair and maintenance when the premises are aged. Therefore I agree to the adjustment at 0.25% per year difference as proposed by Mr Cheung. 42.However, Mr Cheung applied a further -2.0% to Comparable AE-4A and 4B, stating that they lie within a commercial building with external condition better than the Building. Having viewed the premises externally, I do not consider such a further adjustment necessary. Adjustment for Occupational Flexibility 43.Mr Cheung applied +2% and +3% to Comparables AE-2 and AE-3 respectively on the ground that they were sold subject to tenancies. Mr Cheung explained that when a shop is available for sale with vacant possession, it allows more flexibility for the prospective purchaser who can have the choice of either for self-use or for letting out for investment purposes. With respect, there appears that there is no market evidence that a prospective purchaser for owner occupation would necessarily outbid an investor. This is particularly the case in Hong Kong when most shops are owned for investment purposes. I agree with Ms Ng that those shop investors may even prefer to have an existing tenant around the relevant date when the Covid-19 pandemic was prevailing so as to avoid a period of void. 44.In addition, when the tenancies for shops in Hong Kong are usually for relatively short term of 2 to 3 years, even if the rental reserved in a tenancy is low, a valuation by the term and reversion approach would not result in any significant difference.[9] 45.I do not consider Mr Cheung’s adjustment for occupational flexibility justified. Totaling Adjustments 46.Mr Cheung adopted multiplication in total adjustment while Ms Ng proposed to adopt the summation method. 47.In Cheer Capital Limited v Unibase investment Limited & Another, LDCS 5000 & 6000/2013 (unreported, dated 12 June 2015) at §93, the Tribunal explained its preference in adopting the multiplication process in totalling adjustments:
48.Ms Ng explained that the summation method is easiler to understand particularly by laymen. She further explained that the summation method avoids the sequential implication as explained in Hofei Estates Ltd v Secretary for City and New Territories Administration [1980-82] CPR 486 at §19. In that same paragraph, however, the Tribunal added: “usually it will not really matter which method is used, provided the adjustments are supported by analysis which adopts the same approach.” 49.The reason why the Tribunal nowadays prefers the multiplication was further explained in Alliance Develop v Director of Lands, LDLR 1/2020 (unreported, 20 February 2023) at §58:
50.To repeat the observation of the Tribunal in Penny’s Bay Investment Company Limited v Director of Lands, LDMR 1/2005 (unreported, dated 15 October 2014) at §208:
51.The Tribunal considers that the multiplication approach accords with the analysis process. At the end of cross-examination, Ms Ng did not object to such an approach as the difference would not be significant. Valuation 52.Bearing in mind the above, I analyse the comparables adopted as follows:
53.Having reviewed the above, I would place more weight on Comparable AE-4A & 4B/ RE-C8 which occurred closest to the resumption date, closest to the Subject Property in terms of location and possibly size. As a result, I am prepared to adopt a unit rate of $255,000 per sq m as the market value of the Subject Property. Unauthorised Cockloft 54.As said at §13 above, there was an unauthorised cockloft erected at the area of the rear yard. In respect of this, a Building Notice No WCMS/TF6403/06/K-T05E issued on 3 April 2008, ie more than 12 years before the date of resumption, had been registered in the Land Registry against the Subject Property. 55.While Ms Ng deducted $10,000 from her estimated market value of the Subject Property for the reinstatement works, Mr Cheung initially made no such allowance on the ground that there appeared no sign of enforcement being taken by the Building Authority. 56.In Hong Kong, nearly all land is owned by the Government and the respectively owners so-called only hold land interest under the corresponding Government leases. In such regard, section [235.306] of the Halsbury’s Laws of Hong Kong, Volume 36 on Landlord and Tenant, 2nd edition, 2023 states that: “In the absence of an express stipulation, the tenant’s liability for the maintenance of the premises depends partly on the doctrine of waste, and partly on an implied obligation to use the premises in a tenant-like manner.” In respect of the former, section [235.309] states that: “Waste consists of any act or omission which causes a lasting alteration to the nature of the land in question to the prejudice of the person who has the remainder or reversion of the land.” Section [235.310] states further that “an act does not constitute waste unless it is in fact injurious to the inheritance, …, or by increasing the burden upon it, or by impairing the evidence of title.” In my opinion, the registration of a building notice against the Subject Property definitely certainly impairs the evidence of title. 57.In Chiu Yuen Yin v Director of Lands, LDLR 1/2019 (unreported, dated 13 April 2021), the Tribunal agreed to make a similar deduction for the demolition cost of an unauthorised structure at the yard. While the Tribunal in that case agreed with the respondent’s submission that the owner had a legal duty to “repair uphold support maintain” the buildings or structures erected on the lot under the Government lease, I prefer to rely on section 11 of the Ordinance which provides the following:
58.In view of the above provisions, I agree on the one hand that no value should be assigned to the unauthorised cockloft under the Ordinance. This accords also with the remark by Hon Cheung J (as he then was) in Leung Man Cheung & Others v Secretary for Planning and Lands, HCAL 274, 376-382, 390-394, 396, 900-904, 906, 907, and 909-915/2000 (unreported, dated 14 September 2000) at §§67-68:
59.On the other hand, the concept of 'repair' connotes the idea of making good damage so as to leave the subject matter so far as possible as though it had not been damaged: Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 per Atkin LJ. I doubt if the Subject Property with the presence of the unauthorised cockloft can be regarded as in reasonably good repair under section 11(2)(b) of the Ordinance when structural reinstatement was pending. For instance, in Pullman Foods Limited v The Welsh Ministers [2020] EWHC 2521 (TCC), the presence of buried asbestos cladding in the gravel trap was found to be an obligation not consistent with good condition of the premises which was as a result not in proper repair.[10] 60.Rushton & Rushton v Worchester City Council [2001] EWCA Civ 367 concerned the purchase by the claimants of a property under the "Right to Buy" scheme contained in Part V of the English Housing Act 1985 but the council failed to disclose to the claimants at the time of sale certain defects (ie the presence of high alumina cement) in the property which rendered it valueless so far as any re-sale by the claimants was concerned. The English County Court judge decided that potential purchasers with knowledge of the use of high alumina cement in the stitch joints would simply not have proceeded. It, therefore, follows, both on that view and the notional house in good repair less cost of repair approach, that the value was nil or minimal. 61.In light of the above, I agree with Ms Ng that $10,000 has to be deducted from the Subject Property for the reinstatement works. During cross-examination, Mr Cheung also agreed to such approach. Therefore I determine the compensation under section 10(2)(a) of the Ordinance as follows: 62.light of the above, Market Value for the Subject Property
Conclusion 63.I determine the value of the Subject Property for the purpose of section 10(2)(a) of the LRO should be in the sum of $14,400,000. Orders 64.Accordingly, I order that the Respondent do pay the Applicant compensation for the resumption of the Subject Property in the sum of $14,400,000. 65.The matters of professional fees, interest, costs and any other ancillary and consequential matters shall be adjourned to a date to be fixed by parties in consultation with counsel’s diaries if it needs. 66.Last but not least, the Tribunal thanks all Counsel for their helpful assistance.
Mr Francis Chung, instructed by Messrs Chan, Tang & Kwok, for the applicant Ms Ebony Ling, instructed by the Department of Justice, for the respondent [1] See Exhibit R6 & R7. [2] See Trial Bundle at p 218. [3] For the purpose of valuation, Mr Cheung had agreed to adopt the same approach as Ms Ng and treat Comparables AE-4A and AE-4B as one single transaction. Although the purchasers of the two comparables were companies of different directors, there was a conditional clause in each of the Sale and Purchase Agreement that the completion of the sale and purchase of one property was conditional upon and simultaneously with the completion of the sale and purchase of the other. In addition, the two companies shared the same registered office, the same company secretary, the same telephone number and fax number. [4] That Mr Chung’s suggestion of there being a pedestrian crossing right in front of this comparable at Bedford Road is not true. The nearest pedestrian crossing is on the opposite side of Bedford Road closet to the junction between Fir Street and Tong Mi Road. [5] It was a mere construction site as at the date of resumption. [6] See Trial Bundle at p 231. [7] See Tai Ping Restaurant Ltd v Director of Lands, LDLR 1/2013 (unreported, dated 8 December 2014) at §48. [8] See §27 of the judgment. [9] See Poon Chao Fai v Director of Lands, LDLR 6/1998 (unreported, 25 April 2000) at §9, Pang Kam & Another v Director of Lands, LDLR 4 & & /2002 (unreported, 29 January 2003 at §59, Tung Mei Chi Vera v Director of Lands, LDLR 1/2006 (unreported, dated 26 June 2007 at §28, Suen Ping Fat v Director of Lands, LDLR 8/2007 (unreported, 11 December 2008) at §43, Lee Ynn v Director of Lands, LDLR 12/2006 (unreported, dated 22 December 2010) at §35 and Lai Shun Hang v Director of Lands, LDLR 3/2010 (unreported, dated 11 January 2012) at §33. [10] See §153 of the judgment. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under LDLR 1/2022