Read the full judgment text of LDCS 23000/2019 on BabelCite. This Lands Tribunal judgment was delivered on 29 February 2024 before Mr Lawrence Pang, Member of the Lands Tribunal.
Land law – compulsory sale for redevelopment – Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 – building Haven Court at Nos 2-30 Haven Street and Nos 128-138 Leighton Road, Hong Kong – Section C of Inland Lot No 2147 – 11-storey composite building with occupation permit issued on 27 January 1959 (over 63 years old) – applicants collectively owning 84.04% of undivided shares (379 in total) – whether applicants entitled to make application – applicable 80% threshold under Land (Compulsory Sale for Redevelopment (Specification of Lower Percentage) Notice for lots with buildings whose OP was issued at least 50 years before the application – held threshold met – dispute over EUV assessment of G/F shops – frontage adjustment of 2% per 1m preferred over 2% per 0.5m given subject's fringe Causeway Bay location and Haven Street as cul-de-sac – dispute over internal condition adjustments for Block D 8/F, Block I 9/F, Block K 8/F and Block M 2/F – adjustments of 0%, -3%, -6% and -3% adopted respectively – total EUV determined at $1,591,340,000 – whether redevelopment justified by age and state of repair – experts Mr So (structural engineer) and Mr Benson Wong (building surveyor) gave uncontradicted evidence of extensive defects, carbonation, chloride contamination, obsolete fire safety, and non-fire-rated features – repair cost estimated at $48,985,459 (about 25% of new superstructure construction cost) – held redevelopment justified – whether applicants took reasonable steps under section 4(2)(b) – two rounds of offers made to respondents on 11 June 2019 and 14 January 2022 – held reasonable steps taken – RDV estimation – dispute over hypothetical development model – Mr Yung's 24-storey scheme with F&B uses, escalator entrance 38.5m into Haven Street, and podium garden rejected – Mr Raymond Chan's Alternative Scheme (25-storey conventional office building with lift lobby on G/F) adopted – market demand did not support 5 floors of F&B at fringe location – bonus plot ratio for setback not taken into account as planning-mandated dedication unlikely to gain Building Department approval under PNAP APP-108 – podium garden not required under PNAP APP-132, APP-151 and APP-152 – AHU rooms provision required and adopted with 20.27 sq m (1/F-9/F) and 12.23 sq m (10/F-24/F) deductions per floor – construction cost based on $40,000/sq m of saleable area – Mr Varty's evidence based on undefined 'units' inadmissible under Bennett v Birmingham Airport – interest rate of 5.5% adopted – developer's profit of 22.5% adopted as balance between Mr Charles Chan's 25% and Mr Varty's 15% – final RDV determined at $2,425,000,000 (accommodation value of $132,334/sq m) – reserve price fixed at $2,425,000,000 – Mr Anthony Chow and Ms Anna Chow of Messrs Guantao & Chow appointed as trustees – redevelopment to be completed within 6 years – costs order nisi in favour of opposing respondents at High Court scale with certificate for counsel.
Legal issues: Whether the applicants meet the threshold to make a compulsory sale application · Appropriate frontage adjustment for G/F shop EUV valuation · Internal condition adjustments for disputed U/F domestic units · Whether redevelopment is justified by age and state of repair · Whether applicants have taken reasonable steps to acquire minority interests · Choice of optimum hypothetical development model for RDV estimation · Whether bonus plot ratio should be attributed for the setback under the Outline Zoning Plan · Whether to incorporate communal podium garden and its impact on saleable area · Provision of AHU rooms in the hypothetical development · Construction cost adjustment (Mr Varty's use of 1,000+ units of measurement) · Appropriate interest rate for residual valuation · Appropriate development profit for residual valuation
Outcome: Compulsory sale order granted in favour of the applicants. All undivided shares of Section C of Inland Lot No 2147 (the Lot) to be sold by public auction with reserve price of $2,425,000,000. Mr Anthony Chow and Ms Anna Chow of Messrs Guantao & Chow, Solicitors & Notaries appointed as trustees. Costs order nisi made in favour of the 2nd, 3rd, 4th, 5th, 6th, 7th, 9th, 10th, 11th, 13th, 16th, 18th, 19th, 20th, 21st, 22nd, 23rd, 25th and 26th respondents.
Cites 21 cases