Kerryford Holdings Ltd and Others v. Profit Valley Ltd and Others
Read the full judgment text of LDCS 8000/2022 on BabelCite. This LDCS judgment was delivered on 17 September 2025.
1. On 21 August 2025, we handed down the written judgment (“the Judgment”), as amended by the Corrigenda dated 5 September 2025 which was subsequently superseded by the 2 nd Corrigenda dated 11 September 2025 (collectively referred to as “the Amended Judgment” as the case may be).
Cites 4 cases
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LDCS 8000/2022 [2025] HKLdT 51 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE MAIN APPLICATION NO. 8000 OF 2022 ________________________ BETWEEN
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________________________ DECISION ON REVIEW ________________________ 1.On 21 August 2025, we handed down the written judgment (“the Judgment”), as amended by the Corrigenda dated 5 September 2025 which was subsequently superseded by the 2nd Corrigenda dated 11 September 2025 (collectively referred to as “the Amended Judgment” as the case may be). 2.In gist, we made an order for sale by auction under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 (hereinafter referred to as “the Compulsory Sale Ordinance”) to sell all the undivided shares of the following lots (which are hereinafter identified as 1st Lot, 2nd Lot and 3rd Lot or where appropriate, collectively as the Lots) with the corresponding three buildings (which are hereinafter identified as 1st Building, 2nd Building and 3rd Building or where appropriate, collectively as the Buildings) erected thereon:
3.The reserve price for the auction was, as corrected, $2,679,000,000. 4.On 12 September 2025, the 2nd Respondent (“R2”) and the 42nd Respondent (“R42”) both represented by Grandall Zimmern Law Firm, applied to review the Judgment pursuant to section 11A of the Lands Tribunal Ordinance on the redevelopment value (“RDV”) of the Lots, on the basis of which the reserve price was set. 5.Basically, R2 and R42 applied for the review on the basis of the following:
6.In support of the above grounds for application for review, R2 and R42 had attached an Analysis Table prepared by Mr Patrick Lai (“Mr Lai”), the valuation expert appointed by the two respondents. Valuation Date 7.As a matter of common sense, when a property is put up for sale by auction, the reserve price should be fixed as close to the date of auction as possible so as to reflect the up-to-date market conditions. 8.At trial, the two valuation experts agreed to adopt the property market price indices as published by the Rating and Valuation Department (“RVD”) for the purposes of making time adjustments to the respective comparables. In preparing the Judgment, the Tribunal was doing the same where appropriate, taking into account that “the downward movement as indicated by the Private Retail Price index would have most probably underestimated the drop in value of shops in Causeway Bay.”[1] 9.In Billion Glory Properties Limited & Others v Li Boazhu & Others, LDCS 23000/2019 (unreported, dated 31 May 2024), the Tribunal refused to entertain a request by the applicants in that case for leave to refix the reserve price because of the market changes since the date of valuation. Paragraph 37 of the Decision is recited as follows:
10.The other respondents in that case, for instance, the 2nd respondent in that case also submitted that the reserve price fixed by the Tribunal on 29 February 2024 should have reflected the prevailing market conditions, there being no justification for revision[2]. This 2nd respondent further objected to incessant applications for extension of the period allowed by section 5(4) of the Ordinance alluded to by the applicants as it would be prejudicial to the minority owners who then have to shoulder additional legal costs, financial and psychological burdens. 11.The Decision of the Tribunal was approved by the Court of Appeal on 13 August 2024. In the Reasons for Judgment which was handed down on 2 September 2024[3] at §42, the Court of Appeal stated:
12.The present case must be distinguished from Sin Ho Yuen v Fineway Properties Ltd (2011) HKCFAR 497 where the reserve price for auction was agreed by the parties much ahead of the order for sale granted by the Tribunal during which there had been a substantial change of market conditions because of the financial tsunami. In the present case, only certain valuation factors were agreed by the two experts and they let the Tribunal to determine the RDV of the Lots. Having said that, there are numerous authorities, including Myers v. South Lakeland District Council [2005] EWCA Civ 498, [2005] RVR 301 and Checkpoint Limited v. Strathclyde Pension Fund [2003] 14 EG 124, [2003] EWCA Civ 84, that the Tribunal, as an expert tribunal, may not adopt the valuation factors agreed by experts. 13.On the other hand, Bokhary PJ said in Sin Ho Yuen at §17 as follows:
14.In conclusion, we do not agree that the Tribunal should abide by the valuation date agreed by the valuation experts much earlier than the date of the order for sale. The Retail Yield of 3.15% as at September 2024 15.Similarly for the reasons stated above, we do not agree to adopt the yield of 3.15% agreed by the valuation experts as at September 2024. 16.We stated at §335 of the Judgment as follows:
17.Similarly for the reasons stated above, we do not agree to review the market values of the G/F shops in the proposed development. Sale Comparable NSS-1 18.At trial, only the expert on behalf of the applicants, Mr Chan, adopted NSS-1as a comparable. Mr Lai refused to adopt it as a comparable because the building concerned is a Grade B/C commercial building not comparable to the hypothetical development which “should be a very high standard commercial building”. Save from the above, it was unfortunate that Mr Lai did not suggest any adjustment for fallback or otherwise[4]. In any event, as stated by the Tribunal at §350, the Tribunal only adopted this comparable on a de bene esse basis. 19.But more importantly, while Mr Chan did not apply any adjustment for Building Quality in addition to the factor of age, the Tribunal ruled otherwise at §364 and, following the adjustment for Building Quality proposed by Mr Lai for other Grade B/C commercial buildings, adopted +5% in the adjustment for NSS-1. Thus, either R2 and R42 are now seeking a second bite at the cherry or it was their oversight that the Tribunal had indeed allowed the adjustment for Building Quality. 20.Then at §366, the Tribunal observed that the average of the analysis at $188,209 per sq m came very close to the adjusted result of Comparable NSS-4. But in the end at §380, the Tribunal adopted a higher value of $228,000 per sq m to all the upper floors (save for the 1/F & 2/F which are accessible directly by escalators) without further adjustments. Time Adjustment for Shop Rental and Office Rental Comparables 21.Again, it is perhaps the oversight of R2 and 42 that the Tribunal had not taken into account, if necessary, the time adjustment. At §328 of the Judgment, the Tribunal found that the Private Retail Rental Indices published by RVD had stabilised:
22.Even by reference to the latest publication of the indices, the picture remains the same:
23.Indeed, the Tribunal recorded at §330 that both Mr Chan and Mr Lai agreed that the retail property market along Percival Street was recovering. 24.The above thus explained why the Tribunal, for instance, stated at §331 that it was not going to apply any time adjustment for the shop rental comparables. 25.And at §373, the Tribunal made reference to Private Offices Rental Indices for the Grade A office rentals in Wan Chai/ Causeway Bay. As opposed to R2 and R42’s allegation (which is incorrect), the Tribunal did make time adjustment to the office rental comparables at §377. Shop Values in Low Zone 26.The Tribunal did not apply different values to the low zone or high zone and was content at §380 “to apply $228,000 per sq m to all the upper floors (save for the 1/F & 2/F which are accessible directly by escalators) without further adjustments.” 27.We have difficulty in finding any justification for specifically making additional adjustments for shops in the low zone when, by the reference to the hypothetical scheme adopted, the shops in the low zone are not served by escalators. Remember this hypothetical scheme was supposed to be finished to “Grade A office standard”[5] adequately served by a number of lifts. Why should those shops in the low zone fare a better price than those in the high zone? In some respects, one may also argue that shops in high zone should enjoy better view and prestige, attracting higher values. The latter is particularly the case for One Continental at No 232 Wan Chai Road, a comparable in Crown Centre Development Limited & Another v Wong Wai Ping & Others, LDCS 12000/2021 (unreported, dated 8 December 2023), Soundwill Plaza Phase 2 at No 1 Tang Lung Street, a comparable in Billion Glory, supra or even 535 Jaffe Road where prestigious or high-class restaurants could be found in the high zone or even top floor. Shop Values on 1/F & 2/F 28.In §§381-386, we had discussed our approach to evaluating the shop premises on 1/F and 2/F. More importantly, we found Mr Chan’s approach more preferable to that of Mr Lai. By applying for the review, R2 and R42 are just seeking a second bite at the cherry. Value of Car Parking Space 29.Firstly, the Tribunal remarked at §§389-390 that both valuation experts failed to provide more information about the car park ratio of The Sun’s Centre which they adopted as comparable. 30.Then the Tribunal could not but take the average of the adjusted values of the carparking space transactions in The Sun’s Centre. We see no ground for the review or letting R2 and R42 to have a second bite at the cherry. Conclusion 31.In view of the above, we find no ground to revise the reserve price upwards as suggested by R2 and R42. There is no merit in the review and we dismiss the application. 32.For the same reason, we refuse to stay the order for sale as proposed by R2 and R42. 33.We consider the hearing date scheduled on 6 October 2025 no longer necessary. We order to vacate this hearing date. Costs 34.As this decision is made on paper without a hearing pursuant to the Practice Directions issued by the President of the Tribunal: Review No 1/2009, we shall make no order as to costs.
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Cases cited in this judgment
Further hearings and rulings under LDCS 8000/2022