Or Pui Kwan v. Ching Po Yi and Another
Read the full judgment text of LDCS 1000/2023 on BabelCite. This LDCS judgment was delivered on 1 April 2026.
1. The Applicant commenced the present application on 18 January 2023 for an order for sale (the “Application”) under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (the “Ordinance”). The subject lot is Inland Lot No 4868 (the “Lot”) which has a total of 30 equal and undivided shares and a building erected thereon at Nos 35, 37, 37A, 37B, 39 and 39A Gough Street (“GS”), Hong Kong (collectively, the “Building”) also known as:
Cited by 2 cases · Cites 8 cases
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LDCS 1000/2023 [2026] HKLdT 18 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION LAND COMPULSORY SALE MAIN APPLICATION NO 1000 OF 2023 __________________________
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________________ J U D G M E N T ________________ BACKGROUND 1.The Applicant commenced the present application on 18 January 2023 for an order for sale (the “Application”) under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (the “Ordinance”). The subject lot is Inland Lot No 4868 (the “Lot”) which has a total of 30 equal and undivided shares and a building erected thereon at Nos 35, 37, 37A, 37B, 39 and 39A Gough Street (“GS”), Hong Kong (collectively, the “Building”) also known as:
2.The Building is a 5-storey (including a basement / sub-basement) composite building fronting GS, served by 2 common staircases, and governed by the Deed of Mutual Covenant dated 4 May 1959 (the “DMC”). The Building was about 64 years old at the time when the proceedings herein commenced.[1] There are existing unauthorised building works (“UBW”) in the Building. 3.The Lot is held under a Government Lease, which is virtually unrestrictive for a term of 999 years commencing on 26 June 1843. 4.Occupation Permit was issued for the Building on 1 October 1958 (the “OP”) granting permission to occupy the Building for the following purposes as described:- [2]
5.According to an approved Alterations and Additions Plan (“ A & A Plan”) dated 17 February 1959, the two apartments at basement were converted to one workshop.[3] 6.According to another A & A Plan dated 8 February 1968, extension areas were approved for the workshop at basement.[4] 7.From the Land Registry’s records, the undivided shares of the Lot are allotted as follows:-
8.The Applicant owns all the undivided shares with attached or allotted units save those owned by the following remaining 2 Respondents in these proceedings (together with their respective undivided shares):-
9.Thus, the Applicant owns a total of 27/30 undivided shares of the Lot. 10.The Applicant is represented by Mr Mok Yeuk Chi. R2 is represented by Ms Abigail Liu. R5 is represented by Ms Phyllis Lee. Factual witnesses 11.The following witnesses of fact filed witness statements and gave oral evidence at the trial:
12.Mr Lo Kwok Hang for R2 also provided a witness statement, in particular detailing use of a common area, that was admitted without his attendance. Expert evidence 13.The Applicant had appointed initially a structural engineer the late Mr So Kin Shing (“Mr K S So”) of K S So & Associates Ltd and later a structural engineer Mr Philip So Chi Wai (“Mr Philip So”) of Mr Philip So & Associates as its structural assessment expert. Mr Philip So confirmed he agreed with the opinions expressed and content of the expert report of Mr KS So and adopted them as part of his evidence. In addition, the Applicant appointed a building surveyor Mr Benson Wong Sai Ning (“Mr Benson Wong”) of Benson Wong & Associates Limited as its building condition expert and Mr Alnwick Chi Hing Chan (“Mr Alnwick Chan”) jointly with Mr Daniel Ka Man Cheng of Knight Frank (collectively, “KF”) as its valuation experts. Mr Alnwick Chan gave evidence during the trial and confirmed his opinion in accordance with the jointly prepared reports. 14.The Applicant’s expert evidence is based on the following Reports (1) to (10):-
15.R2 and R5 appointed Mr Daniel Mok Kin Yau (“Mr Daniel Mok”) from Wai Kin (HK) Consultants Limited as their structural assessment expert and a building surveyor Mr Andrew Kung Sui Lun (“Mr Andrew Kung”) of Bright Solution Consulting Limited as their building condition expert. In addition, both Respondents have appointed Mr Wong Chi Wai (“Mr C W Wong”) of Grandmax Surveyors Limited as their valuation expert. 16.The Respondents’ expert evidence is based on the following Reports (11) to (14):-
17.The late Mr K S So and Mr Daniel Mok prepared their Joint Statement dated 2 August 2024 on issues in agreement and disagreement regarding Structural Assessment Experts. 18.Mr Benson Wong and Mr Andrew Kung have prepared their Joint Statement dated 12 August 2024 on issues in agreement and disagreement regarding Condition Survey Experts. 19.KF and Mr C W Wong have prepared their Joint Statements on issues in agreement and disagreement dated 12 August 2024 (the “1st Joint Statement of the Valuation Experts”) and 6 May 2025 (the “2nd Joint Statement of the Valuation Experts”) regarding EUV and the updated RDV of the Lot respectively, as well as the updated Consolidated Summary Tables. 20.The parties have also produced various documents marked as Exhibits “A1” to “A9”, “R1” to “R6” and “AR1” to “AR7”. 21.The Tribunal with all relevant parties made a joint site inspection on 21 May 2025, including of numerous comprables. At trial the Applicant called Mr Philip So, Mr Benson Wong and Mr Alnwick Chan as their expert witnesses. Mr Philip So adopted the reports prepared by the late Mr K S So confirming the opinions expressed therein. R1 and R2 called Mr Daniel Mok, Mr Andrew Kung and Mr C W Wong as their expert witnesses. ISSUES FOR DETERMINATION BY THE TRIBUNAL 22.The issues to be decided in this case are agreed by the parties as follows:-
23.If an order for sale is granted, what should be the reserve price for the purpose of public auction? (“Issue 5”) ISSUE 1 – PREREQUISITES FOR AN APPLICATION Ownership of the Applicant 24.At the time of the filing of the Notice of Application on 18 January 2023, the Applicant owned 80% (ie 24/30) of the undivided shares in the Lot and the Respondents owned the remaining 20% (ie 6/30) of the undivided shares. 25.Further, after the commencement of the Application, the Applicant has acquired the 1st Respondent’s Unit, the 3rd Respondent’s Unit and the 4th Respondent’s Unit respectively. The number of undivided shares of the Lot held by the Applicant is now 90% (i.e. 27/30). 26.Section 3(1) of the Ordinance stipulates that the minimum percentage of undivided shares that an applicant or applicants should possess before making an application under the Ordinance is 90%. 27.However, section 3(5) of the Ordinance provides that the Chief Executive in Council may, by notice in the Gazette, specify a lower percentage in respect of a lot belonging to a class of lots specified in that notice. 28.The Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice (the “Notice”), which was issued pursuant to section 3(5) of the Ordinance and was gazetted on 22 January 2010, came into operation on 1 April 2010. Section 3 of the Notice lowered the threshold for compulsory sale of specified classes of lots from 90% to 80%. Those classes of lots include “a lot with each of the buildings erected on the lot issued with an occupation permit at least 50 years before the relevant date”. 29.Since the OP was issued on 1 October 1958, which is more than 50 years before the date of the Application on 18 January 2023 (ie the relevant date), the applicable percentage is therefore 80%. As the Applicant owned 80% of the undivided shares in the Lot at the time of making the Application, the Applicant has satisfied the requirement. Valuation Report 30.Section 3(1)(a) and Part 1 of Schedule 1 of the Ordinance stipulates that an application should be accompanied by a valuation report, prepared not earlier than 3 months before the date on which the application is made. In these proceedings, the accompanying valuation report was dated 13 January 2023, which is not earlier than 3 months before the Application. Thus, the Applicant has complied with the requirement in respect of an accompanying valuation report. Entitlement 31.Since the Applicant has fulfilled the prerequisites as mentioned above, we are satisfied that the Applicant is entitled to make the Application under section 3(1) of the Ordinance. ISSUE 2 – DETERMINATION OF THE MARKET VALUE OF EACH PROPERTY 32.According to section 4(1)(a)(i) of the Ordinance, if there is a dispute between the parties on the value of any property as assessed in the Application, the Tribunal shall determine the dispute. 33.Section 4(1)(a)(ii) of the Ordinance further provides that:-
34.There are disputes between both sides’ valuation experts on the valuation of EUV of the Units of the Building and RDV of the Lot. Thus, we need to determine the same. 35.The date of valuation of EUV of the Units of the Building as agreed by the Applicant and the Respondent is 19 December 2022. Property Particulars of the Building 36.There is no dispute regarding the property’s particulars on the basic saleable area (excluding encroachment of the common area if any) of the respective Units, as well as the valuation conversion factor of the respective ancillary areas. The valuation experts however, have fundamental disputes on whether the likely enhancement value of two groups of structures should be taken into account in the assessment of the market value. The 2 groups basically include: (a) UBW leading to encroachment of the common area of the Building (the “Unauthorized Extended Area”); and (b) structures approved by Buildings Department (“BD”) according to approved A & A Plans leading to encroachment of the common area in basement and sub-basement level of the Building (the “Approved Extended Area”). In gist, KF has made assessment, based on the DMC and assignment plans only but without taking into account the approved A & A Plans, and disregarded both groups of structures. On the other hand, Mr C W Wong has assessed both groups of structures at full value assuming the risk of enforcement by relevant authorities including BD and the Incorporated Owners, is low. 37.Market value is a well-established concept. It refers to a value at which a willing seller is prepared to sell and a willing buyer is prepared to purchase in an arm’s-length transaction when they are acting knowledgeably, prudently and without compulsion. On top of that, there are guiding principles in valuation, such as the principle of “the highest and best use” and the principle of “the market reality”. 38.From the valuation perspective, the principle of “the highest and best use” dictates the market value. In determining the highest and best use of a property, and when UBW like the situation in the Application are involved, suitable assumptions and adjustments have to be considered before the market value can be derived. 39.To conform with “the market reality”, the general principles in considering whether UBW have to be taken into account when assessing the market value of the property can be summarised as follows:-
40.Mr C W Wong opines that the owner of 4/F Block C is occupying the communal Flat Roof on 4/F which is also the top roof of Block D & E of the Building, and thus has included an additional value reflecting the said Flat Roof in the assessed EUV of 4/F Block C. Mr Lo gave details of the family use of the Flat Roof over time to establish continues exclusive use of this open common area. The Tribunal agrees with KF that the evidence, including the existing physical condition and rates payment history of the said Flat Roof, does not support that the said Flat Roof area has been occupied by the owner of 4/F Block C exclusively for whatever period. The Tribunal having had the benefit of the site visit does not accept the claim of the owner of 4/F Block C and opinion of Mr C W Wong in this regard. Internal Condition of the Building 41.The Grade Marking to reflect the Standard of Internal Condition applicable to the Building as adopted by Mr C W Wong for valuation is summarised as follows:
42.KF has raised no disagreement on the above grade marking to reflect the standard of condition. The two valuation experts have no dispute on the internal conditions of all Units in the Building. 43.To conclude, among a total of 30 Units in the Building, the determined grading of various Units in percentage under “Good”, “Fair” and “Poor” is “16.7%”, “70%” and “13.3% respectively. Thus, the overall internal condition of the Building on average is considered by the Tribunal as “Fair”. Upper Floor Domestic Unit Reference Domestic Unit 44.The Unit on 3/F Block C is mutually agreed by the two valuation experts as the Reference Domestic Unit. The Unit has a saleable area of 35.48 sq m with fair internal condition. Transactions selected for Domestic Comparables 45.The direct comparison method of valuation is based on comparing the property to be valued with similar properties and the considerations achieved for them and allowing for differences between them to determine the market value. Thus, as a matter of valuation practice, transactions requiring large scale or many adjustments should be avoided as far as possible. The better practice is in fact whenever sufficient useful comparables are available, transactions requiring many adjustments should be rejected for direct comparison. 46.The valuation experts have identified a total of 9 transactions, namely ER1 to ER9, for consideration. All these transactions have met the general selection criteria for direct comparison. Mr C W Wong however does not agree to select ER6 to ER9 for direct comparison with the main reason being that they are in a different locality. The Tribunal does not agree with the view of Mr C W Wong, as ER6 to ER9 are not too far away from the Building. For ER9, the Tribunal however accepts the view of Mr C W Wong to reject this transaction for direct comparison as it was transacted relatively too distant in time, more than one year, and there are sufficient useful comparables for the exercise. 47.The Tribunal having considered the details of the remaining transactions determines that ER3 and ER4, should also be rejected as the properties were completed in 1971 and 1975 respectively while the Building was completed in 1958. The construction design and standard of buildings completed in the 1950s had fundamental differences as compared with those completed in mid-1960s and afterwards. The reason is that the Building (Planning) Regulation (Amendment) (No. 2) Regulations was enacted in 1962 according to which the statutory control of development intensity by means of volume, height and street width previously was replaced by plot ratio and site coverage. In gist, ER3 and ER4 are not in the same development generation as compared with the Building. 48.Accordingly, only 6 transactions are selected, being ER1, ER2, ER5, ER6, ER7 and ER8, for direct comparison as listed in Table (1) of Appendix I. Adjustments of Domestic Comparables 49.The valuation experts are in agreement on the valuation adjustment of all factors with the exception of “Size” and “Building Age”. The Tribunal accepts the magnitude of adjustments for those agreed factors. 50.For the “Size” factor, KF has applied a threshold approach of “2% for every 10 sq m difference”. Mr C W Wong has applied a linear approach on pro-rata basis of “0.2% per 1 sq m difference”. The Tribunal accepts the view of KF by applying a threshold approach, as a linear approach is over sensitive and relatively difficult to justify by market evidence. 51.For the “Building Age” factor, KF has applied an adjustment of “1% for every 1 year difference”, while Mr C W Wong has applied an adjustment of “0.2% per year difference”. As already explained, the construction design and standard of buildings completed in 1950s like the Building had fundamental differences as compared with those completed in mid-1960s and thereafter, bearing in mind the Building (Planning) Regulation (Amendment) (No. 2) Regulations was enacted in 1962. Thus, the Tribunal does not accept Mr C W Wong’s approach since the identified comparables were constructed in mid-1960s (with the respective occupation permit issued between 1965 to 1969) and if, assuming the age of the Building and the comparable is a decade difference, the adjustment becomes 2% only and that is unreasonably low. Thus, KF’s approach is accepted. 52.The adjustment for various valuation factors to be adopted by the Tribunal are summarised as below:-
53.KF and Mr C W Wong have suggested adopting a unit rate for the Reference Domestic Unit of $117,000 / sq m and $127,000 / sq m respectively. The Tribunal determines the Reference Domestic Unit Rate is $120,000 / sq m and the assessment is in Table (2) of Appendix I. Adjustments of Market Value of Upper Floor Domestic Units 54.To assess EUV of the respective domestic units, there is no dispute between the valuation experts on the adjustment factor for “Floor Level” by applying “2% per actual floor level difference” and the adjustment factor for “Top Floor” by applying “-2%”. The Tribunal accepts the magnitude of adjustments for these agreed factors. Again, the two valuation experts have a different view on the adjustment factor for “Size” and as determined above, KF’s threshold approach is accepted by the Tribunal. 55.As for the adjustment factor for “Internal Condition”, KF has applied a magnitude of “Good for +2% / Fair for 0% / Poor for -2%”. Mr C W Wong however has applied a magnitude of “Good for +3% / Fair for 0% / Poor for -3%”. From the valuation perspective, 2% to 3% is within a reasonable range of value adjustment if the internal condition of a domestic property has been improved from “Poor” to “Fair” and “Fair” to “Good” respectively. To conform with market reality, the magnitude of enhanced value, will depend on various factors affecting its market value in particular the type of building and its locality. For instance, if a property is one of the multiple units within a high-rise composite building situated in an old and run down area, the market value of a property will be highly affected by various external factors like the overall maintenance and management standard of the building. For such property, enhancement of value due to improvement of internal condition will be relatively restricted as there are a number of external factors totally out of the property owner’s control. On the contrary, if a property is a house for single residence situated in a high-end residential area, the applicable adjustment factor will be relatively higher as the owner has full control of the routine maintenance and management works of the building. Having considered the Building itself is a medium-rise building located at the fringe of the Central District, the Tribunal accepts the view of Mr C W Wong to apply an adjustment magnitude of “Good for +3% / Fair for 0% / Poor for -3%”. 56.As compared with the Reference Domestic Unit of 3/F Block C, KF has applied “+2%” to reflect the “Side Window / Lighting & Ventilation” adjustment factor for Units in Block E and Block F, while Mr C W Wong has applied the same adjustment for Units in Bock A and Block F instead. The Tribunal is of the view that the said adjustment should be collectively applicable for those Units in Block A, Block E and Block F. EUV of Upper Floor Domestic Units 57.KF and Mr C W Wong have assessed EUV of Upper Floor Domestic Units at $97,768,199 and $108,754,000 respectively. The Tribunal considers the total EUV of such is $100,763,000 and the assessment is in Table (3) and (4) of Appendix I. Ground Floor Shops Basis of Assessment 58.The two valuation experts observe that Blocks A & B on G/F previously were occupied as a single unit while Blocks C & D as another. They have valued Blocks A & B and Blocks C & D on G/F as two separate ground floor shops respectively. 59.In addition, the two valuation experts observe that Blocks E & F on G/F previously were occupied as part of the other ground floor shops. Notwithstanding these Units under the OP are for domestic purpose, both KF and Mr C W Wong have valued the two Units on the basis as shop for non-domestic use. From valuation perspective, the principle of “the highest and best use” dictates the market value. The Tribunal accepts this agreed approach to assess the market value by changing the use from domestic to shop purpose with the justification that (a) it is permitted under the lease and the relevant Outline Zoning Plan (“OZP”); and (b) even if approval of an A & A Plan is required from BD, there should be no technical problem as similar approval was obtained previously for the Basement Unit of the Building. Reference Ground Floor Shop 60.The combined Unit on G/F of Blocks C & D (Nos. 39 & 39A GS) is the mutually agreed Reference Ground Floor Shop. The Unit has a saleable area of 83.77 sq m with fair internal condition. Transactions Selected for Ground Floor Shop Comparables 61.The valuation experts have identified 8 transactions, namely ES1 to ES8, for consideration. All these transactions have met the general selection criteria for direct comparison. The Tribunal having considered the details of these 8 transactions has decided that ES6 should be rejected in the comparison exercise. The main reason is that ES6 has a size much larger than the subject Units, and that it is in a relatively modern building completed in around 2017. Thus, ES6 is not suitable for direct comparison. For ES1, ES2 and ES8, the Tribunal notes that these transactions were completed over one year before the relevant date but since there are not sufficient useful comparables available for the exercise, they are nonetheless selected for direct comparison. Selected comparables are listed in Table (5) of Appendix I. Adjustment of Ground Floor Shop Comparables 62.The valuation experts have no dispute on the adjustment rate of various factors for the comparables, with the exception of adjustment for 3 factors being “Size”, “Layout” and “Location” which need the determination of the Tribunal. We accept the magnitude of adjustment rate for those agreed factors. 63.As regards the adjustment factor for “Size” and as mentioned earlier, the Tribunal prefers to adopt KF’s threshold approach of “2% for every 10 sq m difference”. 64.For the adjustment rate of “Layout”, the Tribunal finds the approach of Mr C W Wong more consistent and reasonable. Thus, the adjustment rate as adopted by Mr C W Wong is accepted. 65.In so far as the adjustment factor of “Location” is concerned, among the 8 comparables, only the rates of ES2, ES3 and ES5 are in dispute. There is difference in opinion due to professional judgement. Having considered the locality and immediate pedestrian flow of the comparables concerned, the Tribunal has decided to take the view of Mr C W Wong for ES2, and the view of KF for ES3 and ES5 respectively. 66.KF and Mr C W Wong have suggested an adopted unit rate for the Reference Ground Floor Shop of $451,000 / sq m and $443,000 / sq m respectively. The Tribunal determines the Reference Unit Rate is $440,000 / sq m and the assessment is in Table (6) of Appendix I. EUV of Ground Floor Shops 67.Mr C W Wong has included the area next to Blocks E & F on G/F as part of the storage area of Blocks A & B on G/F in his valuation. KF however is of the view that the said storage area are UBW situated within the common part of the Building and thus the potential enhancement value is disregarded. The Tribunal observes that as stipulated under the approved A & A Plan dated 8 February 1968, such storage area should be an open yard but is now covered by UBW constructed with temporary materials. The storage area is the Unauthorized Extended Area of the Building and is vacant with poor maintenance condition. There is no sufficient evidence to support that it is or has been under exclusive occupation of any unit of the Building. Besides, the storage area is located nearer to Blocks E & F than Blocks A & B on G/F. The Tribunal considers that under the market reality principle, a prudent potential purchaser of Blocks A & B on G/F would not be prepared to offer extra value for such storage area which is a common part of the Building under poor maintenance condition. The approach of KF is preferred and thus the potential enhancement value is disregarded. 68.The total EUV of Ground Floor Shops as assessed by KF is $88,455,388 and Mr C W Wong is $88,770,000. The value as approved by the Tribunal is $86,150,000 with the assessment details in Table (7) of Appendix I. Basement Unit Comparable selected for Basement Floor Unit 69.Under the OP, the Basement of Blocks E & F was for two separate apartments respectively but was later converted to one single workshop with the approval of BD. The Unit is being used as a printing workshop and the internal maintenance condition is poor. 70.Only one comparable has been identified but it is a shop premises. In giving oral evidence, both valuation experts expressed that they had made efforts but failed to identify any suitable transaction. The reason is obvious, that there has long been no supply of industrial building without lift facility in Hong Kong while the demand for such workshop, especially situated in basement level lacking adequate natural air ventilation, is very low. Mr Alnwick Chan also stressed that though the subject Unit was occupied as a printing workshop, the printing trade was declining due to technological progress and shifts in market practices. We accept this agreed approach to assess the market value by changing the use from workshop to shop purpose, with the justification that (a) it is permitted under the lease and relevant OZP; and (b) even if approval of an A & A Plan from BD may be required, there should be no technical problem bearing in mind both “Shop” and “Workshop” are classified as “Non-domestic Use” under the relevant Building Regulations. 71.Adjustment of the selected comparable is conducted as below:-
72.The valuation conversion factors as agreed by the two valuation experts regarding the ancillary area of the basement and sub-basement are as below:-
Effective Area of Basement Unit 73.The two valuation experts have fundamental disagreement on the effective area of the Basement Unit. A summary of the various portions now existing in the Basement Unit is in Table (8) of Appendix I. The total Effective Area of the Basement Floor (“B”) Unit including the Sub-basement Floor (“SB”) as determined by the Tribunal according to submitted plan is calculated as below[5]:-
EUV of Basement Unit 74.EUV of Basement Unit as assessed by KF and Mr C W Wong is $10,458,450 and $22,140,000 respectively. EUV as determined by the Tribunal is $137,000 / sq m x 104.37 sq m = $14,298,690 (say $14,300,000). Total Market Value of all Properties in the Building 75.Market values of all properties in the Building as at the relevant date of valuation, 19 December 2022 found by the Tribunal are appended below:-
ISSUE 3 – AGE AND STATE OF REPAIR 76.Section 4(2) of the Ordinance provides that: -
77.Thus, the Applicant has to satisfy the Tribunal that the redevelopment of the Lot is justified due to the age or state of repair of the Building (section 4(2)(a)); and that the Applicant has taken reasonable steps to acquire the respondents’ undivided shares in the Lot (section 4(2)(b)). Otherwise, the Tribunal shall not make an order for sale. Proper Approach 78.Intelligent House Limited v Chan Tung Shing & Others [2008] 4 HKC 421 has laid down useful guidelines for the Tribunal’s determination, for instance at §145:
79.As a general approach and in Top Sail International Limited v Cheng Kai Ming (LDCS 18000/2010, 15.11.2011) the Tribunal held that age and state of repair were two separate grounds and even though there might be considerations common to both, the Tribunal should still consider them separately. Structural Assessment 80.Prior to giving the expert advice on “age’ and “state of repair”, both parties have submitted Structural Assessment Reports to ascertain the existing structural condition of the Building. The Joint Statement on Structural Assessment prepared by the two structural assessment experts, the late Mr K S So and Mr Daniel Mok[6], and opinion on the various structural aspects are discussed below. Visual Inspection 81.Both experts agree that there are structural defects in the structural elements of the Building. The defects are in the form of spalling or cracks within some units and the common area. Concrete Cover 82.There is no disagreement that the results of concrete cover surveys on the structural elements for columns and slabs of the Building are satisfactory. The late Mr K S So has raised that among the measured results, 3 out of 5 results on main bars of beams have not fulfilled the minimum thickness of concrete cover. Mr Daniel Mok however has reported that all measured results including slabs, beams and columns have fulfilled the minimum thickness of concrete cover respectively. Carbonation 83.The two experts agreed that the results of carbonation depth surveys on the structural elements of the Building are not satisfactory. All tested samples have carbonation depth exceeding the mean measured concrete covers. Compression Test 84.The two experts agreed that the results of compression tests on the structural elements of the Building are not satisfactory. Both have found various samples of slabs, beams and columns not fulfilling the 15 MPa requirement. Worst Credible Strength (the “WCS”) 85.The late Mr K S So reported that the WCS for column is less than the required concrete strength of 15MPa. Mr Daniel Mok however is of the view that the WCS for all slabs, beams and columns are satisfactory. Cement Content Test 86.The experts agree that the results of cement content tests on the structural elements of the Building are not satisfactory. Various samples for slabs, beams and columns have been found with cement content less than the 12% requirement. Chloride Content 87.The two experts agree that the results of chloride content tests on the structural elements of the Building are not satisfactory. The late Mr K S So found that the test results of all measured samples are over 0.8%, exceeding the chloride content limit of 0.35%. Mr Daniel Mok has reported that only about half of the samples are found exceeding the said limit. Reinforcement Corrosion Surveys 88.The experts agree that the results of reinforcement corrosion surveys on the structural elements of the Building are not satisfactory. All exposed bars are found having corrosion and suffered from loss in sectional area. The results for proportions of inspected bars with “Loss of Steel Section Distribution over 15%” as reported by the late Mr K S So and Mr Daniel Mok is 5.2% and 10.2% respectively. Conclusion on Structural Conditions 89.Based on visual inspection and the above tests and surveys, the late Mr K S So and Mr Philip So concluded that the Building’s “structural frames have deteriorated extensively” and Mr Daniel Mok has concluded that the Building has exhibited “extensive structural defects”. While no major structural defects have been reported, the experts have the same view that repair works are required. They have given a cost estimate respectively, which will be discussed in detail later together with all other repair cost items as a whole. Age 90.In Top Sail, the Tribunal stated:
91.In Charmlink Limited v Lee Tong Hing & Others (LDCS 16000/2010, 29.11.2022) the Tribunal stated:
92.The building condition experts have no dispute that the Building is now over 65 years old and is the oldest building in the immediate neighborhood[7]. However age is not a conclusive indicator for redevelopment. Consideration should be made of the existing physical and functional conditions of the Building including its maintenance and housekeeping standards. Design Working Life of the Structural Frames 93.Mr Benson Wong stresses that according to a statement under a policy paper of Government to promote Compulsory Sale, with which he agrees, “In Hong Kong, the design working life of an ordinary building is 50 years”. In view of the fact that the Building is 65 years old and the durability provisions (concrete grade and concrete cover etc.) of the Building’s structural members were designed with smaller value than that stipulated in the current Concrete Code applicable, he holds the view that the Building’s structure should have passed its design working life. 94.Mr Daniel Mok replies that the said statement is a generic description and is not a conclusive indicator for all buildings. In actual practice, the environmental and usage conditions of the buildings may vary greatly ending up with very greatly differing degrees of deterioration. 95.The Tribunal agrees with Mr Daniel Mok that if a building undergoes the essential repairs and carries out regular maintenance its service life can be extended. However, given the old age of the Building, more structural defects requiring substantial repairs are anticipated. We are also of the view that comparing the structural design of the building in question with the modern construction requirements is a relevant consideration and correct approach to check against the age of the Building. Based on the evidence given, we accept that the Building can be regarded as old in terms of its design working life of the structural frames. Physical Obsolescence 96.The two building condition experts agree that obsolescence is a concept of comparison. Therefore, relevant factors including current legislative requirements, prevailing property market and construction standards should be used for comparison. 97.Mr Benson Wong has compared the Building with 10 other more modern developments and is of the view that the Building has signs of physical obsolescence due to the following:-
98.Mr Daniel Mak considers that the appearance of the Building and the material used for the external walls of the Building are irrelevant to the assessment under Cap. 545. The Tribunal on the contrary accepts that a building's external appearance is a factor for consideration. However, we find that buildings from the pre-2000s era, now under 50 years old, are still commonplace. The mere presence of external cement rendering. on many of such pre-2000s buildings is not indicative of a state justifying redevelopment. Moreover, the upgrade from mild steel to aluminum windows is a property improvement that cannot be invoked to fortify the justification for redevelopment. For these reasons, the Tribunal attributes little weight to the subjective element of physical obsolescence based on appearance in assessing the justification for redevelopment. Functional Obsolescence 99.By comparing the Building with the latest regulations and standards of safety, hygiene, comfort and convenience, Mr Benson Wong has identified 4 main areas where the Building is significantly inferior. 100.First, as pointed out by the late Mr K S So, the design and construction of the structural frames of the Building has become obsolete over time as it was designed and constructed more than 65 years ago. Among the less stringent structural requirements then, the lack of consideration for robustness is one of the most important items. 101.Secondly, the Building is sub-standard in terms of fire services requirement including the installation of automatic sprinkler system, fire escape arrangement and fire resisting construction. 102.Thirdly, the Building has no Barrier Free Access (“BFA”) facilities provided. 103.Fourthly, the Building is sub-standard in providing essential facilities including equipotential bonding connections, parapet walls and central balusters constructed along the outer edges of the main roof / balcony corridors / staircases, maintenance access for the underground drainage, lighting protection system and building management systems / counter / meeting room. 104.Among the items covered by the 4 main areas aforesaid, Mr Benson Wong holds the view that due to fragmented ownership and cost constraints, most of them cannot be rectified unless the Building is demolished and redeveloped. 105.Mr Daniel Mok considers that though there have been piecemeal changes to the legislation over the years applicable to new buildings due to changes of technology, environment and safety requirements, as long as no major work is to be carried out requiring A & A Plan be submitted for BD’s approval, the new legislative requirements do not generally apply. Besides, some of the features and facilities can be upgraded through mandatory and voluntary improvements. Thus, the Building can still serve its function at present. We cannot totally agree with this position. Apart from the above, the Building is lacking in two aspects of functional sustainability leading to obsolescence as detailed below. 106.First, the Building has no BFA and does not have lift facility, which makes the upper floors inaccessible or extremely difficult for the elderly, people with disabilities and families with young children for residence. Even if it were assumed the upper floor units of the Building are under proper state of repair, they are functionally unsustainable in the context of societal population ageing. This is evidenced by the prevailing market practice since the 1980s, whereby virtually all new multi-storey private housing developments have incorporated lift facilities, with the exception of low-rise developments of not more than three storeys for single residences or New Territories Exempted Houses. 107.Secondly, the Basement Unit of the Building has been converted and is being used as a workshop. Workshop unit requires extra loading & unloading area, fire safety installation & escape measure and it is incompatible with the general use of the Building for domestic purpose. Under the prevailing OZP, the Lot is zoned as Residential (Group A) prohibiting the land for new development composed of industrial use. When conducting EUV valuation of the Basement Unit, both KF and Mr C W Wong have valued the property based on retail shop for non-domestic purpose. In oral evidence, the valuers conceded that they had made effort but failed to identify any sale transaction for a basement workshop not accessible by lift. The reason they gave to the Tribunal, in gist, was the market having no supply and low demand for such a premises. 108.To conclude, the Tribunal has no doubt that a significant portion of the Building suffers functional obsolescence. Useful Life Span 109.It is not in dispute that the following key building components and finishes of the Building have passed their respective useful life span:-
Conclusion on Age 110.Overall, we find that the Applicant has satisfied the requirement for “age” under section 4(2)(a)(i) of the Ordinance. The redevelopment of the Lot is justified due to the age of the Building. State of Repair 111.In Charmlink, the Tribunal stated:
112.The “state of repair” of a property in general refers to its overall condition in terms of maintenance, structural soundness, and any necessary or pending repairs. It assesses whether the property is well-maintained, in good working order, or if it requires upgrades, or renovations. When a property owner considers undertaking major repair works, several key factors must be evaluated to ensure the project’s success including cost-effectiveness, financial viability, and compliance with legal and safety standards. It may also need to determine if the repairs are urgent (safety hazards, structural integrity) or preventive (long-term maintenance). 113.On the ground of “state of repair”, Mr Benson Wong has relied on the guidelines as set out in Intelligent House, where the Tribunal accepted that “tenantable condition” should be used as a benchmark to formulate the repair works required:
Tenantable Condition 114.Mr Benson Wong in his Condition Survey Report[8] states that “…Following the rulings of the Lands Tribunal …for … Intelligent House…I have adopted the ‘tenantable condition’ to be the standard to formulate the necessary repairs which would render the building fit for the enjoyment of its tenants and visitors, in the sense that it is safe and hygienic, and provides a standard of comfort and convenience which is reasonable in the present-day circumstances for the type of buildings in question, and would render the building’s structural frames, components, finishes and service installations in a fair condition, requiring no repair till the next inspection / repair cycle…”. In so doing, he has not proposed any works to rectify features and facilities of obsolescence which are applicable for safety and mandatorily, but not practical. 115.Mr Andrew Kung has not raised any dispute on the above guidelines, which are accepted by the Tribunal. However, the standard of Tenantable Condition as adopted by Mr Andrew Kung are as follows[9]:-
116.Mr Benson Wong commented that the standard as adopted by Mr Andrew Kung is just similar to “Habitable Condition”, which represents a lower threshold for the repair works disregarding a reasonably comfortable state suitable for normal residential use by a tenant. In giving oral evidences, both building experts gave the opinion that a typical repair circle of such works should be 10 years. Thus, we agree with the view of Mr Benson Wong that the repair standard should not disregard a reasonably comfortable state. The Tribunal is of the view that an old building just under “Habitable Condition” can hardly be occupied for 10 more years. 117.Indeed, as regards state of repair or tenantable condition, China Orchid International Ltd and Others v Fujitec (HK) Co Ltd and Others (LDCS7000/2018, 5.5.2023) the Tribunal at §166 stated:
118.Mr Benson Wong follows the guidelines as set out in Intelligent House. The repair standard as adopted by Mr Andrew Kung has deviated from the established guidelines. Thus, in general the Tribunal places relatively more weight on the opinion of Mr Benson Wong when determining the cost assessment of repair works. Condition Classification 119.For the purpose of preparing the Condition Survey Report, both experts have adopted the following 5 condition classifications for recording the existing conditions of individual members of the structural frames, the components, the finishes and the service installations of the Building:-
Mandatory Building Inspection Scheme / Mandatory Window Inspection Scheme (“MBIS / MWIS”) Notices and Building Orders 120.The Building has been served with the following 4 Building Orders[10] issued by BD of which, all remain outstanding:
121.The Building has been served with 6 MBIS and 33 MWIS notices issued by BD requiring the concerned owners of the common parts and private units to carry out the prescribed inspections and necessary repairs. Presently, the following 2 MWIS notices remain not complied with:
122.The Applicant has provided a copy of a letter from BD dated 15 July 2021 in relation to the non-compliance with the MBIS dated 14 November 2018 concerning the common areas of the Building. For this case, BD had appointed consultant and contractor to conduct the prescribed inspection and carry out certain repairs during the period from October 2022 to April 2023 in default of the building owners complying with the said MBIS notice. The repair works were completed, prior to the commencement of Condition Survey Report in July 2023, with the official date of compliance 12 September 2024. Fire Safety Directions 123.4 Fire Safety Directions all dated 5 July 2012 under section 5 of the Fire Safety (Buildings) Ordinance, Cap. 572 were served on the Building requiring the Incorporated Owners to conduct new or improvement works to the existing fire safety construction and fire service installation to the standards of various codes of practice as set out in Cap. 572. According to records available, one of the Directions has been complied with. In any event, fire hose reel and manual alarm system and sprinklers have already been installed in balcony corridors and front staircases from G/F to 2/F, which are common areas. State of Repair in General 124.Mr Benson Wong remarked that despite certain repairs have been carried out, the work nature may help to prevent building accidents but cannot prolong the useful life span of the Building to the standard of common expectations for proper habitation nowadays. He stressed that the Government’s strategic maintenance and development planning for private buildings in Hong Kong is through redevelopment, not by repeated repairs and continued maintenance of aged buildings. Mr Andrew Kung has a different view that, depending on the quality of construction of the Building, the useful life span will be extended by proper repair and maintenance works. In any event, it appears there is no dispute that given the age of the Building, the rate of wear and tear of the structural frames, components, finishes and service installations will continue to grow more rapidly with time. 125.To conclude, the Tribunal is satisfied that the Building is not liable to become dangerous imposing threats to safety in near future. Repair works are required but the scope of such and cost estimate is contentious and in dispute. The key differences in repair costs involve the external building façade and domestic units / shops / workshop internally. These matters are considered below. Repair and Reconstruction Cost Structural Frames 126.The structural repair works include hammer tapping works and repair of concrete spalling and cracking defects. The cost of proposed works as assessed by Mr Benson Wong and Mr Andrew Kung is $136,600 and $433,515 respectively. The dispute is mainly due to the different formulation of the repair works according to the respective professional opinion of the two structural assessment experts. Building Facades 127.There are 3 major disputes on the repair cost estimate of building facades. First, Mr Benson Wong opines that a steel frame covered shelter amounting to $403,200 is necessary. Mr Andrew Kung holds a different view. Covered shelter is normally required for demolition works or other heavy-duty construction works so as to protect the public during the course of works. However, the repair work proposal being examined is relatively minor in nature. The Tribunal considers that there is insufficient justification for erecting a covered shelter to enhance public safety. We agree with Mr Andrew Kung that such shelter is not required. 128.Secondly, the two structural assessment experts have employed 2 different survey specialists to conduct the same Rapid Infrared Thermographic Survey (“RITS”) of the external tiling and rendering. The two survey specialists have conducted the survey by 2 different modes of technology and it appears that each mode of technology has its own strengths and limitations. This is unsatisfactory and there is room for improvement in carrying out the assessment with a view to minimising the dispute. Should one mode of survey technology be agreed, or 2 modes of survey technology be carried out by both parties respectively, a common set of material data can be obtained for further analysis by comparing like with like, such that a more helpful professional opinion would be given to the Tribunal for consideration. The evidence now submitted is that the estimated repair area as identified by Mr Benson Wong and Mr Andrew Kung is about 350 sq m (31% of the stated total external wall) and 159.21 sq m (15% of the stated total external wall) respectively. Mr Benson Wong accordingly has allowed complete replacement of external rendering / tiling and complete painting. Mr Andrew Kung has only allowed complete replacement of tiling and complete painting but with patch repair of rendering, resulting in a difference of $488,150. According to site inspection which reveals that the overall maintenance condition of the existing building facades is relatively poor and in view of the old age of the Building, we prefer the estimate of Mr Benson Wong in this regard. 129.Thirdly, Mr Andrew Kung has not allowed for any repair works to the window surrounds in order to rectify the existing and prevent further possible water seepage below and adjoining windows. In this regard, we consider the repair work as estimated by Mr Benson Wong of $105,750 is not unreasonable and should be taken into account. 130.The submission of repair cost for “Building Facades” of Mr Benson Wong (i.e. $ 2,421,040) needs a deduction of $403,200 to reflect the Tribunal’s finding on “covered shelter” and the adjusted repair cost becomes $2,017,840. As for the cost of Mr Andrew Kung (i.e. $1,423,940), it needs addition to reflect the Tribunal’s finding on “patch repair of rendering” & “window surrounds” of $488,150 & $105,750 respectively. The adjusted repair cost of Mr Andrew Kung is $2,017,840. Roof Areas 131.The cost of proposed works as assessed by Mr Benson Wong and Mr Andrew Kung is $604,625 and $475,675 respectively. Though there is no significant difference, we agree with Mr Andrew Kung that the allowance for the complete replacement of the rendering / tiling on the inside surfaces of parapet walls to repair the defects as found is unnecessary. Thus, the repair cost of Mr Benson Wong requires deduction by $67,200 and the adjusted repair cost is $537,425. Staircases and Balcony Corridors 132.Among the various cost items, Mr Benson Wong has allowed a total estimate of $245,750 as regards the repair cost for wall surfaces, ceilings and beams soffit of the staircases, while the estimate of Mr Andrew Kung is $6,952.5. During the site inspection, we found that the general internal condition of the upper ground floor staircases was fair but the below ground staircases was rather poor. The cost estimate of Mr Andrew Kung is unreasonably low and we are of the view that an upward adjustment of $230,000 for the said sub-item is necessary to reflect the situation. 133.The total proposed works as advised by Mr Benson Wong is $794,615. As for Mr Andrew Kung, the submission (i.e. $268,406) needs an addition of $230,000 to reflect the Tribunal’s above finding. The adjusted repair cost of Mr Andrew Kung is $498,406. Domestic Units and Shops Internally 134.Mr Benson Wong has inspected 17 whereas Mr Andrew Kung has inspected 9 out of a total of the 24 domestic units. The total cost of repair works for the Units as proposed by Mr Benson Wong and Mr Andrew Kung Chan is $1,327,830 and $560,504 respectively. Mr Benson Wong has expressed the view that in general, Mr Andrew Kung has under assessed the conditions and hence, under formulated the scope of works in respect of the respective components and finishes. While the average repair cost / unit submitted by the 2 experts amounts to about $55,000 and $23,000 respectively, the Tribunal considers that both figures fall within an acceptable threshold for usual repair work of the same and thus does not require any adjustment for further consideration. 135.As regards the repair works for the remaining 6 non-domestic units, the cost estimate is $410,540 and $ 115,700 respectively. We are of the view that the dispute is mainly due to the application of different repair standards as discussed aforesaid. While the average repair cost submitted by the 2 experts amounts to about $68,000 and $19,000 per unit respectively, the Tribunal again considers both estimates fall within an acceptable threshold for usual repair work of the same, though the two figures are relatively far apart. No adjustment is required in this regard. Aboveground and Underground Drainage 136.Mr Andrew Kung has proposed a repair cost estimate of $298,150. Mr Benson Wong agrees this cost amount, but he has suggested giving an additional cost of $51,000 for general inspection and repair of existing aboveground pipework. Mr Andrew Kung has rejected this cost item. While similar inspections should have been carried out when preparing the Structural Assessment & Condition Survey Reports, we are of the view that this cost item appears unnecessary and should be disregarded. Thus, the adjusted net repair estimate of Mr Benson Wong for this item is $298,150. Remaining Cost Items 137.The two experts have no substantial dispute on the remaining items and there is no need for the Tribunal to make further findings thereon. Other Fees 138.Other Costs include “Preliminaries & Contract Contingencies” and “Professional & Supervision Fees”. Mr Benson Wong and Mr Andrew Kung have provided an addition of about 44% and 34% of the repair works cost respectively to reflect “Preliminaries and Contract Contingencies”. Given the compliance history of MBIS / MWIS Notices and Building Orders in respect of the common areas of the Building, we consider an allowance of 35% is sufficient for this item. 139.The two experts have no dispute and allow 7.5% for the “Professional Fees”. However, Mr Benson Wong has allowed an additional cost of $405,000 for “Supervision Fees” by employing a clerk-of-works with periodic supervision by a building service manager for 9 months, but Mr Andrew Kung rejects this item. We are of the view there is no need for a separate estimate of “Supervision Fees” as this could be absorbed by the “Professional Fees” to take over the scope of works. Having said that, the Tribunal considers that an overall rate of 10% is more appropriate to cover this additional works. Thus, the total fee amounts to 35% + 10% = 45%. Adjusted Repair Cost Estimate 140.The total Adjusted Repair Works Cost Estimate of the 2 experts are set out below[11]:
Reconstruction Cost 141.For reporting the State of Repair of the Building, both Mr Benson Wong and Mr Andrew Kung have no dispute on the principle of adopting an apple-to-apple comparison of the repair cost and construction cost of a new similar superstructure (“Reconstruction Cost”). The comparison is theoretical in nature with a view to forming a reasonable baseline, in monetary terms, to determine the general state of repair of the Building. 142.Mr Benson Wong having taken the professional advice of a quantity surveyor Mr K C Tang, has submitted an estimate of the Reconstruction Cost as at 1st Quarter of 2024 amounting to $27,440,000[12] . The figure has been assessed by adopting (a) the same cost elements as the repair costs; (b) the same in the physical aspects of size, height, number of storeys and designs as the existing superstructures; and (c) the same provisions for the structural frames, component, finishes and service installations for the same type of buildings developed some 65 years ago. In gist, the Reconstruction Cost is based on approximate quantities estimate excluding substructure and foundations but including fees. For the purpose of this apple-to-apple comparison exercise, which is hypothetical in nature, the Tribunal finds this approach acceptable. 143.In arriving at the Reconstruction Cost, Mr Andrew Kung[13] having taken the advice of a quantity surveyor Mr Stephen Lam has submitted an estimate by making reference to the average Unit Cost published by Rider Levett Bucknall (RLB) for “Apartment, Ordinary Residential Building”. The calculation is as below:
144.Mr K C Tang however replies that RLB has reclassified the Unit Cost starting from 4th Quarter 2022. There is a substantial increase in construction cost as compared with the 3rd Quarter 2022 and which is unreasonable. Mr Stephen Lam explains that this might be due to the relaxation of mandatory quarantine requirements and the contractor had to pay additional costs for the labour and materials to speed up the project that had been delayed during the widespread “COVID” period. 145.The index before and after the said period is as below:
While making no in principle objection to the methodology of adopting the RLB Unit Cost, Mr K C Tang is of the view that the 3rd Quarter 2022 published by RLB for “High-rise Ordinary Quality Residential Building” ranging from $19,300 - $20,400/ sq m should be more suitable for use as reference. In the Rebuttal Report of Mr Benson Wong dated 15 July 2024, Mr K C Tang has thus made an alternative assessment as a check by using the 3rd Quarter 2022 RLB index with adjustment of time factor, giving the result of $27,500,000 to $29,040,000. Mr K C Tang has concluded that the checking does reinforce his estimate as more accurate as the figures are not far apart. 146.To conclude, the submitted assessment of Mr K C Tang acting for the Applicant and Mr Stephen Lam acting for R2 & R5 are $27,440,000 and $34,689,393 respectively. We find the opinion of Mr K C Tang more persuasive and thus allow a weighted average of 0.7 vs 0.3 to give a figure of say $30,000,000 (about $21,000 / sq m of Construction Floor Area) as the Reconstruction Cost for this apple-to-apple comparison exercise. Cost Benefit 147.In market reality, sellers often address minor issues (e.g. painting & fixing leaks) to improve appeal, but major repairs (e.g. UBW reinstatement & structural fixes) may not always yield a proportional increase in sale price. While minor repairs are almost universal, major repairs are situational. When applying this concept to the exercise, the prospective cost and economic benefit of works is crucial in dictating the owners’ decision on whether or not to reject doing the repairs. 148.In various Land Compulsory Sale application judgments, the Tribunal employed a proportionality test by comparing the repair cost and reconstruction cost (the “Cost Ratio”) as the baseline. Where the respective Cost Ratio was found as excessive, the Tribunal would accept the state of repair justified redevelopment of the building as no repair proposal would be reasonably justified. 149.In some Land Compulsory Sale application decisions, particularly when the Cost Ratio has reached the arguability threshold, the comparison of repair cost with the total EUV of the building (the “EUV Ratio”) was also employed. Where the cost was found not exceeding the likely enhancement of value arising from or attributable to the repairs, the Tribunal would not accept the state of repair justified redevelopment of the building. The reason is that the owners would anticipate the repair proposal as being financially viable for implementation. 150.The Cost Ratio and the EUV Ratio will reveal the cost effectiveness and financial viability of the project respectively. For marginal cases, the repair proposal may be considered as cost effective but not financially viable, or vise versa. Under the circumstances, setting a review benchmark for both ratios respectively may assist to draw a conclusion. Cost Effectiveness 151.In giving oral evidence, both building condition experts opined that a repair cycle of the said works was 10 years. Given the general consensus of design working life of an ordinary building in Hong Kong is 50 years, completion of the repair works would represent that the design working life will be extended by 20%. A derived review benchmark for the Cost Ratio can be drawn following the same. 152.As has previously been explained, the Tribunal however considers that the review benchmark applicable to each case is a holistic and flexible one based on individual merits and locality of the building. For instance, the owner of a flat within a high-rise composite building located in an old and run down area or an industrial building may not be willing to make a higher contribution for maintenance such that the derived review benchmark of 20% is the reasonable bottom line. However, the owner of an apartment within a medium-rise purely domestic building located in a high-end residential area may expect the repair cycle will be prolonged for a few more years by means of proper routine maintenance. Under the circumstances, a reasonable review benchmark of over 20% may still be acceptable. 153.When giving oral evidence, Mr Benson Wong opined that as regards a repair cost estimate based on the usual scope of works covering both the private units internally and the outside common area of the building, the review benchmark of the Cost Ratio would be 25% and 20% for a composite building (comprising shops & domestic units) and an industrial building respectively. Mr Andrew Kung had no disagreement with this statement. The Tribunal is of the view that the review benchmark applicable to an ordinary building should be within the range of 20% to 25%. As the Building is a medium rise composite building comprising domestic, shops and workshop units located in the fringe of the Central District, we consider a review benchmark of 22% is reasonable for the subject exercise. 154.The Adjusted Repair Cost as estimated by Mr Benson Wong and Mr Andrew Kung is $ 8,800,000 and $7,200,000 respectively. Given the assessed Reconstruction Cost as adopted by the Tribunal is $30,000,000, the Cost Ratio is 29.3% and 24% respectively, both exceed the applicable review benchmark for the Building of 22%. Further, the cost estimate of Mr Benson Wong has been made following the guidelines as set out in Intelligent House and is considered by the Tribunal to be more acceptable. Thus, the Tribunal accepts the proposed repair project is not cost effective for implementation. Financial Viability 155.In the course of EUV valuation, it has been identified that among a total of 30 Units of the Building, the determined grading of internal conditions of the respective units under “Good”, “Fair” and “Poor” is “16.7%”, “70%” and “13.3%” of the total number of Units respectively. Thus, the overall internal condition of the Building on average is considered as “Fair”. After the proposed repair works are completed, all Units should be graded as “Good” representing that they are all recently refurbished and without obvious defects identified. For valuation of Units under the grading of “Fair” to “Good”, the Tribunal has already determined a value increase of 3%, and which should be the reasonable review benchmark for financial viability of this exercise. 156.Given the total EUV of the Building as assessed by the Tribunal is $201,213,000, the Adjusted Repair Cost as estimated by Mr Benson Wong and Mr Andrew Kung when compared with EUV is 4.4% and 3.6% respectively, both exceeding the review benchmark of 3%. We are of the view that the proposed repair project is not financially viable to carry out. Conclusion on State of Repair 157.The repair works are neither cost effective nor financially viable for implementation. Overall, we find that the Applicant has satisfied the requirement for “state of repair” under section 4(2)(a)(i) of the Ordinance. The redevelopment of the Lot is justified due to the state of repair of the Building. ISSUE 4 – REASONABLE STEPS TAKEN 158.The Applicant is under an obligation to take reasonable steps to negotiate on terms that are fair and reasonable for the purchase of the interest of the respondents under section 4(2)(b) of the Ordinance. Parties’ Negotiation in 2017-2018 159.Counsel of R2 and R5 refer to the parties’ previous negotiation, which took place about 5 years before the commencement of the Application on 18 January 2023, to allege that the Applicant has failed to take reasonable steps. 160.Essentially R2 and R5’s allegation is that the Applicant made offers to R2 ($13,481,600) and R5 ($45,760,000) leading to concluded agreements which the Applicant unreasonably withdrew. The Applicant contends that no agreements were concluded as such offers were made by R2 & R5 and the Applicant did not accept them. Besides, the Applicant did not sign the relevant documents and R2 & R5 returned all earnest money to the Applicant without complaint. The position of each R2, R5 and the Applicant is considered further below. 161.R2 accuses the Applicant of misleadingly suggesting that the first offer to acquire R2’s Unit was on 29 December 2022. This is factually incorrect. The Applicant’s Opening Submissions referred to only two rounds of offers made to R2. Thereafter the Applicant made two further offers immediately before and after the trial commenced, namely:
162.However, in December 2017 the Applicant, then represented by Messrs. Lui & Law (“L&L”), offered to purchase R2’s Unit at HK$13,481,600 (“R2 1st Offer”) and delivered to R2 a signed provisional agreement for sale and purchase (“PSPA”) with three other documents, namely a Supplementary Contract, an “Attachment (I)” and a licence agreement (collectively referred to as “the Ancillary Documents”), along with a cheque for HK$200,000 dated 20 December 2017 representing the initial deposit. The purchase price was specified as HK$6,894,000 in the PSPA and HK$6,587,600 as compensation for decoration and relocation expenses in Clause 1 of the Supplementary Contract, totalling HK$13,481,600. 163.On 11 June 2018, R2’s then administrator Mr. Law Wing Hang Ivanhoe (“Mr Law”) accepted the R2 1st Offer by signing the PSPA and all the Ancillary Documents (including the revised Attachment (I)) and returned them to the Applicant’s representative. R2 says that this formed a valid and binding sale and purchase agreement ("2018 S&P Agreement") for R2's Unit at HK$13,481,600. R2, Madam Ching was appointed as the administrator of the estate of Madam Lee Lim Chu upon the death of Mr. Law. 164.On 14 June 2018, L&L by letter to R2 (“L&L’s Letter”) asserted that: (a) the Applicant understood that [the Respondents] have offered to sell the Properties by executing a purported PSPA and the Applicant is not minded to accept such offer, (b) the terms of the PSPA is not acceptable to the Applicant, (c) the conditions precedent contained in the PSPA have not been fulfilled, satisfied or otherwise waived. L&L demanded the return of the HK$200,000 by 22 June 2018. Mr. Law returned the deposit. 165.Susanna Chan for the Applicant, testified that only the signed PSPA constituted an offer from the Applicant, while the Ancillary Documents were a counter-proposal by R2, which the Applicant did not accept as he did not sign on the Ancillary Documents. Further, that the unfulfilled condition precedent relieved him of any obligation to purchase R2's Unit. 166.R2 submits that the Applicant disingenuously mischaracterised the R2 1st Offer to evade liability. The R2 1st Offer was an offer from the Applicant, not the other way round. R2 accepted the offer, forming the 2018 S&P Agreement, and the Applicant’s refusal to proceed constitutes a breach, misrepresented as non-acceptance of R2’s “offer.” 167.R2 continues that the Applicant’s failure to disclose documents related to the R2 1st Offer raises serious concerns about his candor and compliance with discovery obligations. Under cross-examination, Susanna Chan admitted she should have included steps taken to acquire R2’s Unit in her first witness statement under the heading “Reasonable steps to acquire all the undivided shares in the Land”. She claimed ignorance of the requirement to disclose the R2 1st Offer, that only offers made by professionals were included and attempted to shift the blame, saying that the current application for compulsory sale was handled by solicitors and professionals. 168.R2 considers that the R2 1st Offer is clearly relevant to the trial issues. R2, Madam Ching’s witness statement dated 18 June 2024 describes the R2 1st Offer as an offer by the Applicant. Thus, the Applicant was well aware that R2 challenges his reneging on the R2 1st Offer as unreasonable. Yet, when filing a supplemental witness statement for the purpose of including offers made to R2, under “Previous Offers made by the Applicant to the 2nd and 5th Respondent”, Susanna Chan remained silent about and disclosed no documents relating to the R2 1st Offer. 169.R2 alleges that Susanna Chan’s explanations for omission of the R2 1st Offer were unsatisfactory and evasive excuses. This suggests a deliberate calculated attempt to conceal the Applicant’s unreasonable conduct surrounding the R2 1st Offer, which he knew would risk undermining his compulsory sale application. R2 invites the Tribunal to draw adverse inferences. [14] 170.R2’s case is that R2 accepted the Applicant’s offer of HK$13,481,600 for R2’s Unit by the PSPA and the Ancillary Documents on 11 June 2018, forming the 2018 S&P Agreement. The Applicant’s actions in relation to the R2 1st Offer demonstrate a pattern of unreasonable and unfair conduct toward R2:
171.R2 urges the Tribunal to scrutinise the Applicant’s conduct and not lightly accept his acts as reasonable because the Tribunal serves as the final gatekeeper before the minority’s owner’s right to private ownership of property will be overridden by the Applicant.[15] Ms Liu submits that the Applicant's actions fall far short of the reasonable steps required under section 4(2)(b) of the Ordinance, risking significant prejudice to R2 should the Application be allowed. 172.R5 makes similar submissions to R2 regarding earlier undisclosed offers. The Applicant had made 5 rounds of offers to R5 for the purchase of B/E and B&SB/F, namely:-
173.R5, Mr Au referred to the PSPA and receipt of deposits relating to the R5 1st Offer in his witness statement, yet it was not mentioned in Susana Chan’s witness statements, nor the Applicant’s Opening Submissions. Save for the particulars of the subject property, purchase price and compensation amount, R2 and R5 signed an identical set of documents and executed an identical PSPA dated 11 June 2018 with the Applicant, evidencing the R5 1st Offer. The documents were only produced by the Applicant upon commencement of trial. 174.By the R5 1st Offer the Applicant promised to pay HK$16,760,000 to R5 on the transaction date as compensation for decoration and relocation expenses incurred for the property (“the relocation expenses”) together with the consideration of HK$29,000,000 transaction price specified in the PSPA signed on 11 July 2018, totalling HK$45,760,000. 175.Two cheques of HK$200,000 each, totaling HK$400,000, both dated 20 December 2017 issued to Lee Nui were returned to the Estate Agent prior to 15 June 2018. R5 produced WhatsApp screenshot records evidencing that the two cheques were returned before the 19 June 2018 “deadline” to meet the 80% acquisition threshold. R5 considers the Applicant’s demand for the return of the HK$400,000 earnest money was in breach of Attachment 1. This reflects the Applicant’s deliberate selective conduct, unfairly prejudicing R5. 176.Mr Au during cross-examination denied that the total consideration of HK$45,760,000 was an offer given by his late mother Lee Nui. He explained that prior to the signing of PSPA, negotiations had been carried out and the offer was made by the Applicant to Lee Nui. The reason why the two cheques representing the earnest money were returned to the Applicant was that he believed he had no way “but to be submissive” saying “we cannot just protest against it”. 177.However, contrary to the cancellation procedure expressly stipulated in Attachment 1, there is no evidence that the Applicant had issued any written notice to R5, at any time, regarding cancellation of the PSPA. This is in contrast to R2, who received the L&L’s Letter dated 14 June 2018, which might serve as a written notice. Cancelling the PSPA without a written notice was in breach of clause 6 of Attachment 1. 178.R5 submits that the Applicant exhibited no genuine intention or willingness to purchase B/E and B&SB/F and be bound by contractual obligations, as demonstrated by his attempt to conceal the R5 1st Offer, which was a reasonable offer that he unreasonably withdrew. Accordingly, R5 invites the Tribunal to find that the Applicant has failed to take reasonable steps to acquire R5’s interest in the property. 179.R5 also seeks to draw inferences as to the area of R5s property which was included in the R5 1st Offer based on the consideration of HK$45,760,000. As that was almost 54% higher than that of the subsequent offer of HK$20,622,000 in 2022, he says it is only reasonable to infer that the Applicant had made the R5 1st Offer on the understanding and acknowledgment that at least part of the encroached area outside the assignment plan by R5 was to be included in the effective area of B/E & B&SB/F. 180.The Applicant’s intention to purchase not only areas specified in the assignment plan is said to be shown by Attachment 1, where he as purchaser acknowledges 4 repair orders, among which C/TA/000982/18/HK relates to a metal gate at G/F leading from G/F to the basement floor, which was installed at the common area, instead of requesting R5 to reinstate unauthorised building works. 181.R5 seeks to distinguish Capital Well Ltd v Bond Star Development Ltd (2005) 8 HKCFAR 578 at paragraph 33, which held that the Tribunal does not need to determine disputes about correct valuation principles to assess the offers. Here the unreasonableness of the subsequent offers made by the Applicant to R5 concerns the consistency of the basis of valuation. The R5 1st Offer appears to have included at least part of the encroached areas outside the assignment plan, as reflected in its significantly higher consideration; while subsequent offers, excluded such areas, resulting in a substantial reduction in offers considerations. 182.As such, R5 invites the Tribunal to find that the subsequent offers were not reasonable. If the Tribunal is satisfied that the Applicant has not taken reasonable steps to acquire R5’s undivided shares, no order for sale may be granted. 183.In our view neither the 2018 negotiations, nor the R5 1st Offer, are material in the determination of the area of R5’s property. The Tribunal has determined the material area for the purpose of this Application as set out herein above. The Tribunal does not accept R5’s submissions regarding consistency of the basis of valuation, that the difference in amount of any offer reflects what area was or was not included or that such matters establish subsequent offers were not reasonable. 184.The Applicant says that he had made 4 rounds of offers, each accompanied by KF’s advice letter. Then his most recent offer to R5 dated 27 May 2025 (Exhibit A8 produced during the trial) reflected Mr Alnwick Chan of KF’s fall back assessment taking into account unauthorised areas. None of these was accepted. Further, in 2024 the Applicant conducted mediation with R2 and R5 but no settlement was reached. The Applicant maintains these matters are sufficient to show that he took reasonable steps to acquire the Respondents’ Units in accordance with section 4(2)(b) of the Ordinance. 185.Mr Lee submits that negotiation efforts long before the present Application involving an earlier higher offer (from a minority), are of little or no relevance when the Applicant made other offers, including after the Application commenced. 186.Whether or not the minority owners have missed the opportunity to accept an earlier (higher) offer is irrelevant to whether the “reasonable steps” requirement was satisfied.[16] The suggestion that the Applicant was exploiting market down turns must also be rejected. The Applicant could not predict market movement. Such arguments have been rejected by the Tribunal in the past.[17] 187.The Applicant objects to and denies all allegations made by the Respondents of any misconduct, be it deliberate mischaracterisation of an offer, misrepresentation to mislead R2 or R5 into returning the earnest money or deposits or concealment, in relation to the 2017-2018 negotiations. The Applicant maintains that no agreement on price was reached between the parties. No agreement had been concluded by simultaneous execution of the PSPA and the Supplementary Contract. Consequently there was no concluded agreement. The Applicant’s then solicitor’s L&L Letter dated 14 June 2018 to R2 rejected the offers and sought refund of the earnest money. Further, the 80% undivided share requirement and condition precedent could not be met. The Applicant was entitled rely on the condition precedent notwithstanding that it was 5 days before the last date for satisfying the condition precedent. In any event, the Applicant was entitled to withdraw at any time without the need to rely on non-fulfillment of the condition precedent. 188.It is not disputed that both R2 and R5 duly refunded all earnest money or deposits. Mr Lee submits that it is clear that the parties fully acknowledged that there was no agreement or deal at all. We accept that submission, upon return of the earnest money or deposits. Further, there is no evidence that the R2 or R5 pursued any claim for loss or breach of agreement. The Applicant submits the 2017-2018 negotiations or offers are simply not relevant. 189.In gist, the Applicant took steps to negotiate in 2017-2018 and the purchase price as initially indicated was considered reasonable by R2 & R5. Unfortunately, the offers and deal proposed ultimately failed. We are not satisfied that there was a concluded agreement, but in any event, each R2 and R5 returned the earnest money or deposit and accepted that there was no agreement with the Applicant. If any party considered that a valid contract had been made or that there was a binding agreement, action should have been taken to enforce such agreement, rather than awaiting this Application. Rather than seeking to enforce the 1st Offers, R2 and R5 rely on the events of 2017 and 2018 to show that the Applicant has not satisfied section 4(2)(b) of the Ordinance. Actions relevant to the Application 190.Shortly prior to the commencement of the Application in January 2023, the Applicant had through its solicitors, Messrs So, Lung and Associates, made an offer to each of the Respondents by letter dated 29 December 2022. The offer was made on the pro-rata share of RDV of the Lot by making reference to EUV of the corresponding respondents’ unit and total EUV of the Building based on the advice of KF as follows: 191.In assessing the reasonableness of the offers, we have considered the Court of Final Appeal’s decision in Capital Well Ltd, particularly paragraphs 33 and 36, where Ribeiro PJ held: -
192.We accept that the Applicant’s respective offer prices fall within the range of what may broadly be regarded as fair and reasonable compensation for the interest in question. In these proceedings, there is no evidence that the valuations of KF were basically unreliable. Although we may not agree with each and every item in KF’ assessments, it is a matter of differences in opinion and the valuations before us have no serious flaws or fault. 193.The burden is on the Applicant to establish that he has taken reasonable steps in terms of section 4(2)(b) of the Ordinance. It is a matter for the Applicant to determine the evidence he shall adduce to discharge that burden. The Applicant was not bound to rely upon the events of 2017 and 2018. We also have regard to all offers and steps since commencing the Application. On the evidence the Applicant has discharged that burden. We find that the events of 2017 and 2018, be it the 1st Offers, their quantum, conduct of the Applicant (including his legal advisers), or otherwise, do not negate reasonable steps taken subsequently. 194.Thus, we are satisfied that the Applicant has taken reasonable steps to acquire the Respondents’ properties in accordance with section 4(2)(b) of the Ordinance. ISSUE 5 – RESERVE PRICE FOR THE PUBLIC AUCTION 195.Pursuant to section 5(1) of the Ordinance, if an order for sale is granted and the trustees under the order have complied with section 7(1) in respect of the Lot, the Lot shall be sold by public auction subject to a reserve price, which takes into account the redevelopment potential of the lot on its own. 196.Both valuation experts have agreed to adopt residual valuation method and updated their respective RDV assessment of the Lot. The Valuation Date applied by KF and Mr C W Wong is 15 April 2025 and 18 April 2025 respectively. They consider that the 2 dates have no material difference and that we shall apply 18 April 2025 as the date of valuation (the “RDV Date of Valuation”). 197.The agreed factual information for assessment of RDV of the Lot is summarised as follows:
Hypothetical Development 198.The agreed hypothetical schemes as submitted by the parties is summarised as follows[20]:
Gross Development value – GDV Hypothetical Reference Ground Floor Shop 199.The valuation experts have agreed that under the hypothetical development, there are 2 ground floor shops namely Shop A and Shop B having a saleable area of 98.19 sq m and 137.06 sq m respectively. Shop A is selected as the Reference Unit and the agreed Reference Unit Rate is $383,500 / sq m. While Shop A and Shop B have similar layout, the size of Shop B is larger than Shop A requiring an adjustment for “size” factor. The size adjustment applied by KF and Mr C W Wong is “-6%” and “-3.9%” respectively. We prefer the threshold approach of KF and thus “-6%” is taken. GDV of Ground Floor Shops 200.GDV of Ground Floor Shops is assessed as below:
The value as assessed by FK and Mr C W Wong is about $87M and $88M respectively for reference. Hypothetical Reference Domestic Unit 201.For calculation of the GDV, KF and Mr C W Wong have selected the unit on 13/F as the Hypothetical Reference Domestic Unit. The saleable area is about 34 sq m having a headroom of 3.15 m and an open view over GS. Transactions selected for Hypothetical Reference Domestic Unit 202.The two valuation experts have identified a number of transactions covering 4 Developments, with reference number namely, Development A (No, 42 Tung Street); B (Caine Hill, No, 73 Caine Road); C (The Pierre, No. 1 Coronation Terrace); and D (Upper Central, No. 48 Caine Road). All these transactions have basically met the general selection criteria including the location, age or use of premises for direct comparison. The valuers however have disagreement on the selection of some of these transactions for direct comparison. In gist and first, KF does not agree to adopt Development A as a comparable development and secondly, Mr C W Wong does not agree to adopt those transactions completed too distant in time in the exercise. 203.As for Development A, KF claims that it is a boutique development with one unit per floor served by one lift. Mr Alnwick Chan submitted evidence at trial[21] to demonstrate that the adjusted construction cost of Development A was much higher than that of Development B and Development C of over 43% and 68% respectively. Thus, KF opines that Development A targets a significantly different market and should be rejected. Mr C W Wong submits that Development A is in fact the closest comparable available in terms of location and environment, and there is no reason to exclude it. We are of the view that the ultimate construction cost of a development is highly affected by certain subjective factors that are difficult to be verified and analysed objectively by an outsider. Thus, we are not convinced by Mr Alnwick Chan that Development A is not a comparable development. However, as the transaction price of the respective units of Development A may have reflected the factor of “higher construction cost aiming for more superior quality” resulting to an inflated value, the Tribunal has decided to assign less average weighting for Development A as compared with other Developments. 204.The identified comparable developments are new buildings such that transaction of units within the respective development should have the similar tone of value over the marketing period. Thus, the Tribunal accepts the opinion of Mr C W Wong that only the more recent transactions of the respective development should be selected for detailed analysis. In this regard and for this exercise, we draw the line at transactions not earlier than November 2024, only they are to be adopted for direct comparison. Adjustments of Domestic Comparables 205.The adjustment of valuation factors adopted by the Tribunal are summarised below:-
206.The adjusted unit rate of the respective development is in Table (1) of Appendix II. The average adjusted unit rate of the respective development is as below:-
GDV of Domestic Units 207.Computation of GDV of the domestic units is in Table (2) of Appendix II with a value of $625,000,000. For reference, the value as assessed by KF and Mr C W Wong is about $587M and $657M respectively. Total GDV 208.The total GDV as assessed by KF and Mr C W Wong respectively is about $674M and $745M. The value as assessed by the Tribunal is $87,000,000 + $625,000,000 = $712,000,000. Other RDV Parameters for Residual Valuation Agreed RDV Parameters 209.The RDV parameters for residual valuation as agreed by the two valuation experts are as below:
Interest Rate 210.Initially, KF adopts an interest rate of 5.875%, later revised to 5.25%. Mr C W Wong claims that the investment risk of the development is relatively low due to its small scale and the good demand for new flat at the locality. After rounds of negotiation, Mr C W Wong maintains his view of adopting an interest rate of 5%. The Tribunal is of the view that though the trend of interest rate is going down, the pace is not as smooth as expected. Having considered the property market has lack of momentum to recover rapidly, we accept the opinion of KF adopting an interest rate of 5.25%. For reference, we note that the HSBC Best Lending Rate during the period as from 20 December 2024 up to the RDV Date of Valuation was 5.25%. Developer’s Profit 211.Mr C W Wong adopts a Developer’s Profit of 15%, which rate he considers would be able to reflect increasingly optimistic domestic flat market and the shortage of supply in the locality. KF however has the opinion that the domestic price indices are consistently falling, and he has revised his initial assumption of adopting 18% to 20% as now submitted. The Tribunal takes a balanced view and accepts a rate of 18% since the property market is relatively stable as compared with the period of early 2020s. Construction Period 212.The two valuation experts dispute the assumed construction period. Mr C W Wong adopts a period of 2 years. KF considers a period of 2.5 years is more reasonable, the main reason being that this section of Gough Street immediately fronting the Lot is not wide enough to have construction vehicles moving in and out of the site smoothly. Some construction works may not be able to be carried out during daytime and thus, a longer than normal construction period is anticipated. The Tribunal considers the opinion of KF reasonable and accepts a period of 2.5 years. Marketing Cost 213.Mr C W Wong applies the usual rate of 3% for cost of marketing, while KF adopts a rate of 4% reflecting a general pessimistic market sentiment at present. We are not convinced that applying a higher marketing cost will ensure selling the flat units more smoothly. The reason is that there is shortage of new supply in the locality while the demand for new premises is relatively strong. The overall market sentiment is the most important factor and particularly whether the setting of price level is realistic or not. We consider a rate of 3% is more reasonable. RDV OF THE LOT AND RESERVE PRICE 214.Based on the above determinations, the residual valuation of the Lot is commutated in Table (3) of Appendix II herein. RDV of the Lot as at 18 April 2025 is assessed at $277,000,000 (accommodation value of approx. $78,000/sq m). For reference, RDV as assessed by KF and Mr C W Wong is $239,100,000 and $327,000,000 respectively. 215.We adopt the assessed RDV of $277,000,000 as the Reserve Price for the auction of the Lot. INCIDENTAL MATTERS 216.The Applicant proposes to appoint Mr Chow Wing Kin Anthony and Ms Chow Suk Han Anna, being consultants of Messrs. Guantao & Chow, Solicitors & Notaries, as the sale trustees. Based on the information on their background and experience as set out in their letter dated 24 April 2025, we 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 to be reasonable. 217.The Applicant has prepared a set of draft Particulars and Conditions of Sale of the Lots. Subject to any amendment that may become necessary as a result of our 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. DETERMINATION AND ORDERS 218.The Tribunal having considered all of the evidence and the submissions of each party, is satisfied that redevelopment of the Lot is justified due to “age” and “state of repair” of the Building and that the Applicant has taken reasonable steps to acquire all the undivided shares in the Lot including those of the Respondents. We find that the Applicant has satisfied the requirements under the Ordinance and is entitled to an order for sale of the Lot. We grant an order for sale of the Lot. 219.Therefore we make the following orders:
COSTS 220.In accordance with the compensation approach as determined Good Faith Properties Ltd & Ors v Cibean Development Co Ltd [2014] 5 HKLRD 534, the Respondents are entitled to their costs notwithstanding the outcome of the application. 221.We make a costs order nisi that:
222.We thank Counsel for their assistance.
Mr Jonathan Lee, instructed by So, Lung & Associates, for the applicant Ms Abigail Liu, instructed by Simon Ho & Co., for the 2nd respondent Ms Phyllis Lee, instructed by K.B. Chau & Co., for the 5th respondent Appendix I Table (1) – Selected Domestic Comparables for Market Value (EUV) Assessment
Table (2) – Adjusted Unit Rate of Domestic Comparables for Market Value (EUV) Assessment
Table (3) – Market Value (EUV) Adjustment for Upper Floor Domestic Units (Reference Domestic Unit: 3/F, Block C of 39 Gough Street)
Table (4) – Market Value (EUV) Assessment of Upper Floor Domestic Units (Date of Valuation: 19 December 2022)
Table (5) – Selected G/F Shop Comparables for Market Value (EUV) Assessment
Table (6) – Adjusted Unit Rate of G/F Shop Comparable (Reference G/F Shop: G/F on Block C & D as one unit)
Table (7) – Market value (EUV) Assessment of Ground Floor Units (Date of Valuation: 19 December 2022)
Table (8) – Existing Status of Basement Unit on 21 May 2025[25]
Appendix II Table (1) – Adjusted Unit Rate of Transactions for RDV Assessment (Date of Valuation: 18 April 2025) Development A: No. 42 Tung Street, OP in 2023
Development B: Caine Hill, No. 73 Caine Road, OP in 2023
Development C: The Pierre, No. 1 Coronation Terrace, OP in 2014
Development D: Upper Central, No.48 Caine Road, OP in 2020
Table (2) - GDV of Domestic Units
Table (3) – RDV Assessment (Date of Valuation: 18 April 2025) Residual Valuation
[1] (C2/300-312) [2] (D1-36) [3] (E1/151) [4] (E1/152-161) [5] (Exhibit No. AR4 and Consolidated Tables / 5) [6] (F5/1056-1073) [7] (E/2575-2609) [8] (E1/38) [9] (E11/2612) [10] (E5/1174-1178) [11] (E11/2683) [12] (E11/2712) [13] (E11/2689) [14] Tullett & Tokyo International Securities Ltd v APC Securities Co. Ltd [2001] 2 HKC 713 per Le Pichon JA at 723B to G. [15] Good Faith Properties Ltd v Cibean Development Co. Ltd (CA) [2014] 5 HKLRD 534 at §13. [16] Kerryford Holdings v Winrise Corporation Ltd (LDCS 8000/2022, 21.8.2025) §219. [17] Kerryford Holdings, Winland Property Ltd v Chang Sai Ho (LDCS 7000/2022, 28.3.2024), [2024] HKLdt 27. [18] (C2/386-394) [19] (C3/530-547) [20] (D3/549-550) [21] (Exhibit No. A6) [22] Cap 545 [23] See: SC’s Supplemental Witness Statement dated 6.5.2025 at §13 [B1/29.5]. [24] [C3/576-605]; SC’s Supplemental Witness Statement dated 6.5.2025 at §12 [B1/29.5]. [25] (According to Exhibit No, AR4 - as prepared and agreed by both sides’ building condition experts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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