Lai Chi Kok Amusement Park Co, Ltd v. Ng Chi Chung Appointed By Order Dated 29 February 2024 To Represent the Estate of Ng Tsz Wa, Alias Ng Sze Wah, Deceased and Others
|
HCMP 512/2022 and HCMP 513/2022 and (Heard Together) [2026] HKCFI 4693 HCMP 512/2022 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 512 OF 2022 ________________________
__________________ BETWEEN
________________________ AND HCMP 513/2022 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 513 OF 2022 ________________________
__________________ BETWEEN
________________________ AND HCMP 514/2022 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 514 OF 2022 ________________________
__________________ BETWEEN
________________________ AND HCMP 826/2022 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 826 OF 2022 ________________________
__________________ BETWEEN
________________________ (Heard Together)
________________________ J U D G M E N T ________________________ Introduction 1.These four actions concern four lots of land in Kwai Chung, Tsuen Wan, New Territories (collectively “the Lands”) and involve the same parties. At the commencement of these four actions, Lai Chi Kok Amusement Park Company, Limited (“the Company”), the late Mr Ng Sze Wah (“the late Father”), Mr Ng Tsz Wan (“Wan”), Mr Ng Cho Yan (“Yan”) and Ms Ng Wai Yi (“Yi”) were co-owners of the Lands. The Company brought these actions to dissolve the co-ownership pursuant to the Partition Ordinance, Cap 352 (“the PO”). 2.The Company commenced the first three actions under HCMP 512/2022, HCMP 513/2022 and HCMP 514/2022 by originating summonses (collectively “the 512-514 OSs”) on 3 May 2022. 3.The late Father passed away on 17 June 2022. 4.By an originating summons dated 29 June 2022 (“the 826 OS”), the Company applied for an order for partition and alternatively an order for sale. 5.By an order dated 29 February 2024, Mr Ng Chi Chung (“Mr Ng”) was appointed to represent the estate of the late Father. 6.By an assignment dated 9 July 2025, the Company acquired the shares of Wan, Yan and Yi in the Lands at the consideration of HK$2,468,500. 7.On 18 September 2025, the Company discontinued the four actions against Wan, Yan and Yi. 8.The Company now holds 5/6 share of the Lands and the estate of the late Father holds 1/6 share of the Lands. 9.Neither party is contented with the co-ownership. Whilst the Company prays for an order for sale, Mr Ng is desirous of a partition. This is the major controversy of this trial. 10.By an order of Cheng J dated 21 March 2023, these four actions shall be tried together before the same judge. Mr Lau together with Mr Hui appeared for the Company and Mr Ho together with Mr Fung appeared for Mr Ng at trial. Undisputed background facts 11.The following background facts are gleaned from the Agreed Chronology and the Statement of Agreed Facts filed by the parties. 12.The Lands consist of the following pieces or parcels of ground registered in the Land Registry:
13.The Lands are classified as “Agricultural” under the Government Lease. They are located in Kau Wa Keng Village which is in the northern side of Mei Foo. The Lands are surrounded by several parcels of private lot and government land. 14.Pursuant to the Kwai Chung Outline Zoning Plan No. S/KC/32, the Lands except Lot 1327 fall within an area zoned as “Comprehensive Development Area” (“CDA”). Lot 1327 is within an area zoned as “Green Belt”. 15.The area of the Lands, according to the expert witnesses of the parties, is as follows:
16.In 1962, the Lands were held by the late Father and Wan (joint tenant within 1/3 tenants in common), one Ng Sze Mui (1/3) and one Ng Kwai Tsing (1/3). 17.On or about 20 December 1974, Ng Sze Mui sold her 1/3 share of the Subject Lots to Cornhill Enterprises Limited (“Cornhill”) which is, as with the Company, an affiliate and associate company of Far East Hotel and Entertainment Limited (“Far East Group”). On the same date, Cornhill executed a declaration of trust to the effect that it holds the 1/3 interest in the Lands on trust for the Company. 18.The Far East Group is a listed company in the Hong Kong Stock Exchange. 19.On 26 January 1978, the administrators of Ng Kwai Tsing’s estate (i.e. his wife Tang Yee Mui and his son Ng Wai Ming) sold Ng Kwai Tsing’s 1/3 share of the Lands to Cornhill. 20.On or around 26 January 1978, a declaration of trust was made by Cornhill in favour of the Company in respect of its newly acquired 1/3 share in the Lands; 21.On 23 June 2021, pursuant to a vesting assignment, the interests of Cornhill in the Lands were vested in the Company. 22.On 3 May 2022, the Company instituted the 512-514 OSs against the late Father, Wan, Yan and Yi. 23.On 29 June 2022, the Company commenced the proceedings under HCMP 826/2022. 24.In or about January 2022, Cornhill and the Company jointly made an application to the Town Planning Board for planning permission (“the Application”) (Application no. A/KC/489). The Application concerned a residential development project at the Lands and their surrounding plots of land for a total site area of 48,313 sqm covering a total of 5,973 residential flats. 25.In or about July 2023, the Application was approved by the Town Planning Board subject to certain conditions. The permission should be valid until 14 July 2027. 26.From 2021 to 2024, the Company received a total licence fee of HK$6,600 in respect of Lot 1316 and another amount of licence fee of HK$3,600 from 2022 to 2025 for Lot RP1355. Agreed list of issues 27.The following issues have been identified by the parties:
Relevant legal principles 28.The relevant statutory provisions are included in the PO. The preamble of the PO reads,
29.Section 2 of the PO empowers the court, where any property in land is held by 2 or more persons, whether as joint tenants or as tenants in common, may (a) make an order under s.4 for a partition of the property; (b) make an order under s.6 for a sale of the property; or (c) refuse to make any order. 30.Section 4 provides,
31.Section 6 provides,
32.Both Mr Lau and Mr Ho refer to Wong Chun Kei v Poon Vai Ching [2007] 1 HKLRD 825 in which Mr Recorder Joseph Fok (as he then was) made a comprehensive review of the legal principles relating to applications made under the PO. 33.The material facts of Wong Chun Kei can be briefly outlined as follows. The plaintiffs and defendants were co-owners, as tenants in common, of a residential property known as Villa Splendour, comprising 12 flats and associated carparking spaces, each holding an equal undivided 1/12 share. The property was subject to a Deed of Mutual Covenant granting each co-owner exclusive use and occupation of their respective flat and carparking space. 34.The property was in a state of disrepair, with expert evidence indicating substantial renovation costs, but the flats remained habitable and capable of refurbishment. 35.The plaintiffs had entered into conditional sale and purchase agreements with a property developer to sell their flats, contingent upon obtaining a court order for sale of the property as a whole pursuant to section 6(1) or alternatively section 6(3), of the PO. 36.The defendants opposed the application for sale, with one defendant in occupation of their flat and expressing sentimental attachment, and another defendant family residing in their flat as their home. 37.At the end, the learned Recorder refused to make any order. 38.The learned Recorder cited extensively the judgment of Trainor J in Pun Jong Sau & Others v Poon Wing Kong & Others [1980] HKLR 662. As explained by the learned Recorder, Trainor J in Pun Jong Sau examined the history of the development of the law pertaining to partition in England and Hong Kong in order to ascertain the intention behind the legislative scheme under the PO. 39.The following passage of the position taken by Mr Ng:
40.The learned Recorder relied on the following passage in Pun Jong Sau as well at §87,
41.The learned Recorder went on to cite the following passage in the judgment of Briggs CJ sitting at first instance in Fook Sun Enterprises Co Ltd v Cromwell Investment Co Ltd & Others [1973-1976] HKC 335 at p.337 H-I at §16:
42.The learned Recorder then agreed the following propositions to be fair and accurate statements of the law as regards the court’s jurisdiction when faced with an application for partition or sale under the PO at §18:
43.Relying on the foregoing propositions, Mr Ho submits that the Company must show that it has no other remedy to get rid of the co-ownership before it can ask for an order for partition or sale. 44.I am unable to accept this submission. 45.I believe that the court has a wide discretion in applications made under the PO and no mechanical approach should be adopted. The court should take a holistic view of the matter and must take into account the whole circumstances before exercising the jurisdiction to choose which course to take under section 2. The availability of a remedy other than a partition or a sale does not necessarily oblige the court to refuse to order a partition or a sale though it is undoubtedly a weighty factor in the balance. 46.In Wong Chun Kei, the learned Recorder, at §87, found that the plaintiffs were not in a situation in which they were forced to remain unwilling co-owners of the property and in fact they had the ability to unshackle themselves from the incidents of co-ownership. They did not sell their flats individually without a court order or the consent of the defendants merely because of the financial advantages that have been offered to them by the developer. 47.The learned Recorder rejected the submission of the defendants’ counsel that given this finding, no order for partition or sale should be made. At §89, the learned Recorder held that the mere fact that the plaintiffs can sell their flats individually does not mean that the court lacks jurisdiction to make an order for partition or sale under the PO. He continued at §90 to say that it was a factor to be taken into account but does not of itself deprive the court of jurisdiction to make any of the orders available under section 2 of the PO. 48.At §95, the learned Recorder pointed out that where the unwilling co-owner can terminate his co-ownership otherwise than by way of partition or sale, the court must give considerable weight to that factor. 49.Wong Chun Kei has been commonly cited by the courts when dealing with applications made under the PO. In Silver Wealth Capital Investment Ltd (銀康創富有限公司) v Lai Wai Cheun (黎惠泉) & Anor [2015] 4 HKC 191, Chow J (as he then was) approved the propositions stated in Wong Chun Kei (at §20). 50.In that case, it was common ground that partition was impracticable. It is worthy of note that the judge first considered the issue of hardship if an order for sale was made before considering the availability of other remedies. The judge concluded that a sale would result in very great hardship to the opposing co-owner and so he decided against it (§28). 51.The judge went on to conclude that there was a market for the sale and purchase of undivided interests in a small single shop in an old district in Hong Kong but the plaintiff did not take any step to look for a buyer for its undivided interests in the subject property. Hence, on this additional ground, the judge refused to make an order for sale. A summary of the factual evidence of the Company 52.The factual evidence of the Company emanated from Madam Chan who is an officer of Far East Group. Madam Chan made 3 affirmations in each of the four actions and she testified at the trial. 53.Madam Chan gave an account of the undisputed background facts in her affirmations including the devolution of titles to the Lands. 54.Madam Chan says that the Lands has been left vacant and unused since at least 1994. This is supported by the expert evidence. The Company has managed the Lands by conducting inspections, erecting fences to prevent trespassers, posting notices and taking legal action to recover possession from trespassers. The Company bore all the management expenses alone due to the indifference or absenteeism of all the other co-owners. 55.Madam Chan further says that the Company has attempted to negotiate with the co-owners with offers to buy their interest in the Lands out. Such attempts are evidenced by a letter dated 1 November 2021 (“the 11/2021 Letter”) and another letter dated 13 September 2023. However, those offers were either ignored or rejected. 56.Madam Chan explains that there is a change of the position of the Company in respect of Lot RP 1355. At the very outset, the Company primarily asked for partition in the 826 OS. In her affirmation in support of the 826 OS, she disclosed that the Company instructed Land Marker (1980) H K Co Ltd (“Land Marker”) to study the feasibility of a physical partition of Lot RP 1355. 57.Land Marker came up with a division which could fairly apportion the lot into two halves. One half commands the size of 763.6 sq m out of the total area proportionate to 2/3 share of the lot whilst another half commands the size of 381.8 sq m proportionate to 1/3 share of the lot. It was proposed that the Company should keep the former and all the defendants should keep the latter. 58.However, in her second affirmation, she referred to the call-over hearing of the 826 OS on 18 June 2024 in which counsel for the Company indicated to this court that the Company no longer sought an order for partition in respect of Lot RP1355. It was also submitted that the layout of the lot and the structures located on the lot would render it difficult to be partitioned. A summary of the factual evidence of Mr Ng 59.Mr Ng’s affirmations contain a large quantity of irrelevant matters and wide-ranging accusations against the Company. These matters have no bearing on the list of issues agreed by his counsel. 60.His relevant evidence relating to the applications of the Company is summarized as follows. 61.Mr Ng was a teacher and now is a retiree. He is in his mid- sixties. 62.Mr Ng and his family are indigenous inhabitants of Kau Wah Keng Village, with a long-standing connection to the Lands. Mr Ng regarded the Lands as ancestral property inherited from his great-grandfather and family heirloom intended to be passed down through generations. 63.Mr Ng claims that the family tradition emphasizes the importance of retaining the ancestral lands within the family and selling shares to outsiders is viewed as disrespectful to family tradition and ancestral spirits. Mr Ng recounts that previous sales by other family members to the plaintiff’s group were strongly criticized within the family. 64.His sibling and he applied to build small houses on the Lands under the Small House Policy in the 1980s but their applications were unsuccessful due to government development plans and zoning changes. 65.Mr Ng claims that, for nearly 50 years, the Company and its associated companies took no action to manage or develop the Lands and they did not communicate with his family regarding the use or management of the Lands. 66.Mr Ng complains that in 2014, fences were erected around several lots including Lot RP1355, Lot 1348 and Lot 1316 by the Company or its agents without the consent of the late Father or other family co-owners. Signs were posted naming only some of the co-owners and padlocks were installed. Although they were provided with the keys, they were not allowed access and his family was effectively excluded from the Lands. 67.Mr Ng alleges recurring incidents from 2019 onwards where the late Father was allegedly harassed by individuals claiming to act for the Company or Far East Group, including unsolicited visits, phone calls, and notes urging the sale of the Lands. Mr Ng claims that these threatening actions caused him distress. 68.Mr Ng denies that his family was indifferent or absentee stating that his late parents lived near the Lands for their entire lives and that the Lands hold significant sentimental value. 69.Mr Ng accepts that he has received the 11/2021 Letter. He found that the purchase price offered to the late Father was exceedingly and unreasonably low and the Company was not genuine in the negotiation. 70.Mr Ng gathers that the Company has made a planning permission application and had a development scheme to construct a large private housing estate with a total of 14 residential blocks consisting of 5,973 residential flats and various community facilities in four phases (“the Development Scheme”). Lot 1316, Lot 1348 and Lot RP1355 are situated at Phase 1A of the development scheme. The Company has acquired all other lots located at Phase 1A except the said three lots. Mr Ng asserts that despite its clear intention to develop the said three lots, the Company did not properly embark on any bona fide negotiation with the late Father before his demise. Instead, the Company deployed underhanded tactics to exert pressure on him by way of harassment and threats. 71.Mr Ng asserts that if the court grants an order for sale by public auction, there will likely be no other potential buyers in the market in view of the Development Scheme. 72.In the circumstances, Mr Ng maintains that the conduct of the Company is oppressive and the present proceedings are an attempt to force a sale at an undervalue. 73.Mr Ng stresses that the Development Scheme largely falls within the village environ (“VE”) of Kau Wa Keng and lands with the VE are primarily preserved for small house development by indigenous villagers under the Small House Policy. He claims that he being an indigenous male villager is entitled to apply to build a small house. 74.The primary position of Mr Ng is that the court should dismiss the applications of the Company under the PO. After the commencement of the trial, through his solicitors, Mr Ng made an open offer in a letter dated 8 May 2026 (“the Open Offer”). The Open Offer contains the following terms:
75.By a letter of the same date issued by Messrs. Woo Kwan Lee & Lo (“WKLL”) acting for the Company, the Open Offer was rejected. A counter proposal of buying out all the interests of Mr Ng in the Lands was made. Apparently, it was rejected too. Practicability of partition of the Lands 76.To resolve the first agreed issue, I start with the question as to practicability of partition of the Lands. There is no agreement between the parties on this issue. 77.In her affirmations, Madam Chan says nothing about the feasibility of partition of the Lands except Lot RP1355. As related above, for Lot RP1355, Land Marker made a proposal of how this lot could be divided into two parts (“the Land Marker Proposal”). 78.In cross-examination, Madam Chan did not accept that partition was feasible. She claimed that Lot 1316 and Lot 1327 are too small to be partitioned and Lot RP1355 is of an irregular shape and she had no idea how partition could be done. She also said that partitioning of the Lands would waste much money and time. She said she did not know whether the Company had considered the feasibility of partitioning Lot RP1355 subsequent to its acquisition of the interests of the other co-owners in 2024. 79.In his opening submission, Mr Ho takes the position that the Company had previously asked for partition and so partition is not impracticable. The threshold for an order for sale is not met and all the OSs should be dismissed accordingly. 80.Mr Ho submits that partition is a less intrusive and viable alternative to an order for sale and should always be the first choice. However, as I understand his submissions, Mr Ng does not expressly seek an order for partition. He merely relies on the practicability of partition as his core argument against the application of the Company for an order for sale. 81.In his affirmations, Mr Ng actually has not said anything about partition. Nor has he adduced any evidence to show that partition is practicable. He has not responded to the Land Marker Proposal and he has not explained why he did not do so. In cross-examination, he indicated for the first time that in light of the current impasse, he considered partition an acceptable solution. 82.Mr Ho, nevertheless, submits that Lot RP1355 is amenable to partition and references are made to the Land Marker Proposal only. I do not agree with his submissions. 83.The Land Marker Proposal is clearly obsolete. It was made before the Company acquired the interests of all other co-owners. Circumstances have changed already. The division is different and the Land Marker proposal can no longer be applicable. 84.I cannot accept that impracticability of partition can only be proved by expert evidence. In Silver Wealth Capital Investment Ltd and Pun Jong-sau & Ors., the parties sensibly agreed that no partition was feasible. A common sense approach should be adopted. 85.I also cannot accept Mr Ho’s submission that there is no evidence to support the conclusion that physical partitioning of the Lands would be costly. First, in cross-examination, Madam Chan made such an assertion and was not contradicted. Even if this court does not place any weight on her opinion for want of any collaborative empirical evidence, it is no rocket science that the Lands cannot be partitioned without much expenses. 86.Mr Ho submits that in view of the lack of any permanent structures erected on the Lands and the easy accessibility of the Lands by foot, there is no conceptual difficulty of a partition. He goes further to submit that one cannot think of a more suitable example for partition. 87.I cannot subscribe to this simplistic view. To my mind, partitioning of the Lands in accordance with the respective shares of the Company and the late Father is fraught with difficulties. 88.In the first place, there is no expert evidence of the feasibility, let alone the ease, of physical partitioning of the Lands in accordance with the shares of the parties. 89.In my view, partitioning of the Lands is not anything like cutting a cake into 6 equal and identical slices. Physical partitioning of the Lands is no mean feat and requires full co-operation of the parties. 90.The determination of the area of the Lands to which Mr Ng is entitled is apparently a simple arithmetic question. For his 1/6 share in the Lands, this is calculated by dividing the total area of the Lands by six. However, the parties must agree on how such a parcel of land within the Lands should be carved out and its exact location. 91.The parties have never discussed this issue before. Mr Ng has never indicated how the partition can and should be done. 92.It is worthy of note that Mr Ng did not show any interest in the Land Marker Proposal and even did not respond to it. Nor had he expressed any view on partition until he was cross-examined. I do not believe that he is genuinely interested in physical partitioning of the Lands. 93.I am of the view that the parties will inevitably have disputes over how partition should be carried out particularly given the longstanding hostility of Mr Ng towards the Company. It is unrealistic to expect any agreement to be reached between them on the evidence. 94.In the circumstances, I am far from convinced that partition is practicable. 95.Mr Ho refers to section 4(1) of the PO and submits that the court may give all necessary or proper consequential directions. He submits that this court can (a) make a ruling or determination that there should be a partition but give consequential directions for the parties to put forward their own proposals on how the Lands should be partitioned for the determination of this court or (b) make a ruling that the Company failed to demonstrate that partition is impracticable as an alternative remedy and on this basis adjourn the proceedings for the parties to put in further evidence to address the Court on this topic. 96.Neither course appears to be appropriate. 97.Section 4(1) merely empowers the court to give consequential directions after an order for partition is made. An order for partition can only be made when this court is satisfied that it is practicable on the evidence. Such consequential directions are for the purpose of carrying out the order for partition. In the present case, before any order for partition is made, there can be no consequential directions pursuant to section 4(1). Such consequential directions cannot be given for obvious reasons. The parties may remain at loggerheads and partition may remain impracticable despite the assistance of experts. The parties should then have to come back and resume their arguments regarding the dissolution of their plainly unhappy co-ownership of the Lands. This is inappropriate and will unnecessarily consume judicial resources. Mr Ho’s comparison to a split trial is inapt. 98.In light of my conclusion that partition is impracticable, the latter course is academic. In any event, section 4(1) is not engaged at all if this court refuses to make an order for partition. 99.Now I consider an order for sale, to which Mr Ng raises strong objection. 100.It should be borne in mind that the opposing co-owners has to discharge their burden to prove to the satisfaction of the court that an order for sale will not be beneficial to all the co-owners to avoid such an order: Wong Chun Kei at §18(b). 101.As can be seen in the summary of the evidence of Mr Ng above, Mr Ng mainly relies on the alleged belief within his family including his 5 children that the Lands are ancestral lands that should be kept within the Ng family so far as possible (“the Alleged Belief”). 102.In cross-examination, Mr Ng explained that the Lands were first owned by his great-grandfather at the inception. He was told by the late Father that the original intention of his great-grandfather was that the Lands were to be bequeathed to his late grandfather as his lineal descendant according to the family tradition. However, the Lands were mistakenly bequeathed to his grandfather and his other three nephews in equal shares. Mr Ng claimed that but for this mistake, the late Father would have been the sole owner of the Lands and he would not have found himself in this predicament. 103.I do not intend to invalidate the subjective feeling of Mr Ng. However, the Alleged Belief does not sit comfortably with his inaction to avoid or put an end to the co-ownership of the Lands by Cornhill and the Company for nearly half a century. 104.The Lands have been left unattended for decades. There is nothing to show that Mr Ng or the late Father had ever maintained, let alone treasured, the Lands as ancestral property. I can discern little sentimental attachment to the Lands as alleged. 105.Rather, Mr Ng himself and his two brothers applied in 1980s to build small houses in Kau Wah Keng Village on the basis of their interests in the Lands. They were ready to give up their interests in the ancestral property for a small house to be constructed in another area. They acted with scant regard for the Alleged Belief if it ever existed. 106.Moreover, it seems that Mr Ng is the only person who holds the Alleged Belief. Mr Ng failed to adduce evidence to show that it was shared by his brothers and his children. By their sale of their interests in the Lands, Wan, Yan and Yi showed that they did not insist on the Alleged Belief. 107.It is remarkable that Mr Ng in his evidence complained about the failure of the Company to negotiate with his late Father to acquire his interests in the Lands for decades and the insultingly low offer in the 11/2021 Letter. There is no reason why he made such complaints if he held on to the Alleged Belief. His Late Father’s interest in the Lands should never be open for sale. Plainly, Mr Ng is unhappy that the Company did not offer to buy out interests of his late Father at a satisfactory purchase price. He never indicates to the Company that the late Father’s interests in the Lands are not for sale at any price. 108.On such evidence, I cannot accept that the Alleged Belief and the alleged sentimental value of the Lands can render a sale of the Lands not beneficial to all the co-owners. I am not persuaded that Mr Ng will suffer any significant hardship in the event of a sale of the Lands. 109.In addition, as rightly pointed out by Mr Lau, a co-owner’s sentimental attachment to the co-owned property has little weight in the consideration of an application for an order for sale: Re Inland Lot No.476 (unreported, HCMP 1273/2009, 12.3.2010) per Bharwaney J at §12, Lam Chung Wai v Lam Hi Way (unreported, HCMP 2898/2012, 4.9.2013) per DHCJ Mayo at §16; Chan Ching Kit Katherine v Lam Sik Shi and Anor. (unreported, HCMP 2239/2000, 24.6.2002) per Kwan J (as she then was) at §50. 110.Mr Ho refers to Silver Wealth and Wong Chun Kei and submits that the Company has not explored the possibility of the sale of its own shares to outside buyers and therefore it fails to discharge the burden of showing that it has no alternative remedy to rid itself of the shackles of co-ownership. 111.It is only trite that each case is dependent on its own facts. Whether it was possible to sell their own shares in the co-owned properties in those two cases was very much a facts sensitive question. The conclusions in those two cases can have little bearing on whether the Company could realistically dispose of its shares by way of an open sale in the present case. 112.In Silver Wealth, the co-ownership related to a single ground floor shop of a 6-storey building in Shanghai Street. The 1st defendant had operated a drapery shop business there since 1965. The plaintiff acquired 40% interest in the shop premises in 2012. The shop premises yielded rental income throughout. The plaintiff’s 40% interest was obviously of commercial value as an investment and the judge rightly concluded that there was a market for the sale and purchase of undivided shares in the shop premises. 113.In Wong Chun Kei, the parties co-owned a three-storey property of 12 flats as tenants in common with each owner having an equal undivided 1/12 share. The plaintiffs actually accepted that they were able to sell their flats without an order for sale though the sale price would be lower than that could be fetched if the entire property was sold as a whole. 114.In the present case, the Lands are for agricultural use and they have long been left unused. A small part of the Lands was licensed to certain elderly people to do some plantings for a short period of time and only nominal amounts of licence fees were charged. 115.I cannot believe that there are willing buyers intending to purchase the Lands for agricultural purpose. The late Father and Mr Ng never farmed on any part of the Lands. 116.The Lands can only have significant value and attract potential buyers if they are to be redeveloped. However, given the intransigent position of Mr Ng regarding the sale of the interests of the late Father, the prospect of redevelopment of the Lands appears bleak and prospective purchasers would be deterred. 117.Therefore, I cannot accept that the sale of the shares of the Company to an outsider is a realistic alternative remedy. 118.As regards the Open Offer, it was only given in the middle of the trial and it cannot be a complete solution in any event. 119.I am driven to the conclusion that an order for sale is the most appropriate means to rid the shackles of the parties’ co-ownership with which neither party is content. 120.For completeness, I should briefly dispose of two matters raised by Mr Ng. 121.First, Mr Ng complains that there were repeated incidents from 2019 onwards where his late Father was allegedly harassed by individuals claiming to act for the Company or Far East Group, making unsolicited visits, phone calls and notes urging the sale of the Lands. Mr Ng claims that these actions caused distress and were perceived as threats. 122.I agree with Mr Lau that, as a matter of law, these accusations are neither here nor there. As observed by Bharwaney J in Re Inland Lot No.476 at §11, it is not necessary for the court to go into the rights or wrongs of the conduct of the parties. 123.Nevertheless, I have examined the evidence of Madam Chan and Mr Ng and the documentary evidence, I can conclude that the allegations of Mr Ng are not borne out. Madam Chan impressed me as an honest and truthful witness. Her evidence is logical and reasonable. I prefer the evidence of Madam Chan to that of Mr Ng. 124.In particular, I accept the evidence of Madam Chan and I do not believe that the two handwritten notes which were allegedly left with the late Father originated from Madam Chan or anyone representing Far East Group. There is no direct evidence as to who sent these two notes to the late Father. The redevelopment plan of the Company must be attractive to certain people other than Far East Group and these messages could have been sent by such people. 125.Lastly, Mr Ng complains that the Company has failed to account to him his share of the licence fees. In his closing submissions, Mr Ho confirms that upon the undertaking of the Company to pay the outstanding licence fees to Nr Ng forthwith, Mr Ng will no longer pursue this matter. 126.The primary position of the Company is that there is no duty to account anything to Mr Ng given the admission of Mr Ng that there was no wrongful exclusion against him and there was no agreement between Mr Ng and the Company that the Company would lease the Lots as agent or bailiff for Mr Ng. In this regard, Mr Lau prays in aid Cheung Lai Mui v Chueng Wai Shing (2021) 24 HKCFAR 116 per Ribeiro PJ and Gummow NPJ at §104. 127.The Company, nevertheless, is willing to pay the amount of HK$2,047 to Mr Ng as his share of the licence fees collected by the Company in respect of Lot 1316 and Lot RP 1355 as per the letter of WKLL dated 22 November 2024 on a non-admission of liability basis. 128.Despite the absence of an undertaking given by the Company pursuant to the demand of Mr Ng, I refuse to accept his claim. 129.To start with, Mr Ng should claim for his share of licence fees by way of a counterclaim pursuant to O.28 r.7, Rules of the High Court. Under r.7(2), Mr Ng is required to inform this court of his claim as soon as practicable so that this court could give direction as to how he could proceed with his claim under rule 4 or rule 8. 130.Mr Ng has not given such a notice and he merely says that he was advised and he verily believes that the Company is liable to give an account of the licence fees received in his affirmations. 131.In the premises, Mr Ng failed to make a counterclaim properly. His claim could not be entertained. 132.In any event, I accept the submission of Mr Lau that the Company has no duty to account for the licence fees in the absence of an ouster. Valuation 133.Having reached the conclusion that an order for sale should be made, I proceed to consider the expert evidence on valuation to determine the reserve price. 134.Mr Ho reminds this court that the reserve price is to protect the interests of the unwilling owner: Packman Lucas Ltd v Mentmore Towers Ltd [2010] EWHC 1037 (TCC) per Coulson J (as he then was) at §16. 135.Mr Ho submits that there is no injustice in erring on the higher side. In the event of an aborted sale, the parties can seek further directions from the court: Packman at §18, Lam Chok Lai v Official Receiver [2021] 1 HKLRD 1185 at §§17-18. 136.Mr Lau does not dispute these propositions. 137.The Company engaged Mr Lin and Mr Ng engaged Mr Tse. Each of Mr Lin and Mr Tse has made a valuation report and they also made a Joint Valuation Report (“JVR”). Both of them are professional surveyors and there is no debate about their qualifications. 138.A summary of the differences between the valuation of Mr Lin and that of Mr Tse is as follows. 139.First, the experts differ in their methodology. Mr Lin primarily relies on the direct comparison method and rejects residual valuation. His focus is on comparable sales evidence. 140.Mr Tse uses both direct comparison and residual valuation methods. For Lot 1316 and Lot 1327, he adopts direct comparison method and for Lot 1348 and Lot RP 1355, he adopts residual valuation method. 141.Second, Mr Lin values the Lands on the premise that the Lands are mere agricultural lands, disregarding any redevelopment prospects. 142.Mr Tse suggests that the Lands hold significant redevelopment potential and valuations should reflect such “hope value”. 143.Third, Mr Lin prioritises comparables close to the Lands such as Tsuen Wan, Kwan Chung and Yuen Long. Location of his comparables is considered the most critical factor and he selects comparables with similar redevelopment prospects. 144.Mr Tse, on the other hand, selects some comparables that are geographically distant such as Sai Kung and includes larger size adjustments and uses comparables with different redevelopment prospects. 145.Fourth, Mr Lin applies adjustments based on location and zoning and Mr Tse makes substantial adjustments for size and other factors. 146.In the JVR, the experts’ respective valuation of the Lands is shown in a table, which is reproduced below:
148.Mr Ho submits that the redevelopment potential of the Lands and their hope value should be taken into account. He refers to the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“LCSRO”), which was considered a help reference point in Wong Chun Kei. He submits that the present case is no different from those applications made under the LCSRO in which minority co-owners are compelled to sell their interest to facilitate redevelopment of their land. 149.I agree with Mr Ho. In the present case, the Company clearly acquired the interests in the Lands from the other co-owners with a view to redevelopment. There is no other discernible purposes. The Application makes its intention crystal clear. I do not think that there are any willing buyers who intend to purchase the Lands for agricultural purposes. 150.Mr Lin’s rejection of any hope value causes this court some concern about his impartiality. In the JVR, Mr Lin claims that the likelihood of redevelopment for Lot 1316, Lot 1348 and Lot RP 1355, despite their location in the CDA Zone, is minimal. He considers that employing residual valuation is inappropriate because of its numerous ungrounded assumptions. In cross-examination, he asserts that the chance of redevelopment is very slim. 151.I am unable to understand the basis of his assertion. He appears to have lost sight of the grant of the Application. I refuse to accept his evidence. 152.Mr Lau submits that any redevelopment plan remains contingent and uncertain. There are multiple rounds of land-exchange because of the ownership of the Government of the adjacent lands. Be that as it may, this does not alter the fact that the Lands could be, and most likely will be, acquired for the purpose of redevelopment. 153.In my view, the prospect of redevelopment has a strong impact on the valuation of a piece of agricultural land. I am convinced that there is a real chance that the redevelopment of the Lands will be carried out on the evidence. I prefer the methodology and approach of the valuation of Mr Tse. 154.For the same reason, the comparables chosen by Mr Lin save Comparable 7 (Mr Tse’s Comparable 4) are not helpful. None of them shows any prospect of redevelopment and involves no planning application. 155.On the other hand, the comparables of Mr Tse are not seriously challenged by Mr Lau. I do not think the geographical distance between the comparables chosen by Mr Tse and the Lands is a significant factor. What is more important about the comparables is the nature of the land and the chance of redevelopment. 156.Mr Lau points out that the actual use of Comparables A6 and A7 is for open storage. I accept the submission of Mr Ho that their actual use is irrelevant since lots demised for agricultural can also be employed for open storage of containers. What matters is that the zoning of both the Comparables and the Lots (except Lot 1327) is CDA. 157.Valuation of the Lots taking into account of the hope value is understandably difficult. As accepted by Mr Ho, there is no empirical data concerning the hope value attributable to the Lands. No comparable having a similar level of redevelopment prospect and value as the Lands is available. I am convinced by Mr Tse that his valuation is his best estimate in the circumstances. 158.I have considered Mr Lau’s criticism of Mr Tse’s professionalism. I do not find any validity in his allegation of lack of impartiality. 159.For present purposes, I am prepared to accept the valuation of Mr Tse. 160.Mr Lau has provided a draft order. It provides that the sale of Lot 1316 and Lot 1327 should be conducted by public auction whereas Lot 1348 and Lot RP1355 should be conducted by way of private treaty or public auction (at the selection of the Company in the absence of the agreement of parties). 161.Mr Ho submits that the sale should be by public auction only: Wong Arlene Bei Ling & Ors v Pao Zen Kwok Peter & Ors [2022] 2 HKC 165 per Recorder William Wong SC. I accept his submission. 162.I also accept that, to avoid conflict of interest and to protect Mr Ng’s interests, an independent professional property agent should be engaged to conduct the sale. I see no objection to entrust WKLL to complete the conveyance process, however. Conclusion and order 163.Neither party is satisfied with the co-ownership of the Lands. For the reasons given, there being no viable alternative remedy, it is clear to me that an order for sale is most appropriate to rid the parties of the shackles of the co-ownership and I so order. 164.I direct that the parties should jointly lodge with this court an agreed draft order containing terms to give full effect to the order for sale within 28 days from the date of this Judgment. If the parties are unable to reach any agreement, each of them should lodge with this court their respective draft order with 14 days thereafter. 165.On the issue of costs, I take into account the following matters. 166.In the first place, my view is that Mr Ng should not have resisted an order for sale at all and his opposition is wholly unmeritorious. His reliance on the Alleged Belief and all the serious accusations is misguided. I do not believe that Mr Ng has any genuine intention to remain to be a co-owner of the Lot. I am of the view that he is merely trying to maximize the financial gains out of the 1/6 share of the Lands. Mr Ng should bear the costs of his unsuccessful opposition in these four actions. 167.Expert evidence is, however, required to set the reserve price and I accept the evidence of Mr Tse. The parties’ costs arising from and relating to the dispute over valuation of the Lands including the engagement of the experts and 1 day of the trial hearing should be paid out of the proceeds of sale of the Lands, to be taxed if not agreed, with certificate for one counsel. 168.Thus, I make a costs nisi that Mr Ng do pay the Company its costs of the 512-514 Oss and the 826 OS, including all costs reserved, except that the parties’ costs arising from and relating to the valuation of the Lands are to be paid in the manner stated in the preceding paragraph, to be taxed if not agreed, with certificate for one counsel. 169.Lastly, I thank Mr Lau, Mr Hui, Mr Ho and Mr Fung for their helpful assistance.
Mr Kin Lau & Mr Hui Ho Ming, instructed by Messrs Woo, Kwan, Lee & Lo, for the Plaintiff Mr Martin Ho & Mr Chester C.K. Fung, instructed by Messrs Charles Yeung Clement Lam Liu & Yip, for the 1st Defendant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Silver Wealth Captial Investment Ltd v. Lai Wai Cheun and Another
Chan William Lai Yee and Others v. Chan Yau Yuen Fun Therese and Another
Kwun Sau Kam v. Li Yan Lam and Another
Re Liu Yi Fang
Chan Siu Yuk v. Tsoi Hung Wan
Liu Chung Hang and Others v. Liu Chung Leung Alfred
黃德忠及另一人 對 黃炳城
Lam Po Chun Virginia v. Ku Kin Kwan
Lam Chok Lai and Another v. The Official Receiver and Trustee in Bankruptcy of Lam Chok Wai, A Bankrupt and Another
Law Shu Keung Stephen t/a Excel Finance Co v. Ng Ming and Another
Lee Tung Kin Manda v. Chan Yan Wing Vivien and Another
Ho Sui Man Winnie v. Zhu Yun Hua
Kwan Yee Wai and Another v. The Personal Representatives of Poon King (Deceased)
黃冠華 對 歐珈妤
Ng, Ming Joe Joseph, Executor of the Estate of Late Ng, Kar Yuen Peter (Deceased) v. The Personal Representatives of Late Lau Yue Heng (Deceased)
Law Chun Wai t/a Fu Tat Finance Co v. Chu Suk Har and Another
Easy One Finance Ltd v. Lee Kam Mui and Another
Pins Credit Management Co., Ltd v. Tse Tai Yim and Another
廣東信貸有限公司 對 黃偉興及另一人
Vampio Ltd v. Lai Yuk Leong and Others
Further hearings and rulings under HCMP 512/2022