Secretary for The New Territories v. Lee Pui Leung
Read the full judgment text of on BabelCite. was delivered on 21 June 1982.
1. Both parties applied under section 11A of the Lands Tribunal Ordinance for a review of the decision given by the Tribunal on 8th January 1982.
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LDLR000001A/1981
Coram: J. Lyons, Presiding Member, and W. Hume and D.W. Manohey, Additional Members, in Court Date: 21 June 1982 ---------------------------- D E C I S I O N ---------------------------- 1. Both parties applied under section 11A of the Lands Tribunal Ordinance for a review of the decision given by the Tribunal on 8th January 1982. 2. The ground for the Applicant's application was stated as follows :
3. The grounds for the Respondent's application were stated as follows :
4. Mr Robert McCullogh, Crown Counsel, again appeared for the Applicant, while the Respondent was again represented by Miss Maria Yuen of Counsel. 5. Before the commencement of the arguments, Mr McCullogh, with the acquiescence of Miss Yuen, clarified for the record the identification of the plans produced to the Tribunal at the original hearing, and produced three new plans numbered LTW 146, LTW 146/A and LTW 146/C. It was agreed by both parties that the new plans were not in any material respect different from the plans originally produced and on the basis of which the Tribunal had reached its decision. There was accordingly no suggestion that the Tribunal's decision would have been affected if the new plans had been before the Tribunal at the original hearing. We make it clear for the record that it is the new plan numbered 146A whose effects are to be taken into account, and the new plan numbered 146C that led to the resumption of the subject premises, and whose effects are therefore to be disregarded. 6. It was decided to hear the Respondent's argument first, but before Miss Yuen opened, it was accepted by Mr McCullogh and the Tribunal that the Respondent's ground (1) was valid and that the area of the kiosk should be included in the calculation of compensation. 7. With regard to the Respondent's ground (2) Miss Yuen argued that the subject property, far from being on the fringe of the proposed Town Centre as shown on Plan LTW 146A, was in fact approximately at the centre of the Castle Peak Road boundary of the Town Centre Zone, which, she pointed out, extended to the re-aligned Route TWISK on the North and East sides, Castle Peak Road on the South-West side and an un-named road to the West. Her argument continued that not only was the subject property at the nucleus or hub of the Town Centre Area directly opposite the mass transit railway station and close to the bus terminus, but it was also adjacent to the area zoned Commercial/Residential on the opposite side of Castle Peak Road and was thus in a local centre as well as a Town Centre. She admitted out that the subject property was not at the physical centre of the Town Centre Zone but submitted that the physical centre is not necessarily the nucleus. This nucleus must be ascertained by looking at how it relates to the remainder of the town. She therefore asked the Tribunal to find that their earlier decision that the subject property is on the fringe of the Town Centre Zone is inappropriate. Physically the property was on the edge of the area but looking at the services, major roads and those areas already developed, the property was very much at the hub of the proposed Town Centre. 8. Miss Yuen further submitted that in view of the above arguments the comparison of the subject property with comparables C2, C3 and C5 was also inappropriate. The Respondent, she said, accepts that these comparables are on the fringe of the existing Town Centre but that if it is agreed that the subject property is at the nucleus of the proposed Town Centre then the correct comparable to be used is one in the nucleus of the existing centre, which is, she submitted, at Sha Tsui Road. In this case a suitable comparable would be C4 on the Respondent's list (at Annexure 6) just off Sha Tsui Road. At Annexure 8 the adjusted price for property in this area is shown as $68,817 per square metre. Since at the date of resumption the subject property qua part of the proposed Town Centre had not reached the same stage of maturity as comparable C4, Miss Yuen agreed that a period of deferment would be appropriate but argued that using a 5-year period was unduly pessimistic. Averaging the adjusted values of C2, C3 and C5 and then deferring this resultant figure for a period of 5 years meant doubly penalising the subject property by disregarding the enhancement factor of 35% placed on the existing fringe properties by the Respondent's valuer. So far as the figures are concerned, enhancing C2, C3 and C5 by 35% produces a result that is close to the figure arrived at by deferring the figure for C4 by 5 years. 9. Miss Yuen quoted a passage from Keeble's Principles of Town Planning to the effect that the effective Town Centre is where the services are, and we shall deal with this point later in our decision. 10. Mr. McCullough submitted that the introductory remarks in Keeble's Principles quoted by Miss Yuen were not relevant. If they were, then it would be necessary to ignore comparables C2, C3 and C5 and look at C4. If the Town Centre is where the services are, then looking at the plan at Annexure 6, C4 is on the fringe. Mr McCullough further argued that no detail is shown on Plan LTW 146A, and indeed the area designated as the Town Centre is noted on the Plan as being subject to detailed local planning. He said that in Hong Kong there was no practical difference between the T/C and the C/R designations. Even if the Mass Transit Railway station were close to the subject property its effect would depend on the position of the walkways. He submitted that a deferment period of 5 years was realistic, i. e 2-1/2 years for site formation and 2 - 2-1/2 years for construction. C4 as a comparable is on the edge of a C/R zone and adjacent to industrial properties. 11. In her reply, Miss Yuen argued that Mr McCullough's arguments served only to strengthen her case. If, as he stated, C4 was a fringe property then it should be used as a comparable. 12. We must first point out that what the Tribunal is required to do is to assess the market value of the property as at the date of the resumption, assuming, as we have done, that the new plan LTW 146C is the "scheme" the effects of which have to be disregarded and that the effects of new plan LTW 146A are to be taken into account. It is to be noted, however, that plan LTW 146A is only a draft plan. We must emphasise that it is all the effects of plan LTW 146A that are to be considered, not merely those which might have a beneficial effect on the subject property. 13. Dealing with the grounds set out in the Respondent's application for a review in the order in which they appear : 14. Ground (1) has been dealt with above. 15. As for ground (2) there is no doubt in our minds that the subject property is on the fringe of the area described on plan LTW 146A as the Town Centre zone. This zone is the area described by Miss Yuen as bounded by Route TWISK on the North and East, Castle Peak Road on the South-West and an un-named road on the West. It should not be confused with the existing township of Tsuen Wan, although it is obviously intended to be an extension of that township. It is, however, as we pointed out in our original decision, separated from the existing town by Castle Peak Road, which is not only a main trunk road carrying a very heavy volume of traffic in both directions, but also in our opinion a separator of the township and the proposed extension, which separation would be increased in its effect by the construction of an overhead MTR station. On this plan there are no walkways shown, and as far as the plan itself is concerned we cannot see that they would be necessary. Certainly it is only on a later plan (Exhibit 3) that these walkways appear. In spite of this separation there appears to be no reason that we can see from the plan why the proposed Town Centre should not grow as an entity in its own right. This form of development of separate centres is by no means unknown, not only in Hong Kong but in many other townships with populations akin to that of the expanded Tsuen Wan. 16. Mr McCullough is correct in pointing out that the note on plan LTW 146A refers to the necessity for detailed planning of this area, and this is a factor which must be taken into account when assessing the total effect of the plan. Because of this there is no certainty as to where the nucleus of the zone will develop. An inspection of the existing Tsuen Wan township reveals that the hub of the town is not near the transport services or the Town Hall, and in this respect we are of the opinion that Keeble's Principles of Town Planning, which were first propounded many years ago, are not necessarily relevant in today's conditions in Hong Kong. We are convinced that the nucleus of a Town Centre is made by the actions of the people using it, and that its location can change from time to time depending on the prevalence of such facilities as popular restaurants, cinemas and other amenities which may be in favour with the populace at any one particular time. In other words the main criterion is public taste. 17. The above reasoning leads us directly to the Respondent's ground (3), and here we must refer again to the fact that what is being sought is the market value of the property as at the date of resumption. 18. In looking at the various comparables to decide which were the correct ones to use, the Tribunal considered the conditions and circumstances which would fit the case of the subject property in its relationship to the proposed Town Centre, and we reiterate our statement on page 11 of the original decision that adjustments made as a preliminary to valuation in respect of the effects of the superseded plan LTW 146A must be largely a matter of conjecture. However, the points that must be taken into account are, first, that detailed planning of the Town Centre zone had not then taken place and was in fact overtaken by later plans, secondly, that any suppositions on the question of market value must involve the "reasonable man" and not a speculator, and thirdly, that as we pointed out in the case of the Director of Lands & Survey v Cheung Yuen - keung [1978 HKLTR 45 at p.51] -
19. A reasonable purchaser of the subject property would not, we are convinced, assume that the subject property is at the centre of an as yet undetailed Town Centre. His bid would be such as to ensure that in the event of detailed planning of the area being in any way unfavourable to the subject property he would not thereby be unduly prejudiced. 20. With this in mind the Tribunal considered very carefully which comparables would satisfy the conditions envisaged. Our opinion remains that the relationship of the subject property to the proposed Town Centre would be, as nearly as could possibly be foreseen, similar to the relationship of the fringe properties chosen to the existing Tsuen Wan Town Centre, with their values adjusted to (inter alia) the resumption date. It follows from this that no enhancement factor is needed but that, and here we come to the Respondent's ground (4), a further adjustment would be needed because the proposed Town Centre was not then in existence, whereas the Tsuen Wan centre was, and had been for a considerable period. 21. Whilst we do hot necessarily agree with Mr McCullough's reasoning as to why a 5-year period is correct, we cannot accept Miss Yuen's example of the mass transit railway construction period on the Tsuen Wan line as being relevant. She made no mention of the period required for the planning of this line in advance of its construction, and this, we feel, is of equal importance. We have no doubt either that planning of other recently completed projects in Tsuen Wan such as the bus terminus and the Nam Fung Centre was commenced a considerable time before any work on the projects was started. We therefore remain unconvinced that the period of deferment of 5 years is not the correct one to use. Neither do we consider that this involves any question of a double penalty being imposed on the subject property. 22. The Respondent's ground (5) merely reiterates that the subject property should be considered as a central part of the proposed Town Centre development, and this question has been dealt with above. 23. To sum up, we do not accept the Respondent's grounds (2) to (5) as valid, and we therefore confirm our previous award, subject only to the inclusion of compensation for the area of the kiosk. The award, as so amended, is as follows :
24. The open market value of the interest we therefore take at : $1,476,000 and our previous award is amended to this figure. 25. As for the Applicant's application for a review on the question of costs, Mr McCullogh acknowledged that since under section 12 of the Lands Tribunal Ordinance the President or Presiding Member, as the case may be, has complete discretion as to costs, he strictly speaking had no ground for his application, which he therefore formally withdrew. However, since a review was in fact taking place he asked us to consider his submissions. 26. As the question is of some general importance, we have thought it right to set out the arguments and our decision. 27. Mr McCullogh referred to the decision of the Tribunal on the question of costs in Director of Lands & Survey v. Wong Chung-don & Others 1977 HKLTR 43 at p. 62. There Mr President Power set out the Tribunal's practice in the following terms :
28. It will be seen that the owners of 6 & 8A Chung's Lane were unsuccessful in their claims in that each received compensation in the same amount as had been offered by the Crown. They must in the circumstances fail in their application for costs of their applications. The other five owners were successful in that each received compensation in an amount somewhat greater than the Crown's offer. Nonetheless the Crown suggests that the circumstances of these applications are such that no order for costs should be made in favour of the five claimants. It is argued :
29. As regards (a) it is true that the claimants received only marginally more than they were originally offered by the Crown but I do not consider that they should, because of this, be deprived of their costs. Surely the Tribunal must approach this in the same way as it would a payment into Court. If the litigant receives more than is paid in even though the difference be not great he is nonetheless entitled to his costs. Further in the present case the approach, although not the figures upon which it was based, of the claimant's expert was used by the Tribunal in fixing the amount awarded. 30. It is true the Crown was successful as regards the major points of law argued however these were difficult and doubtful points upon which no decision had ever been given in Hong Kong. In all of the circumstances I do not consider that any special order should be made in favour of the Crown as regards the costs of those issues.". 31. Mr McCuIlogh made the following points, namely that-
32. Miss Yuen's answer was brief, and to the effect that if the Respondent had not come to the Tribunal he would not have received the amount awarded by the Tribunal, which was higher than that offered by the Applicant. She considered that that represented success and that the general rule should apply. 33. Our conclusion, after due consideration, is that we are not convinced by Mr McCullogh's arguments for altering the existing practice. We agree with the position adopted by Mr President Power in the case cited above. In our view there is material difference between the present case and a High Court action for damages where liability is admitted, the only matter in dispute is the quantum of damages, and a sum of money is paid into court. It is true that the latter case would arise out of a tort or breach of contract, whereas our case arises out of the legitimate exercise of a statutory power. We do not think that matters. In both cases, there is an admission of liability but disagreement between the parties as to the proper amount of damages or compensation, and we see no reason why we should not look upon the Crown's offer in a Crown land resumption as being the equivalent of an amount paid into court. 34. We are aware of no special circumstances in the present case that would suggest any departure from the normal rule. On the contrary, we point out that, as in the case cited above, we did in fact adopt the Respondent's approach, namely that the effects of the 1976 plan are not to be disregarded. We shall therefore adhere to the normal rule enunciated by Mr President Power and we confirm the award of costs set out in our decision of 8th January. 35. As for the costs of this review, we direct that each party shall pay his own costs.
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