Giocondo Mario Mauriello v. Commissioner of Rating and Valuation

LDRA000009/1982

Rating - appeal by ratepayer on g ground  tenement valued below proper rateable value - use of rateable values to divide post-war domestic premises into Part II and Part IV- powers on appeal - proper date for ascertaining rateable values - effect of designated date and other provisions of 1981 Rating (Amendment) Ordinance - projection of values from date of physical valuation to date Valuation List comes into effect - tone of list - Sections 7, 7A, 11, 14, 37, 39 and 44 Rating Ordinance, Cap.116, Section 50(6)(m) Landlord and Tenant (Consolidation) Ordinance, Cap.7.

IN THE LANDS TRIBUNAL OF HONG KONG

(Appellate Jurisdiction)

___________________

Coram: TRIBUNAL:  His Honour Judge Cruden, Presiding Officer and .W.Phillips, Esq., Member.

Date: 11 December 1982

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JUDGMENT

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1. The appellant being the owner of Flat C, 12th Floor, Olympian Mansion, 9 Conduit Road, Hong Kong has appealed pursuant to Section 42 of the Rating Ordinance, Cap.116 against the respondent Commissioner's Notice of Decision under Section 39, relating to the appellant's prior proposal that this tenement has been valued below its proper rateable value.

2. The ground of the appellant's appeal is that he is aggrieved that the rateable value was determined at less than $60,000. The Commissioner's Notice of Decision, which is the subject of this appeal, was that the rateable value of the tenement in the Valuation List of $57,600 should remain unaltered.

3. Counsel for the appellant at the outset stated that the reason for the appeal was not because of any eagerness on the part of appellant as a ratepayer to increase the incidence of rates on this tenement but because of impending changes to the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. Under the Landlord and Tenant (Consolidation) (Amendment) (No.1) Ordinance No. 52/81 major changes were made to the principal Ordinance. Before the Amendment all domestic premises for which occupation permits under Section 21 of the Buildings Ordinance, Cap. 123 had been granted after the 16th day of August 1945 were subject to Part II of the Landlord and Tenant (Consolidation) Ordinance. These properties are generally referred to as post-war domestic properties.

4. Under the Amendment these properties were divided into two new groups. From the 19th day of December 1981 such domestic properties with rateable values under $80,000 remained in Part II. Post-war domestic properties having rateable values of $80,000 or over moved into a new Part IV of the Ordinance. In summary, Part II properties continued to enjoy the twofold statutory protection of restricted rents and security of tenure. On the other hand, Part IV properties, while given some statutory security of tenure, were not to enjoy any restriction on rents.

5. The new Section 50(6)(m) of the principal Ordinance provides that the Legislative Council may, by resolution, determine the rateable value, which divides Parts II and IV, at a sum other than the existing $80,000. More importantly, Section 52 of the Amendment already provides that the sum of $80,000 is to be reduced to $60,000 with effect from the 19th day of December, 1982.

6. These changes explain the otherwise perhaps inscrutable reason why an owner would appeal against his rateable value being too low, with the inevitable consequence, if his appeal were successful, of his tenement being liable to pay increased general and Urban Council rates. For if an owner is able to have the rateable value of his tenement increased from below $60,000 up to $60,000 or more, then as from the 19th day of December, 1982 the tenement will move from the rent restrictions of Part II to the uncontrolled rents of Part IV.

7. In this appeal we are merely concerned with the proper rateable value of the property and not with the motives of an appellant for they are irrelevant. We might add that the tenement is occupied by an officer of the United States Consulate General and for that reason has, since the 1st day of February 1970, been exempted from paying rates pursuant to the Consular Privileges Ordinance, Cap. 189. That exemption does not affect the rateable value of the tenement nor, of course, the appellant's appellate rights. We merely mention these matters to complete the background.

8. The Commissioner, when directed by the Governor, is obliged under Section 12 to prepare a list of rateable values of tenements for any specified area. When the list is completed the Commissioner signs the appropriate declaration and that declared list, by virtue of Section 14, becomes:-

"... the valuation list ... for the year next following the date of the declaration and thereafter until a new valuation list comes into force."

9. In discharge of his statutory obligations the Commissioner valued the appellant's tenement in February 1976 as part of a larger valuation exercise which included the area in which this tenement is situated. On the 2nd day of December, 1976 the Commissioner sent a Notice of rateable Value of the tenement to the appellant in compliance with Section 17 in which the proposed new rateable value of the tenement was $57,600.

10. The appellant took no steps in relation to that Notice of Rateable Value and after the new list, including this particular tenement, was declared by the Commissioner on the 3rd day of March 1977, it came into effect on the 1st day of April 1977.

11. Even though tenements are naturally not revalued by the Commissioner annually, nevertheless in March of each year he opens the Valuation List for the forthcoming financial year commencing on the 1st day of April next following for public inspection for 21 days. During March in any year any person aggrieved with the Valuation List on any of the 4 grounds set forth in Section 37, may within that month serve a "proposal" on the Commissioner for the alteration of the Valuation List.

12. Following the valuation in 1976 the Commissioner duly opened the Valuation List during March in 1977, 1978, 1979, 1980 and 1981. In none of those 5 successive years did the appellant exercise his right to serve a proposal on the Commissioner, pursuant to Section 37, for alteration of the tenement's rateable value.

13. However, upon the Commissioner opening the Valuation List for public inspection in March 1982 the appellant thereupon on the 26th day of March, 1982 served notice on the Commissioner under the statutory Form R.20A of his proposal for alteration of the Valuation List on the ground that the tenement had been valued below its proper rateable value. It was in response to that proposal by the appellant that the Commissioner issued his Notice of Decision under Section 39.

14. On the hearing of this appeal the Tribunal has the following powers under Section 44:-

15. Mr. F.G. Heath, a chartered surveyor who is a Senior Rating and Valuation Surveyor, was called to give expert evidence for the Commissioner. We learned from him that the Valuation carried out in February 1976 was part of the last general revaluation of Hong Kong tenements. He explained that while the new valuations took effect on the 1st day of April 1977 the sheer size of such a major revaluation necessarily means that the actual valuation work must commence many months earlier. We were informed that when the valuation of this tenement was carried out in February 1976 there was some uncertainty in the residential property market. There had been a fall in the residential market since it peaked in 1973. In early 1976 there was no concrete evidence that the market would not ease even further. The Commissioner understood his task was to project the actual valuations carried out on different dates in 1976, forward to the 1st day of April 1977.

16. The Commissioner took what he thought was a prudent view and analysed the market with caution. In the case of this particular tenement its rateable value was projected forwarded from February 1976 to the 1st day of April 1977 at a lower value than the actual value of the tenement in March 1976. Contrary to what may well have been a reasonable projection in February 1976, the residential property market for accomodation of the type provided by this tenement did not ease. Instead, during the second half of 1976, the residential property market rose and continued to rise throughout 1977.

17. We recognise how in Hong Kong's volatile property market it is very difficult to make accurate projections. Nevertheless the unusual position that has arisen in respect of this tenement is the rateable value of the property when the Valuation List came into force on the let day of April 1977 was lower than the actual value of the tenement when it was valued in February 1976 and also was lower than the actual value of the tenement as at the 1st day of April 1977.

18. The Commissioner, while conceding these discrepancies, asks that the rateable value not be disturbed for two reasons. First, he submits it is not unreasonable in relation to values for this type of tenement during early 1976. Secondly, the Valuation List for this and other similar tenements which came into effect on the 1st day of April 1977 has not been disturbed since then. It is submitted that a tone of the list has been clearly established for Mid-Levels tenements and all interim valuations have been tied to this tone. In these circumstances, it is urged the uniformity and relativity of this established level of valuation should, under the Rating Ordinance, prevail over arguments as to the correctness of the valuation.

19. Before turning to consider these issues it is necessary to determine the proper date of valuation for rating purposes. Clearly the Commissioner by his projection was of the opinion that the proper date was the date the Valuation List was to come into effect, namely the 1st day of April, 1977. The appellant was content to proceed with his appeal on the basis that the proper date was either when the valuation was physically carried out in February 1976 or during March to April 1977. This latter period covered the formal declaration of the Valuation List on the 3rd day of March 1977 and its subsequent coming into effect on the let day of April 1977.

20. This question of the proper date was considered by the Lands Tribunal in Wei Che-van v Commissioner of Rating and Valuation (1978) H.K.L.T.L.R. 192. That case is of particular interest for it was concerned with another valuation under the general revaluation which came into effect on the 1st day of April 1977 and the Commissioner gave evidence personally. The Tribunal observed at page 195:

"

In the course of the hearing it became apparent that no evidence had been given as to the date at which the Commissioner's valuation was made. The valuer for the Commissioner, Mr. HO Chi-chiu, being still in the box, stated that the valuations were as at 1 April 1977. There is indeed, no express reference, in the Rating Ordinance, to a date in relation to which valuations are to be made. However when dealing with this matter in R. v. Paddington (Valuation Officer) experts peachey property Corp. Ltd." (1966) 1 Q.B. 380, "..." Lord Denning, M.R. said at page 405, when describing how the Valuation List was made, that:

It would appear that the values are meant to be those prevailing at the time when the list is declared under s.13 of the Rating Ordinance which in the present instance, according to the evidence of Mr. Fry, the Commissioner of Rating and Valuation, who was called to give evidence was the 3 March 1977."

21. We are satisfied that the Commissioner, in the instant case, has meticulously complied with that decision by projecting his February 1976 valuation to the month when the final steps were taken to bring the new rateable values into effect. There may be a residual argument remaining, whether the precise projected date should have been the 3rd day of March 1977 or the 1st day of April 1977. We incline to the latter date, but in the absence of argument on which of those dates is correct, will leave that issue open. On this appeal it is only of academic interest, for it was undisputed that there was no difference in value between the 3rd day of March 1977 and the 1st day of April 1977.

22. Since both the new Valuation List came into effect on the 1st day of April 1977 and the Lands Tribunal delivered judgment in Wei Che-van's Case the Rating Ordinance has been significantly amended. Under the Rating (Amendment) Ordinance No.33 of 1981, Section 11 was amended and now expressly provides for a date when new rateable values are to be ascertained :

(Underlining added)

23. So this 1981 Amendment has filled the gap which the Lands Tribunal referred to in 1977. Further, a date may now be designated on which rateable values are to be ascertained other than the date the Valuation List is declared or comes into effects. This new power, if appropriately exercised, would remove the necessity for any projection.

24. A date may be designated under Section 11(1)(b) different to the date when the Valuation List is declared or comes into effect. That date may be months before the Valuation comes into effect. It may be the same date as when the actual Valuation were physically completed. The new provision merely gives the Governor a discretion to designate a date. No date has been designated in relation to the valuation now under attack.

25. In these circumstances the law which previously applied, continues to apply to this case. The proper date of valuation in this case is therefore either the 3rd day of March 1977 or the 1st day of April 1977 when, it is common ground, the same values applied.

26. Under the 1981 Amendment new Sections 7 and 7A were also enacted. Section 7 deals with the general rule to be followed in ascertaining rateable values. Section 7A is a supplementary provision dealing with valuations. On this appeal we are particularly concerned with Section 7(6) which is the new procedure for ascertaining the value of a tenement where a proposal for alteration has been made under section 37. The relevent provisions of Section 7 for our present purposes are:-

27. The original valuation which came into effect on the 1st day of April 1977 was, of course, made before the enactment of the 1981 Amendment. However, the appellant's proposal under Section 37, which has now culminated in this appeal, was made and served after the Amendment came into force. Clearly this appeal is therefore governed by the provisions of Section7(6).

28. The appellant submits that the use of the word "shall" the makes provisions of Section 7(6) mandatory. In future no doubt few difficulties will arise, for at least on a general revaluation the Governor can be expected to specify the date on which rateable values will be "ascertained". That date then becomes the same "ascertained" date which is referred to in Section 7(6).

29. For the reasons already given, we are of the view that the rateable value of the appellant's tenement is to be ascertained by reference to the value as at the 3rd day of March 1977 or the 1st day of April 1977. There is no major disagreement between the valuers that the rateable value in 1977 was at least $62,400 based on a calendar monthly rent of $5,200 but was probably even higher. This compares with the rent during February 1976 which after being projected downwards to $4,800 per month as at the 1st day of April 1977, produces the current rateable value of $57,600. One of the appellant's alternative submissions is that under Section 7(6) the Commissioner was obliged to value the tenement in accordance with its value on either of the 1977 dates.

30. To this the Commissioner advanced in reply the two submission we have recorded. We do not need to consider the first submission in view of our having held that the date in reference to which the rateable value should have been ascertained' was either the 3rd day of March 1977 or the 1st day of April 1977. The Commissioner's second and more substantial submission, relates to the tone of the list.

31. We recognise at once the importance of preserving the tone of the list. Where a Valuation List has remained undisturbed for 5 years that importance must increase rather than diminish. If the consequences of the Rating Ordinance were merely to provide, as between rateable tenements, a fair and equitable basis to compute rates, then it is arguable that it matters little on what basis a valuation was done or the precise valuations or the proportion those values may bear to market values provided relativity, which ensures fairness, is preserved. However other difficulties arise when values ascertained under the Rating Ordinance are used for non-rating purposes. That is precisely what has happened here with the Landlord and Tenant (Consolidation) Ordinance adopting the former Ordinance's rateable values in order to divide post-war domestic properties into the very different Part II and Part IV provisions. We therefore have some sympathy for the Commissioner in been faced with an appeal which attacks his valuations but for non-rating purposes.

32. The tore of the list is a concept of major importance in English rating law. Indeed, when in a series of appellate judgments that principle appeared to have been whittled down it was reinstated and recognised by statute in what is now Section 20 of the English General Rate Act 1976.

33. Our Rating Ordinance too, recognises the importance of the tone of the list and the importance of new, interim or altered rateable values being ascertained on the basis of the same prior date on which the Valuation List itself is based. Our Section 7, for example, is largely based on the English Section 20. There is, however, at least one important difference. In the English General Rate Act there is no provision specifying the date by reference to which values-whether new, interim or under a proposal for alteration - are to be ascertained. Ryde on Rating (13th Edn.) at page 477 refers to this omission thus:

"

Surprisingly, there is no express statement in the General Rate Act, 1967 of a date by reference to which values are to be taken, i.e. a valuation date."

34. However, in our Rating Ordinance Section 11(1)(b) as we have observed, empowers the Governor to designate a date by reference to which rateable values are to be ascertained. Before the 1981 Amendment there was no express procedural provision for dealing with a Section 37proposal. Sections 7(6) and 7A(4) are quite novel provisions. Where in future the Governor designates a date under Section 11(1)(b) then the present difficulties could be avoided. For if that date is designated in regard to the realities of physically carrying out a major revaluation, the designated date could be the date when the valuations in a specified area were carried out. There would then be no need for the Commissioner to attempt to project his values forward to the relatively distant date when he either declares the list or it comes into effect.

35. One of the present difficulties is that not only do Sections 7(6) and 7A(4) for the first time provide for the express procedure to be followed in the present case but they are tightly related to a date being designated under Section 11(1)(b). We no longer have the statutory flexibility we enjoyed hitherto. If in principle it is desirable to preserve that tone of the list, this will conversely, be better able to be done in future by Sections 7(6) and 7A(4) being applied in reference to a speific date designated under Section 11(1)(b). While there is no designated date at present Sections 7(6) and 7A(4) still refer to a specific date.

36. Section 7(1) requires rateable values to be ascertained in accordance with Sections 7 and 7A. Section 7A dealing with new, interim and proposals for altered valuations refers to the "relevant date" by reference to which valuations are to be made. Section 7A(5) defines that term as follows:

37. So the scheme of the 1981 Amendment was to create clearer and more precise rating valuation machinery, than exists at present in England. It is against the background of these important statutory changes that the position in England should be considered if that is sought to be done for comparison purposes. We recognise that major similarities between Hong Kong and English rating principles remain. In any comparison all that needs to be done is to exericse caution in case these statutory differences may lead to different results. Ryde 466 devotes the whole of Chapter 25 to the tone of the list and the date of valuation in the context of the English legislation.

38. In accordance with those principles collected by Ryde Mr. Heath advanced cogent reasons why, in certain circumstances, correctness of valuation should be sacrificed in order to preserve the tone of the list. Mr. Heath was of the opinion that the Commissioner's approach in February 1976 was reasonable. He conceded, however, that now with the advantage of hindsight, the approach in pure valuation terms was inaccurate. However, he went on to point out that the unanticipated upward movement in values when the projection was they would ease on an already falling market, did not assert itself until the last quarter of 1976. By July 1976, he stated, there was not sufficent evidence to justify the Commissioner in reversing the projection already made although this conflicted with his other statement that there was evidence in April 1976 that the market was no longer falling.

39. The appellant had submitted that even if the approach in February 1976 was reasonable, the downward projection should have been checked against the market between February 1976 and March 1977 and any necessary adjustments made. The appellant recognised that in practical terms it would be difficult to take into account any major fluctuations in the final weeks before the list was declared in March 1977. However, it was the appellant's view that values available to the Commissioner during the latter half of 1976 should have put him on notice that his projection was seriously in error and that he should have taken steps to remedy his error before declaring the list on the 3rd day of March 1977. The position of the market down to the end of June 1976 was important so far as the Commissioner was concerned for no doubt very practical reasons.

40. For the Commissioner pointed out that the final valuation figures for the 1977 general revaluation, were handed over to Treasury on the 22nd day of June 1976, to enable them to be computerised. When cross-examined over the necessity to hand the figures over at such an early date, it was explained that computer time was allocated to different Government departments in accordance with a prearranged timetable which could not easily be altered.

41. Counsel for the appellant, adopting much of the language of Scrutton L.J. in Ladies Hoiserv and Underwear Ltd. v. West Middlesex Assessment Committee (1932) 2 K.B. 679 submitted that correctness as a matter of law should not be sacrificed to uniformity; that unfairness should be corrected by seeking uniform correctness. Fairness could not be achieved by preserving uniform unfairness. That English Court of Appeal decision is in most respects no longer good law as a result of the enactment of Section 20 in England. In Hong Kong our Sections 7 and 7A equally effectively dispose of that part of its ratio which held that the valuation of a new tenement which has come into existence since the last general revaluation, does not have to be valued by reference back to the date of that last revaluation. However, Counsel for the appellant argues that the other principles of the judgment have not been reduced by the subsequent legilsation.

42. Certainly the tone of the list can only properly be preserved if the values on which it is based are correct. On this point Ryde cites the English Lands Tribunal decision of Boddington v. Sture (Valuation Officer) (1970) 17 R.R.C. 112, 116 :

"

I take the view that in s. 20 the words 'the value which would have been ascribed' can only mean the value which would properly have been ascribed; and I do not see that the words of the statute can be invoked in order to give authority to an incorrect value merely because it was in fact the value ascribed. In other words any value in the list can be challenged by an aggrieved person at any time; ... In either case it is the duty of the tribunal to examine the proposal on its merits."

43. It is not seriously disputed that the Commissioner's valuation was neither the correct value of the tenement during February 1976 when it was made or as at the 1st day of April 1977 when it came into effect. As we have already held, we are concerned with the value of the tenement as at the 3rd day of March 1977 or as at the lot day of April 1977. The facts are quite different to those which arose in the Ladies Hoisery Case or in any of the other criticised decisions where - as is now prohibited by statute - tenements were valued at dates other than the date of the last quinquennial or other periodic general revaluation.

44. Here we hold that the valuation should have been made to reflect, as far as possible, the values existing as at the 1st day of April 1977. Because of the necessity to project the valuation forward it was sufficent, the Commissioner submitted, if the valuation based on current values in February 1976 reflected, in Lord Denning's earlier cited words, "as far as possible" the values which would prevail on the 1st day of April 1977. The question, even on that qualified basis, is whether the Commissioners valuation did reflect, as far as possible, the anticipated value of the tenement at that future date.

45. The Tribunal recognises the difficulties of forecasting trends. These difficulties are increased by the technical problems of completing a major revaluation as close as possible to the date the list comes into effect so as to reduce the period of forecast. Ryde page 476, recognises these difficulties :

"

... it is also clear that the valuation list there under dispute was based on rental evidence gathered up to an earlier date, as indeed it had to be. While improved office machinery and techniques may shorten the mechanical aspects of preparing a list, the time taken overall must mean that the list is based on rental evidence of a date some time before it takes effect."

46. In England a valuation officer is not under any statutory duty to anticipate changes between the date of his valuation and the date it comes into effect but may do so. In England if he does so, then in the absence of bad faith, it is apparently difficult to challenge his forecast.

47. On this application there is no suggestion that Commissioner acted other than in good faith. The burden of the appellant's complaint is that well before the Valuation List was declared or came into effect, it should have been known to the Commissioner that his forecast was wrong.

48. The Commissioner states that because the earlier valuation figures were handed to Treasury for computer processing on the 22nd day of June 1976 it was not "possible", in Lord Denning's phraseology, to take any changes to reflect market changes thereafter. Not only do we appreciate the Commissioner's difficulty in making the projection he elected to make, but we have some sympathy for his misfortune in then witnessing the market rise even more sharply than he had expected it to ease.

49. As to projections Ryde at page 479 makes this observation:

"

A difficult question is the extent to which a ratepayer or other person may challenge on merit an assessment in which the valuation officer has "given effect to future trends". One established trend has been inflation, and the increase in rental values due in truth to the decline in the value of money. The valuation officer has no general duty to anticipate general changes in rental values, and in particular need not anticipate changes in the value of money; however he may do so, it seems, and if he acts properly his opinion will not be open to challenge in law."

50. The words "given effect to future trends" are taken from the judgment of the Divisional Court in Peachey's Case to which we have already referred, although from the judgment of Lord Denning, after it went up to the Court of Appeal, on appeal from the Divisional Court. After stating that the valuation officer had a discretion whether to anticipate general changes in rental values Widgery J., as he then was, who delivered the judgment of the Divisional Court below, went on:

"

In the opinion of the court the valuation officer should have regard to the desirability of his list being up to date when it takes effect. He should postpone the collection of rental evidence and the actual compilation of the list for as long as is reasonably possible having regard to the work to be done, but the actual timetable to be adopted is a matter for his own discretion, if he acts in good faith. Having thus compiled his list on the material then available, he may give effect to anticipated future trends, if his skill and experience tell him these trends are sufficently established, but his question is one of profess onal opinion and his decision will rarely be open to challenge as being contrary to law. He should hesitate to disturb the fairness and equality of his original list by giving effect to evidence of altered value which comes to him too late to be reflected in the list as a whole."

51. In Hong Kong, very much more than in England, anticipating trends in the property market is difficult. Where the period for which it is necessary to forecast is not limited to several months but, as in this case, amounts to more than 1 year, any such forecast becomes less a matter for an expert's skill and experience and more a matter for informed speculation. The dangers inherent in any long term forecast of this nature, are highlighted by how inaccurate and misleading the Commissioner's forecast turned out to be, once that period had expired. This should at least instill caution in the valuer. The peculiar circumstances of the Hong Kong property market also makes statements of general principle in English rating cases, at least in the area of forecasting trends, of much less weight and relevance.

52. The Commissioner relies on these English statements of general principles to uphold his forecast. The appellant argues that on the undisputed facts the Commissioner had ample time to change his original February 1976 valuation once the market began to rise from July 1976 before, many months later, the Valuation List was declared. We accept that the Commissioner has the power to anticipate general trends although he should do so with caution. We accept too, that for the practical reasons we have already adverted to the Commissioner is obliged some months before the Valuation List is declared to treat as final and no longer take into account, changes that may have occurred since the time of the original physical valuation. The crucial question is whether before that time arrived did he have sufficent notice that his projection was wrong.

53. Unfortunately, for practical reasons, it is not possible to reproduce in this judgment the graph which was produced as Exhibit A3 showing the movement of rental values in Olympian Mansions from the 1st day of January 1973 to the 1st day of April 1977. This confirms the general rental trend of domestic post-war properties rents which increased sharply in 1973 and then declined through 1974 until the middle of 1976 when they commenced to rise sharply and continued to rise through the first quarter of 1977.

54. The appellant's valuer who gave evidence stated that the sharp cyclical movements indicated by the graph, are typical of rising and falling Hong Kong rentals for this type of tenement, over even longer periods. Accordingly in his opinion any experienced and skillful valuer, when entering upon a long range forecast, would take into account the probability of a falling market rising in the future.

55. The danger's of forecasting were highlighted in the evidence given for the Commissioner. The Commissioner's witness stated that in these circumstances forecasting is "hazardous". He further stated that it was not until April 1976 that there were signs that the falling market had bottomed out. However, he qualified that statement by stating that it was not until late 1976 that the market "rose dramatically."

56. In the light of the whole of the evidence we arrive at these conclusions. First, that in forecasting trends beyond February 1976, in order to project the valuation forward to the 1st day of April 1977, the Commissioner did not give sufficent weight to the cyclical, if erratic, Hong Kong property market. Secondly, even if the projection were reasonable in the circumstances existing in February 1976, the Commissioner knew, or should have known, at least during the last quarter of 1976, that his projection was seriously in error. Thirdly, that even though arrangements may have been made to process the valuations by computer, he should have been in a position to have altered his valuations during the last quarter of 1976. For that was not a matter of a few weeks but 3 to 6 months before the Valuation List was declared and shortly thereafter came into effect.

57. Whether computer time should have been reserved later in 1976 or whether the Commissioner should have arranged to have the processed or partly processed valuations, altered during 1976, are details it is not necessary for us to consider or comment upon. What is abundantly clear is that the steps taken, fell far short of the steps it was reasonably possible to have taken.

58. After taking these matters into account and giving full weight to the desirability of preserving the tone of an established Valuation List, we can only conclude that the value of this tenement in the Valuation List is, in terms of the Rating Ordinance, incorrect.

59. Facts in each case necessarily differ and while we are conscious of the dangers, it may be helpful, in view of the very comprehensive submissions we have heard on the tone of the list, if we were to set out these very general guidelines where the tone of the list is in issue:

60. On this appeal we are satified that in determining the base monthly rent at $4,800 the Commissioner made a major error. Both expert witnesses for each party were of the opinion that the correct base monthly rent in February 1976 was $5,200. The projection downwards should have been corrected when later in 1976 it became apparent that far from easing rents were sharply rising. The expert witnesses evidence could supporta base monthly rent as at the 1st day of April 1977 of up to $5,700 and certainly in excess of $5,200.

61. After considering the whole of the evidence and giving due weight to all the relevant principles, including the tone of the list, we determine the 1977 rent at $5,500 per calender month which produces a rateable value of $66,000. We there fore mace the following orders:

Liberty to apply in relation to any consequential matters is reserved.

DATED this 11th day of December 1982.

Representation:

Mr. A. Huggins instructed by Robert W.H. Wang & Co for the appellant.

Mr. N.L. Strawbridge, Crown Counsel for the respondent.