Chow Chi Keung v. China Light and Power Ltd

LDMR000001A/1982

Lands Tribunal - procedure - stay of execution pending appeal - discretion - generally stay only granted where respondent probably unlikely to recover back compensation if award quashed or reduced on appeal - grounds of appeal may also be relevant to exercise of discretion to stay - Held : Application for stay refused -- s. 10 Lands Tribunal Ordinance, Cap. 17, R.S.C. Order 13 r.1.

IN THE LANDS TRIBUNAL OF HONG KONG

Miscellaneous Reference No.1 of 1982

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

Date: 3rd day of June, 1983

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JUDGMENT

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1. On the 11th day of March 1983 the Tribunal awarded the applicant $20,000 compensation, pursuant to Section 10 of the Electricity Networks (Statutory Easements) ordinance, Cap. 357, for the diminution of the value of his land being lot 998 in Demarcation District 130, New Territories, Hong Kong, attributable to the registration of the Order which has allowed the respondent to carry electricity transmission lines over the land.

2. The respondent on the 25th day of March 1983 gave notice of appeal, by way of case stated, against that award of compensation.  The Tribunal has yet to receive, consequent to that notice of appeal, the draft Case Stated for consideration.  However, on the 24th day of May, 1983 the respondent further gave notice that it would apply to the Tribunal on the 3rd day of June 1983 for a stay of execution of the order awarding compensation, pending the disposal of the appeal.

3. Counsel for the respondent has appeared and informed the Tribunal today that the reason why the stay is sought is to avoid the respondent having to issue Court proceedings, if necessary, to recover the compensation if it were paid, in the event of the appeal being successful.  The respondent conceded that it could place no evidence before the Tribunal questioning the ability of the applicant to make repayment if the appeal were successful.  We also note that no affidavit has been filed by the respondent deposing to any factors relevant to the applicant's financial position from which we might infer that the respondent might find it difficult in that event to effect recovery.  We would record that the respondent has offered to pay the whole sum into the supreme Court pending the outcome of the appeal or alternatively to pay half of the sum awarded by the Tribunal to the applicant immediately.

4. Whether a stay is granted is a matter for our discretion. The general principle is that an appeal does not operate as a stay. Under Section 10 of the Lands Tribunal Ordinance, Cap. 17, R.S.C. Order 59 Rule 13 applies, which provides :

It is clear from the principles collected in 1 'Supreme Court Practice 1982' 955, that on the one hand a. successful litigant should not be deprived of the fruits of his litigation by having his funds looked up, while on the other hand the Court should ensure that an appeal, if successful, should not be nugatory. The rule is stated by the 'Supreme Court Practice' in these terms:

5. An offer of payment into Court is not equivalent to payment to the applicant. On the other hand where a stay is granted in accordance with the general rule already referred to, the Tribunal might well in addition order payment into Court of the full sum awarded, to protect the position of a successful party before the Tribunal, where the financial position of an appellant were doubtful. The respondent is clearly far from being in that category. There is no evidence which would, on any ground, justify us in making an order for payment into Court.

6. In the instant case, the award of compensation was for a relatively small sum. During the hearing it was disclosed that in line with similar offers to many other affected land owners, the respondent had already offered the applicant an ex-gratia payment of $10,346. The applicant is in regular employ-ment as the Operations Manager of an air freight company. He is the Crown registered lessee of the subject property which is unencumbered and farmed by his parents. Far from there being no evidence adduced by the respondent that there would be no reasonable probability of recovering back the compensation if it succeeds on appeal, all the evidence points to the contrary.

7. In the exercise of our discretion, it is also open to us to consider the grounds of the appeal. Generally it is undesirable at this stage to review our substantive judgment in detail or comment on the merits of an appeal. However, where we are satisfied that a judgment was per incuriam or that the grounds of the appeal appear particularly strong, that might lead us to grant a stay even though there was every probability that, if the appeal were allowed, the appellant would probably have no difficulty in recovering any compensation earlier paid. As to the grounds of the appeal we would in this particular case make these two passing observations. First, in reaching our judgment we gave consideration to the permitted use of the subject property under the Crown lease which merely described the property in the schedule as a "padi" lot. At page 6 of our judgment we held that description included general agricultural purposes:

"We have not overlooked that, as was typical for leases of this vintage, the permitted use is described as a "padi" lot. We hold that such a use includes not merely the growing of rice but general agricultural purposes."

Two days after our decision, the Court of Appeal in Melhado Investment Ltd. v. Attorney-General Civil Appeal No. 79 of 1982, delivered judgment in respect of another property in the New Territories where the provisions of a similar block lease were considered. The Court of Appeal saw no reason to doubt its earlier decision in Watford Construction Co. v. secretary for the New Territories (1978) H K.L.R. 410 that the description of land in the schedule to a block lease was merely a description of the land and not a limitation on use.

8. Secondly, we held that in ascertaining the open market value of the land in accordance with Section 10(1) no deduction was to be made for residential buildings under Section 10(5).  In our earlier judgment we pointed out that the provisions of Section 10(5) are similar to Section 12(c) of the Crown Lands Resumption Ordinance, Cap. 124, which directs that no compensation shall be given in respect of any expectancy or probability of the grant or of any renewal by the Crown to any person of any licence, permission, lease or permit. The respondent argued that buildings could only be lawfully erected pursuant to a Modification of Tenancy.  This particular Modification of Tenancy was revocable at will by the Crown as lessor but otherwise enured subject to payment of an annual fee.   The respondent submitted the property was to be valued as only bare agricultural land.  The Crown apparently accepted that the pigsties and chicken sheds did not require any approval by the lessor for the Modification of Tenancy only covers the residential building which was small house.

9. The house was occupied by the applicant's parents who were responsible for looking after the pigs and chickens reared in adjoining buildings also erected on the property.  We would record that, although the issue was not argued before us when the applicant was unrepresented, that it would have been open to us to have arrived at our same conclusion disregarding, the Modification of Tenancy, but by a different route.  For the house was occupied in relation to the lawful agricultural use of the land, namely as the home for the two persons who were responsible for rearing the pigs and chickens.  On this finding the occupation of the house fell within the agricultural use of the property. In that event, as a matter of law, no Modification of Tenancy was necessary. However, as a matter of practice, Crown lessees in the New Territories commonly obtain such modifications.  That practice was followed in the instant case but it seems equally clear that it was an unnecessary exercise, at least so long as the house was used by persons occupied in rearing the pigs and chickens on the property. We would add that not only is this alternative ground supported by the Court of Appeal's decision in Melhado Investment Ltd. v. Attorney-General but it also gains strength from the recent judgment in Winfat Enterprises (H.K.) Ltd. v. Attorney-General M.P. No. 982 of 1982 delivered even more recently on the 29th day of April 1983.

10. Dealing with the earlier decision, the Court of Appeal in Melhado Investment Ltd. v. Attorney-General rejected the Attorney General's submission that the words in the schedule were more than descriptive.  They declined to hold that the words in the schedule limited the lawful user of the land and held that the description in the schedule did not affect the use of the land. The Court of Appeal was strengthened in coming to that decision by the fact that the lease contained a positive covenant requiring a licence before the land was converted into use for building purposes. Here too the lease requires a licence from the Crown before the land is converted to building purposes. However, a licence is not required for all buildings but only for buildings, to quote from the words of the lease:-

"other than for the proper occupation of the same ground as agricultural or garden land ... "

No such licence is therefore required for buildings erected in relation to the agricultural use of the land.

11. In Winfat Enterprises (H.K.) Ltd. v. Attorney-General the High Court considered permitted uses under a similar agricultural block lease. After doing so Kempster J. made, what was in those proceedings the 10th declaration, in these terms:-

"The severed land may be and prior to resumption the resumed land might lawfully have been used for open storage of motor vehicles or any purpose apart from building purposes inconsistent with the proper occupation of the said lands as agricultural or garden land or from any noisy, noisome or offensive trade or business."

12. Kempster J. implicitly recognised that agriculture land under block leases may be used for residential purposes consistent with the proper occupation of the land as agricultural land. It is difficult to envisage any residential occupation more consistent with agricultural use, than the occupation of the sole residential unit on the agricultural land by the husband and wife responsible for rearing the pigs and chickens on the land when, furthermore, the rearing of those pigs and chickens is the principal and lawful agricultural use of the land.

13. At this stage these matters are relevant to the limited issue of the exercise of our discretion whether to stay the enforcement of the substantive judgment. They at least make it arguable that our final conclusion could be supported not only on the express ground therein set out but also on the latter alternative ground which has, prima facie, gained in strength as a result of the recent decisions of the Court of Appeal and the High Court in Melhado Investment Ltd. v. Attorney-General and Winfat Enterprises (H.K.) Ltd. v. Attorney-General respectively.

14. For all the foregoing reasons we reject the respondent's application for stay pending appeal. There will be no order as to costs on the present application for stay.

DATED this 3rd day of June, 1983.

Representation:

Mr. R. Morris of Deacons for the respondent.

The applicant in person.