The Hongkong Land Co Ltd v. The Secretary of State of the United States of America
Read the full judgment text of DCMP 2/1974 on BabelCite. This District Court judgment.
1. The real issue between the parties in these appeals is the matter of the 'fair market rent'. Once this is established in respect of each of the suit premises, the amount by which the rent may be increased, if at all, is determined by a simple mathematical calculation based on the formula provided in Section 58(2).
|
IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CIVIL JURISDICTION LANDLORD & TENANT APPEAL NO. 2 OF 1974 (Consolidated with Nos. 8 and 9 of 74) -----------------
----------------- Coram: Hooper, D.J. in Court. Date of Judgment: 26th September 1974. ----------------- JUDGMENT ----------------- 1. The real issue between the parties in these appeals is the matter of the 'fair market rent'. Once this is established in respect of each of the suit premises, the amount by which the rent may be increased, if at all, is determined by a simple mathematical calculation based on the formula provided in Section 58(2). 2. In determining what is the 'fair market rent' I repeat everything I said in the judgment in Landlord & Tenant Appeal No.4 of 1974. 3. In the present appeals both parties have agreed that the relevant date for determining the 'fair market rent' is the date of the application for an increase in rent to the Commissioner of Rating and Valuation under Section 57. 4. I have therefore considered the 'fair market rent' in respect of the following dates:
5. As I indicated in my previous judgment, it is my view that before the Court can reach a conclusion as to the 'fair market rent', it is necessary to first consider the length of term for which the suit premises could reasonably be expected to be let, because this would have a bearing on the amount of rent for which the premises could reasonably be expected to be let. I am satisfied on the evidence in this case that the suit premises could each reasonably be expected to be let for terms of 2 to 3 years, disregarding the effect of Part II. 6. In assessing the 'fair market rent' I made some observations in my previous judgment about the probable effect of Part II on the recently negotiated tenancies. I felt that some discount should be made, on the basis that Part II must have pushed up the market rent to some extent. Expert evidence has now been led and figures for rent have been quoted in respect of premises recently let in the Mei Foo Sun Chuen Development, showing the rents in respect of premises for which the occupation permits were issued before the 14th of December 1973, and in respect of premises for which the occupation permits were issued after the 14th December 1973. The two sets of figures appear to show that the tenants paid similar rents in both cases, and on the strength of these figures Mr. Doran maintained that Part II had had no effect upon the market rents to-day. 7. I do not think these figures for rents in the Mei Foo Sun Chuen Development are very helpful because
8. Mr. Waung has asked me to consider the passage in Megarry's Rent Acts, 10th edition, Volume I at p. 393 under the heading 'Return on Capital Value'. This I have done. The return which the landlord has for his investment is a factor for consideration that it is only one of the factors for consideration. 9. I have been asked to take into consideration the fact that the net usable floor area of the flat A2 is only about 1600 sq.ft. This is not really disputed. Mr. Brook said "it could well be that." I have borne this in mind. 10. While the evidence of rent passing is indicative, it is not conclusive evidence of the 'fair market rent'. Many factors must be considered of the sort I have mentioned, and in particular it must be reasonable. 11. Evidence has been given as to the levels of cents of other similar mid-level properties and I am of the opinion that these should also be considered as well as rent passing for flats in the Fair Lane Towers Building at 7B Bonham Road. On the evidence as a whole I am of the opinion that the 'fair market rent' for each of the suit premises is as follows:-
12. In reaching this decision I have taken into consideration the location of the premises, the age and character of the building and the standard of maintenance and repair. From a visit to the premises by the Court it is evident that the lower apartments on account of having a restricted view would be less attractive and this factor has been taken into consideration in assessing the 'fair market rent'. CALCULATIONS
13. Since the increase is less than 21% of the current rent it is not necessary for me to consider the rateable value.
14. Again as this is less than 21% of the current rent, the rateable value did not need to be considered. 15. In these cases therefore the appeal is allowed and under Section 60(3) I vary the permitted increase from $310 to $560 in respect of flat 2A and from nil to $220 in respect of flats 6B and 7B. 16. Finally in conclusion I would like to thank the legal representatives of the parties who have assisted the Court, and also Mr. Wood the nominated assessor who has been of considerable assistance to me.
Representation: Mrs. Wong of Deacons for Appellant. W. Waung instructed by Johnson, Stokes & Master for Respondent. |
Further hearings and rulings under DCMP 2/1974