Read the full judgment text of LDCS 011000/2006 on BabelCite. This LDCS judgment was delivered on 23 June 2008 before H.H. Judge Thomas Au, Mr. W.K. Lo.
Lands Tribunal – Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) – compulsory sale of lot for redevelopment – majority owner with 92.87% undivided shares – two 46-year-old buildings (Kam Kwok Building and National Building) on the Lots situated at the Remaining Portion of Section A of Marine Lot No. 436 and Section F of Marine Lot No. 435 – Applicant purchased majority shares in 2006 public tender for $825 million – Whether Ordinance infringes Basic Law Articles 29 (inviolability of homes) and 105 (protection of private property and compensation for deprivation) – Whether applicant meets 90% undivided shares threshold under s. 3(1) – Whether EUVs of individual residential and commercial/retail units are appropriate – Whether redevelopment justified on grounds of age or state of repair – Whether applicant took reasonable steps to acquire minority shares – Whether RDV too low – Constitutional challenge rejected; Articles 29 and 105 do not apply to private-to-private transfers under the Ordinance, following Harvest Good Development Ltd v Secretary for Justice – 90% threshold satisfied based on undivided shares of the entire Lots (not each building) – date of EUV valuation is the date of the valuation report attached to the application (29 September 2006), not the date of trial – tribunal adopts mixed approach to EUV valuation: Mr Chan's basic unit rates for residential units with Mr Lynch's RZA method for commercial/retail units – meaning of "age" and "state of repair" under s. 4(2)(a)(i) interpreted broadly: land economic test (cleared site value exceeds EUV) applicable to age; repair cost vs. enhancement value test applicable to state of repair – redevelopment justified on ground of age: cleared site value of approximately $1.2 billion substantially exceeds EUV of approximately $579 million – redevelopment justified on ground of state of repair: total repair cost of $91,239,654.50 exceeds enhancement value of $70,770,954 by $20,468,700.50 – reasonable steps requirement under s. 4(2)(b) satisfied: four written offers and meetings; offer prices based on auctioned sale price and Savills valuation fall within range of fair and reasonable compensation – reserve price fixed at $1,421,124,000 reflecting 8.4% increase (1.4% per month over 6 months) over January 2008 RDV – order for sale granted – costs nisi against 13th Respondent (China Superior) only, on High Court Scale with certificate for 2 counsel
Legal issues: Constitutionality of the Ordinance under Basic Law Articles 29 and 105 · Whether the 90% undivided shares threshold is met · Correct date of EUV valuation · Appropriateness of RZA method for commercial/retail unit valuation · Proper interpretation of "age" and "state of repair" under s. 4(2)(a)(i) · Whether redevelopment is justified on the ground of "age" · Whether redevelopment is justified on the ground of "state of repair" · Whether Intelligent House took reasonable steps to acquire minority shares
Outcome: Order for sale of all undivided shares of the Lots granted in favour of the Applicant Intelligent House Limited; redevelopment held to be justified on grounds of age, state of repair, and collectively on both grounds.
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