Fineway Properties Ltd v. Sin Ho Yuen Victor, The Administrator of the Estate of Sin Yat

CACV 95/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 95 OF 2009

(ON APPEAL FROM LDCS NO. 5000 OF 2007)

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BETWEEN

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Before: Hon Le Pichon, Cheung JJA and Lam J in Court

Date of Hearing: 18 November 2010

Date of Handing Down Judgment: 30 November 2010

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Hon Le Pichon JA:

1.This is an application by the respondent for leave to appeal to the Court of Final Appeal pursuant to section 22(1)(a) and (b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484. At the conclusion of the hearing judgment was reserved which we now give.

2.The matter before the tribunal was the applicant’s application for an order for the compulsory sale of a building.  The respondent is the owner of one undivided share of and in the building, representing 6.25% of the lot.  The trial commenced in June 2008 and shortly after it began, the parties agreed the reserve price or redevelopment value (“RDV”) at $122 million.  Unfortunately the trial dates of 7 days proved wholly inadequate and the matter had to be adjourned, part heard, for another 7 days commencing 8 December 2008 and a further 4 days in February 2009.  On 11 December 2008, the applicant applied to reopen the fixing of the RDV which had been agreed that $122 million, inter alia, because the financial crisis had occurred during the 6-month adjournment.  The tribunal allowed the application and ultimately set the RDV at $70.5 million.

3.In March 2009, the tribunal handed down its judgment.  Inter alia, the tribunal made an order that the lot be sold by way of public auction pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 and made provision for the sale by public auction with the reserve price set at $70.5 million.

4.The auction duly took place.  The applicant was the only bidder and acquired the lot at the reserve price of $70.5 million.

5.When the matter reached this court, the respondent had accepted the reality of the auction but contended that the tribunal had erred in allowing the RDV to be reopened.  The respondent contended that if the tribunal had not erred, the respondent would have been entitled to his proper share calculated, at a minimum, on the basis of the previously agreed reserve price of $122 million rather than the reserve price of $70.5 million and that the difference or shortfall is at least $6.2 million.

6.While this court had considerable sympathy for the respondent and his predicament, it did not consider that it had jurisdiction to order the applicant to pay the respondent the shortfall and held that the absence of any available remedy was the inevitable consequence of the respondent not having obtained a stay.

Section 22(1)(a)

7.Although the submission that the respondent is entitled as of right to appeal was not the main focus of Mr Coleman SC’s submissions but rather an afterthought, logically, this needs to be addressed first.

8.The proper construction of the two limbs of section 22(1)(a) has been the subject of recent Court of Final Appeal decisions.  The first limb applies to money claims.  I do not consider that the first limb is applicable because had an auction taken place with a reserve price of $122 million, it might have fetched a higher price, resulting in the respondent’s share of the proceeds being greater than $6.2 million.  The fact that the respondent is content to be paid $6.2 million does not alter the fact that his claim remains an unliquidated claim and, as such, does not fall within the first limb.

9.As regards the second limb, it is clear from China Field Ltd v Appeal Tribunal (Buildings) (No. 1) (2009) 12 HKCFAR 68 §§17, 18 and 24, that a narrow construction is to be adopted.  It only applies if the claim is to particular property or to a proprietary right of the requisite value: see WLK v TMC (No. 1) (2009) 12 HKCFAR 473, §§12 and 13.  The respondent’s claim is a monetary claim, albeit that it represents a share of the net proceeds of sale derived from the sale of property that he owned.

10.For those reasons, I do not consider that the respondent is entitled to appeal as of right.

Question of great, general or public importance

11.The question as formulated by Mr Coleman is as follows:

“whether there is a remedy available to a minority owner after an auction has taken place when it has been held that the reserve price at that auction was the wrong price.”

12.Mr Coleman submitted that the presence or absence of jurisdiction to grant a remedy to redress the tribunal’s error cannot be determined by the grant or refusal of a stay since a stay requires a discretionary and balancing exercise to be undertaken by a court by reference to matters that may not be relevant to the question of the court’s jurisdiction.  I can see the force of that submission.  For my part, I would grant leave to appeal pursuant to section 22(1)(b).

Hon Cheung JA:

13.I agree.

Hon Lam J:

14.I agree.

Mr Mok Yeuk Chi, instructed by Messrs Lo, Wong & Tsui, for the Applicant/Respondent

Mr Russell Coleman SC & Mr Liu Chin Yu, instructed by Messrs Wong Poon Chan Law & Co., for the Respondent/Applicant