Chum Hon Chi v. Director of Lands

CACV000122/1996

IN THE COURT OF APPEAL

1996, No. 122
(Civil)

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Coram: Hon Litton, V.-P., Liu and Ching, JJ.A. in Court

Date of hearing: 26 July 1996

Date of judgment: 26 July 1996

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J U D G M E N T

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Litton, V.-P. (giving the judgment of the Court):

1. We have before us a motion taken out by the Director of Lands, the respondent to the appeal, that the notice of appeal dated 3 July 1996 taken out by the appellant be struck out and the appeal dismissed. The motion is based on two grounds:

(1) That the notice was not served within 21 days of 23 May 1996 on which the judgment of the Lands Tribunal was given; and

(2) that the appeal is frivolous, vexatious and an abuse of process in that the appeal fails to specify the grounds of appeal identifying a point of law to be decided by this court.

2. The matter concerns a workshop, the Sam Hing Hong Roller Shutter Co., previously located at the Ground Floor of 11 Sui Lun Street which was resumed by the Crown on 3 October 1992 on account of the Housing Society's Urban Improvement Scheme. The award of the Lands Tribunal concerns business loss suffered by the appellant, compensated under section 10(2)(d) of the Crown Lands Resumption Ordinance, Cap 124.

3. There were two items of claim which principally concerned the Lands Tribunal: (1) a claim of $110m made by the appellant for loss of goodwill; and (2) a claim for loss on the forced sale of stock, machinery and equipment which amounted to approximately $2.39m.

4. As regards the claim for loss of goodwill in the sum of $110m this was computed on a figure of $1.542m annual profits as a starting point, increased annually by 18.5% for growth and projected to the year 2047. On any view of the facts as found by the tribunal this was a grossly exaggerated sum. The business was located in a dilapidated area of Kowloon and in a building which had stood for want of repair for very many years.

5. In relation to the total claim the tribunal awarded a sum of $4.65m which included (1) loss of goodwill in the sum of $3.9m and (2) loss on forced sale of machinery, etc in the sum of $608,850.

6. The appellant was dissatisfied with the award and sought a review of the decision of the tribunal, as he was entitled to do, and this was heard on 26 June 1996 when by its determination of that date the tribunal affirmed its earlier award.

7. On 3 July 1996 the appellant lodged his notice of appeal and the sole ground of appeal is stated as follows:

"The ground for review is that the calculation approach cannot fulfill the fundamental principle of compensation which is to put the party who has suffered in the same position he would have been if he had not sustained the damage due to resumption."

8. On 11 July 1996 the Director of Lands took out the present motion before us.

9. In relation to the first point relied upon by the Director, the time point, Mr Lam on his behalf draws our attention to the provisions of Order 60A of the Rules of the Supreme Court, Cap 4 which requires that a notice of appeal be served within 21 days of the date on which the decision or order of the tribunal was given. He says that as the original decision was given on 23 May a notice of appeal lodged on 3 July is clearly out of time. This however ignores the decision given on 26 June on review. If the computation of the 21 days were made from the date of the decision on review then the appellant is plainly within time. It is unnecessary for us to determine the issue as to whether the computation is made from the date of the original decision or that on review. On any view of the matter if there were a valid point of law for determination we would have extended the time necessary for the lodging of the notice of appeal. It would therefore be convenient to turn to the second point, namely the fundamental defect in the notice of appeal in that it fails to state a point of law for determination by this court.

10. Plainly on the face of the notice of appeal as lodged, the point is well taken by the Director. What is sought in the notice of appeal is in effect a complete review by this court of the approach of the tribunal to the award of compensation. This court has no such power. Our powers are limited by s11(2) the Lands Tribunal Ordinance, Cap 17 which states:

"any party to proceedings before the Tribunal may appeal to the Court of Appeal against a determination or order of the Tribunal on the ground that such determination or order is erroneous in point of law."

11. However a few days before the day fixed for the hearing of this motion, the appellant lodged what he calls "skeleton arguments" which we have looked at with care. This has been elaborated upon in oral argument before us.

12. As the appellant is unrepresented, we have deemed it our duty to use our best endeavours to see whether there are in fact questions of law raised in his home-made arguments. Three possible points have been identified in relation to which we allowed argument.

13. The first is this: "The tribunal erred in point of law in failing to give effect to the provisions of s12(aa) of the Crown Lands Resumption Ordinance Cap 124 by erroneously taking into account the fact that the appellant's workshop fell within an area affected by the resumption."

14. This has reference to a passage in the Tribunal's judgment where they said:

"the area affected by the Scheme is an old quartier due for renewal. Sporadic re-development had been going on for some time in the immediate vicinity. It was to be expected that very soon either the government would resume or private developers would assemble sites in the area for major re-construction .... We would not give a business within the area affected by the Scheme more than 5 years before it is extinguished by natural causes."

15. On that basis the tribunal projected the future loss of profit for 5 years. The question is whether arguably there is an error of law for which we ought now to give leave to amend the notice of appeal.

16. Mr Lam opposes the application because he says that it is bound to fail. If the judgment were read as a whole then it is not capable of the construction for which the appellant contends. We have looked at the judgment carefully and we agree with Mr Lam. All that the tribunal meant to say was that facts such as the age of the building and the dilapidation of the area in which the business was located must be taken into account. This plainly is consistent with the provisions of s11(1)(a) of the Crown Lands Resumption Ordinance, Cap 124 which says that the tribunal in determining compensation may:

"take into consideration the nature and existing condition of the property, and the probable duration of the buildings in their existing state, and the state of repair thereof;"

17. Although that provision relates to assessing compensation for the resumption of property and not for extinguishment of business it does not mean that the tribunal is not entitled to take into account the state of repair of the building in which the business is located. We therefore decline leave to amend in relation to the first point.

18. The second matter is this: The appellant with assistance from this court applies to amend his notice of appeal as follows:

"The Tribunal erred in point of law in the assessment for loss of goodwill by deducting from the annual profits figure of $1.16m 'an element of wages for the appellant himself' as sole proprietor (see para 17 of judgment) when such deduction is arbitrary and not warranted in principle."

19. This has regard to the fact that the profit is produced partly from employed labour but also from the appellant's own efforts within the business. Plainly, if the appellant did not work in the business himself then he would have to employ someone else and pay for such services. It seems to us therefore that to arrive at the true profits, some sort of deduction is permissible. We therefore see no possibility of that point succeeding if the notice of appeal were amended. We therefore decline leave in relation to the second point.

20. The third point is formulated as follows:

"In arriving at the lump sum payment for loss of goodwill the Tribunal applied a discount rate of 9% (see p15 of judgment). In so doing the Tribunal erred in law and contradicted itself because the multiplier was 'selected on personal injuries basis' (p14 of judgment) and on that basis the discount rate should only have been 4-5%."

21. When the point was put to Mr Lam he very fairly conceded that, arguably, this is a matter which might properly be considered by the Court of Appeal on the substantive appeal as constituting a point of law. We express no view as to the merits of the point, which has not of course been argued.

22. The proper course therefore is give leave to the appellant to amend the notice of appeal to add the point of law which we have just articulated and we remind the appellant that physically his notice of appeal lodged in court will need to be amended.

23. The position therefore is that in giving leave as we do, there is now before us a properly constituted notice of appeal and the Director's motion to strike out the notice of appeal and have the appeal dismissed must therefore itself be rejected.

24. The appellant has asked that the costs of this motion be paid by the Director as to which we shall hear counsel Mr Lam.

25. Having heard counsel we order that the costs of the motion to strike out be costs in the appeal.

Representation:

Mr Simon K.C. Lam (Attorney General's Chambers) for the Respondent/Respondent

Applicant (Appellant) in person