Tsui Tan Fai and Another v. Director of Lands
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CACV000124/1996 IN THE COURT OF APPEAL 1996, No. 124
-------------------------------- Coram: Hon Litton, V.-P., Liu and Ching, JJ.A. in Court Date of hearing: 26 July 1996 Date of judgment: 26 July 1996 ---------------------- J U D G M E N T ---------------------- Litton, V.-P. (giving the judgment of the Court): 1. We have before us a motion by the Director of Lands that a notice of appeal lodged by the appellants dated 3 July 1996 be struck out and the appeal dismissed on two grounds:
2. We feel that we only need to proceed on the basis of the second ground. In all the circumstances of the case and particularly as the appellants are unrepresented, if there had been a failure to observe the time limit we would have given an extension of time: assuming, that is, that there were some clearly identified questions of law to be determined. We move therefore to consider whether the appeal should be dismissed on the basis that it is frivolous, vexatious and an abuse of process. 3. The appellants are the owners of a restaurant entitled Lucky Money located in leased premises at No. 15, Ground Floor, Ma Tau Kok Road. The premises were resumed by the Crown on 3 October 1992 on account of the Ma Tau Wai Urban Improvement Scheme. The claim for compensation was confined to business loss under section 10(2)(d) of the Crown Lands Resumption Ordinance, Cap 124. 4. There were three major items in the appellants' claim totalling $19.275m as follows:
In the event the tribunal awarded compensation as follows:
5. The appellants being dissatisfied with the award, lodged their notice of appeal on 3 July 1996 and the ground of appeal is stated as follows:
6. This, on the face of the notice of appeal, does not identify a point of law for the determination of this court. This court's jurisdiction on appeal is limited by s11(2) of the Lands Tribunal Ordinance, Cap 17 which reads:
7. However a few days before the day fixed for the hearing of the Director's application, the appellants lodged a document entitled "skeleton arguments" which attempts to identify four grounds said to be errors of law. Normally such a document would not have been entertained as it is not in support of any viable ground of appeal. However as the appellants are laymen we felt it right in the discharge of our duties to look at that document. 8. Before dealing with that, something more of the background needs to be said. One particular difficulty which faced the appellants before the tribunal was this: The Lucky Money Restaurant only operated for four months, so what value could properly attach to the goodwill of the restaurant? At the hearing, the appellants were unable to produce proper accounts and the tribunal concluded that in any case trading accounts for four months could not provide a reliable basis for projecting profitability into the future. Being constrained by lack of material the tribunal resorted to this approach: It assumed that the profitability of the restaurant was at least equal to the rental value of the premises: An approach which on the face of it does not seem ungenerous to the appellants on whom the burden of proof lay. On this basis the tribunal worked out the profit per annum at the figure of $532,707.69. This approach has been criticised in ground 1 of the appellants' "skeleton arguments" but plainly this was an approach open in the circumstances to the tribunal to adopt. 9. The tribunal projected this figure forward for four years and four months to the end of the lease period. But, because the award was in a lump sum to be paid forthwith, applied a discount rate of 9% which then gave a multiplier of 3.46; multiplying $532,707.69 by 3.46 this gave a figure of $1.845m. The tribunal then rounded this up and awarded to the appellants a sum of $1.9m for the loss of goodwill. 10. As to this in relation to Civil Appeal No. 122/96 we had given leave to the appellant to amend his notice of appeal to challenge the discount rate of 9%: plainly in relation to these appellants we should similarly give leave. Accordingly we give leave to the appellants to amend their notice of appeal by adding the following:
11. There is another matter that we feel we have to deal with. In relation to the fixtures, fittings and decoration the appellants' claim was, as mentioned earlier, a sum of $1.194m. The tribunal awarded only $900,000 and the reason for that appears to be as follows: they thought that $300,000 in relation to town gas works had to be deducted, because that work was never undertaken. The appellants have satisfied us that in this regard, arguably, there could also be an error of law. The error was in misconstruing the effect of the written contract exhibit A3 for the cost of decoration amounting to $1.194m. This never included the town-gas works which, the appellants claim, were to be done separately by specialist contractors. Accordingly we give leave to the appellants to amend the notice of appeal as follows:
12. There is nothing else in the "skeleton arguments" which remotely raise points of law: in particular whether there was an element of "profit rent" which required compensating. The assessment of market rent is peculiarly a function left to the Tribunal and we can detect no error in their approach. 13. The result therefore must be this:
14. As far as costs are concerned, subject to anything further said, the proper order will be that the costs of the application will be costs in the appeal, to follow the event.
Representation: Mr Simon K.C. Lam (Attorney General's Chambers) for the Respondent/Respondent 1st Applicant (Appellant) in person 2nd Applicant (Appellant) absent (represented by Tsui Tan Fai) |