Day Bright Development Ltd and Others v. Wong Sai Mui and Others

LDCS21000 /2012

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE APPLICATION NO. 21000 OF 2012

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BETWEEN

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J U D G M E N T

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Background

1.This is an application for compulsory sale of all the undivided shares in Section A of Inland Lot No. 5099 and Section C of Inland Lot No. 5741 (collectively “the Lot”), with a building erected thereon known as Nos. 720 & 722 King’s Road (“No. 720” & “No. 722”) and Nos. 15 & 17 Nation Street (“No. 15” & “No. 17”), North Point, Hong Kong (“the Building”), for the purposes of redevelopment pursuant to Section3(1) of the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 (“the Ordinance”).

2.The Building is a block of 9-storey commercial/residential building served by 2 common staircases. The front elevation of the Building is facing King’s Road and the rear facing Nation Street, a private right of way. There are 4 units at each level, comprising 4 shops on Ground Floor and altogether 32 residential units from 1/F to 8/F. Each of the shops and residential units is given 1 of 36 undivided shares of the Lot. The occupation permit (which covers the Building and other adjacent buildings, collectively known as Kut Cheong Mansion) was issued on 8 September 1960, more than 50 years before the date of the present application on 13 February 2012 (“the Application”).

3.Kut Cheong Mansion in fact is a composite building comprising 14 tenement buildings arranged in two rows of seven. The Application is in fact one of the many applications concerning these tenement buildings made under the Ordinance. A more detailed description of Kut Cheong Mansion can be found in our recent unreported decision in LDCS13000/2012 handed down on 14March 2014 concerning one of the tenement buildings of the same Mansion made by the same applicants. We do not wish to repeat the same here. Suffice for the present purpose that each of the constituent tenement buildings of Kut Cheong Mansion has its own staircases and governed by a separate DMC. The Building, likewise, has its own deed of mutual covenants. 

4.In LDCS13000/2012 we set out some of the legal principles applicable to applications under the Ordinance. Again we do not wish to repeat the same here. As the issues raised in the present application are similar to the said decision, we will apply the same principles we have set out there to the present application.  

The Application

5.When the 1^st, 2^nd, 3^rd and the 4^th applicants (hereinafter collectively referred to as “the applicants”) commenced the present proceedings, the corresponding ownerships of the respective units of the Building are shown in the table below:

6.Thus as at the date of the Application, the applicants together owned 88.8889%[1] equal undivided parts or shares in the Lot.  By the time of filing of the witness statement of Mr Hui Lok Shan (“Hui’s Statement”), the representative of the applicants, dated 12 November 2013, they had further acquired the interest owned by the 1^st respondent and the application against her was discontinued. The applicants then owned 91.6667%[2] of all the undivided shares of the Lot. Since then, the 2^nd applicant further purchased the interest owned by the 2^nd & 3^rd respondents and the Application against them was also discontinued. The applicants then owned 94.4444%[3] of all the undivided shares of the Lot. The applicants contend that they are entitled to make the Application by virtue of Section 3(1) of the Ordinance.

7.Thus at the commencement of trial, the applicants have not acquired undivided shares of 2 units, particulars of which are as follows:

(i) 3/F, No. 17 (“the R4’s Unit”), which is owned by the 4^th respondent. However, on the second day of the trial, the parties reached an agreement to purchase the R4’s Unit. A consent summons was signed whereby the 4^th respondent withdrew her Notice of Opposition and whatever evidence she had submitted.

(ii) 7/F, No. 17 (“the R5’s Unit”) which is registered in the name of Shun Kit Fong, deceased:

(a) As no probate or letters of administration of the estate of the deceased registered owner have been granted, on 29 August 2012 this tribunal appointed Choy Yuet Ngan Rosita to represent the estate of the deceased as the 5^th respondent.

(b) The 6^th respondent (“R6”) is the son of the deceased registered owner:

(1) He occupied the R5’s Unit;

(2) He claimed adverse possession of R5’s Unit by HCMP No. 1398 of 2012 in the Court of First Instance;

(3) By an Assignment dated 28 September 2012, R6 assigned to the 2^nd applicant all his estate, title, rights and interests of and in R5’s Unit including all the rights he has or may have to the possession of R5’s Unit and all his rights, interests, benefits and claims under HCMP 1398 of 2012;

(4) R6 had delivered vacant possession of R5’s Unit to the 2^nd applicant;

(5) By an Order dated 26 February 2013 granted in HCMP 1398 of 2012, it was ordered and declared, inter alia, that the title of the deceased registered owner of R5’s Unit has been extinguished and R6 has acquired all the possessory right, title and interests, including the right to exclusive physical occupation of and in R5’s Unit (“the Possessory Title”); and

(6) By a Consent Order dated 30 October 2012, the Application herein against R6 was discontinued.

(iii) Accordingly, the applicants submit that R5 is in the position akin to being a missing owner in that there is no step that the applicants can take to purchase the undivided share allotted to R5’s Unit.

8.The 4^th respondent has in the course of the proceedings submitted evidence to dispute the applicants’ offers for purchase of her interest not being fair and reasonable. As mentioned above all her evidence was subsequently withdrawn. None of the other respondents have filed any evidence or any expert evidence.

9.Accordingly, Mr Mok, counsel for the applicants, called witnesses to prove the applicants’ case.  Since the evidence is unchallenged, the applicants contend that all the requirements of the Ordinance have been satisfied and ask for an order for sale in terms of the draft order submitted. 

Section 3 of the Ordinance – Percentage Ownership of the Applicants

10.Section 3(1) of the Ordinance requires the applicants to have not less than 90% of the undivided shares in a lot before it can make an application. 

11.Section 3(5) of the Ordinance also states that the Chief Executive in Council may, by notice in the Gazette, specify a percentage lower than the percentage mentioned in subsection (1) in respect of a lot belonging to a class of lots specified in the notice.

12.Pursuant to Section 3(5) of the Ordinance, the Notice was gazetted on 22 January 2010 and tabled at the Legislative Council meeting on 27 January 2010.  It came into operation on 1 April 2010.  Section 3 of the said Notice lowered the threshold for compulsory sale, insofar as it is applicable, from 90% to 80%.  Section 4(1)(b) of the said Notice specified one of the classes for the purposes of Section 3 as “a lot with each of the building erected on the lot issued with an occupation permit at least 50 years before the relevant date (which is the date of the application)”.  The occupation permit in respect of the Building was issued on 8 September 1960, which is more than 50 years as at the date of application.  The Building is therefore covered by the Notice and the applicable percentage is 80%.

Determination of the existing use values (“EUV”) of all units in the Building

13.Pursuant to section 3 of the Ordinance, the Application was accompanied by a valuation report (“Application Report”) prepared by Mr Charles Chan of Savills Valuation and Professional Services Limited (“Mr C Chan”), the applicants’ valuation expert witness, containing the assessments of the values of all units (which are conveniently termed as the existing use values, the “EUV” of all units) in the Building on the Lot as at 28 November 2011.

14.Under section 4(1)(a)(i), if there is a dispute between the parties on the EUV of the units in the Building on the Lot, the tribunal has to determine the values. Section 4(1)(a)(ii) further provides that, in the case of any minority owner of the Lot who cannot be found, the majority owner of the Lot is required to satisfy the tribunal that the value of the minority owner’s property is “(A) not less than fair and reasonable; and (B) not less than fair and reasonable when compared with the value of the majority owner’s property as assessed in the application.”

15.In the Application Report of 28 November 2011, Mr C Chan explained the method of valuation and the process of his assessment to arrive at the EUV of each unit of the Building.

16.In his valuation of the EUV of the domestic units of the Building, Mr C Chan adopted the following methodology :

(i)   He selected 4/F, No. 720 King’s Road (“the Reference Domestic Unit”), which was situated on the middle floor of the domestic portion as the reference unit for the purpose of valuing its unit price. 

(ii)   The unit price of the Reference Domestic Unit was first assessed by making reference to market comparables.  He took into account 7 comparable transactions in 6 different buildings nearby.  After making what he regarded as the necessary adjustments (for time, location, age, floor, quantum, aspect and noise effect) for all these comparable transactions, he took the average of the adjusted unit rate of the comparables to arrive at the unit price of the Reference Domestic Unit.

(iii)   He further considered the floor difference, view, quantum, lighting & ventilation and internal conditions of the Reference Domestic Unit and the remaining domestic units within the Building and made adjustments to arrive at the EUV of all the domestic units.

17.In assessing the EUV of all the 4 Ground Floor units, Mr C Chan selected G/F, No. 722 King’s Road and G/F, 15 Nation Street respectively as the Reference Shop Units for shops facing King’s Road where pedestrian flow is moderate to high (“the 1^st Group”) and for shops facing Nation Street where pedestrian flow is only moderate (“the 2^nd Group”).  He then took into account 7 comparable transactions in 5 different buildings nearby for the 1^st Group and 5 comparable transactions in 3 different buildings nearby for the 2^nd Group. After making what he regarded as the necessary adjustments (for time, location, visibility, quantum, building age, layout, headroom plus accessibility (for the 2^nd Group only)) for all these comparable transactions, he took the average of the adjusted unit rate of the comparables to come to the unit price of the respective Ground Floor Units.

18.Mr C Chan updated the Application Report by a supplemental report dated 28 November 2013 (“Supplemental Report”). He revised therein the EUV of all the units in the Building after inspection of units which were unavailable when he did the first report and taking into account the updated property index prepared by the Rating and Valuation Department. In the Supplemental Report, Mr C Chan repeated the exercise he did in the Application Report with the new information and set out his revised assessments of the EUV of each unit as at 28 November 2011.

19.The updated EUV of all units in the Building, including the R4’s Unit and the R5’s Unit, as at the relevant date of valuation of 28 November 2011, are as shown in paragraph B3.5 of the Supplemental Report: see the table at Bundle B1/5-6which is reproduced below:

20.We are satisfied that the EUV values of the R4’s Unit and the R5’s Unit as assessed by Mr C Chan respectively are not less than fair and reasonable; and not less than fair and reasonable when compared with the value of the applicants’ properties:

(i)   the R4’s Unit - assessed at $2,090,000  (representing 1.8681% of the total EUV of all units);

(ii)   the R5’s Unit - assessed at $1,860,000 (representing 1.6625% of the total EUV of all units); and

(iii)   the total EUV of all units - assessed at $111,880,000.

SECTION 4(2) OF THE ORDINANCE – JUSTIFICATION AND REASONABLE STEPS

21.Under Section 4(1)(b) of the Ordinance the second determination is whether an order of sale should be made. According to Section 4(2) of the Ordinance, this would involve 2 considerations, namely :-

(i)   is the redevelopment justified due to age or state of repair of the Building; and

(ii)   has the applicant taken reasonable steps to acquire all the undivided shares in the Lot where owners’ whereabouts are known.

22.The applicants have to satisfy this tribunal that the above statutory requirements were met, otherwise, an order for compulsory sale should not be granted.

23.For the age and state of repair requirements, we have taken into consideration the expert evidence of Mr Benson Wong (“Mr Wong”), the building surveyor and Mr So Kin Shing (“Mr So”), the structural engineer adduced by the applicants. 

24.Mr So had conducted a structural assessment of the Building and prepared a report dated 27 November 2013. He found the following defects in the Building:

(i)   Visual inspections showed many defects in the form of cracks and spallings of various degrees in some 71 structural members of the Building. 21 of them were accorded the highest severity index of 4 requiring detailed investigation with a view to providing immediate protective measures. Despite the fact that the Buildings Department has recently carried out repairs to some defective parts in common areas (corridor of the 5^th Floor), there was still a location in the common areas with defective structural member assessed with severity index three (i.e. detailed investigation required)[4].

(ii)   Covermeter survey revealed that of 15 structural members surveyed[5], at least 1 column, 2 beams and 1 slab did not have sufficient concrete cover to:

(a)   protect the embedded steel reinforcement bars against corrosion,

(b)   protect the bars against fire, and

(c)   provide sufficient depth of concrete for the safe transmission of bond forces.

(iii)   Carbonation depth test results revealed that carbonation had penetrated past the concrete cover of all the beam and slab samples. For columns, 40% of the samples failed the test[6]. This means the alkaline environment in many of the concrete covers, at least in some of the beams and slabs sampled, which gives protection to the reinforcement steel bars in the structural members against corrosion have been destroyed. The steel bars in these structural members must have already started to corrode.

(iv)   Compression tests revealed deficiency in the concrete strength of 2 beam samples. The structural integrity of the structural frames of the Building could have been adversely affected.

(v)   Chloride content tests showed an increased risk of corrosion of the embedded steel reinforcement bars. Of 5 samples each taken of the columns, beams and slabs, 3 columns, 1 beam and 2 slabs were found to have failed the test[7].

(vi)   Corrosion survey by opening up of the concrete cover to examine the reinforcement steel bars embedded was carried out. The survey revealed columns, beams and slabs were suffering from various degree of rusting, resulting in reduction in cross-section area of some steel bars, with a corresponding drop in the overall strength to support the Building. In the worst sample, the cross section area of the steel bar was reduced by 28.1%[8] due to rusting.

(vii)   Based on the above findings, the structural frames of the Building are deteriorating and need be repaired. The deterioration will continue steadily due to extensive carbonation of the reinforced concrete structural members. The extent of corrosion of the reinforcement steel bar and the concrete cover being penetrated by carbonation are results of aging and/or lack of repair of the Building[9].

(viii)   The design and construction of the structural frames were based on an obsolete design. There were at least 9 structural design and construction aspects of the Building falling short of present structural engineering design requirements. Among these 9 aspects, the lack of consideration for robustness is one of utmost importance. As a result, the Building may not process adequate robustness to prevent it from damages arising from accidents or misuse. A recent example is the Ma Tau Wai Road collapse where the accidental damage of a reinforced concrete column caused the collapse of a significant part of the building[10].

25.Based on the above findings, Mr So concluded that the structural frames of the Building were in need of repair. The Building, completed more than 53 years ago, has exhibited signs that its structural frames have deteriorated to the final stages of its designed working life. The deterioration will continue steadily due to extensive carbonation of the concrete.  It is inevitable that new defects will occur and previous defects, though repaired, will recur readily, requiring substantial repairs or even partial demolition and re-construction of some defective structural members in the future.  Repair works need be carried out regularly in future and such repairs will be more and more extensive.  It is his view that although the costs of repair may be relatively modest, such costs will escalate in future as the extent and seriousness of the deterioration of the structural members increases with age.  He recommended that hammer tapping works be carried out to all structural members with a view to finding out the full extent of defects to be repaired as a matter of urgency.

26.Mr Wong, in his Condition Survey Report dated 28 November 2013 stated that :

(i)   The Building is in a poor state of repair due to general wear and tear;

(ii)   The external rendering on the external walls has signs of deterioration with not less than 71 hidden hollow spots and is potentially dangerous to public safety in the event loosened rendering falling off ;

(iii)   The envelope of the Building is not external seepage resistant as evidenced by damp penetrations through the external walls, the main roof coverings and the original mild steel windows;

(iv)   The two staircases are unsatisfactory means of fire escape for the upper floors because no improvement had ever been made to the fire resisting construction and fire service installation in the Building;

(v)   Front balconies of all the units had been enclosed and such works were unauthorized. They adversely affected the structural safety of the Building;

(vi)   The conditions of the internal doors, finishes, bathrooms and kitchens fitments are poor; the most common defects in the flats being missing or defective doors of bedroom, bathroom and kitchen, cracks and spallings to the internal floors, walls and ceilings;

(vii)   Sanitary fitments in the bathrooms and cooking facilities in the kitchens in most units inspected are broken or otherwise defective requiring replacement;

(viii)   The original mild steel windows have generally corroded and are not water resistant;

(ix)   Internal electrical installations inside 23 flats have been haphazardly altered and are in poor condition;

(x)   Internal inspection of flats found equipotential bonding connections are not provided for exposed and extraneous conductive parts;

(xi)   Flushing water supply system for the Building have been abandoned from use;

(xii)   Condensate drainage system with drain inlets provided for all air-conditioning units needs be installed in order to avoid  nuisance caused by dripping of condensate water;

(xiii)   Closed circuit television survey carried out to the underground drainage revealed defective drainpipes and a manhole requiring replacements and repairs;

(xiv)   Defects in electrical installation require repair and maintenance;

(xv)   Fire service systems required to be added in order to bring the Building in compliance with the requirements of the Fire Safety (Buildings) Ordinance.

27.Mr Wong assessed the total cost of repair works at $11,261,218 which amounts to 46% of the construction costs of a new similar superstructure.  He came to the conclusion that the Building has deteriorated to a state which was beyond reasonable economic repair as signified by the high repair costs.  As more rapid deterioration will occur in the future, the necessary maintenance and repairs will inevitably be more frequent and extensive, making the continued occupation of the Building not economical and even unsafe, to both occupants and third parties.  He recommended the owners to redevelop rather than repair given the Building does not possess any historical value or architectural merit. 

28.The applicants also relied upon two economic tests, i.e. the age test and the repair test, conducted by Mr C Chan in his Supplemental Report prepared on 28 November 2013.

29.For the repair test, Mr C Chan adopted the findings by Mr Wong that the total estimated cost to restore the Building to tenantable standard is $11,261,218. If the unauthorized building works related items are excluded[11], the net repair cost for the remedial works is about $9,715,099. His assessment of the EUV as at date of report (i.e. 28 November 2013) was $154,070,000 comprising $59,890,000 for retail portion and $94,180,000 for the domestic portion[12]. He took the view that even if the repairs proposed by Mr. Benson Wong were carried out, they were remedial in nature and would not, in his view, enhance the value of the unit substantially. He considered such work would only bring about 3% enhancement to the domestic portion. Only nominal enhancement will be made to the ground floor as retail shops are less sensitive to building condition as compared to residential flats[13]. The enhancement by the repairs (the difference between the After EUV and the Before EUV) is $2,825,400[14]. He considered obviously, putting good money of $9,715,099 to bring about an increase in value of only $2,825,400 would not make any economical sense.

30.For the age test, Mr. C. Chan assessed the total existing use value (“EUV”) of $154,070,000 could be enhanced to $156,895,400[15] if a net repair cost of $9,715,099 were spent. He further assessed the redevelopment value (“RDV”) of the Lot on its own at $167,000,000[16].  Given the RDV is higher than the enhanced EUV, Mr. C Chan was of the view that repair is not economically viable and the redevelopment of the Lot is warranted.

31.All the expert evidence is unchallenged. We accept the applicants’ evidence in whole.  In particular, we are satisfied that based on the evidence of Mr. So and Mr. Wong, redevelopment of the Lot is justified due to the age and the state of repair of the Building :

(i)   the Building is over 53 years old, with obsolete designs and has now passed its designed working life;

(ii)   the Building is in very poor physical conditions. Huge and disproportionate costs are required to repair and maintain it, yet it remains a Building with outdated designs. Based on evidence of Mr. So and Mr Wong, the repair will recur soon and the quiet enjoyment of the owners of the Building will be disturbed during the lengthy period of repair, and repeatedly. The deterioration of the Building has reached a state which is beyond economical repair;  and

(iii)   the Building has become obsolete in many respect both physical and functionally, and falling short of present standards in terms of safety and hygiene.

REASONABLE STEPS TO ACQUIRE THE UNDIVIDED SHARES IN THE LOT

32.The applicants are under an obligation to negotiate on terms that are fair and reasonable in a situation when the whereabouts of a minority owner is known.

33.The applicants submit that they have taken reasonable steps including making four offers to purchase the R4’s Unit since the action was started on 13 February 2012 each enclosing an advice letter of Mr C Chan. The 6^th offer of $5,340,000 and the 7^th offer $5,500,000 were made in light of the two recent judgments of the tribunal, namely, LDCS 46000/2011[17] and LDCS 28000/2012[18]. The applicants submit that these offers were formulated at a level higher than the formula stipulated in paragraph 141 of Supergoal even if it were rightly decided. In any event, during the trial, by a consent summons dated 25 February 2014, the 4^th respondent agreed to sell her unit to the applicants and withdrew her Notice of Opposition and any evidence submitted thereof.

34.As for the R5’s Unit, the applicants submit that the deceased registered owner died without any grant of probate or letters of administration up-to-date. There is no legal way to purchase the unit. In the circumstances, the applicants submit that:

(i)   There is no legal obligation on their part to take steps to acquire the undivided share allotted to R5’s Unit (similar to unit owned by a missing owner).

(ii)   Further and/or alternatively, by being able (i) to purchase all undivided shares allotted to all the units except R5’s Unit and (ii) to purchase R6’s possessory title in R5’s Unit and obtained vacant possession of the unit, reasonable steps have also been taken by the applicants, as far as possible, to acquire all the undivided share in the Building, including the 1 undivided share allotted to R5’s Unit.

35.In the circumstances of this particular case, we are satisfied that the applicants have taken reasonable steps to acquire all the undivided shares in the Lot, particularly the R4’s Unit and the R5’s Unit. As an example, given our decision on the RDV[19] which represents the reserve price of the Lot, and assuming the same will be sold at the reserve price, the pro-rated RDV of R4’s Unit will only be around $3,063,640[20]. The last few offers made by the applicants were well above the said pro-rated RDV which provides a ready yardstick to measure whether reasonable steps have been taken to acquire R4’s Unit.   

RESERVE PRICE FOR THE AUCTION

36.Mr C Chan prepared another supplemental report dated 30^th January 2014 for the purpose of assessing the RDV of the Lot as at the same date and on the “on its own” basis. The applicants submit that the reserve price for the auction of the Lot should be fixed at $164,000,000[21] according to Mr Chan’s said supplemental report.

37.We have considered Mr C Chan’s valuation of the RDV of the Lot.  We note Mr C Chan had considered two land sale transactions in the past years, i.e. the sale of the site at North Point Estate Lane and Shu Kuk Street in North Point in March 2013 and another at 5-9 Hing Wan Street, Wan Chai in April 2012. We agree with him that these two transactions are not suitable for direct comparison between the Lot and the land sale comparables because, as put by Mr C Chan, “… of the substantial disparity in development potential due to different attributes on location, development scale and development restrictions”. 

38.We agree with Mr C Chan that as a last resort, the residual method can be employed as the method to assess the Lot’s RDV. This is done by deducting development costs (including construction costs, professional fees, finance costs etc) and developer’s profit from the estimated gross development value of the completed development.

39.Mr C Chan was of the view that the optimum development on the Lot would be a block of 26-storey hotel with entrance lobby and retail shops on G/F, back of house on 1/F and hotel guest rooms on the upper floors with details of the hypothetical development and residual valuation set out in Appendix 1.4 (Bundle B3/201-203), and details of the comparables with adjustments in Appendix 1.6 (for shops at Bundle B3/212) and Appendix 1.7 (for hotels at Bundle B3/214).  Mr C Chan also adopted the Development Cost Pro-forma recently promulgated by the Hong Kong Institute of Surveyors to facilitate consideration of construction costs in land value assessments in Appendix 1.5 (Bundle B3/205-210). We have gone through his valuation.  We are satisfied with his valuation. We also accept the valuation assumptions he has adopted as well as the values and the costs parameters he has used in his valuation. 

40.Based on Mr C Chan’s valuation, we come to the view that the reserve price for the auction of the Lot should be HK$164,000,000.

TRUSTEES

41.The applicants proposed to appoint Mr Ma Ho Fai (馬豪輝) and Ms Tsang May Ping (曾美萍) who are senior partner and partner respectively of Woo Kwan Lee & Lo, Solicitors, Notaries, Agents for Trademarks & Patents, as the sale trustees.  Based on the information on their background and experience as set out in the letter dated 11 February 2014 from their firm, we are satisfied that they are proper persons to be appointed.  Their remuneration at the rate of $5,500 per hour (exclusive of disbursements) as mentioned in the letter dated 11 February 2014 is also reasonable and is hereby allowed.

PARTICULARS AND CONDITIONS OF SALE OF THE LOT

42.Mr Mok has submitted a set of draft particulars and conditions of sale by public auction for our consideration.  While we understand these are the usual terms used for compulsory sale, we approve the draft particulars and conditions of sale accordingly.

Conclusion AND ORDERS

43.By reasons of the aforesaid, we are satisfied that the redevelopment of the Lot is justified due to the age and state of repair of the Building; and the applicants have taken reasonable steps to acquire the undivided shares in the Lot. This tribunal is also satisfied that the values of the minority owners’ units as assessed in the Application are not less than fair and reasonable, and not less than fair and reasonable when compared with the value of the applicants’ property as assessed in the Application.  This tribunal makes the following orders:

(i)   All the undivided shares in the Lot, the subject of the Application, be sold by way of public auction for the purposes of redevelopment of the Lot;

(ii)   Mr Ma Ho Fai (馬豪輝) and Ms Tsang May Ping (曾美萍) nominated by the applicants be appointed trustees (“the Trustees”) to discharge the duties imposed on trustees under the Ordinance in relation to the Lot; and the Trustee be authorized to charge such remuneration for their service in accordance with the terms set out in the letter from Woo Kwan Lee & Lo, dated 11February 2014;

(iii)   For the purpose of the sale of the Lot by public auction,

(a)   The sale of the Lot be on particulars and conditions of sale the same or substantially the same as the set of draft particulars and conditions of sale submitted to the tribunal (Document Bundle A5/154/1313-1342) initialled and approved by us;

(b)   The reserve price of the Lot be set at HK$164,000,000;

(c)   Subject to further extension that the tribunal may subsequently allow upon the application of the purchaser of the Lot or its successor in title, the redevelopment of the Lot be completed and made fit for occupation within a period of six (6) years after the date on which the purchaser of the Lot becomes the owner of the Lot;

(iv)   There be liberty to the applicants, the respondents and the Trustees to apply for further directions.

Costs

44.Since both the applicants, the 3^rd and 4^th respondents do not ask for costs, we make a costs order nisi that there be no order as to costs between the parties, such order be made absolute after 14 days if no application is made to vary the said costs order.

Mr Y C Mok, instructed by Mayer Brown JSM, for the applicants

Madam Cheung Kit Yee on behalf of the 4^th respondent

Attendance of Peter W.K. Lo & Co, for the 5^th respondent, was excused