SCAIFFEE LTD v. CHOW HEI CHUEN AND OTHERS

LDHA000016/1983

VICTORIA LANDS TRIBUNAL

HOLDEN AT VICTORIA

ACTION NOS. 6-23 CONSOLIDATED

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BETWEEN

SCAIFFEE LTD. Applicant
and
CHOW HEI CHUEN & OTHERS Respondent

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Coram: Judge Li, Presiding Officer in Court, M.W. Phillips, Member, Lands Tribunal

Date: 22nd day of June, 1983

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DECISION

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1. This is an application under Section 53(2)(c) for repossession of the suit premises, namely Nos. 4, 6 and 8 of Arbuthnot Road, HongKong for redevelopment.

2. It is not in dispute and at all events we are satisfied that the suit premises are post-war buildings to which Part II of the Landlord and Tenant (Consolidation) Ordinance applies. Nor is it in dispute and We find as a fact as to the Landlord-Tenant Relationship amongst the parties.

3. From the evidence of A.W.1, CHIU Tak-kwong, the Chartered Engineer, an authorised person for the redeveloper, the applicant company,we find as facts as stated in the paragraph. The total floor area of the suit premises comprising the three buildings adjoined toeach other is 2054.2 square metres and the total floor area available after redevelopment will be 3571.47 square metres. There willbe 44 units of which 8 will be non-domestic premises as compared with 25 units with 3 units of non-domestic premises as at present.This will result in an increase in the number of dwellings for domestic use as well as for business premises. The site is oppositeor obliquely opposite to the entrance of the Central Police Station, which is suitable for business premises on the lower floors.We are quite satisfied that the scheme for redevelopment is conducive to the public interest within the meaning of Section 53A(1).

4. The Building Authority has approved the Building Plan.

5. We also accept the evidence of A.W.2, HO Kwong-chat, a director of the applicant company, and find as facts as stated in this paragraph.The applicant company purchased the three buildings between 1980 and 1981 for the total consideration of 24.25 million dollars exclusiveof stamp duty and legal costs. The total yields from rents are about $27,000 a month, giving roughly 1.34% per annum, as capitalreturn. The buildings were purchased for redevelopment. The applicant company genuinely intends to redevelop. The authorised andfully paid up capital of the company amounts to HK$10,000,000. The shareholders had advanced HK$16,554,272 for this project. Togetherwith another HK$10,000,000 advanced from the shareholders (which money was crystallized into the said paid up capital) the loan partlyfinanced the project. The applicant company took up a building mortgage with the Hang Seng Bank Limited for a building loan of HK$10,000,000. Exhibit A.14 refers. If need be, shareholders of the applicant company, some of whom are reputed businessmen anddevelopers will further finance the project. We have come to the conclusion that the applicant company has sufficient means to carryout the project.

6. It is submitted by counsel for respondent No.13 the applicant company was only one in the group of associated companies and the financialmargin between the costs and the funds available is not very substantial. We have given due consideration to that and we come tothe finding that the funds are sufficient to meet the project. At any rate, the shareholders of substantial means will put up additionalfunds if absolutely necessary, bearing in mind that such additional funds will not be substantial.

7. We have also considered counsel’s submission that clauses 2, 6A and 8 laid down stringent conditions. However these conditions areno more stringent than usual conditions which normally appear in a standard building mortgage, i.e. agreement and assignment.

8. For the above reasons we make an order for repossession as applied for, but subject to the conditions to be imposed and specifiedas follows:-

(1) A copy of the plans of the new buildings showing the number and size of all the dwellings and non-domestic unitsto be erected shall be lodged with the Tribunal and that the new buildings shall be erected to provide 44 units in accordance withthe Building Plan, Exhibit A.7;

(2) that the new buildings shall be commenced within six months from the date of delivery of vacant possession of allthe premises in the three buildings Nos. 4, 6 and 8 Arbuthnot Road and that the new buildings shall be completed within 48 monthsfrom the date of this order.

(3) no less than HK$8,000,000 shall be spent as building costs for erecting the buildings;

(4) subject to the approval of the Registrar General (Land Office) with or without conditions, the applicant companyshall not assign, underlet or part with the possession of or otherwise dispose of any undivided share of or in any of the said buildingsor any part thereof or in any building or part of any building thereon (whether by way of direct or indirect reservation, the grantof any right of first refusal, option or power of attorney, in favour of any person, firm, company, corporation or group or by wayof any other method, arrangement or document of any description ) or enter into any agreement so to do, unless and until the workon any of the said buildings has been completed in accordance with the provisions of Conditions 1, 2 and 3 above-mentioned and anOccupation Permit in respect thereof has been issued by the Building Authority under the provisions of the Buildings Ordinance;

(5) subject to the approval of the Registrar General (Land Office with or without conditions, the applicant company shallnot solicit or accept, whether directly or indirectly or through a solicitor, agent, contractor or trustee or through a corporationin which the applicant company is the owner of shares or which is the owner of shares in the applicant company or otherwise, anymoney or money’s worth or other valuable consideration of any description in respect of any undivided share in any of the said buildingsor in any building or part of any building thereon, or in respect of or in connection with or under or pursuant to any transaction,present or future, conditional or unconditional, whereby any undivided share in any of the said buildings or in any building or anypart of any building thereon is or may be sold, assigned, underlet or otherwise disposed of or affected, or enter into any agreementto do any of the things before mentioned, unless and until -the work on any of the said buildings has been completed in accordancewith the provisions of Conditions 1, 2 and 3 above-mentioned and an Occupation Permit in respect thereof has been issued by the BuildingAuthority under the provisions of the Buildings Ordinance;

(6) the applicant company shall pay compensation to the tenants, the respondents, in the respective sums and in a manneras agreed upon between the parties in accordance with the respective Terms of Settlement; and

(7) the applicant company shall pay such compensation to those respondents who have not entered into agreement with the applicant companyregarding the amounts of compensation payable, as may be determined by the Tribunal to be announced at a later date. There willbe stay of execution for possession in respect of R.13, R.14 and R.15 until the date of delivery of our decision on their amountsof compensation subject to further stay.

Dated the 22nd day of June, 1983.

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Eric Li

Michael Phillips

Presiding Officer, Lands Tribunal Member, Lands Tribunal