Hong Kong Case Law: Decisions & Judgments

Topic

Valuation by comparables

Legal area

Court

21 Nov 2005

NAM CHUN INVESTMENT CO LTD v. THE DIRECTOR OF LANDS

Citation

NAM CHUN INVESTMENT CO LTD v. THE DIRECTOR OF LANDS
Court

Court of Final Appeal
Case number

FACV11/2005

The Court affirmed that s.12(c) of the Lands Resumption Ordinance requires valuation for compensation to exclude any element reflecting the expectancy or probability of obtaining modification of lease terms; therefore development potential and any premium in comparables attributable to hopes of lease modification must be disregarded or adjusted out and zoning has no realizable independent value if it depends on such modification; appeals dismissed and matters remitted to the Lands Tribunal to determine compensation in accordance with this principle.
20 Dec 2000

Burns Gerard James v. Colliers Jardine Properties Ltd.

Citation

Burns Gerard James v. Colliers Jardine Properties Ltd.
Court

Lands Tribunal
Case number

LDNT296/2000

Tribunal accepted the expert valuer's methodology and comparables generally but adjusted the expert's figures where specific factors warranted change: disallowed the additional $2,000 parking adjustment, applied a 5% downward adjustment for unusual vacancy and tenant security/comfort concerns, and a 2.5% downward adjustment for foreseeable impact of nearby large development; using the adjusted unit rates of the remaining comparables the Tribunal calculated a PMR of $32,500 per month exclusive of rates and management fees and ordered a new two year tenancy on the same other terms.
1 Sept 2000

Chan Kai Yuen and Another v. The Director of Lands

Citation

Chan Kai Yuen and Another v. The Director of Lands
Court

Lands Tribunal
Case number

LDLR8/1999

The Tribunal accepted the Respondent's factual measures and adjustments to comparables (location, time, size, frontage) as consistent with tribunal precedent, adopted an adjusted unit rate of $200,000 per sqm for the main shop area, applied a 5% enhancement for the extra 2.1m headroom provided by the cockloft (while excluding the value of an unauthorized structure), used the Respondent's internal floor area calculations for yard, and thereby assessed open market value at $8,000,000 to be paid as compensation.
6 Apr 1991

MCKINSEY & CO INC HONG KONG AND OTHERS v. SKY ALLIANCE DEVELOPMENT LTD

Citation

MCKINSEY & CO INC HONG KONG AND OTHERS v. SKY ALLIANCE DEVELOPMENT LTD
Court

Lands Tribunal
Case number

LDLA3685/1991

The Tribunal held that prevailing market rent must assume contractual repair obligations will be honoured and that the damp problems were common to all houses and remediable, so no special deduction for A3; comparables (notably House A5 at $112,500) supported rents of A1 $110,000, A2 $95,000 and A3 $95,000; new tenancies granted for two years and a break clause permitting termination after 12 months on three months' notice was included for A3 given market practice and section 119J discretion.
22 Feb 1990

YING FUNG DISTILLERY LTD v. HO HUNG SANG

Citation

YING FUNG DISTILLERY LTD v. HO HUNG SANG
Court

Court of First Instance
Case number

HCA5345/1988

The court rejected the plaintiff's $19,000 figure because the valuer failed to take into account recurring flooding and relied on only two comparables; the defendant's contemporaneous offer of $15,000 for a new lease was accepted as a reliable indicator of the market rent, resulting in an award of $15,000 per month for five months plus rates and interest.
11 Feb 1985

TAM SHIU HONG v. COMMISSIONER OF RATING & VALUATION

Citation

TAM SHIU HONG v. COMMISSIONER OF RATING & VALUATION
Court

Lands Tribunal
Case number

LDLA30/1984

The Tribunal upheld the Commissioner's assessment that the prevailing market rent for the subject ground-floor flat as at 6 July 1984 was $8,000 pcm based on analysed comparable lettings; statistical and large-percentage adjustments advanced by the appellant were unreliable; therefore the Commissioner’s certified increase of $1,140 pcm stands and the appeal is dismissed.

Hong Kong Case Law

NAM CHUN INVESTMENT CO LTD v. THE DIRECTOR OF LANDS

Burns Gerard James v. Colliers Jardine Properties Ltd.

Chan Kai Yuen and Another v. The Director of Lands

MCKINSEY & CO INC HONG KONG AND OTHERS v. SKY ALLIANCE DEVELOPMENT LTD

YING FUNG DISTILLERY LTD v. HO HUNG SANG

TAM SHIU HONG v. COMMISSIONER OF RATING & VALUATION