Hong Kong Case Law: Decisions & Judgments | LexChat

Hong Kong Case Law

Discount rate

  • 7 Feb 2013

    LI KA WAI v. HOSPITAL AUTHORITY

    Citation
    LI KA WAI v. HOSPITAL AUTHORITY
    Court
    Court of First Instance
    Case number
    HCPI671/2007

    The Cookson v Knowles assumption of a 4.5% real net return is no longer valid in Hong Kong; the court must deduct price inflation and reasonable management fees and tailor the notional investment portfolio to the claimant's period of need. Accordingly distinct net discount rates are set according to term of need: -0.5% for plaintiffs with needs up to 5 years (portfolio: ~20% 12-month time deposits, 80% EFNs), 1% for needs up to 10 years (portfolio: ~15% time deposits, 85% EFNs/bonds of BBB+ or better after a 0.75% management fee), and 2.5% for needs exceeding 10 years (portfolio: ~10% time de…

  • 7 Feb 2013

    CHAN PAK TING v. CHAN CHI KUEN AND ANOTHER

    Citation
    CHAN PAK TING v. CHAN CHI KUEN AND ANOTHER
    Court
    Court of First Instance
    Case number
    HCPI235/2011

    Cookson v Knowles assumption of a 4.5% net real return is no longer valid in Hong Kong. The court set differentiated discount rates by duration based on reasonable investment portfolios and recent historical performance: -0.5% for plaintiffs with future needs up to 5 years; 1% for needs up to 10 years; 2.5% for needs exceeding 10 years. Management fees should be deducted where the chosen portfolio requires active management; wage-price differentials in Hong Kong are insufficiently large to justify separate earnings and non-earnings rates at present. The appropriate portfolio mixes and histori…

  • 7 Feb 2013

    YUEN HIU TUNG v. HOSPITAL AUTHORITY

    Citation
    YUEN HIU TUNG v. HOSPITAL AUTHORITY
    Court
    Court of First Instance
    Case number
    HCPI228/2010

    The Cookson v Knowles 4.5% assumption is no longer valid in Hong Kong. The court sets pragmatic, horizon-based real net discount rates after deducting price inflation and reasonable management fees, using asset mixes and review periods matched to claimant needs: -0.5% for needs up to 5 years, 1% for needs up to 10 years, and 2.5% for needs exceeding 10 years. These rates follow from (a) adopting price inflation (not payroll) for non-earnings losses, (b) deducting reasonable management fees where mixed portfolios (equities/bonds) are used, (c) using a 5–7 year review for fixed income/EFNs and…

  • 16 Oct 2012

    CHAN PAK TING v. CHAN CHI KUEN AND ANOTHER

    Citation
    CHAN PAK TING v. CHAN CHI KUEN AND ANOTHER
    Court
    Court of First Instance
    Case number
    HCPI235/2011

    Sufficient evidence of a substantial change in the economic landscape since the 1996 Court of Appeal decision justified granting leave to adduce actuarial and economic evidence and ordering a trial of the preliminary issue to determine whether the Cookson 4.5% net rate remains valid for selecting multipliers in Hong Kong.

  • 16 Oct 2012

    YUEN HIU TUNG v. HOSPITAL AUTHORITY

    Citation
    YUEN HIU TUNG v. HOSPITAL AUTHORITY
    Court
    Court of First Instance
    Case number
    HCPI228/2010

    There has been sufficient evidence of a substantial change in the economic landscape since the earlier authorities to justify admitting actuarial and economic evidence to test whether the conventional 4.5% real net rate of return remains appropriate in Hong Kong; accordingly leave to adduce such evidence was granted and a preliminary issue was ordered to determine the appropriate net rate of return and resulting multipliers, with strict directions limiting experts to historical data and prohibiting opinions on future economic developments.

  • 27 Sept 2012

    RE JAMES BADENOCH QC

    Citation
    RE JAMES BADENOCH QC
    Court
    Court of First Instance
    Case number
    HCMP1890/2012

    The applicant was admitted only for the limited purpose of advising and representing the Hospital Authority on the November preliminary hearing on the discount rate because that issue is unusually difficult, has potentially significant implications for local jurisprudence and the applicant has relevant expertise; the applicant was refused admission to conduct the main trial because the applicant failed to show reasonable, adequately particularised efforts to locate suitable local senior counsel and the main trial was not demonstrated to be unusually difficult to justify overseas counsel.

  • 20 May 2011

    KAISILK DEVELOPMENT LTD v. DIRECTOR OF LANDS

    Citation
    KAISILK DEVELOPMENT LTD v. DIRECTOR OF LANDS
    Court
    Lands Tribunal
    Case number
    LDLR1/2005

    Applying the residual method with the parties' agreed assumptions and the Tribunal's determinations on comparables adjustments, ground floor unit rate $264,349 psm, first floor unit rate at one-fifth of ground floor ($52,870 psm), discount rate 10.75%, and a 6-month allowance to obtain vacant possession, the open market value of the Subject Property at the date of resumption is determined to be HK$74,451,000.

  • 26 Jul 1996

    TSUI TAN FAI AND ANOTHER v. DIRECTOR OF LANDS

    Citation
    TSUI TAN FAI AND ANOTHER v. DIRECTOR OF LANDS
    Court
    Court of Appeal
    Case number
    CACV124/1996

    Leave to appeal was refused because the applicants failed to demonstrate that altering the discount rate would, with any real probability, raise the compensatory award to the $1,000,000 statutory threshold for an appeal as of right, and their grounds did not present questions of great general or public importance to justify discretionary leave under s.22(1)(b); additional grounds were factual, lacked merit or were not proper points of law.