Hong Kong Case Law: Decisions & Judgments

Topic

Rebus sic stantibus

Legal area

Court

21 Dec 2021

FANCY MILLION LTD AND OTHERS v. YEAR GLORY LTD AND OTHERS

Citation

[2021] HKLdT 81
Court

Lands Tribunal
Case number

LDCS15000/2018

The Tribunal did not err in adopting the Income Capitalization Method for the Remaining Portion of the RCHE because the physical configuration and supporting facilities integrated into the ground floor units made realistic subdivision and direct comparison unreliable and because the relevant tenancy evidence (the 3rd tenancy) supported capitalization of income; Rebus Sic Stantibus and the Tribunal's discretion under Cap 545 justified the methodology and the review application was dismissed.
24 Apr 2013

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Lands Tribunal
Case number

LDRA365/2004

The Tribunal held the correct valuation method is the receipts and expenditure method with the tenant's share apportioned by an asset-split using depreciated replacement cost as proxy for market value, rejecting the Commissioner's WACC approach and rejecting use of the contractor's basis as a reliable adjunct; the China assets materially contributed and warranted an uplift, assets under construction are not rateable and appropriate deductions must be made, while dedicated substations and the identified plant, cables and pipework are rateable under s8A.
24 Apr 2013

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Lands Tribunal
Case number

LDRA367/2004

The Lands Tribunal held the R&E method is the appropriate valuation approach, rejected the CRV's WACC approach for fixing the hypothetical tenant's share, accepted an asset-split approach adjusted to reflect the economic contribution of CLP's China assets, rejected separate uplifts for effort and risk and rejected use of the contractor's basis as a reliable adjunct; assets under construction are non-rateable and deductions must be made; dedicated substations and specified plant, cables and pipework are rateable under s8A; accordingly CRV's assessment for 2004/05 was set aside and the appeals…
24 Apr 2013

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

CLP POWER HONG KONG LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Lands Tribunal
Case number

LDRA366/2004

The tribunal held that the R&E method is the appropriate primary valuation method; the Commissioner's WACC‑based approach to fix the tenant's share was rejected; an asset‑split approach using DRC as proxy for market value is adopted for apportioning the divisible balance, with a specific uplift to reflect the contribution of the China assets; the contractor's basis is not a reliable adjunct or cross‑check and separate uplifts for effort and risk were rejected; assets under construction are non‑rateable and should be deducted; dedicated substations and specified plant/cables fall within s8A an…
21 Dec 2012

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Court of Final Appeal
Case number

FACV21/2011

Section 2 does not create a special regime displacing ss.7 and 7A; for Government rent purposes development sites are to be treated as rateable tenements but rateable value must be ascertained in accordance with the Rating Ordinance subject to its statutory assumptions. The intrinsic character and development potential of an active construction site are relevant under the rebus assumptions and the hypothetical yearly tenancy is to be understood as of indefinite duration for valuation purposes; applying those principles the Lands Tribunal correctly used the contractor's basis and the Court of…
19 Nov 2010

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Court of Appeal
Case number

CACV67/2008

The Court dismissed Best Origin's appeal, holding that under GRACO (and Rent Regulation 2) and the Rating Ordinance (s.7(2), s.7A(2)) a site being occupied as a development site is to be valued taking into account the present prospect of realising development potential; the hypothetical yearly tenancy may assume a reasonable duration and conduct enabling the developer to realise profits, and the Lands Tribunal was entitled to adopt the contractor's basis valuation and to include development potential in the assessment of government rent.
25 Feb 2008

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION

Citation

BEST ORIGIN LTD v. COMMISSIONER OF RATING AND VALUATION
Court

Lands Tribunal
Case number

LDGA14/1998

The Tribunal held that where the mode/character of occupation at the relevant date is a development site, the development potential and the present likelihood of development must be taken into account in ascertaining rateable value; the Contractor's Basis using the adjusted auction price as capital value and a properly derived decapitalisation rate is an appropriate primary method; applying that method the correct rateable value for 1997/98 is HKD 26,880,000, and the Appellant's primary and alternative valuations (including PDM and contractor-as-tenant nominal valuation) were rejected.
6 Mar 2001

AGRILA LTD. AND OTHERS v. COMMISSIONER OF RATING & VALUATION

Citation

AGRILA LTD. AND OTHERS v. COMMISSIONER OF RATING & VALUATION
Court

Court of Final Appeal
Case number

FACV2/2000

The Court allowed the Commissioner's appeal and held that Rent regulation 2 validly deems leased land to be a tenement liable to rates for rent‑assessment purposes and that rateable value for government rent must be ascertained in accordance with ss.7 and 7A of the Rating Ordinance while taking into account the intrinsic development characteristics and likelihood of development at the relevant date; Regulations 4 and 5 are valid; the Rent Ordinance and regulations do not conflict with Basic Law Article 121.
16 Dec 1999

AGRILA LTD. AND OTHERS v. COMISSIONER OF RATING AND VALUATION

Citation

AGRILA LTD. AND OTHERS v. COMISSIONER OF RATING AND VALUATION
Court

Court of Appeal
Case number

CACV107/1999

Rateable value for Government rent must, absent clear specific statutory provision to the contrary, be ascertained by application of the Rating Ordinance (s7 and s7A) and the rebus sic stantibus principle; regulation 2 does not displace the Rating Ordinance for undeveloped sites; regulations 4 and 5 (LARV formula) exceed the powers conferred by s34 and are ultra vires and void; developers' intentions and development potential cannot be imputed to create rateable occupation where none exists; agricultural land exempt under s36 of the Rating Ordinance is not brought into charge by Rent Ordinanc…
29 Mar 1999

AGRILA LTD. AND OTHERS v. COMMISSIONER OF RATING AND VALUATION

Citation

AGRILA LTD. AND OTHERS v. COMMISSIONER OF RATING AND VALUATION
Court

Lands Tribunal
Case number

LDGA90/1998

Tribunal held s.2 of the Rent Regulations must be read to permit the Commissioner to ascertain rateable values for development sites despite lack of rateable occupation but the ascertainment is in the quantum sense applying rating valuation principles; developer's intention to develop is irrelevant to the hypothetical year‑to‑year tenancy valuation; contractor's test is an admissible method but not the sole or prescribed test; ss.4 and 5 of the Rent Regulations are ultra vires to the extent they adopt the 'last ascertained rateable value' for demolished buildings and so contravene Basic Law A…