Hong Kong Case Law: Decisions & Judgments

Topic

Valuation and comparables

Legal area

Court

21 Nov 2005

DRAGON HOUSE INVESTMENT LTD v. THE SECRETARY FOR TRANSPORT

Citation

DRAGON HOUSE INVESTMENT LTD v. THE SECRETARY FOR TRANSPORT
Court

Court of Final Appeal
Case number

FACV13/2004

s.12(c) must be applied to exclude from compensation any element of open market value attributable to the prospect or expectation of obtaining a modification, licence or permission to permit development; development potential that depends on lease modification belongs to the Government and must be disregarded in valuation unless the claimant has a legal entitlement; comparables reflecting such development premium must be adjusted or replaced by restricted-use comparables; zoning only has value if realisable without lease modification; legitimate expectation argument was both procedurally barr…
4 Mar 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 Appeal
Case number

CACV335/2003

On proper construction of the CFA judgment, s.12(c) of the LRO excludes from compensation any zoning or planning benefit that is parasitic on or realizable only by modification of the lease; therefore intrinsic value for compensation cannot include development potential requiring lease modification and comparables that embody such benefits must be adjusted; appeal allowed and assessment remitted for re‑hearing consistent with this rule.
17 Jan 2003

DIRECTOR OF LANDS v. YIN SHUEN ENTERPRISES LTD. AND ANOTHER

Citation

DIRECTOR OF LANDS v. YIN SHUEN ENTERPRISES LTD. AND ANOTHER
Court

Court of Final Appeal
Case number

FACV3/2002

Section 12(c) must be read to exclude from compensation any speculative 'hope value' attributable to the expectancy or probability of obtaining grants, permissions, leases or permits that would permit development beyond the claimant's lawful interest under the lease; compensation therefore is limited to the claimant's interest under the lease (its real value absent speculative overage) and s.12(c) is consistent with Basic Law art.105; accordingly the Court allowed the appeal, discharged the assessments and remitted the matters for reassessment excluding speculative elements where applicable.
15 Dec 1998

WAH KOON INVESTMENT CO. LTD. v. THE INCORPORATED OWNERS OF ESTORIL COURT

Citation

WAH KOON INVESTMENT CO. LTD. v. THE INCORPORATED OWNERS OF ESTORIL COURT
Court

Court of First Instance
Case number

HCA12755/1997

The court accepted the Floral Tower comparable unit rate of $7.9 per sq ft as the starting point, applied adjustments (time +10%, equipment +5%, age -5%, area -5%, restriction to residents/accessibility -15%, commercial activities in vicinity -10%) to arrive at an assessed unit rent of $6.32 per sq ft, producing an assessed monthly rent of $51,337.36 and aggregate mesne profits for 26 August 1996 to 1 March 1998 of $930,917.46 less interim payment of $382,254.00 = $548,663.46; interest at judgment rate and costs of assessment were ordered against the defendant.
31 Mar 1983

SHUN TAK ENTERPRISES LTD v. TOBERMORY INVESTMENT LTD

Citation

SHUN TAK ENTERPRISES LTD v. TOBERMORY INVESTMENT LTD
Court

Lands Tribunal
Case number

LDLA22/1982

The Tribunal fixed the new rent at $43,000 per month exclusive of rates and management charges for a three‑year tenancy commencing 1 July 1982 because the best evidence of value was the recent letting of Flat A6 in the same building at $37,000 per month, adjusted upward to reflect the suit premises' greater space, extra rooms and additional carpark; penthouse comparables in different localities were given little weight due to differing characteristics and market susceptibility to subjective taste and obsolescence.
27 Aug 1982

MASS TRANSIT RAILWAY CORPORATION AND OTHERS v. HSU AND SONS LTD

Citation

MASS TRANSIT RAILWAY CORPORATION AND OTHERS v. HSU AND SONS LTD
Court

Lands Tribunal
Case number

LDNT3/1982

The Tribunal's statutory role under s.119K is confined to determining the fair market rent at the specified date by reference to market evidence and comparables and not to regulate rents or make non-market subjective adjustments; applying that principle to the evidence the Tribunal fixed the monthly fair market rents (exclusive of rates and management charges) at HKD 38,500 for Unit No.1, HKD 38,500 for Unit No.2 and HKD 35,500 for Unit No.5 effective for two-year tenancies commencing 1 July 1982.

Hong Kong Case Law

DRAGON HOUSE INVESTMENT LTD v. THE SECRETARY FOR TRANSPORT

NAM CHUN INVESTMENT CO LTD v. THE DIRECTOR OF LANDS

DIRECTOR OF LANDS v. YIN SHUEN ENTERPRISES LTD. AND ANOTHER

WAH KOON INVESTMENT CO. LTD. v. THE INCORPORATED OWNERS OF ESTORIL COURT

SHUN TAK ENTERPRISES LTD v. TOBERMORY INVESTMENT LTD

MASS TRANSIT RAILWAY CORPORATION AND OTHERS v. HSU AND SONS LTD