LegCo Paper No. CB(1)391/96-97
Ref : CB1/BC/45/95/2
(These minutes have been
seen by the Administration)

Bills Committee on New Territories Land Exchange Entitlements (Redemption) Bill

Minutes of meeting held on Monday, 28 October 1996 at 4:30 p.m. in Conference Room B of the Legislative Council Building

Member present :
    Hon Zachary WONG Wai-yin (Chairman)
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Dr Hon Anthony CHEUNG Bing-leung
    Hon Ambrose LAU Hon-chuen, JP
Members absent :
    Hon NGAN Kam-chuen
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
Public officer attending :
    Mr Trevor KEEN
    Principal Assistant Secretary for
    Planning, Environment and Lands
    Mr C M MO
    Principal Government Land Agent (Specialist)
    Lands Department
    Ms Sherman CHAN
    Senior Assistant Law Draftsman
Clerk in attendance :
    Miss Odelia LEUNG
    Chief Assistant Secretary (1)1
Staff in attendance :
    Mr Y S LEE
    Senior Assistant Legal Adviser
    Mrs Mary TANG
    Senior Assistant Secretary (1)2

I. Confirmation of minutes of meeting and matters arising

(LegCo Paper No. CB(1) 123/96-97)

The minutes of meeting held on 19 July 1996 were confirmed.

2. Members noted that Miss Margaret NG had given notice to withdraw from the Bills Committee.

II. Meeting with the Administration

(LegCo Paper No. CB(1)58/96-97)

3. Mr Ronald ARCULLI stated that he was in favour of maintaining the status quo such that holders of Letters A/B could retain their option for land exchanges. He expressed concern over the effect of the Bill which attempted to modify contractual obligations by legislative means. He opined that the Bill was unfair in that it sought to deprive holders of Letters A/B of different options and provided for an arbitrary compensation at monetized values delinking with market land prices. He queried if public interest was at stake for the introduction of the Bill.

4. In response, Mr Trevor KEEN made the following points -

  1. The Administration would not resort lightly to use legislative means to modify contractual obligations.
  2. Presently, over 95% of the land exchange entitlements (LEE) had been redeemed. Holders of the remaining LEEs had been given ample opportunities to exchange their entitlements for land over the years but they had not done so. To protect public interest, there was a need to draw a line under the issue to bring it to a close, such that there would not be an unquantifiable contingent liability left to be settled in future.
  3. The best way to deal with the situation was by fixing through legislation the value of the remaining Letters A/B at a given date and ensuring that sufficient funds were set aside to enable that value plus interest be payable on redemption.
  4. Although the Bill proposed to remove the rights of Letters A/B holders for land exchanges, the arrangement would not be unfair to the holders since most of the remaining entitlements were held in small packets and were not viable for land exchanges. In fact, most of the outstanding entitlements were believed to have been lost. Furthermore, it was no longer practicable for the Administration to continue to provide land for redemption purposes. The proposed arrangement was considered the right way forward under the present situation.

5. In response to Mr Albert CHAN's query about whether the introduction of the Bill was a political decision with the objective of settling the liability before the change of sovereignty, Mr KEEN stated that although the subject had come up in discussions with the Chinese side, there had not been any pressure from the Chinese side. A copy of the Bill had been passed to the Chinese side for information, but no comments had been received so far.

6. Mr Albert CHAN asked if it would be feasible to adjust the monetized values regularly with regard to the movement of property prices instead of crystallizing the monetized values at a specified date and providing interest thereon. In response, Mr KEEN explained that the monetized values reflected the average prices of land of different types. These were related to market values but were not the actual values at which the land was traded. The suggestion had been considered by the Administration but it remained of the view that this would incur an unquantifiable contingent liability and should be avoided. By crystallizing the monetized values, it would serve public interest as the liability on public funds could be assessed. Mr C M MO added that the market value of the remaining entitlements would not be as high as those traded earlier because they were held in very small packets and were not viable for land exchanges. Members noted that the Administration would introduce Committee Stage amendments to update the monetized values specified in the Schedule to the Bill. The Administration was asked to generally reconsider the suggestion.Admin

7. As to whether the public or the Heung Yee Kuk had expressed views on the Bill, Mr KEEN replied that the Administration had not received any comments.

8. Mr ARCULLI enquired whether an amendment to the Bill to delete the provisions relating to delinking of monetized values from land prices would have a charging effect and hence be ruled out of order under Standing Order 45. Mr Y S LEE said that if the amendment was meant to preserve the existing practice, he failed to see why there would be a charging effect but ultimately this would be a matter for the President of LegCo to decide.

Clause by clause examination

Clause 3 Application

9. In reply to members' query on the need for the clause, Mr MO clarified that this clause was intended to confine the application of the Bill to those entitlements granted for surrender or resumption of land before the commencement date of the Bill. Mr KEEN added that the inclusion of the clause was to avoid any confusion or challenge that might arise in future.

Clause 5 Claims procedure

10. Addressing members' concern about the scope of power conferred on the Director of Lands (the Director) in determining claims, Mr KEEN and Ms Sherman CHAN made the following points -

  1. The Director, in exercising his discretion on the validity of the claims, would examine all the evidence which were reasonably required regarding ownership of Letters A/B, including those information recorded in the Commitment Transfer Register.
  2. The Director was experienced in dealing with redemption of Letters A/B and every effort would be made to protect the interest of genuine holders.
  3. Where the Director was not satisfied with the evidence produced, he might either reject the entire claim, or admit a specified part or parts. Under such circumstances, the claimant might apply to the High Court for a declaration on ownership of Letters A/B in question. The application for court declarations was a routine practice which had been in use for many years in the determination of ownership.

11. Mr Albert CHAN was concerned about the high legal fees incurred in applying for a declaration from the High Court and asked whether the procedure could be simplified, or an appeal channel be provided. Mr KEEN agreed to take up the issue with the Director of Administration on the feasibility of including appeals against the Director's decisions on redemption matters in the jurisdiction of the Administrative Appeals Board.Admin

12. On members' suggestion to spell out the documentary requirements for redemption in the Bill, Mr KEEN said that it was not desirable to burden the legislation with administrative schedules and prescribed forms. Guidance on the kind of information and evidence to be submitted for the purpose of redemption would be provided by the Lands Department. The requirements would differ from case to case, given the many variations in title transfers ranging from land transactions to wills. At members' request, the Administration would provide a list of documents/evidence which are normally required by the Director in assessing a claim.Admin

Clause 8 Conditions for payment

13. Ms Sherman CHAN stated that as a condition for payment, the holders would be required to surrender to the Director all or some of the evidence furnished for the purpose of establishing ownership.Admin.

Section 9 Presumption of equal shares

14. The Chairman asked whether it would be necessary for each of the owners of Letters A/B to submit an individual claim for redemption in case of joint ownership. Ms Sherman CHAN advised that the Bill would allow any holder of Letters A/B to submit a claim for redemption to the Director, who, unless the contrary was proved, would presume that the respective shares of the owners were equal.

Clause 11 Service of notice

15. The Chairman was concerned about the service of notice by post since most Letters A/B holders were likely to be elderly residents living in rural areas in the New Territories who might not have a proper mailing address. Mr KEEN stated that as the notice would be served to an address provided by the claimant upon application, it should be address through which the claimant could be contacted. Where a person could not be contacted by post, efforts would be made to deliver the notice in person. Mr MO added that the claimant could be contacted through the telephone number provided in the application form. Mr Y S LEE advised that in serving notices by post, whether the recipient was allowed reasonable time to respond should be considered.

Internal discussion

16.Members reiterated their concern about public knowledge of the Bill and the wide power conferred on the Director of Lands under the Bill. They requested the Secretary for Planning, Environment and Lands to address these concerns at the resumed debate on the Bill.Clerk

17. Mr Ronald ARCULLI had indicated that he objected to the enactment of the Bill as a matter of principle that the Government should not unilaterally vary contractual rights by legislative means. The majority of members of the Bills Committee expressed support for the Bill.

18. Members agreed that pending the Administration's response, a report on the deliberations of the Bills Committee would be submitted to the House Committee for consideration on 8 November 1996 to recommend the resumption of the Second Reading debate on the Bill at the LegCo Sitting on 20 November 1996.Clerk

19. There being no other business, the meeting closed at 5:45 p.m.

(Post-meeting note: the Administration was unable to provide the requested information before 4 November 1996, the report was hence submitted to the House Committee for consideration on 15 November 1996)

Legislative Council Secretariat
25 November 1996

Last Updated on 15 December 1998