Provisional Legislative Council

PLC Paper No. CB(1)1361
(These minutes have been
seen by the Administration)

Ref : CB1/BC/6/97

Bills Committee on
Land (Compulsory Sale for Redevelopment) Bill

Minutes of the meeting held on Wednesday, 11 March 1998, at 8:30 am in Conference Room A of the Legislative Council Building

Members present :

Hon Ronald ARCULLI, JP (Chairman)
Hon WONG Siu-yee
Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Hon Mrs Peggy LAM, JP
Hon Kennedy WONG Ying-ho
Hon Howard YOUNG, JP
Hon Bruce LIU Sing-lee
Hon KAN Fook-yee
Hon NGAN Kam-chuen

Member attending :

Hon CHAN Yuen-han

Members absent :

Dr Hon Raymond HO Chung-tai, JP
Hon MA Fung-kwok
Dr Hon Charles YEUNG Chun-kam
Hon YEUNG Yiu-chung
Hon IP Kwok-him
Hon Ambrose LAU Hon-chuen, JP
Dr Hon LAW Cheung-kwok
Hon CHOY So-yuk

Public officers attending :

Mr Richard LUK
Principal Assistant Secretary for Planning, Environment and Lands

Mr Gordon HO
Assistant Secretary for Planning, Environment and Lands

Ms Fanny IP
Senior Assistant Law Draftsman

Clerk in attendance:

Miss Odelia LEUNG
Chief Assistant Secretary (1)1

Staff in attendance :

Ms Bernice WONG
Assistant Legal Adviser 1

Mrs Mary TANG
Senior Assistant Secretary (1)2

Meeting with the Administration
(PLC Paper No. CB(1)1106 and CB(1)1115(01))

The Assistant Legal Adviser 1 (ALA1) took members through PLC Paper No. CB(1)1106 which set out the information required by members on the addition of the Secretary for Justice (SJ) as a defendant. The subject was raised when members examined clause 3 of the Bill at the meeting on 28 February 1998. The Law Society of Hong Kong (LS) had recommended that a copy of the application be served on SJ under clause 3. The Bills Committee then requested ALA1 to provide information on whether the Lands Tribunal had the power to appoint an amicus curiae, i.e., a friend of the court to advise the court on matters of law if no express provision was made in the Bill.

2. ALA1 drew members' attention to the distinction between an amicus and an intervener. The recommendation of LS was based on sections 3A and 3B of the Partition Ordinance Cap. 352, which provided a mechanism for SJ to intervene and join as a party to the proceedings if she so wished. In the absence of such provisions, SJ would have a right of intervention in a private suit whenever it affected the Government's prerogatives. She also had a right of intervention at the invitation or with the permission of the court where the suit raised any question of public policy on which the executive might have a view which it desired to bring to the notice of the court, especially where the law was doubtful or the considerations of public policy were in dispute. ALA1 advised members that in considering the proposal of LS, members were actually deciding as a matter of policy whether SJ was entitled to intervene on her own initiative or only at the invitation of the Tribunal.

3. The Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) remarked that as the Bill was intended to address matters between property owners, the Administration would wish to keep Government intervention to a minimal. Where necessary, the Lands Tribunal could request SJ to intervene.

4. Members concurred that an express provision similar to sections 3A and 3B of the Partition Ordinance requiring the addition of SJ as a defendant was not necessary.

5. ALA1 referred members to a draft conditions of sale prepared by LS which had been circulated to members vide PLC Paper No. CB(1)1115(01). According to ALA1, LS was concerned about the need for consistency and suggested incorporating these conditions of sale under Schedule 2 to the Bill for the following reasons -

  1. A set of standardized conditions of sale would ensure consistency and would avoid disputes between the majority owners and the minority owners. It would also avoid any possible impartiality on the part of trustees who were paid by the majority owners; and

  2. the inclusion of standardized conditions of sale under the Schedule to the Bill would dispense with the need for making the order nisi and order absolute as was originally proposed by LS.

6. The Chairman agreed with LS on the need for stating in the Bill the principles and conditions relevant to the sale by auction to ensure consistency. However, whether these conditions should be in minute details as was proposed by LS was a matter of judgement. In his view, the Lands Tribunal should not be used as a battle ground for the majority owners and the minority owners to dispute their interests. As the existing conditions of sale under Schedule 2 to the Bill were brief, he questioned whether the Secretary for Planning, Environment and Lands (SPEL) might consider imposing conditions in the form of a standardized contract to be issued as subsidiary legislation at a later stage after the enactment of the Bill.

7. PAS/PEL explained that most of the conditions subject to which the lot should be sold had already been incorporated in the amended provisions of the Bill. He did not consider it necessary to further stipulate the conditions suggested by LS under Schedule 2 to the Bill. He opined that the details should more appropriately be included in the auction documents.

8. The Senior Assistant Law Draftsman (SALD) added that the conditions of sale could in no way be exhaustive. The uniqueness of each case would make it difficult to set a standardized contract which was suitable to every situation. As far as title problems were concerned, these had been taken care of by clause 8(1). Under the amended provisions of clause 4(6), the trustees might apply to the Lands Tribunal for directions in case of doubt or where the matter was not provided for in the provisions of the Bill.

9. In response to members, the Administration agreed to study the draft conditions of sale provided by LS and to advise on the need for making a standardized contract, and if so needed, its content. Admin

10. SALD took members through the marked-up copy of the Bill which had incorporated the ninth draft Committee stage amendments, highlighting the salient points of and the rationale for the amendments.

Clause 4

11. Regarding the remuneration of trustees under subclause (8), members agreed that this should be borne by the majority owners of the lot.

12. As to the expenses of the auction, members concurred that these should be solely borne by the majority owners if there was no successful bid as they considered it unfair to require the minority owners to share out these expenses given that they did not wish to sell their properties. Where there was a successful bid, members agreed that these expenses should be shared out between the majority owners and the minority owners. Members requested the Administration to provide a chart to explain the responsibilities for the expenses of the auction under all possible scenarios. Admin

13. Referring to subclause (5)(a)(iii) on the holding by the trustees of such part of proceeds of sale specified by the Lands Tribunal in view of lis pendens affecting the lot, a member enquired about the basis on which sale proceeds would be set aside to cover lis pendens. He was particularly concerned about situations which did not affect title claims, such as cases involving roof dwellers who had no claim to the property and advertisements on external walls of building.

14. SALD said in response that the amount set aside would be based on the assessed value of the property, to be specified by the Lands Tribunal. The Chairman pointed out that as lis pendens would normally involve a specified unit of the lot, the amount to be set aside could be calculated on the basis of the assessed value of the property.

Clause 7

15. Referring to subclause (5)(a) on the assignment of property by the majority owners at any time before the successful sale of the lot, a member enquired whether a successor in title would be deemed to be a party to the application. SALD explained that the definitions of "majority owner" and "minority owner" under clause 2 of the Bill already covered a successor in title to any such owner. The member opined that the definition did not apply where a minority owner assigned his property to a majority owner. In that case, the successor in title, being the majority owner, might wish to become a party to the application for a sale order. The Administration noted the member's point and agreed to review the drafting of the definitions. Admin

Clause 8

16. ALA1 drew members' attention to the inadequacy of subclause (2) regarding the notification of tenants on the termination of tenancies. The amended provisions of the Bill only provided for the posting of the notice on a conspicuous part of the lot and made no mention of the service of the notice to the tenants concerned. ALA1 suggested and the Administration agreed to further amend the clause to provide for the notice to be served on the tenants of the affected premises.

17. Referring to subclause (1)(c) which provided that the lot the subject of an order for sale would be sold notwithstanding the terms of any lease or the provisions of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7, members enquired whether this would mean the overriding of the Bill over the provisions of the Landlord and Tenant (Consolidation) Ordinance. ALA1 advised that the leases would be terminated immediately upon the day on which the purchaser of the lot became the owner, irrespective of the duration of the tenancies. PAS/PEL added that the Secretary for Housing had been asked to take account of the implications of the Bill in the forthcoming review of the Landlord and Tenant (Consolidation) Ordinance.

Schedule 3

18. Referring to the Schedule, a member opined that the time for completion of redevelopment should only be extended by the Lands Tribunal upon application by the purchaser of the lot. Where appropriate, the Lands Tribunal might specify a period shorter than six years. The Administration took on board the member's views and agreed to introduce CSAs to achieve this effect. Admin

19. Members agreed to continue discussion at the next meeting on 12 March 1998.

20. The meeting closed at 10:00 am.

Provisional Legislative Council Secretariat
11 June 1998