PLC Paper No. LS 83


Paper for the House Committee Meeting of the Provisional Legislative Council
on 23 January 1998

Legal Service Division Report on
Land (Compulsory Sale for Redevelopment) Bill

Objects of the Bill

To -

  1. enable persons who own a specified majority of the undivided shares in a lot ("the majority owner") to make an application to the Lands Tribunal ("the Tribunal") for an order that all the undivided shares in the lot be sold by public auction for the purposes of redevelopment of the lot; and

  2. empower the Tribunal to make an order for sale if certain criteria are met, to impose conditions on the purchaser and his successors in title for redevelopment to be completed within 6 years (or such shorter period as the Tribunal may specify), and to vest in the purchaser and his successors a statutory power to terminate the tenancy on the lot in accordance with the directions specified by the Tribunal.

Provisional LegCo Brief Reference

2. PELB(L) 70/41/85 (97) Pt. II of 14 January 1998 issued by the Planning, Environment and Lands Bureau.

Date of First Reading

3. 21 January 1998.

Comments

4. Under the Bill, persons who own not less than 90% of the undivided shares of a lot, or in the case of a lot belonging to a class specified by the Chief Executive in Council by notice in the Gazette, not less than 80%, may make an application to the Tribunal for an order for sale.

5. The Tribunal may make an order for sale if it is satisfied that:

  1. disputes as to values of properties have been settled;

  2. the sale is to enable redevelopment of the lot and that redevelopment is justified; and

  3. the majority owner has taken all reasonable steps to acquire all of the undivided shares of the lot.

Matters to be taken into account by the Tribunal when considering the above will be specified in the regulations by the Secretary for Planning, Environment and Lands.

6. The Tribunal has also been empowered to make orders or directions in relation to:

  1. the giving of notices;

  2. the sale by auction, including what the reserve price will be;

  3. the termination of tenancies, including how compensation will be payable;

  4. the appointment of trustees and application of sale proceeds; and

  5. the time for completing redevelopment.

7. Under the Lands Tribunal Ordinance (Cap. 17), any order or direction mentioned in paragraphs 5 and 6 are reviewable by the Tribunal and appeal may only be made to the Court of Appeal on the ground that such order or direction is erroneous in point of law.

8. The Bill protects the purchaser against the claims of any prior owner or his assigns or personal representatives. This is a useful remedy in the case of properties not having a good title or where an owner cannot be located or has died intestate, or where persons are claiming equitable interest in respect of the properties.

9. Members may wish to refer to paragraphs 14 to 17 of the PLC Brief for implications of the Basic Law and the Hong Kong Bill of Rights Ordinance. Paragraph 22 of the Brief sets out the grounds put forward by the Administration justifying why it is essential to introduce the Bill within this session.

10. Paragraph 22(c) of the Brief refers to the Partition Ordinance (Cap. 352) which contains provisions similar to the Bill. Section 6 of that Ordinance permits the High Court or the District Court to make an order for sale of a property where it appears to the court that a partition of the property would not be beneficial to all the persons interested. Although there is no judgment specifically ruling that the Ordinance does not apply to co-owners in a multi-storey building who have a specified undivided share in the property and the exclusive right to use part of the property under a deed of mutual covenant, cases suggest that this is the reason for providing the court with a power to refuse to order sale or partition under section 2 of the Ordinance.

Public Consultation

11. According to the Brief, public consultation has been carried out from July to November 1995 and views from the general public and various public and professional bodies have been sought.

Consultation with the Provisional LegCo Panel

12. No consultation with any PLC Panel has been carried out.

Conclusion

13. The Legal Service Division is still scrutinizing the Bill. In view of the fact that the policy aspects of the Bill have not been referred to any PLC Panel, members may wish to consider setting up a Bills Committee to study its policy implications.


Prepared by


Wong Sze-man, Bernice
Assistant Legal Adviser
Provisional Legislative Council Secretariat
20 January 1998