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Agrila Ltd. And Others v Comissioner Of Rating And Valuation

Judgment Cited authorities 13 Cited in Precedent Map Related
Vincent
Judgment Date16 December 1999
Year1999
Judgement NumberCACV107/1999
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV000107/1999 AGRILA LTD. AND OTHERS v. COMISSIONER OF RATING AND VALUATION

CACV000107/1999

CACV 107/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 107 OF 1999

(ON APPEAL FROM LDGA NOS. 5-32, 41-53, 55-59, 88, 92, 100-109 AND
123 OF 1998 (CONSOLIDATED))

BETWEEN
AGRILA LIMITED AND 58 OTHERS
Appellants
AND
COMISSIONER OF RATING AND VALUATION
Respondent

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Coram: Hon. Mayo, J.A., Keith, J.A. and Ribeiro, J. in Court

Date of hearing: 3 - 5 November 1999

Date of handing down judgment: 16 December 1999

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J U D G M E N T

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Mayo, J.A.:

1. This is an appeal from a judgment of the Lands Tribunal.

2. The Appellants are subsidiaries or associated companies of nine groups of developers of land in Hong Kong. They are the owners of land which they are either developing or about to develop.

3. They acquired the land before 30th June 1997 by way of new grant, surrender and re-grant or exchange for development purposes.

4. It is common ground between the Appellants and the Commissioner of Rating and Valuation ("the Commissioner") that the main issue which has to be resolved is whether "rateable value" under the Government Rent (Assessment and Collection) Ordinance, Cap. 515 ("the Rent Ordinance") bears the same meaning as "rateable value" under the Rating Ordinance, Cap. 116. The Appellants say it does and the Commissioner says it doesn't.

5. The consequence of this difference is that if the meanings are the same only a nominal rent will be payable by the Appellants. On the other hand if the Commissioner is held to be able to make a separate assessment under the Rent Ordinance a very substantial amount of rent is payable.

6. This is not such a simple issue to resolve as might appear at first sight. There are numerous complications.

7. The various pieces of land can be divided up into three main categories.

1. Development Sites

2. Redevelopment Sites and

3. Agricultural land

8. 33 of the parcels of land are development sites; 23 are redevelopment sites and 2 are agricultural land.

9. All the development sites are held under leases granted since May 1985. All of the redevelopment sites are in the New Territories and are held under extensions of non-renewable leases.

10. After all of the proceedings were consolidated in the Lands Tribunal an agreement was concluded between the parties to frame ten separate questions for the decision of the Tribunal. The main purpose of proceeding in this manner was to endeavour to ensure that all of the problems which could be anticipated to arise from the Rent Ordinance might be resolved in one case thus obviating the necessity for numerous further applications.

11. The Lands Tribunal resolved some of these issues in favour of the Appellants and some in favour of the Commissioner. At the outset of this appeal the parties agreed that the Commissioner who was represented by Mr. Spence, Q.C. should assume the role of Appellants notwithstanding the title of this appeal. It was however agreed that if the need arose the Appellants who were represented by Mr. FitzGerald, Q.C. would be afforded a right of reply.

12. The 1st question is:

"Development sites

1. Whether the Commissioner of Rating and Valuation ('the Commissioner') is required or empowered by section 8 of the Government Rent (Assessment and Collection) Ordinance or section 2 of the Government Rent (Assessment and Collection) Regulation to ascertain the rateable value of leased land before or during development otherwise than in accordance with sections 7 and 7A of the Rating Ordinance (and the rebus sic stantibus rule) whether or not it is liable for assessment to rates under the Rating Ordinance."

13. On this question the Commissioner sought the answer "Yes", and the Tribunal answered it "Yes".

14. It is necessary to consider various statutory provisions in order to determine the answer to this question.

15. The definition of "rateable value" is contained in s 2 of the Rent Ordinance,

"rateable value" (應課差餉租值) means -

(a) the rateable value of the tenement ascertained under Part III of the Rating Ordinance (Cap. 116); or

(b) the rateable value ascertained under this Ordinance;"

16. S 6 provides that the annual rent shall be 3% of the rateable value of the land leased.

17. Ss 7 & 8 provide:

"7. Rateable value of land leased

(1) The rateable value of the land leased under an applicable lease is an aggregate of the rateable values of the tenements comprised in the land leased. The Commissioner may apportion the rateable values in accordance with this Ordinance.

(2) The rateable value of the land leased under an applicable lease or of any tenement comprised in the land leased can be ascertained by reference to the rateable value set out in respect thereof in

(a) the Government Rent Roll, or

(b) if an interim valuation has been made, the notice of interim valuation,

and the rateable value so set out in the Government Rent Roll or the notice of interim valuation, as the case may be, shall, subject to other provisions of this Ordinance, be regarded as the rateable value of the land leased or the tenement, as the case may be.

8. Valuation of land and tenements

(1) The Commissioner may value land held under an applicable lease and any tenement comprised therein at any time to ascertain the rateable value for the purposes of section 7.

(2) The Rating Ordinance (Cap. 116) applies to the ascertainment of rateable values under this Ordinance subject to any specific provisions of this Ordinance.

(3) For the purpose of this Ordinance, where the rateable value of a tenement does not in the opinion of the Commissioner exceed the minimum rateable value, the rateable value of the tenement shall be deemed to be $1."

18. S 34 provides:

"34. Regulations, forms, etc.

(1) The Governor in Council may make regulations for -

(a) ascertaining the rateable value of land, including interests held under applicable leases, parts of lots and tenements, and for maintaining the assessments;

(b) ascertaining the rateable value of classes of interests held under applicable leases and tenements by issuing rules, formulae, statements of principles, assumptions and guidelines;

(c) the manner and timing of collection of Government rent;

(d) the revision of the rateable value and the collection of Government rent as a result of modifications of an applicable lease;

(e) amending rateable values of land held under applicable leases;

(f) ascertaining the rateable value where there has been a development or a partial development or a redevelopment or a partial redevelopment of land held under an applicable lease;

(g) ascertaining the rateable values of new grant lots arising out of an applicable lease;

(h) determining the effective date of a deletion and of an interim valuation;

(i) special provisions for collection of Government rent for tenements and interests held under applicable leases with rateable values not exceeding the minimum rateable value;

(j) making equitable adjustments or apportionments of rateable values on the Government Rent Roll;

(k) submission of certificates, reports and information in connection with eligibility for exemption from liability to pay Government rent;

(l) prescribing any matter or thing which is referred to in this Ordinance as prescribed;

(m) generally the better carrying out of the provisions and purposes of this Ordinance.

(2) The Commissioner may specify the forms for use under this Ordinance."

19. Regulation 2 of the regulations purportedly made pursuant to s 34 provides:

"2. Rateable value of leased land before development

Where any leased land has not been developed after the commencement of the term of the applicable lease under which it is leased, the rateable value of the leased land at any time before any part of it is developed shall be ascertained as if the leased land were a tenement liable for assessment to rates under the Rating Ordinance (Cap. 116)."

20. S 7(2) of the Rating Ordinance, Cap. 116 provides:

"7. Ascertainment of rateable value - general rule

(2) The rateable value of a tenement shall be an amount equal to the rent at which the tenement might reasonably be expected to let, from year to year, if -

(a) the tenant undertook to pay all usual tenant's rates and taxes;

and

(b) the landlord undertook to pay the Government rent, the costs of repairs and insurance and any other expenses necessary to maintain the tenement in a state to command that rent."

21. S 7A(2) of the Rating Ordinance provides:

"7A. Rateable values in new valuation lists

(2) The rateable value of any tenement to be included in a list prepared under section 12 shall be ascertained by reference to the relevant date on the assumption that at that date -

(a) the tenement was in the same state as at the time the list comes into force;

(b) any relevant factors affecting the mode or character of occupation were those subsisting at the time the list comes into force; and

(c) the locality in which the tenement is situated was in the same state, with regard to other premises situated in the locality, the occupation and use of those premises, the transport services and other facilities available in the locality and other matters affecting the amenities of the locality, as at the time the list comes into force."

22. S 9(1) of the Government Leases Ordinance, Cap. 40 provides that subject to subsection 9 the new Government rent payable under a new Government lease shall be an amount equal to 3% of the...

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