Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Penny"s Bay Investment Co Ltd v Director Of Lands

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date16 May 2016
Year2016
Judgement NumberCACV16/2015
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV13/2015 PENNY'S BAY INVESTMENT CO LTD v. DIRECTOR OF LANDS

CACV 13/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 13 OF 2015

(ON APPEAL FROM LDMR NO 23 OF 1999)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Respondent)

and
DIRECTOR OF LANDS Respondent
(Appellant)

_______________

CACV 14/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 14 OF 2015

(ON APPEAL FROM LDMR NO 1 OF 2005)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Respondent)

and
DIRECTOR OF LANDS Respondent
(Appellant)

_______________

CACV 15/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 15 OF 2015

(ON APPEAL FROM LDMR NO 23 OF 1999)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Appellant)
and
DIRECTOR OF LANDS Respondent
(Respondent)

_______________

CACV 16/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 16 OF 2015

(ON APPEAL FROM LDMR NO 1 OF 2005)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Appellant)
and
DIRECTOR OF LANDS Respondent
(Respondent)

_______________

CACV 115/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 115 OF 2015

(ON APPEAL FROM LDMR NO 23 OF 1999)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Respondent)
and
DIRECTOR OF LANDS Respondent
(Appellant)

_______________

CACV 116/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 116 OF 2015

(ON APPEAL FROM LDMR NO 1 OF 2005)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Respondent)
and
DIRECTOR OF LANDS Respondent
(Appellant)

_______________

CACV 119/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 119 OF 2015

(ON APPEAL FROM LDMR NO 23 OF 1999)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Appellant)

and
DIRECTOR OF LANDS Respondent
(Respondent)

_______________

CACV 120/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 120 OF 2015

(ON APPEAL FROM LDMR NO 1 OF 2005)

_______________

BETWEEN
PENNY’S BAY INVESTMENT COMPANY LIMITED Applicant
(Appellant)
and
DIRECTOR OF LANDS Respondent
(Respondent)

_______________

Before: Hon Lam VP, Barma and Poon JJA in Court
Dates of Hearing: 19 and 20 April 2016
Date of Judgment: 16 May 2016

________

JUDGMENT

_________

The Court:

A. INTRODUCTION

1. By a judgment handed down on 15 October 2014, the Lands Tribunal made an award of compensation in connection with the extinguishment of marine rights pertaining to Lot 22 in DD 356, Penny’s Bay, Lantau, Hong Kong (“Lot 22”), then held by Penny’s Bay Investment Company Limited (“the Applicant”). The marine rights were extinguished under the Foreshore and Sea-Bed Ordinance (“FSRO”)[1] on 5 May 1995 upon the gazettal of the notice of reclamation proposal approved by the then Governor in Council (“the 1995 Authorization”).

2. The award of compensation that the Tribunal made was in the sum of HK$10,952,500.[2] However, in its decision of 16 January 2015, which dealt with the parties’ applications for leave to appeal, the Tribunal admitted that it had made a mistake and that the correct amount of compensation should be HK$9,431,000.[3]

3. Both the Applicant and the Directors of Lands (“the Respondent”) were dissatisfied with the Tribunal’s award. They first obtained leave to appeal from the Tribunal on 16 January 2015 on certain grounds, which resulted in CACV 13-14/2015 (with the Respondent as the appellant) and CACV 15-16/2015 (with the Applicant as the appellant). Later on 15 May 2015, the parties obtained further leave from the Court of Appeal[4] to appeal on some other grounds which the Tribunal had refused. That resulted in CACV 115-116/2015 (with the Respondent as the appellant) and CACV 119-120/2015 (with the Applicant as the appellant).

B. Background

4. The proceedings leading to the Tribunal’s award had a protracted history.[5] For present purposes, we largely base our summary of facts on Lord Hoffmann NPJ’s summary in Penny’s Bay Investment Co Ltd v Director of Lands (2010) 13 HKCFAR 287and Lam J’s summary in his judgment dated 25 May 2007. Where necessary, we will add some more details to paint a fuller backdrop.

B1. Lot 22

5. As already alluded to, Lot 22 was situated at Penny’s Bay, which lies near the eastern end of Lantau Island. It is now the site of Hong Kong Disneyland, which opened in 2005 and was built on about 300 hectares of land that had been reclaimed from the waters of the bay. It has its own MTR station and fast road connections to Hong Kong Island and the airport. In 1994, however, Penny’s Bay was a remote corner of the coastline, inaccessible except from the sea or on foot.

6. The land around Penny’s Bay was Lot 22. It was acquired by the Applicant in 1970 by an Agreement and Conditions of Exchange dated 2 January 1970 registered in Tsuen Wan Land Registry as New Grant No 4706 (“the Grant”). The initial term of the lease was 99 years less the last 3 days commencing 1 July 1898. It was subsequently extended to 30 June 2047 by the New Territories Leases (Extension) Ordinance.[6] The Applicant enjoyed limited right to access to the sea from its land.

7. Lot 22 was about 2,010,000 sq ft in size. Under Condition 3(a) of the Special Conditions of the Grant, the Lot was to be used for general industrial and/or godown purposes excluding any offensive trade, and no less than 285,000 sq ft of the Lot shall be used for shipbuilding purposes only. There were also restrictions on the erection of any building on the Lot under Condition 3(b) and (c).

8. By a Tenancy Agreement dated 8 December 1975, the Applicant let Lot 22 to a subsidiary, Cheoy Lee Shipyards Limited (“Cheoy Lee”), which carried on the business of shipbuilding and repairing. At all times thereafter until the surrender of the lease by the Applicant to the Government on 3 April 2001. Lot 22 was used by Cheoy Lee for shipyard purposes utilizing the marine access.

B2. The 1995 Authorization

9. On 11 March 1994, the Director of Lands, pursuant to section 5 of the FSRO, published a Gazette Notice No GN 847 delineating and describing a proposed reclamation of foreshore and sea-bed situated at Penny’s Bay to provide for, inter alia, land for the construction of Container Terminals 10 and 11 (“CT10” and “CT11”), land for industry, back-up areas for container terminals and associated infrastructure (“the Container Terminal Scheme”).

10. On 24 March 1995, a draft Outline Zoning Plan (OZP) No S/I-NELP/1 (“the Draft OZP”), outlining the development plan for the Container Terminal Scheme was published. The area to be reclaimed at Penny’s Bay, including part of Lot 22, was zoned for industrial use, container terminals, container back-up area, a business park, etc. The majority area of Lot 22 was zoned for industrial use, with the rest mainly for “Government/Institution/Community”, “Other Specified Use (Service Area)” and “Road” uses. There would be a new access road linking the North Lantau Expressway with the container terminal sites. This access road would run through Lot 22.

11. On 25 April 1995, the Secretary for Transport, pursuant to section 8(2) of the Roads (Works, Use and Compensation) Ordinance[7], published in the Gazette Notice No GN 1450 a road scheme associated with the Container Terminal Scheme. The notice provided description of the general nature of the proposed road works.

12. On the same day, the then Governor in Council, pursuant to section 8(1)(c) of the FSRO, published in Gazette Notice No GN 1574 dated 5 May 1995 the 1995 Authorization, which authorized a proposal to reclaim about 1260 hectares of the foreshore and sea-bed at Penny’s Bay for the purpose of construction of CT10 and CT11 and associated infrastructure.

B3. Subsequent changes

13. In or about August 1999, the Government abandoned the Container Terminal Scheme. The road scheme, which was a necessary element of the Container Terminal Scheme and which had never been implemented, was aborted, too. Instead, the Government decided to promote the Disney Project.

14. Subsequently by a Gazette Notice GN 2230 dated 10 April 2000 the 1995 Authorization was revoked and four days later, on 14 April 2000 the new authorization for the Disneyland reclamation for the somewhat more modest area (about 330 hectares) was published in Gazette Notice GN 2231.

15. To implement the Disneyland project, Lot 22 was required. By a Deed of Surrender executed on 3 April 2001 the Government acquired Lot 22. Upon the execution of the Deed of Surrender, the Government paid the Applicant a sum of $1,506,098,750, of which $1,483,380,000 was paid as ex gratia payment.

16. It is not in dispute that the revocation of the 1995 Authorization did not revive the Applicant’s marine rights and that it had a vested right to compensation by virtue of the 1995 Authorization. The question for the Tribunal in the proceedings below was how the compensation which had become...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT