LDMR000038A/2000
LDMR 38/2000
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MISCELLANEOUS REFERENCE APPLICATION NO. 38 OF 2000
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| Between | | |
| Tang Ping-choi | 1st Applicant |
| Chan Chuen | 2nd Applicant |
| | |
| AND | |
| | |
| The Secretary for Transport | Respondent |
_______________
| Coram: | H. H. Judge CHOW, Presiding Officer of the Lands Tribunal
Mr. W. K. LO, Member of the Lands Tribunal |
Date of Judgment: 28 February 2003
______________________________________
JUDGMENT ON REVIEW
______________________________________
Scope of review
1. Following the delivery of Judgment of the present application by the Tribunal, the Applicants, acting by Counsel, applied under the Lands Tribunal Ordinance (Cap. 17) for a review of the decision of the Tribunal. In the Grounds of review filed by the Applicants on 7 November 2002 ("Review Document"), they stated many grounds which are summarized below: -
"A. The Tribunal erred in law in permitting cross examination and submissions in pursuit of a case which had not been pleaded or put to the witnesses and in accepting such submissions and in rejecting objections raised on behalf of the Applicants.
B. In determining the Applicants' application for compensation, the Tribunal erred in the following major areas:
1. In finding whether the plants grown on the lots of the present application ("The Land") affection by the resumption were Barbados Lilies ("BL") of Dutch Hybrids or Chinese Variety;
2. In finding the value of the flowers grown on The Land;
3. In the assessment of the loss of profits of the Applicants;
4. In the assessment of the loss of stock of the Applicants."
2. Although Counsel for the Applicants gave notice in the Review Document that at the hearing for review, the Applicants would seek leave from the Tribunal to call for new evidence from several witnesses and for the production of further documents. However, this was not pursued at the review hearing. Therefore, for the purpose of this review, we shall rely on the same evidence as adduced by the parties in the original hearing.
3. The Respondent, acting by Counsel, submitted in response that the Applicants did not raise any new point in the review and were simply trying to have the "second bite of the cherry" by repeating the points they had given in the original hearing of the application.
4. In this Judgment, our judgment dated 27 September 2002 for this application will be referred to as "the original Judgment". The grounds raised by the Applicants in the Review Document will be dealt with more or less in the same order as summarized above. Whilst we have considered all the grounds set out in the Review Document, we find that the grounds of review were so extensive that the Applicants reviewed almost every finding and decision of the original Judgment. We found that in many instances, we had before giving the original Judgment already taken into consideration all the evidence adduced in this application. These included many matters that were raised by the Applicants in the Review Document. It was simply the case that because the Applicants did not like the outcome of the Tribunal's findings of facts, they raised up the matters again in their Review Document. When this is very apparent, we decide in this Judgment not to repeat what we had already clearly set out in the original Judgment. Otherwise, we find that we will have to repeat, in this Judgment, everything that we had said in the original Judgment.
BL of Dutch Hybrids or Chinese Variety?
5. This was addressed to by the Applicants in P. 1 to 6 of the Review Document. The subject issue had been dealt with in paragraphs 5 and 6 (P. 5 to 17) of the original Judgment.
6. Having carefully considered the submissions of the Applicants, we consider that we only need to deal with some of the Applicants' submissions. Under Ground B1(i) and (xi)(d) of the review application, the Applicants submitted that this Tribunal "failed to consider sufficiently or at all whether if not of Dutch origin, the plants were of a superior Chinese origin. The Tribunal failed to consider the evidence of Mr. Cheng that the flower at P. 44(1) WB was Hippeasrtum Reginae". But Mr. Cheng's evidence was that this species was still of Chinese origin. His evidence was that Chan Chuen was growing several varieties of Barbados lily (BL) flowers in his fields. All the BL plants grown by him were of the Chinese variety (paragraph 7.1 of Mr. Cheng's report dated 21.11.2000). Although there are different species of Chinese BL plants, it is not the Respondent's case that different species of Chinese variety attract different market prices.
7. The Applicants submitted that even if Chan Chuen's flowers were "Chinese varieties", they were sufficiently attractive and they were clearly of superior quality to the ordinary Chinese variety, and the best guide to its price would be a price higher than the prices quoted by the government at WB 325. We cannot see any marked distinction between Chan Chuen's flowers and the Respondent's flowers. We do not accept the Applicants' submission.
8. Under Ground B1(ii), the Applicants submitted that "the Tribunal in holding that the fact that Chan Chuen did not know whether the bulbs he purchased in 1992 were Dutch impugns the credibility of the assertion in his witness statement that the bulbs purchased in 1992 were of Dutch origin failed to consider that Chan Chuen's witness statement referred to his knowledge in 2001". This is not correct because his witness statement dated 5th January 2001 did not expressly or impliedly refer to his knowledge in 2001. Although he made his statement on 5th January 2001, he was in fact referring to his knowledge at the material times as referred to in his statement. In any event when deciding whether the BL plants were of Dutch hybrid or of Chinese variety, we considered all the available evidence. The allegation by Chan Chuen as referred to in his witness statement that the plants in question were of Dutch hybrid is merely one of the pieces of evidence considered by us. Our finding is made at paragraph 6.10 of the original Judgment.
9. Under Ground B1(v), the Applicants submitted that "in holding that it was not known why Mr. Wong Chau Kwong did not testify, and in attaching no weight to his witness statement Exhibit 38A1, the Tribunal failed to consider the submission of Counsel that ever since the transcript of his interview with Messrs. Ko & Cheng had been shown to him, Mr. Wong had made it impossible for Mr. Chan or his solicitors to contact him. But Counsel's submission is not evidence. If the Applicants wished to adduce evidence to support his submission, so that the Tribunal could make a finding of fact, they should have done so during the trial. But the Applicants did not do so, and so we stated that we did not know why Mr. Wong Chau Kwong did not testify in court.
Value of flowers
10. This issue was raised by the Applicants in P. 6 to 9 of the Review Document. The matter had been covered in paragraph 6 (P. 8 to 17) of the original Judgment.
11. Under ground B2(iii), the Applicants submitted that it was not pleaded or put to Chan Chuen that the receipt dated 5th October was forged; the burden of proof was that of beyond reasonable doubt. It was the Tribunal's finding that it was inexplicable why Chan Chuen should have obtained such a receipt from Wong Chau Kwong just to prove the mere sales of 300 BL flowers by the latter. There was absolutely no reason for him to do so. We found that the explanation given by Chan Chuen incredible. The other document which supported the Applicants' assertion that the BL flowers could have been sold at $16.50 per cut flower is the "agreement" in Chinese dated 1.1.1998. For the reasons given in our original Judgment, we found that the evidence given by Chan Chuen relating to these 2 documents incredible, and accordingly we attached no weight to these documents. In the circumstances, the Applicants failed to discharge their onus of proof on the balance of probabilities, and it is on this ground that we rejected the Applicants' evidence.
12. Under ground B2(vi), the Applicants submitted that "the Tribunal failed to consider that Mr. Cheng's activities beyond the scope of his duties disqualified him from giving evidence as an expert and that his telling lies affected his credibility". Having heard his evidence, we did not find that he lied in court, and we did not find that his telling lies to Wong Chau Kwong on 7th September 2000 affected his credibility. In essence he lied to Wong chau Kwong that he was growing flowers; he did not reveal his identity. The lie was made in response to questions posed by Wong Chau Kwong. It appears that on that occasion Mr. Cheng was trying to find out at what price Wong Chau Kwong would be selling cut flowers. His report dated 21.11.2000 contains factual matters relating to the BL plants, and his report dated 21.2.2001 contain matters relating to his comments on the Applicants' horticulture expert report and BL popularity survey. (The latter report also contains comments on the witness statements of witness, but no weight whatsoever was attached such comments). These matters are distinctively different from the matters referred to in his meeting with Wong Chau Kwong. We found that he gave his evidence objectively and truthfully as an expert. We could not find any reason to exclude him from giving evidence as an expert.
Assessment of Loss of Profits
13. Before going to the details of the assessments almost all of which were the subject matter of the Applicants' review, we first deal with the major issues under the heading of "assessment of loss of profit". We summarize these below: -
(1) "in holding ... that the Applicants were bound by the basis of Mr. So for calculations and bound by his concession, the Tribunal failed to consider that Mr. So's reports were not pleadings or that the Applicants could not be bounded by his reports if his assumptions were not accepted."
(2) "in holding ... that the Applicants could not claim a third harvest the Tribunal erred in law in holding that the compensation period is limited to the unexpired portion of the lease and failed to consider the notice period or the Applicants' prospects of obtaining a new lease."
(3) That the Tribunal was wrong in adopting the actual cultivated area for the purpose of assessment, including the projection of the number of bulbs and flowers in the first and second harvests.
(4) That the Tribunal erred in not accepting that the optimal density for the growing of BL on The Land was 100 bulbs per sq. m. as put forward by Mr. Ho, the horticulture expert witness called by the Applicants.
(5) That the Tribunal was wrong in holding that the spacing of a density of 100 bulbs per sq. m. was insufficient.
(6) That the Tribunal was wrong in finding that Mr. Ho was not a credible witness and that "the Tribunal erred in law in paying no heed to any of Mr. Ho's evidence on the grounds that the Tribunal disagreed with Mr. Ho's estimate as to maximum density" .
(7) That "in accepting Mr. Cheng's evidence and Mr. Hong's based on Mr. Cheng's the Tribunal failed or failed adequately to consider the shortcomings in Mr. Cheng's evidence" .
Were Mr. So's reports pleadings and were the Applicants bound by Mr. So's reports?
14. In the Amended Statement of Claim filed by the Applicants on 12 February 2001, the Applicants pleaded the following: -
"......................................
14. The Applicants claim for loss of leasehold interest as stated in s10(2)(a) of the Lands Resumption Ordinance (as incorporated by reference under the Ordinance) in the sum of HK$74,371.00 and full particulars of which are set out in Paragraph 3 of the Applicants' Submission of Claim dated 24th June 2000 as amended by the Supplementary Expert Report of So Chun Hin dated 22nd January 2001.
15. The Applicants also claim for disturbance compensation as stated in s10(2)(d) of the Lands Resumption Ordinance (as incorporated by reference under the Ordinance) in the sums of :
(a) HK$10,728,077.00 for loss of expected profit; and
(b) HK$8,810,901.00 for loss of stock
And full particulars of which are set out in Paragraph 4 of the Applicants' Submission of Claim dated 24th June 2000 as amended by the Supplementary Expert Report of So Chun Hin dated 22nd January 2001.
....................................."
15. From the above quotations of the Amended Statement of Claim of the Applicants, it is obvious that the Supplementary Expert Report of Mr. So dated 22 January 2001 formed part of the pleadings of the Applicants. Besides, since the said Supplementary Expert Report made references to Mr. So's previous expert report, the latter (as amended where appropriate) also formed part of the pleadings of the Applicants. This answers the Applicants' submission that the Applicants were not bound by Mr. So's reports if his assumptions were not accepted.
16. We also disagree with the Applicants that, putting aside the issue of pleadings or not, if a valuation expert surveyor's assumptions as to values and quantities of produce, etc. in his valuation were not accepted by the Tribunal, the surveyor could then say that he was not bound by whatever approach or valuation method or whatever data regarding the background of the valuation that he previously might have agreed with the other party, whether the agreements were reached after the concession was given from his side in order to reach a speedier settlement with or without the need to resort to a hearing in the Tribunal.
17. We give a common example of cases heard before the Tribunal to illustrate the fallacies of such arguments by the Applicants. For example, any agreement between the parties on the data of particular case, such as the frontage, headroom or gross floor area of a shop premises cannot be dependent on the result of the values eventually determined by the Tribunal after hearing the evidence and submission from the parties. A surveyor or any party which was represented by the surveyor could not come back to the Tribunal saying that although they, during the course of negotiation or even during the hearing, agreed with the other side on the frontage, headroom or gross floor of the shop, they are not bound by these concessions after reading the Judgment, knowing that the assumptions as to the values adopted by their surveyor were rejected by the Tribunal, who preferred to accept the unit rates proposed by the other side. Similarly, the surveyor or the party could not come back to the Tribunal alleging that although they had agreed a certain method of valuation or the basic approach to value the premises, they are not bound by their agreements after knowing that the Tribunal did not accept their valuations.
18. The same analogy applies here. We summarized in the original Judgment that the expert surveyors for the parties had agreed on the approach of valuation in this case. Of course, either one of the surveyors or the party who instructed that surveyor cannot now claim that they are not bound by their agreements.
19. Similarly, after Mr. So said in his Supplementary Report and his oral evidence that he had agreed to adopt the unexpired terms of the various lots of The Land as computed by the Respondent's surveyor, Mr. Hong, the Respondent cannot now say that they are not bound by Mr. So's agreement since the Tribunal did not accept the other assumptions of Mr. So's reports. Did Mr. So state categorically at the time of writing up his Supplementary Report and at the time of giving evidence that his concessions were contingent upon the Tribunal accepting his other assumptions (for example, as to his projection of the quantities of produce on the Land and the unit price of such produce)? There was definitely no evidence as such.
Should compensation to the Applicants be confined to 2 harvests, or to 3 harvests as claimed by Mr. So, or to more number of harvests?
20. We understand that the Applicants did not have any actual accounts of their business of growing BL in The Land. As a result, Mr. Hong, with the assistance of Mr. Cheng, attempted to work out the potential profit and loss statement for the planting of the BL in The Land. He summarized in his valuation reports his approach which, in a nutshell, could be represented by the following equation: -
"Net profit/loss = Total Revenue x (1 - Wastage%) - Total Costs"
21. This approach, we note, was agreed by Mr. So, the expert surveyor acting for the Applicants. However, the difference between Mr. Hong and Mr. So was that whilst Mr. Hong, in his revised valuation, gave evidence that only 2 harvests were feasible, having regard to the leasehold interests of The Land, Mr. So said 3 harvests were possible.
22. We stated in paragraph 9.1 of the original Judgment the
following: -
"The two experts agreed on the sum of the rents reserved under the existing leases of the subject land to be $250.60, and the residual term of Lot No. 157(P) in D.D. 106 and that of various other lots to be 533 days and 502 days respectively. Both experts also agreed on the landlord's requirement to serve a not less than 6 months' notice to the tenant after the expiry of the periodic lease term thus increasing the residual term of each lease by 6 months..."
23. Therefore, based on the agreed unexpired terms of the leases of the land, we decided whether two harvests or three harvests should be allowed in the original Judgment. This is obviously so because any Tribunal will not decide on a matter which has been agreed by the parties. What the Tribunal was required to find out was whether, given the agreed unexpired periods of 533 and 502 days, there were sufficient time for the Applicants to have a 3rd harvest, bearing in mind that according to the Mr. Cheng's evidence, the peak blooming season of BL flowers were the months of March to April of each year and that based on the Applicants' evidence, the BL flowers would only bloom from about the Chinese New Year to Ching Ming Festival, which also corresponded with the best marketing times of the BL flowers during the year. Therefore, based on the agreed unexpired periods of 533 and 502 days (with the latter representing an overwhelming majority of The Land), we found that it would not be possible for the Applicants to have a third harvest.
24. In the Review Document, the Applicants submitted that the Tribunal erred in holding that the Applicants could not claim a third harvest. Also, the Tribunal further erred in law in holding that the compensation period was limited to the unexpired portion of the lease and failed to consider the notice period or the Applicants' prospect of obtaining a new lease.
25. In this review, we have gone through the evidence of the witnesses and the documents produced. We find that for Lot 157(P) in D.D. 106, it was sub-let by the tenants to Chan Chuen and Tang Ping Choi from 1 January 1997 at a rent of $250 p.a. As for Lot No. 155 in DD 106 and others, they were sub-let by the tenants to Chan Chuen and Tang Ping Choi at a rent of $0.60 p.a. In each case, there was no written tenancy and no other details of the sub-tenancy, except that the rent was an annual amount. Mr. Hong also said that under common law, in the absence of express agreement to the contrarily, the minimum length of the notice to quit will be half a year. On this basis, Mr. Hong estimated the effective remaining terms of the leases of the lots as summarized above.
26. We find that there was nothing wrong in the interpretation of the sub-tenancies in question by Mr. Hong. Therefore we still hold that only two harvests were feasible. Regarding the submission by the Counsel for the Applicants that 3 or even more number of harvests were possible, we decide that (1) there was no evidence adduced in support of this contention; (2) Counsel was not supposed to and could not amend their client's pleadings in the submissions.
27. To conclude, we continue to hold that only 2 harvests should be considered in the assessment of the loss of profits to the Applicants caused by the Resumption.
Areas under cultivation and the issue of potential land for expansion
28. In P. 35 to 38 of the original Judgment, we have set out under the above headings the parties' agreed details of the total cultivated areas and the leased areas, the differences in their assumptions for the purpose of estimating the maximum number of the BL bulbs and flowers, and the resulting estimation of the loss of profits from these bulbs and flowers.
29. In the Review Document, the Applicants submitted that: -
"in holding that ... there was no evidence that it would have been possible for the Applicants to expand the cultivated area for BL and that they would not have done so, the Tribunal failed to consider that since it was Mr. Tang's land prima facie it was at his disposal, or that the amount of land originally used for planting BL was limited by the number of BL bulbs available or that the other users did not need to be told to cease immediately or that measures could be taken to clear the land..."
30. However, in paragraphs 14.1 and 14.2 of the original Judgment, we found that we disagreed with Mr. So who gave evidence that the maximum number of bulbs to be produced per harvest within the subject lot would be calculated as the product of the total leased area and the assumed maximum planting density of 100 bulbs per sq. m. put forward by Mr. Ho. Without repeating all the reasons in the original Judgment, we wish to point out that the approach of calculating the potential profits/loss of the Applicants' business had been agreed by the parties (see paragraphs 12.3 and 12.4 of the original Judgment). Also, it was agreed that only about half of all the leased areas of The Land were found to be cultivated for the growing of BL and that if not for the resumption on 16 January 1999, the first harvest in the year 1999 would be imminent, with the best blooming season of BL flowers being in March and April of each year. The Tribunal did not hear any evidence from the Applicants regarding the re-possession of any land by Mr. Tang Ping Choi from other occupiers before the resumption, that any measures had been taken by the Applicants to clear any of the uncultivated land including the physical filling up of pond to fields, the breaking up of concrete paving etc. to form fields and so on. On the other hand, we heard evidence from Mr. Hong, the expert surveyor witness for the Respondent who referred us to survey plan which indicated the existence of such ponds, concrete paving. Also, we heard evidence that there were other occupiers in the remainder of the leased land not cultivated with BL. Even if the re-possession might be possible, is it realistic to assume that the other occupiers might not require any notice before agreeing to quit so that all the land occupied by them could immediately be used for the growing of BL? What about the costs of conversion of the said land and the timing of such conversion? The Tribunal did not hear any evidence in this regard.
31. Also, we heard evidence from Mr. Chan Chuen that at the time of resumption, he already had possession of some 2.5 million bulbs. In giving evidence, he did not say that the amount of land used for planting BL had been limited by the number of BL bulbs available to him, as submitted by counsel for the Applicants.
32. Summing up, for reasons clearly stated and set out in the original Judgment, we hold that it would be reasonable to assume that the Applicants had, after planting and growing BL on The Land since 1997, fully utilized at the date of resumption whatever cultivated land that were suitable and ear-marked for the growing of BL. There was no evidence that any other remaining parts of the total leased area of The Land were suitable for the growing of BL or that even if such lands were suitable, they could be immediately or in the future converted for that use prior to the resumption. In reaching our decision, we are aware of the fact that the areas of the cultivated land of the Applicants were in fact measured and agreed by the parties during their joint site inspection and that those visits were made shortly before the resumption. The assumptions of Mr. So in projecting the maximum number of BL bulbs and flowers by adopting the total leased area and the assumed maximum density of 100 bulbs per sq. ft. were obviously unreasonable and wrong. As such, his assumptions were not accepted by us in the original Judgment. We maintain this finding in this Judgment.
Were Medium bulbs too young to produce a marketable flower?
33. The Applicants submitted that in holding that Medium bulbs were too young to produce a marketable flower, the Tribunal had failed to consider that Mr. Cheng had agreed in cross examination that a 1.25 in. bulb would produce a marketable flower and that the Tribunal had failed to consider the evidence of Mr. Chan Chuen.
34. In the original Judgment, we also stated that this was one of the areas where the expert witnesses had major disagreements. Mr. Ho for the Applicants opined that about half of the Medium bulbs would produce flowers whilst Mr. Cheng said that they were too young. We were not aware of the admission by Mr. Cheng upon cross examination and we could not find the record of transcript on this point. As far as we can now remember, even if Mr. Cheng had agreed in cross examination that a 1.25 in. bulb would produce a marketable flower, he might have meant that to be a possibility but not that about half of such Medium bulbs would produce flowers. Therefore, we do not find it fit to amend our adopted assumption.
35. We also note that in a survey carried out by AFCD in 1997/1998, the flowers/bulbs of BL of Chinese origin (as they were imported from China) had circumstances of 15 cm. To 18 cm. (equivalent to a diameter of about 1.88 in. to 2.25 in.) This particular survey was referred to in paragraph (xiv) of the Applicants' Review Document. When we compare these dimensions with the witnesses' agreed definition of different types of BL bulbs, as summarized in paragraph 15.1 of the original Judgment, we find that the BL flowers/bulbs of Chinese origin that were found marketed in Hong Kong during that survey fall within the range of Large Bulbs as defined by the witnesses for this case. That is, none of the BL flowers/bulbs sold were of Medium Bulbs size or less. This supports our finding and decision regarding the productivity of flowers of Medium Bulbs in the original Judgment.
36. Summing up, there is no evidence to lead us to amend our finding and decision regarding this matter in the original Judgment.
Is 100 bulbs per sq. m. the maximum optimal density for the BL bulbs?
37. The Applicants submitted in the Review Document that although our analysis of the spacing between bulbs were correct arithmetically we were wrong to conclude that a density of 100 bulbs per sq. m. was exceedingly high.
38. We do not wish to repeat what we said in the original Judgment. We only wish to re-iterate that in our view, a spacing of 2 inches for a bulb of 1.5 inches in diameter or a spacing of 1.5 inches for a bulb of 2 inches in diameter are exceedingly dense. In each of these two instances, the density was about 100 bulbs per sq.m. Moreover, we also note from the document at P. 325 of the witness bundle that according to the survey made in 1997/1998, the separation of BL plants were found to be between 1 bulb/sq. ft. to 2.23 bulb/sq. ft. These results high-light the sort of density that Mr. Ho was talking about.
39. To conclude, we find that there is no other evidence to persuade us to amend our view on the maximum optional density for the BL bulbs. For the same reason, we do not change on view on the credibility of Mr. Ho as an expert witness.
Estimation of unit value of BL flowers
40. The survey of prices of BL flowers by Mr. So and his team was of no assistance. We also do not agree that the Applicants' BL flowers were of superior Chinese variety. In the circumstances, we still hold our view that it would be reasonable to estimate those flowers at a price of $2.5 per cut flower.
Adoption of various revenue and cost items in the assessment of loss of profits
41. The Applicants disputed each item in the calculations. We re-affirm that based on all the evidence available to us, our adopted rates are reasonable. There is no reason to amend any of these variables, including the estimates of wastage % and wholesale discounts.
Tribunal's revised valuation of the loss of profits
42. We agree that, as submitted by the Applicants, we should have reduced the amounts of harvesting labour costs and harvesting transportation costs because in the calculation of such costs, we had not taken into account the wasted quantities. Other than that, we do not find that we have to revise any other figures. Therefore, we revise our valuations for the first and second harvests, as follows: -
Valuation of Loss of Profits (revised)
| | | | | | 1st Harvest | | | | | | | | | Estimated no. of flowers | 62,901 | | | (based on Mr. Hong's estimate) | | | | | | | | | Estimate revenue: | | | | - | Estimated unit price | ___$2.50 | ________ | | | | | $157,253 | | Less | - | Wastage allowance say 20% | | _$31,451 | | | | | $125,802 | | Less | - | Wholesale discount on unit price | | | | | say 40% | | __$50,321 | | | Total net revenue | | $75,481 | | | | | | | Deduct | - | Costs: | | | | | 1) Rent @$2/sq. m.×10,566.80 × 2/12 | $3,522 | | | | 2) Cost of bulb | $0 | | | | 3) Fertilizer | | | | | | 5,013 sq.m. × $1.46/sq.m. × 2/12 |
| $1,220 | | | | 4) Pesticides | | | | | | 5,013 sq.m. × $1.29/sq.m. × 2/12 |
| $1,078 | | | | 5) Regular labour cost | | | | | | 5,013 sq.m. × $21.43/sq.m. × 2/12 |
| $17,905 | | | | 6) Harvesting labour cost | | | | | | 62,901 flowers × 1,200/2,000 × 0.8 |
| $30,192 | | | | 7) Harvesting transportation cost | | | | | | 62,901 flowers × 200/2,000 × 0.8 |
| $5,032 | | | | 8) Division cost | $0 | | | Total cost for 1st harvest | | $58,949 |
|
| Net profit from 1st harvest | | $16,532 |
|
| | | | | | 2nd Harvest - 1 year after 1st harvest | | | | Estimated no. of flowers | 164,766 | | | (based on Mr. Hong's estimate) | | | | | | | | | Estimate revenue: | | | | - | Unit sale price | $2.50 | | | | | | $411,915 | | Less | - | Wastage say 20% | | _$82,383 | | | | | $329,532 | | Less | - | Wholesale discount on unit price | | | | | Say 40% | | $131,813 | | | Total net revenue | | $197,719 | | | | | | | Deduct | - | Costs: | | | | | 1) Rent @$2/sq.m x 10,566.80 sq. m. | $21,134 | | | | 2) Cost of bulb | $0 | | | | 3) Fertilizer | | | | | | 5,013 sq.m. × $1.46/sq.m. |
| $7,319 | | | | 4) Pesticides | | | | | | 5,013 sq.m. × $1.29/sq.m. |
| $6,467 | | | | 5) Regular labour cost | | | | | | 5,013 sq.m. × $21.43/sq.m. |
| $107,429 | | | | 6) Harvesting labour cost | | | | | | 164,766 × 1,200/2,000 × 0.8 |
| $79,088 | | | | 7) Harvesting transportation cost | | | | | | 164,766 × 200/2,000 × 0.8 |
| $13,181 | | | | 8) Division cost | $0 | | | Total cost for 2nd harvest | ________ | $234,618 | | Net profit from 2nd harvest | | -$66,901 | | | | | ======= |
|
Estimation of unit value of BL bulbs
43. We stated in the original Judgment that there was scant evidence as to the retail or wholesale price of BL bulbs of Chinese variety. The survey by Mr. So and his colleagues did not assist as they were in respect of BL bulbs of Dutch origin.
44. In Mr. Hong's witness statement dated 14 September 2001, he based the findings of 5 bags of bulbs purchased from Chan Ho Farm. He made estimates under two different scenario, as follows: -
"In the first scenario, I adopt $1.35 per bulb for all the medium sized or large bulbs. See the small bulbs are disregarded because they are not marketable. In the second scenario, I adopt $0.51 per bulb for all the bulbs found in the subject lots. Thus price is the average cost per bulb found in Table 2 on page 4 of Mr. Cheng's Witness Statement."
45. In the original Judgment, we adopt the estimated quantity of bulbs in Mr. Hong's first scenario.
46. We do not agree with the Applicants that if the small bulbs were not valued, that amounted to confistication. We decide that the valuation of any products, including agricultural products such as BL bulbs have to be realistic, having regard to the market sentiments. If there is no market for the small bulbs, we could not insist on imputing a value for them. In this regard, we were told by Mr. Chan Chuen that in the 1990's, he was allowed to take away 800,000 bulbs even after he received fair compensation, albeit computed on a different basis at that time. One may ask, if the bulbs were valuable, is it more likely than not that Mr. Chan Chuen be not allowed to remove them, at least not without any charges?
47. In the Review Document the Applicants submitted that we should have regard to the market survey carried out by AFCD in 1997/1998. (P. 325 of Exhibit 38A1). We have reviewed the document and found that according to the survey, the BL bulbs of Chinese variety range in price from about $1.25 to $4.25/bulb. This therefore supports our adopted unit rate of $3 per bulb on the original Judgment for bulbs of medium size or larger.
48. Since the sale of the stock of bulbs were to be made after the 2nd harvest, we do not agree with the Applicants that discounting is not required. Therefore, the valuation of the loss of stock remains the same, $224,485 as in the original Judgment.
Costs
49. The Applicants succeeded in having the valuation of the profits from the harvests revised. In terms of the proportion of all the matters they sought to review, these only represent a very small fraction. It would be reasonable to attribute to this matter costs of this review in the region of 1/10. Therefore, the Applicants should pay 9/10 of the costs of this review. After deducting 1/10 of the costs which should be borne by the Respondent, the Applicants are still required to bear 8/10 of the costs of this review.
Orders
(1) We order that Order No. (1) and Order No. (3) of our original Judgment dated 27 September 2002 remain unchanged.
(2) We further order that Order No. (2) of our original Judgment dated 27 September 2002 be replaced by the following: -
"(2) We further order the Respondent pays the Applicants compensation in the sum of $268,434 (Hong Kong Dollars Two Hundred Sixty Eight Thousand Four Hundred and Thirty Four), comprising the following: -
| Item of Claim | Compensation |
| Loss of leasehold interest | $27,417 |
| Loss of profits (from first harvest) | $16,532 |
| Loss of stock | $224,485" |
(3) The Applicants should bear 8/10 of the Respondent's costs attributable to this review, to be taxed (on High Court scale) if not agreed, with certificate for Counsel.
| (H. H. Judge CHOW) | (Mr. W. K. LO) |
| Presiding Officer, | Member, |
| Lands Tribunal | Lands Tribunal |
Representation:
The Applicants : represented by Messrs. Chan & Tsu, Solicitors.
The Respondent : represented by Secretary for Justice.