Calculation of loss of income for purposes of ‘disturbance payment’ under the Railways Ordinance

Lingrade Development Ltd v Secretary for the Environment ([2011] HKEC 307, CFA) concerned an appeal from a decision of the Lands Tribunal. The Kowloon-Canton Railway Corporation used its statutory powers to take occupation of a strip of Lindale’s land to allow it to carry out work in connection with the West Rail line. The result was to stop work on Lingrade’s development of an apartment complex for a substantial period of time. The Lands Tribunal had to assess the amount of the ‘disturbance payment’ due to Lingrade under the Railways Ordinance (Cap 519). One question was the amount of income lost by Lingrade as a result of the scheme. The Lands Tribunal had to compare the sale proceeds actually received with the proceeds that would have been received had it not been for the delay. It took the actual sale proceeds as the best comparable and adjusted them using an index of price movements in the New Territories. On appeal, the Secretary for the Environment contended that the Lands Tribunal was not entitled to take this approach. It should, it was argued, have asked for the developer’s forecasts of the sales prices likely to be achieved and used these. Lord Hoffman NPJ rejected this. The Lands Tribunal’s approach of looking at prices actually achieved was a much firmer and more realistic basis on which to make the calculations required of it.

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