Mill wins appeal for $600m payout

PUBLISHED : Thursday, 09 December, 1993, 12:00am
UPDATED : Thursday, 09 December, 1993, 12:00am

A STEEL mill company which has been seeking $1 billion compensation since the Government reclaimed its land in 1987, had been ''ill-used'' by the legal process, the Court of Appeal said yesterday as it more than quadrupled the firm's award.

When the figures are finally worked out by accountants, Shun Fung Ironworks is likely to get about $600 million.

In a 102-page judgment delivered by Mr Justice Power, the Court of Appeal was critical of the Lands Tribunal, which spent 22 months hearing arguments in what was supposed to be a one-month case.

The record breaking 833-page tribunal judgment took Mr Justice Rhind and M. Phillips almost two years to write, and the Court of Appeal said its confusion could be seen in many passages.

''In its earnest endeavour to achieve perfect justice, the tribunal has chased every point and pursued every argument thrown at it. In the process it failed to do practical justice to the parties,'' the court said.

Shun Fung Ironworks' Junk Bay site was resumed in 1987 to make way for a new town, but it was not until June last year that the Lands Tribunal ruled that its damages should be limited to $131 million.

The company, which used to be a leader in the construction industry, making steel reinforcing bars, had claimed costs for relocating its business to China, and loss of future profits.

The Lands Tribunal held Shun Fung had inflated its claim and was only entitled to compensation for its business being extinguished by the resumption, and so it was incapable of relocating.

But the Court of Appeal said yesterday the tribunal found after almost four years that Shun Fung's business would have been profitable had there been no resumption and yet the firm received an award that came nowhere near to compensating it for the lossof that profitable business.

Although the court allowed a cross-appeal by the Government and rejected some awards to the company made by the tribunal, it held the company should be awarded future loss of profits from the date of repossession of the land for 61/2 years and relocationcosts.

Shun Fung may have exaggerated its claim, the judgment said, but from the start it faced a hostile reception from the Government.

Arguments on costs, estimated to be more than $150 million for the tribunal hearing alone, are due to be heard next week.