Definition of house at heart of battle between government and developer

Developer and the government are at odds over whether the building of a 26-storey block is permitted under the terms of the 1952 lease

PUBLISHED : Thursday, 25 April, 2013, 12:00am
UPDATED : Thursday, 25 April, 2013, 8:59am

It's a court battle that's going all around the houses.

A developer wants to tear down five houses and build a 26-storey block in their place.

But the director of the Lands Department insists that it can build only houses - not multi-storey blocks - on the subdivided site, according to the government lease.

And if the developer wants to build upwards, the structure would no longer be considered a house and it would have to pay a premium, the government says.

The developer, Fully Profit (Asia), wants to build the 26-storey block on Nam Kok Road, Kowloon City.

But under the 1952 government lease, any development on the 22,800 square foot site is restricted to no more than 20 houses, Audrey Eu Yuet-mee SC, representing the government, told the Court of Final Appeal yesterday. The land has been subdivided into 20 lots, with no more than one house permitted on each, according to the subsequent leases, the court heard.

The developer was appointed by the land owner, who was not identified, in 2006 to replace the five existing houses with a 26-storey block.

But Eu said the developer must modify its use of the lease and that it would have to pay a premium if it wanted to build a 26-storey block on the site because its plan did not meet the lease requirement.

"If you build a multi-storey building, you would be required to make modifications and pay the premium," Eu said.

The developer in 2011 applied to the Court of First Instance for a declaration that its plan to build the multi-storey block did not breach the lease.

The court dismissed the application, ruling that a 26-storey block was not a house.

But in January last year, the Court of Appeal ruled in favour of the developer.

Eu told the court yesterday that the lease not only stipulated how many structures could be built on the site, but also what type of buildings could go up. She asked the court to consider the "ordinary" and "natural" meaning of the word "house".

"You have to look at the physical attributes and the external appearance of the structure," Eu said, adding that there was also a height restriction.

"A 26-storey building is not a house, so how does it fit into the lease condition which states 'no more than one house'?" Eu said.

"You cannot go beyond what is permitted."

But Edward Chan King-sang SC, for Fully Profit, said the lease limited only the number of houses, not the type of structures, and that the developer would not be in breach of the lease by building a multi-storey structure.

The Court of Final Appeal reserved its decision.