Firms dispute decision to cease holding over rents accrued since the handover More than 200 companies, most of which are units of major Hong Kong developers such as Sino Land, yesterday began a bid to overturn a decision that could see them having to pay $1.2 billion in government rents accrued since the handover. The firms asked the Court of First Instance to review a decision by the Commissioner of Rating and Valuation to cease holding over rent demands for numerous development sites across the city. They said the commissioner had no basis for withdrawing his holdover orders while the valuations upon which the demands were based were still subject to an ongoing appeals process. The rents in question were based on interim valuations made by the commissioner after July 1, 1997, when a new ordinance relating to government rents came into effect. Before the handover, development sites had been largely exempt from such rents or subject to nominal ones. All the affected leases carry a condition that they are subject to annual government rents equivalent to 3 per cent of the rateable value of the land. The new ordinance required valuations of the properties' rateable values be obtained regardless of whether they were tenanted or not, and it is the manner in which those figures were arrived at that the firms are appealing. Up until April 30 last year, some 587 additional appeals had been lodged regarding the valuations, which continued to be made in the wake of the original objections. The total amount of outstanding rents is estimated to be $1.2 billion. The firms have given undertakings to pay whatever rents are due pending the appeals outcome. The judicial review proceedings relate to the fact the commissioner previously decided to hold over the demands while the appeals were in progress. However, on April 29 last year, he reversed the decision. At the time, the commissioner said a Court of Final Appeal case involving some of the companies had nullified the basis for the orders. According to the companies' legal team, in making his decision the commissioner wrongly invoked a section of the Interpretation and General Clauses Ordinance that states any person who is granted the power to make a decision also has the power to reverse it. Guy Roots QC, for the firms, said it was beyond the power of the commissioner to invoke that law given the conditions for withdrawing the holdover orders were clearly stated in the Government Rent (Assessment and Collection) Ordinance, under which they were granted in the first place. 'If [the Interpretation Ordinance] allowed him to withdraw orders in any circumstances,' Mr Roots said, '... there would have been no need to provide [within the rent ordinance] that the commissioner could withdraw orders in certain circumstances.' The hearing continues today.