Country Park Enclaves –Land Issues

Contents 1. Village type development zones ‘VTD’

a.k.a. ‘V Zone’

What are they and who are they for?

Areas within the village environs set aside for building N.T.E.H. (‘small houses’) by:-

Eligible adult male indigenous villagers

Small house policy

• Introduced in 1972 to "allow an indigenous villager to apply for permission to erect for himself during his lifetime a small house on a suitable site within his own village".

1. Lands Department (2001), "The New Territories Small House Policy - How to Apply for a Small House Grant", page 7.

http://www.info.gov.hk/landsd/public/public.htm

Who is allowed to apply to build in the V Zone?

• Only an adult male indigenous villager

• On a private lot owned by himself

• Or, if no private land, on Government land

Who is not allowed to apply to build in V Zone?

• Non-indigenous villagers,

e.g. third parties e.g. outside developers, development companies

Who can buy or sell private land in the V Zone?

• Anyone

• Indigenous villager can sell private lot

• Anyone may buy, e.g. development companies

• Any buyer can sell to anyone else

Who owns the private land in V Zones?

• In many Country Park village enclaves, development companies have bought large numbers of private lots from indigenous villagers

• e.g. in Hoi Ha and Pak Lap most of the private land lots have been sold by indigenous villagers to developers

Companies owning private lots in Hoi Ha

Source of information: Land Registry and Companies Registry

Hoi Ha DD283 land ownership map

Source of information: Land Registry and Companies Registry

Land Holdings under Company Ownership in Hoi Ha overlaying the Proposed Zonings

Pak Lap DD368 land ownership map – all lots in orange owned by Master Mind Development Ltd

Source of information: Land Registry and Companies Registry

Land Holdings under Company Ownership in Pak Lap overlaying the Proposed V Zone

Why have these areas been zoned ‘V’? Why do development companies buy ‘V ZONE’ land?

• To build small houses for sale or rent to outside (non indigenous) persons

• Payment of the full purchase price of the land to the indigenous villager vendor is conditional upon building permission being granted

How can a developer who is not an indigenous villager build small houses

in a V Zone?• By various legal devices

e.g. • The developer executes a legal agreement

assigning legal title in the land to an indigenous villager who applies for building permission, but the villager signs a secret agreement assigning beneficial ownership of the land and any small house to the developer

Legal devices used to enable developers to build small houses

• The indigenous villager signs, inter alia, a trust document, a power of attorney and a will in favour of the developer

• The indigenous villager applies to build on what appears to be his own land and represents to Government that he is the land owner and will be the owner of any subsequently approved small house

Why would the indigenous villager assign his right in the land and small

house to the developer?

• For payment of a cash sum or in return for some other benefit from the developer

• If he does not already own land in the village

Are these legal devices lawful?

• No, the application is a misrepresentation to Government that the small house applicant is applying for permission to build for himself

• Examples are in various court cases:Civil Appeal No. 20 of 2001, Madam Chung Mui Teck & anor v Hang Tak Buddhist Hall Association Ltd & anor 22 May 2001 per Hon Le Pichon JA:

Quotations from Hon Le Pichon JA • In Best Sheen Development Limited v. The Official Receiver and Trustee of the Property of Lai Thomas, A

Bankrupt, HCMP 7250 of 1999, unreported, 24 April 2001, Yuen J found on the facts of that case that there was a ‘development scheme’ between the plaintiff and L whereby (1) the plaintiff would provide the land and bear all construction and other costs for the building of a small house; (2) L would apply to Government for the grant of a free building licence to build the small house; and (3) L would have no interest in the land or the house to be erected. L also executed powers of attorney in favour of the plaintiff as well as a Will appointing the plaintiff his sole executor to whom the land was bequeathed. She held that the agreement was illegal: its purpose was to misrepresent that L was the true owner in order to enable the plaintiff to obtain the concessionary terms in the building licence available under the Small House Policy only to individual indigenous villagers and not the plaintiff.

• Central to the decision is the holding that in making the application, the villager is representing to the Government that he is the legal and beneficial owner of the land in respect of which the application for a grant under the Small House Policy is made. That holding appears to me to be correct. An indigenous villager who holds the land as a mere nominee would not qualify given the purpose of the Small House Policy which is “to allow an indigenous villager to apply for permission to erect for himself during his lifetime a small house within his own village”.

• ……..the small houses when erected would belong, not to the applicants, but to the Owner or the Developer. In other words, the applicants will not be or become beneficial owners of the relevant sections or lots of the houses erected on them.

• It is evident that neither of the defendants is eligible to apply for a grant under the Small House Policy.

• ……….the Deed is plainly unenforceable on public policy grounds because performance according to its terms necessarily involves the swearing of false declarations and the making of misrepresentations to Government.

Other legal cases• Cheung Chi Fai v Wang Hang Ping HCA 193 of 2002 per Hon A Cheung J 24 Nov 2004:

“The Plaintiff is an indigenous villager of the New Territories. The Defendant is one of the two directors and shareholders of a limited company, Bright Wide Investment Limited – a company “specialising” in the development of small houses in the New Territories under the Government’s concessionary Small House Policy.

The New Territories Small House Policy“…This policy, implemented since December 1972, is designed to allow male indigenous villagers of a village which has been in existence since 1 July 1898 to apply for permission to erect small houses for their own habitation….”

It was agreed between the father and Bright Wide that each of the three indigenous villagers would be paid $250,000.00 for so making available their indigenous rights under the Small House Policy for the benefit of the intended development under the Chinese agreement. The money would be paid after completion of the three houses.

…this was a case where the developer was merely making use of the Plaintiff’s indigenous right to apply for permission to erect a small house on a piece of land that was actually owned by the developer.

• IllegalityTurning to the question of illegality, the type of schemes in question has been the subject of judicial discussions and decisions, see for instance, Li Pui Wan v Wong Mei Yin [1998] 1 HKLRD 84; Best Sheen Development Ltd v Official Receiver [2001] 1 HKLRD 866; and Chung Mui Teck v Hang Tak Buddhist Hall Association Ltd, supra. In short, the case law is to the effect that the making use of the name of an indigenous villager to apply for the necessary building licence under the concessionary Small House Policy from the Government to develop a piece of land beneficially owned by the developer is illegal in its performance in that under a typical scheme, a false statutory declaration will be made by the villager to the Government to the effect that he is the legal and beneficial owner of the land in question and he has not entered into any private arrangements for his right under the Small House Policy to be sold to another individual or developer, and the tort of misrepresentation to the Government that the indigenous villager is the legal and beneficial owner of the land to be developed will be committed. Furthermore, according to the authorities, given the illegality of the contract in question, the court will not lend itself to the enforcement of the same by either party.

So Lo Pun• There are over 200 private lots of land which appear to be all,

or almost all, owned by members of the Wong clan.

• Nevertheless, this does not exclude the possibility or even likelihood that a developer with the resources to finance a development of up to 134 houses (as contemplated by Planning Dept.) will be involved and have indigenous villagers misrepresent that they will be the true owners in order to enable the developer to obtain the concessionary terms in the building licence available under the Small House Policy only to individual indigenous villagers and not the developer.

Are the illegal schemes merely unenforceable in civil law?

• No, they may also be criminal offences • Under section 16A (1) Theft Ordinance Cap 210:

If any person by any deceit (whether or not the deceit is the sole or main inducement) and with intent to defraud induces another person to commit an act or make an omission, which results either-(a) in benefit to any person other than the second-mentioned person; or(b) in prejudice or a substantial risk of prejudice to any person other than the first-mentioned person,the first-mentioned person commits the offence of fraud and is liable on conviction upon indictment to imprisonment for 14 years.

How common are illegal schemes?

• Common and widespread in many Country Park enclaves and villages in the New Territories

• Exact numbers are impossible to ascertain, but it is known that in a recent trip to Europe, a deputation from the New Territories recruited numbers of indigenous villagers residing abroad to sign documents selling their Ding rights to developers. The current going rate for sale of a Ding right is about HK$450,000

Who can be criminally liable under an illegal scheme?

• The indigenous villager who applies for permission to build a small house having secretly sold his Ding right

• The village representative who vouches for the indigenous villager’s lineage and decent in the male line to a recognised village in 1898

• The developer

• The solicitor who drafts and executes the documents

• Anyone else who knowingly colludes in the illegal scheme

Some Case Studies&

Some Info. on Each Enclave

Small House = House for Indigenous Villagers?

• Small House Policy: to "allow an indigenous villager to apply for permission to erect for himself during his lifetime a small house on a suitable site within his own village".

• Whilst ‘House (NTEH only)’ is a use always permitted, ‘Flat’ and ‘House (not elsewhere specified)’ are uses which require planning permission of the Board. As such, there is sufficient control in the draft OZP in that land within “V” zone will be used for Small House development.

Is this really the case?

Small House = House for Indigenous Villagers?

• Case 1

Small House = House for Indigenous Villagers?

• A/NE-TK/13, A/NE-TK/123, A/NE-TK/204, A/NE-TK/217…• Applications usually under the name of Small House/ NTEH• 1995 – 2006 • Example: A/NE-TK/204: Proposed 37 Houses (New Territories Exempted

Houses); Approved with conditions 07/04/2006

Small House = House for Indigenous Villagers?

Small House = House for Indigenous Villagers?

Small House = House for Indigenous Villagers?• Case 2

Small House = House for Indigenous Villagers?

• A/YL-PS/90, A/YL-PS/119, A/YL-PS/151, A/YL-PS/213, A/YL-PS/241…• Applications usually under the name of Vehicle Park• 2001 – 2006 • No application for Small House/ NTEH/ House

Small House = House for Indigenous Villagers?

An NTEH can be a luxury item

• Price: HK$10.5 million• Down payment

30% = HK $3.15 million• Monthly mortgage

HK$34,855 (for 25 yrs)• The median monthly

domestic household income for 2012 was $20,700.

Small House Policy

So what is the future for Hoi Ha, Pak Lap and So Lo Pun……

Small House Demands: Proposed and Outstanding

Hoi Ha Pak Lap So Lo Pun

Small House Demands by VRs

2010: 852012: 84

(Outstanding: 10)

2010: 152012: 72

(Outstanding: 7)

2010: 2302012: 270

(Outstanding: 0)

PlanD’s proposal Latest: ~ 40 ~ 79 ~ 134

Existing and Expected

Population

Existing: 110Expected: ~393

Existing: Less than 50

Expected: 230

Existing: 0Expected: 1000

Possible Monetary Value Created @

2014 PricesHK$ 400 million HK$ 790 million HK$ 1,340 million

Small House Demand in So Lo Pun: Just a Guesstimate?

2008 Extensive Tree Felling in So Lo Pun and related Media’s Report

• 本身經營著名魚翅酒家「 XXX」的鎖羅盆村委員會主席黃富，接受本報訪問時強調，斬樹是為復修村落，並將種果樹美化環境。不過他也承認，復修鎖羅盆村不單為原居民子孫將來得以尋根，將來也大有發展潛力。

• 他說，該村有大量農田地及丁屋地，將來倘獲政府批准填地，可改建起碼 40間愉景灣式的別墅豪宅：「搞荔枝園太低檔次了，我們想搞高檔次的，要富豪級的，用遊艇出入，坐遊艇來別墅度假！」

• 經營酒家發迹的黃富，也窺中鎖羅盆村對正鹽田港，隨着將來貨運吞吐量愈趨增加，希望岸灘可經營酒吧讓船員上岸消遣：「外人不知，鎖羅盆岸灘有很多蠔，有檸檬汁便食得，還有很靚的帶子，炭燒帶子一流。」

• 鎖羅盆地勢儼如深處一個谷內，中原測量師行董事總經理XXX認為，這種自成一國的富豪別墅，有其市場需求，像過去黃金海岸、愉景灣和西貢匡湖居等獨立屋，尤其是近年獨立屋豪宅都以難以置信的天價成交，買家多以內地富豪及外國華僑為主，概念是大有可為的……

Villager’s Latest “Village (?)” Layoutcovering the whole valley

Small House Demand in Pak Lap

Cooperating with Developer(s)?

2 December 2013 TVB 東張西望

Cooperating with Developer(s)?

Japanese Developer in Hoi Ha (2010)?

• 海下灣事件，也再一次說明原居民「丁權」扭曲的事實。日本財團能夠開展海下灣別墅群計劃，主要獲得原居民出售「丁權」配合。發展商在新界鄉村「套丁權」建村屋，變相把村屋發展為高級別墅的操作，在新界地區甚為普遍。簡言之，發展商物色原居民，收買他們的「丁權」，即原居民承諾丁屋建成後，必定把丁屋權益售給發展商。所以，「丁權」成為部分原居民出賣身分，得財致富的權利，已經有違讓原居民一生可建一間面積2100 方呎、最高三層村屋以安居的原旨。

“Number is meaningless”

A village chief has dismissed the government's allocation of land for village houses as a bargaining game, as the Planning Department conceded there had been no verification of villagers' demands when drafting a plan for an enclave in Sai Kung East Country Park.

“Of course I have asked for more than the actual need. It's only a game,” said XX XX-XX, a Tung A village representative.

The government would never agree to the full amount of land demanded by a village chief, so he could only bargain for more by asking for more, XX said. “To me, the number is meaningless.”

Genuine Need or Real Estate Investment?

Genuine Need or Real Estate Investment?

Huge monetary rewards will drive destruction

• Current zonings cannot provide enough protection

• Monetary incentive will only encourage more and more destructions

Dec 2012 Sept 2013 Dec 2013

Public’s Natural Heritage and the Public Interest should NOT be exploited as a money spinner by a

small minority of developers