TNAG-1617-FCO40-2225-Executive-Council-of-Hong-Kong-memoranda-and-minutes-of-meet-1987 — Page 311

CONFIDENTIAL

For information (29.7.86)

ANNEX

A

XCCI (86) 35

Copy No...

NOTE FOR EXECUTIVE COUNCIL

QUEEN'S GARDENS/TREGUNTER DISPUTE WITH HONG KONG LAND

A

Members are aware of the dispute with Hong Kong Land in the Queen's Gardens/Tregunter case.

2

make

Basically the intention was that Government would a private treaty grant of the Queen's Gardens site to Hong Kong Land in return for a premium of $103 million, 83 flats in Tregunter, and the undertaking of certain road works by Hong Kong Land.

3

Hong Kong Land paid $103 million and handed over the 83 flats. They took possession under licence of Queen's Gardens and demolished the 24 flats standing on the site. This all took place in advance of the finalisation of the Conditions of Exchange, and in 1983 Hong Kong Land refused to complete the deal unless Government was prepared to re-negotiate on property values current in 1983. Government refused to do this and the present proceedings ensued.

4

Both Government and Hong Kong Land accept that the terms of the agreement were "subject to

71 contract and that the final conditions were not signed. Government's case has been that although there was

legally binding contract, nevertheless, on established principles of equity, Hong Kong Land should not be allowed to withdraw in the light of all that had been done by both the Government and Hong Kong Land. On 10th May 1985 the High Court found against Government and this finding was upheld by the Court of Appeal on 31st January 1986. The terms of the judgment are at Annex A. Government has obtained leave of appeal to the Privy Council and the appeal is set down for hearing in November 1986.

5

An opinion on the prospects

of success in the Privy Council was

was obtained from Gerald Godfrey, Q.C., who represented the Government in the High Court and the Court of Appeal. It is his view that an appeal has a good chance of succeeding on the basis that the Hong

the Hong Kong Courts had not drawn the correct inferences from the facts proved before them and that this has resulted in an obvious injustice which it is open to the Privy Council to rectify.

CONFIDENTIAL