Defying Malpractices is a Social Responsibility

It has been reported that the Hong Kong SAR government has finally slapped a lawsuit on the Wharf Group for its alleged breach of a deed of dedication in connection with making unauthorized profit from public open space usage at Times Square.

For the background information and my earlier comments about the issue, please read my previous blogpost titled “The Public Open Space Conundrum”.

As one barrister pointed out, the fact that government is taking action after silently permitting Wharf’s action for 16 years would present itself as a good defense. However, as I pointed out in my previous blogpost, the spirit of the deed, which should imply that the open space is for the public’s benefit and enjoyment and as such, should not be treated as commercial space from which to derive profit, would be a crucial moot point. Besides, by entering into the deed of dedication, Wharf presumably acknowledged it had received full consideration for the public space dedication, which was additional buildable floor area. I must admit I’m no legal expert, but am basing my judgment on common sense.

It would be interesting to see how this case eventually ends, as it will set an important precedent for numerous other cases where developers blatantly contravene terms and conditions set out in deeds of dedication of public open space or in land leases.

Another eye-catching case is of course Sun Hung Kai Properties’ Ma Wan residential development (Park Island) where Phase 1 of a public theme park was supposed to have been completed by the end of this year (having already been extended from June 2006) but one-third of whose facilities has been delayed for at least two years, and where Phase 2 actually lacks a definite date of completion (please see LegCo Q & A).

It would also be interesting to see how government, if it comes out as the winner on the Times Square case, will deal with other similar cases and what it will do to plug up contractual loopholes in land leases where they concern public open space/public facilities within private developments.

No matter what the final outcome is, we should be pleased that at least the government is finally trying to right a wrong. Better late than never. And I have a hunch that much owes to Carrie Lam’s (Secretary for Development) initiatives in the Times Square case.

Another piece of news concerning the real estate industry is about kickbacks in property transactions and the conviction and sentencing to jail of three former Centaline Property Agency staff and one former Li & Fung (Trading) general manager for involvement in giving and receiving kickbacks. Hopefully, this will act as a deterrent to other would-be offenders.

According to the news article, Centaline chairman Shih Wing-ching urged the ICAC (Independent Commission Against Corruption) to pay more attention to the real estate industry. Bravo, Mr. Shih! There certainly is a need for more Hong Kongers to speak out against malpractices in the industry, even if it may sometimes be against one’s own interests. This is called social responsibility.