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Hong Kong Law Reform Commission |
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Chapter 10 - Disclosure
requirements for completed units offered for sale by developers
(continued)
__________________________________________
Introduction
| 10.1 | In
this chapter, we continue to look at the various sales particulars that should
be provided by developers as well as the way to enforce the relevant
recommendations. |
Financing
arrangements
| 10.2 | In
the case of local completed residential properties, developers usually require
the transaction to be completed within five weeks of signing the
preliminary agreement. Purchasers are therefore under some pressure to arrange
mortgage facilities. It is thus in purchasers' best interest that sales
brochures give them sufficient information as to the terms of the mortgage loans
that are offered by banks and other financial
institutions. |
| 10.3 | We
have considered the recommendations in the First Report and are of the view that
they can be extended to local completed residential properties subject to some
modifications.[69] |
Recommendation
23
We recommend
that:
(a) Where the developer quotes in
any sales literature or advertisement a list of banks providing initial finance,
the sales literature should contain a general description of the finance schemes
available from the banks so quoted. Where the interest is specified, it should
be the rate per annum.
(b) Where the
developer arranges finance, whether solely or to top up other loans, details of
those facilities and the interest rates per annum should be disclosed in the
sales literature.
(c) Where the
developer provides initial finance but later arranges for replacement finance,
purchasers should be informed in the sales literature of the possibility of the
costs of replacement finance which may be passed to them.
Interest chargeable for
late payment of purchase price
| 10.4 | There
are invariably provisions in the ASP which give the developer the right to
charge interest on any part of the purchase price not paid by the purchaser on
its due date as set out in the agreement. The First Report recommended that the
rate of interest chargeable in those circumstances should be included in the
sale brochure.[70] We take the view
that this recommendation should be extended to local completed residential
properties. |
Recommendation
24
We recommend that the rate of
interest per annum chargeable under the ASP for late payment of any part of the
purchase price should be stated in the sales
literature.
Change in market
condition and bank lending policy
| 10.5 | For
completed properties, completion may not take place immediately after signing of
the preliminary agreement. There may still be a time gap between the signing of
the preliminary agreement and completion. In a fluctuating market, banks may
change their lending policies and refuse to grant mortgage loans to the full
extent they originally promised to the developer. Purchasers will as a result
fail to obtain the necessary amount of mortgage loan to complete the transaction
and their deposits will be forfeited. There is a view that if a developer makes
representations in the sales brochure or during the promotion exercise as to the
availability of mortgage facilities, the developer should be liable if
purchasers cannot subsequently obtain the facilities. We do not share that
view, as the developer has no control over any subsequent change in bank lending
policies. |
Cooling-off period
| 10.6 | Under
the existing LACO rule, a purchaser of a Consent Scheme flat is required to sign
the formal agreement for sale and purchase within three working days of signing
the preliminary agreement. He can withdraw from the preliminary agreement
subject to the forfeiture of five percent of the purchase price or the amount of
the preliminary deposit, whichever is the lower. We understand that this LACO
rule functions well and believe it can be applied to completed flats in the
first-hand
market. |
Recommendation
25
We recommend that there should be a
cooling-off period of three working days after signing the preliminary agreement
for local completed residential properties in the first-hand market. A
purchaser can elect to cancel the preliminary agreement within the cooling-off
period subject to forfeiture of five percent of the purchase price or the
amount of the preliminary deposit, whichever is the lower.
Preliminary agreement
for sale and purchase
| 10.7 | In
Hong Kong, the usual procedure for the purchase of a completed unit commences
with the developer and the purchaser entering into a preliminary agreement for
sale and purchase (or a "Memorandum for Sale" as they are more frequently
called) at the site office or the developer's office. The purchaser pays a
deposit or reservation fee upon signing the preliminary agreement. A formal ASP
will later replace the preliminary agreement if the purchaser decides to go
ahead with the deal. |
| 10.8 | It
is often difficult to construe the terms in a preliminary agreement to determine
whether it is intended to be binding. It is therefore in consumers' interests
that the sales literature spell out whether or not the preliminary agreement is
intended to be binding. |
| 10.9 | If
the preliminary agreement is not intended to be binding, purchasers can walk out
of the deal simply by not signing the formal agreement within the stipulated
period (usually within three working days of the preliminary agreement). But
there will, invariably, be legal consequences following the purchaser's breach.
It is desirable that sales brochures should spell out these legal consequences,
such as the amount of preliminary deposits that would be forfeited. The
procedures for rescinding the preliminary agreement should also be stated in
sales brochures. If the preliminary agreement is to be rescinded by a formal
cancellation agreement, there will be legal costs such as the relevant
solicitors' charges and Land Registry registration fees. Purchasers should be
informed of these costs in sales brochures. |
| 10.10 | We
consider that the recommendations in the First Report on this subject can be
extended to local completed
flats.[71] A specimen copy of the
preliminary agreement should be displayed at the sales
office. |
Recommendation
26
We recommend that sales brochures
should state that the preliminary agreement or Memorandum for Sale is subject to
a cooling-off period of three working days after signing the preliminary
agreement. Sales brochures should also state that a purchaser can elect to
cancel the preliminary agreement within the cooling-off period subject to
forfeiture of five percent of the purchase price or the amount of the
preliminary deposit, whichever is the lower.
Right of inspection
prior to signing of preliminary agreement
| 10.11 | Purchasers
of first-hand completed flats from developers may not be able to inspect the
property until completion of the transaction. The question is whether it should
be mandatory for developers to allow prospective purchasers to view the
completed units before signing the preliminary agreement. In our view, this
question can be tied to the cooling-off period. Where a purchaser has a right
of inspection before signing the preliminary agreement and he elects to cancel
the transaction during the cooling-off period, the preliminary deposits should
be liable to forfeiture as mentioned above. If, however, a purchaser does not
have the right to inspect the unit before signing the preliminary agreement, the
preliminary deposits should not be liable to forfeiture in the event of
cancellation of the transaction during the cooling-off period. Such
arrangements have the advantage of encouraging developers to allow purchasers to
view the units before purchasers commit themselves to a binding preliminary
agreement. For the avoidance of doubt, a purchaser who elects not to view the
unit when offered the opportunity to do so by the developer should be treated as
if he has viewed the
unit. |
Recommendation
27
We recommend that if there is no
right of inspection prior to signing of the preliminary agreement, the purchaser
of a completed residential unit in the first-hand market should not be liable to
forfeiture of his preliminary deposits where he takes advantage of the
cooling-off period to cancel the preliminary
agreement.
Defect liability
period
| 10.12 | There
are two Defect Liability Periods, namely, (i) that between the developer and the
purchaser, and (ii) that between the developer and his contractor. Our concern
is with the first of these periods. Within the Defect Liability Period between
the developer and the purchaser, the purchaser may request the developer to make
good any defects in the property and its
installations. |
| 10.13 | The
current Defect Liability Period between the developer and purchaser is in most
cases six to 12 months from the date of completion of the sale and
purchase.[72] Developers usually
require the purchaser to report, within 12 months of handing over possession,
any defects not ascertainable when the units are handed over. Any such
requirement, if stated in the ASP, can only limit the developer's contractual
duty to remedy defects but does not affect the developer's separate liability in
negligence to make good the defects. We consider that the Defect Liability
Period of completed units should run from the date of the Assignment. By
executing the Assignment, the purchaser becomes the legal owner of the unit he
has bought. It is therefore fair that the Defect Liability Period starts to run
from the date of the Assignment. |
| 10.14 | As
the duration of the Defect Liability Period is of great importance to
purchasers, we consider that sales brochures of local completed residential
properties should state the Defect Liability
Period. |
Recommendation
28
We recommend that sales
literature should state the duration of the Defect Liability Period and when it
will start to run.
| 10.15 | There
is a view that in order to provide better protection for purchasers, the current
Defect Liability Period of 12 months should be lengthened to, say, 24 months as
in the case of the Home Ownership Scheme. We see no compelling reason to
lengthen the current Defect Liability Period of 12 months. Most defects in the
property will be detectable during the early months of occupation. A common
defect is blockage of pipes caused by decorators dumping rubbish into the pipes.
Such blockage is readily detectable. Another common defect is water leakage,
but this will normally be detectable during the first complete annual cycle of
seasons. |
Warranties made to the
developer by the contractor
| 10.16 | Most
grantees of Government leases tend to be subsidiary shell companies of
developers. Some developers may evade their liability to make good defects in
the property by winding up the subsidiary shell company after completion of the
development. To address this problem, we consider that recommendations should
be made along the lines of some observations made in the First
Report.[73] |
Recommendation
29
We recommend that if the
developer is wound up, the benefits of any warranties made to the developer by
contractors should be passed on to the Owners' Corporation or the Manager of the
development.
We recommend that
notwithstanding any term in the building contract between the developer and the
contractor prohibiting the assignment of the developer's rights against the
contractor, the purchasers should have the right to take direct legal action
against the contractor for any defects in the
units.
| 10.17 | We
have considered the likelihood of requiring developers to provide bank bonds to
cover defects. The bank bond might be, say, one percent of the construction
costs. The disadvantage of a bank bond is that it would discourage small
developers. Large developers are more willing to provide some sort of bond in
any event. On the other hand, a bond is fair and works well for projects in the
Housing Authority's Private Sector Participation Scheme. We consider that
the subject of bank bonds is worth exploring further and would like to hear
public comments on this issue. |
Deed of Mutual
Covenant
Purposes of a
DMC
| 10.18 | To
prospective purchasers of local completed residential properties, the Deed of
Mutual Covenant (DMC) is an important document. A DMC serves three main
purposes. First, it has a technical purpose: the allocation of shares in land.
In Hong Kong, when a person buys a unit he buys the notional shares, (called
undivided shares) of the land. The DMC allocates units to the undivided shares.
The method of allocation can usually be found at the end of the DMC. Whilst a
purchaser buys the undivided shares allocated to his unit, he also buys the
exclusive use of his unit together with an equal share of the use of the common
parts. |
| 10.19 | The
second purpose of a DMC is the definition and regulation of rights between
owners. The local laws and rules of the development are achieved mainly through
covenants binding all owners among themselves and their successors. The
covenants in relation to the common areas and facilities are of particular
importance. |
| 10.20 | The
third purpose of a DMC is the provision for management of the development.
Usually, the management rules are in the DMC, rather than a separate management
agreement. |
Parties to a
DMC
| 10.21 | The
parties to a DMC are normally the developer/vendor, the first purchaser of a
unit and the management company. As there is typically no separate legal
representation for the first purchaser, there is no negotiation on the terms of
the DMC. |
Contents of the
DMC
| 10.22 | The
primary responsibility for settling the contents of the DMC is with the
developer's solicitors. DMCs are similar in terms because of Government's input
and control. The Government, as grantor of land, imposes certain conditions to
protect purchasers of units. The LACO, for example, lays down certain terms for
DMCs relating to properties under the Consent Scheme. Also, the Building
Management Ordinance (Cap 344) contains in two of its schedules certain implied
terms for DMCs. Most of these implied terms concern management budgets,
appointment and removal of the manager and meetings of
owners. |
DMC
guidelines
| 10.23 | At
present, detailed provisions on the management of multi-storey buildings are
contained in the two schedules to the Building Management Ordinance (Cap 344).
Cap 344 however does not contain provisions setting guidelines for the DMC.
Instead, Government enforces DMC guidelines by administrative means through the
Consent Scheme. We are of the view that the DMC guidelines require statutory
backing because they are currently applicable to Consent Scheme properties only.
We consider that Government should set up a Building Management Working Group
with a view to giving a statutory basis to the DMC
guidelines. |
Salient provisions of
the DMC
| 10.24 | The
term "salient provisions" means what an owner needs to know about the DMC. The
First Report recommended that certain specified provisions in the DMC should be
disclosed in the sales brochures of local uncompleted
flats.[74] These were regarded as
the salient provisions. |
| 10.25 | What
provisions of the DMC are salient is, however, a movable idea. For example,
modern technology has brought split-type air-conditioners which are installed on
the external wall. That may be in breach of the DMC, but was never anticipated
when the original DMC was drafted. Also, there is such a variety of
developments that it is difficult to cover all aspects of different types of
DMC. |
| 10.26 | We
take the view that certain categories of provisions should be included in the
list. In the first place, clauses in the DMC imposing financial obligations are
generally of importance, as are those clauses touching upon everyday usage of
the property, such as use of common areas, recreational facilities, illegal
alterations and structures, prohibition on keeping of pets and carparking.
|
| 10.27 | Whilst
we agree that the salient provisions should be disclosed in the sales brochures,
we do not want to define what the salient provisions are. We prefer to leave it
to the Administration to draw up the a detailed list of the salient provisions
of the DMC but believe that the salient provisions in the Consent Scheme
should be used as a reference
point. |
Recommendation
30
We recommend that sales
brochures should state the salient provisions of the Deed of Mutual Covenant
(DMC). The list should include those clauses in the DMC imposing financial
obligations and those touching upon everyday usage of the property.
Availability of
bilingual copies of DMC
| 10.28 | The
First Report recommended that sales brochures should state that English and
Chinese versions of the DMC are available at the sales office or solicitor's
office for inspection.[75] That
recommendation would oblige the developer to arrange for Chinese translation of
the DMC. We take the view that it is desirable to have a Chinese version of the
DMC. |
Recommendation
31
We recommend that the
developer should deposit copies of the English and Chinese versions of the DMC
at the sales office or the solicitors' office for free inspection during normal
office hours. The sales brochure should contain a statement to the effect that
the English and Chinese versions of the DMC are so available for
inspection.
Private slope
maintenance
| 10.29 | The
slope adjacent to a building is often owned by individual owners of the building
under the terms of the Government Lease. The maintenance of these private
slopes is the responsibility of the individual owners. The DMC often sets out
the individual owners' liability for potential expenses of slope maintenance.
The consent letter issued by the LACO will build such a provision into the DMC
(called a Slope Maintenance clause) to ensure that money can be collected in
future from owners to undertake the repairs or maintenance.
|
| 10.30 | The
cost of maintaining and repairing private slopes can be great and the burden on
individual owners heavy. As heavy rains are common every summer, private slopes
are liable to erosion and damage. It is important that purchasers know of that
potential liability for private slope maintenance.
|
Recommendation
32
We recommend that if there is
actual or potential responsibility for maintaining private slopes, there should
be clear notification to purchasers in the sales brochure of that
responsibility. The sales brochure should also disclose any existing notice
from the authorities to repair and maintain private slopes at the date of its
printing. Moreover, if there is responsibility in the Government Lease for
maintaining private slopes, that responsibility should be spelt out in the sales
brochure.
Duty to maintain terms
of DMC unchanged
10.31 We take the view that if an uncompleted development
has a DMC, developers should have an obligation to keep its terms unchanged when
it later becomes completed with the issue of the occupation permit. The
contents of the DMC should not change because it defines the rights and
obligations of the owners in the same development. Whether or not there is an
occupation permit should not have any bearing on those rights and
obligations.
Recommendation 33
We recommend that if an uncompleted development has a DMC,
developers should have an obligation to keep its terms unchanged when the
development later becomes completed with the issue of the occupation
permit.
Conditions of the
Government lease
| 10.32 | There
are three main areas of concern in relation to the conditions of the Government
lease, namely, (i) user restrictions; (ii) duration, and (iii) special lease
conditions. User restrictions are the most important conditions of the
Government lease. |
User
restrictions
| 10.33 | Government
leases and Conditions of Grant contain provisions which restrict the land to
certain uses, the common ones being "commercial/residential", "non-industrial"
and "industrial/godown". Compliance with the user restrictions is important as
the Government may re-enter and take back possession of the land if a condition
governing the land use is breached. Moreover, if the land is put to more
valuable use than that specified, a premium has to be paid to the Government.
If, for example, an industrial use is converted to residential, a premium equal
to the difference between the market value of the two uses will be payable.
|
Duration of the
Government lease
| 10.34 | The
duration of the Government lease and the unexpired term of the lease are of
interest to purchasers because renewal of a Government lease requires a
substantial increase in the annual rent payable to the Government. The amount
of Government rent in some cases could be three per cent of the rateable value
of the property[76] and that can be
a substantial sum. It is the responsibility of the individual owners to pay
their share of Government rent of the lot where the building is
situated. |
| 10.35 | Apart
from the potential liability for Government rent, the duration of the Government
lease and its unexpired term are of interest to purchasers because it may affect
banks' mortgage policies for the
development. |
Special lease
conditions
| 10.36 | There
are various special lease conditions which impose on a flat-buyer continuing
financial obligations,
including: |
(1) The construction
and maintenance of pedestrian subways and
footbridges;
(2) The construction and
maintenance of escalators, stairways and lifts for the
disabled;
(3) The maintenance of slopes,
toe-walls and retaining walls;
(4) The
maintenance of private open spaces and toilets;
and
(5) The maintenance of internal
roads.
| 10.37 | The
First Report made certain recommendations in relation to the conditions of the
Government Lease.[77] We consider
that those recommendations can be extended to local completed residential
properties. |
Recommendation
34
We recommend that sales
brochures should state the following:
| (1) | the
permitted uses of the individual units as stated in the approved building plans,
together with any restrictions on use contained in the Government lease or
Conditions of Grant of the land; |
| (2) | the
original term of the Government lease and its date of
expiry; |
| (3) | the
rent provisions in the Government lease;
and |
| (4) | that
the renewed Government rent may be an apportioned amount of three percent of the
rateable value of the
building. |
Sales brochures
should also contain a general notification to the effect that the Government
lease will impose various financial obligations on purchasers and that they are
advised to consult their professional advisers accordingly.
Translation of extracts
of Government lease into Chinese
| 10.38 | Whilst
we consider it desirable that the Government lease should be translated into
Chinese, we are aware that there are few available resources for the translation
work and problems can arise as to who should be responsible for the costs of
translation. Bearing in mind these practical difficulties, we consider that
it is desirable for the Government to prepare a summary of extracts of the
Government lease in plain language, in both English and
Chinese. |
Apportionment of
Government rent
| 10.39 | Some
property owners have complained that some solicitors when acting for a purchaser
do not check whether Government rent is paid up to date before completing a sale
and purchase.[78] As the new
Government rent may involve greater sums of money, it is important that property
owners are not exposed to additional charges which should have been the
responsibility of previous owners. There is the possibility of re-entry by
Government in the event of non-payment of Government rent, even if the amount is
small. We consider that the Law Society should encourage solicitors to
properly apportion the respective liabilities of vendor and purchaser to pay
Government rent at the time of conveyancing. |
Prices and number of
units for sale
| 10.40 | The
First Report made several recommendations to ensure prospective purchasers of
uncompleted properties get an accurate impression of the prices of the units
offered for sale and their
number.[79] Those recommendations
were made on the basis that prospective purchasers had to go through the process
of balloting in all public sales. Nowadays, balloting is seldom used in the
sale of completed units in view of prevalent market conditions. Depending upon
market conditions, discounts from the prices quoted in the price lists are
sometimes offered. When estate agents are employed by the developer to
negotiate with prospective purchasers, price lists sometimes are not released to
the public. In such situations, purchasers are not aware of the true prices
being offered by the developer. |
Recommendation 35
We recommend that the price lists of all units offered for
sale should be made available to prospective purchasers by developers or their
estate agent prior to the payment of any reservation fee or the signing of any
preliminary agreement. We recommend that if developers advertise that a certain
number of units will be offered for sale, that number of units should be
available for sale to the public.
Miscellaneous matters
| 10.41 | The
First Report made a number of miscellaneous recommendations relating to local
uncompleted flats.[80] These
include the names of the contractors and Authorised Persons, responsibility for
transaction fees, the date of printing of the sales brochure, supplementary
charges payable by purchasers on taking possession, licence fee to Government,
charges for right of way, car park spaces. We consider similar recommendations
should be made in respect of local completed units. In addition, we take the
view that the name of the firm of the Authorised Person should be stated.
Prospective purchasers may show more interest in the name of the firm than the
identity of the individual Authorised
Person. |
Recommendation
36
Name of main contractors, Authorised
Person and his firm
We recommend that
the names of the main contractors and the Authorised Person and his firm should
be disclosed in the sales brochure. For the present purpose, the Authorised
Person means the person occupying that position at the time of printing of the
sales brochures.
Recommendation
37
Responsibility for transaction
fee
We recommend that whenever the sales
literature contains information about the prices of the units, it should also
state with whom the responsibility for legal costs and stamp duties
lies.
Scales of legal costs and stamp
duties
We recommend that information
on the scales of legal costs (if any) and stamp duties should be provided by
developers to purchasers upon request and a note to this effect should appear in
the price list or other sales literature containing information about the prices
of the units.
Date of printing of sales
brochure
We recommend that the sales
brochure should carry its date of
printing.
Supplementary charges upon
taking possession
We recommend that
the sales brochure should provide an itemised list of supplementary charges
payable by purchasers upon taking possession of their units. If the exact
amounts of such charges are unknown, the obligation to pay them should be
disclosed in the sales brochure.
Licence fee to Government and
charges for right of way
We recommend
that where applicable, the sales brochure should state any way leave charges,
licence fees or waiver fees payable to Government for water supply/drainage
system going through Government land and/or pump room situated on Government
land and any fees or charges payable to adjoining lot owners for right of way or
easements. The amount of such charges or fees should also be stated, if
known.
Recommendation
38
Car park spaces
We recommend that the sales brochure should contain a
description of the car park spaces within the development, including their
respective numbers for sale, for rent, and those for visitors. If the developer
has not yet decided at the date of the printing of the sales brochure any of
these matters, the sales brochure should clearly state this fact. Moreover, any
descriptions of car park spaces in the sales brochure should be binding on the
developer.
Enforcement of the
recommendations
| 10.42 | The
First Report recommended that the proposals on local uncompleted flats should be
enforced by new legislation.[81] We
consider that this approach should also be used for local completed flats sold
in the first-hand market. |
Recommendation
39
We recommend that our recommendations
on local completed residential properties sold in the first-hand market should
be enforced by legislation.
We recommend
that the proposed legislation should have the following
features:
| (1) | Fines
should be sufficiently high to be an adequate
deterrent; |
| (2) | Civil
remedies should be available to enable purchasers to claim damages for loss
suffered as a result of a breach of the proposed legislation. A breach of the
proposed legislation should be a statutory tort. This remedy of damages for
breach of the proposed legislation should only be available to purchasers and
sub-purchasers but not to potential
purchasers. |
We recommend that
there should be clear provisions in the new legislation that nothing in the
legislation will detract from the rights of the purchaser under the ASP, and
that no clauses in the ASP will detract from the statutory remedies in the
legislation.
[69]
See the First Report, at paragraphs 7.6 to 7.8 for the previous
recommendations.[70]
The First Report, at paragraph
7.10.[71]
The First Report, at paragraphs 8.5, 8.6 and
8.13.[72]
In the Housing Authority's Private Sector Participation Scheme, the Defect
Liability Period is 12 months from the date of the Assignment. Starting
from Phase 17A in 1995, the Defect Liability Period of Home Ownership Scheme
units has changed to 12 months from the date of the completion
certificate.[73]
The First Report, at paragraphs 17.5 and 17.7.
[74]
(1) The definition of common parts; (2) the number of undivided shares
allocated to each unit and the method of apportionment of management charges;
(3) the fact that the number of undivided shares is subject to change; (4) the
sum payable by the owners as deposit for the first year budgeted management
expenses (to be expressed in terms of a specific number of months of management
fee if the exact amount has not yet been worked out); (5) any restrictions
imposed on owners in the use of the common parts; (6) interest and charges on
owners who default in paying sums due under the DMC; and (7) the name of the
first manager (if already decided) and the minimum period of its management.
See paragraph 10.13 of First Report.
[75]
The First Report, at paragraph 10.15.
[76] Non-renewable
Government Leases which expire before 30 June 1997 are automatically extended up
to 30 June 2046 without payment of additional premium but a new Government
rent is payable (see Annex III of the Sino-British Joint Declaration on the
Future of Hong Kong). All Government Leases whether in Hong Kong Island,
Kowloon or the New Territories which have been granted since 27 May 1985 are
also subject to this new Government rent from 1 July 1997 (see paragraph 1 of
explanatory notes to Preliminary Advices on Government Rent issued by the Rating
and Valuation Department to individual owners in April 1997.) The result is
that many new developments are subject to the new Government rent, as they are
built on lots of land granted after 27 May 1985. The new Government rent is at
three percent of the rateable value of the property and so can be a substantial
sum. This being the case, the Rating and Valuation Department has since 1 July
1997 issued demands for Government rent to the individual owners who are so
liable.[77]
The First Report, at paragraphs 11.12 to 11.13.
[78]
See Legal Advisory and Conveyancing Office Circular Memorandum No 22 dated
30 September
1996.[79]
First Report, at paragraphs 12.6, 12.15 and
12.16.[80]
First Report, at paragraphs 13.7, 13.13, 13.14, 13.18, 13.22, 13.24,
13.29.[81]
First Report, at paragraph 15.27.