Ma Wah Yan and Another v. Dharma Realm Buddhist Association, Inc. and Others

HCA 1190, 1191,
1192 and 1193/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS 1190, 1191, 1192 AND 1193 OF 2007

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(Consolidated by the Order of Master J Wong dated 18th July 2012)

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J U D G M E N T

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A.  INTRODUCTION

1.The core issue in this case is whether or not 4 properties of the deceased were subject to a public charity for the advancement of Buddhism.

B.   THE PARTIES

2.The deceased (“Priest To Lun”) had various names including TO Lun (度輪), SIK To Lun (釋度輪), Priest To-Lun (度輪法師) and Xuan Hua (宣化).  He died on 7 June 1995, intestate.  He was not married and did not leave any issue.  He was survived by his brother.  The Plaintiffs are the administrators of Priest To Lun’s estate.

3.The 1^st defendant in the consolidated action (“D1”) is a non-profit organization registered under the laws of California but it is not clear if it has charitable status.  Mr Chong, counsel for D1 accepts that D1 is not a beneficiary to the alleged charitable trust but the “trustee”.

4.The other defendants have not filed acknowledgement of service.  The trial proceeded in their absence.

C.  UNDISPUTED OR INDISPUTABLE FACTS

5.The following facts are undisputed or indisputable as being based on documents.

6.Priest To Lun was born in Mainland China in 1918.  He became a monk in 1937 at the age of 19 and was ordained in 1947.  In 1949, he came to Hong Kong to preach Buddhism.  Two years later, he established the Western Bliss Garden (西樂園) and preached there.

7.In between 1954 and 1958, Priest To Lun became registered owners of the 4 subject properties, tabulated below:

8.In February 1959, D1 was incorporated under its former name of “Buddhist Lecture Hall Inc” in California.  Contrary to paragraph 28 of the Amended Defence, Priest To Lun was not one of its founders.  Mr Miu (counsel for the Plaintiffs), however, accepts that Priest To Lun was the spiritual and de facto head of D1 during his lifetime, and that the directors and office holders of D1 were his followers and would obey his commands.

9.Priest To Lun used to preach at the Buddhist Lecture Hall until he departed for the USA in 1962 to continue preaching there. He had never since resided in Hong Kong except to return on 4 occasions to preach.

10.On 7 June 1995, Priest To Lun passed away in the USA.

11.For about 57 years till now, D1 has been operating the Tsz Hing Monastery and the Buddhist Lecture Hall.

D.  ISSUES AND BURDEN OF PROOF

12.The Happy Valley Property is no longer in issue as the Plaintiffs agreed to judgment being entered for a declaration that it was held on trust for a charitable purpose for the advancement of Buddhism.

13.As regards the remaining 3 Properties, the core issue remains as set out in paragraph 1 above.  D1 claims to be in actual or constructive possession of all 4 properties, but the Plaintiffs say that D1 was a trespasser.  If D1 is found to be in trespass of any of the 3 Properties, there is no dispute as to quantum of mesne profits.

14.The plea of “implied trust” is no longer relied on by D1.

15.The equitable interest in a property follows the legal title.  It is for the party claiming beneficial interest to prove the contrary.  In this case, the burden rests on D1.

E.   LEGAL PRINCIPLES ON CHARITABLE TRUST

16.According to Cheung Man Yu v Lau Yuen Ching & ors [2007] 4 HKC 314, Tang VP (as he then was), §24, to qualify as a public charity, 3 criteria must be satisfied:

(1)   The purposes of the institution must have charitable character;

(2)   The institution must exist for the benefit of the public;

(3)   The institution must be exclusively charitable.

17.A gift for the advancement of religion or promotion of public worship is considered as a gift to charity: Li Kim Sang Victor v Chen Chi Hsia & anor, HCA 481/2008, 24 February 2015, Au-Yeung J; Tudor on Charities, 10th ed, §2-110. This applies even if the gift is subject to conditions: Tudor on Charities, §§2-110 & 2-114.

18.So long as land is held for the purpose that a place of public worship should be built on it, the fact that there was no formal declaration of trust would not prevent a public charity for the advancement of religion from being formed: Cheung Man Yu, §45. 

19.It did not matter that the keeper of the building built for the advancement of the religion did not know that a charitable trust had been established.  Although subsequent events or conduct might throw light on whether a charitable trust had been established years back, they could not by themselves convert a properly constituted charitable trust, or its assets, into a private trust or private property. When the evidence supports the existence of a charity, the court should not be astute to find otherwise, unless the contrary is shown.  See Cheung Man Yu, §46.

20.A gift for the benefit or support of clergy or preachers is a charitable object, provided that the gift is for the office-holder for the time being, and not restricted to the individual filling the office at the time: Li Kim Sang Victor, §80.

21.Mr Miu submits that in ascertaining whether a charitable trust is attached to a transfer of property the court looks only at the intention of the donor(s), and not that of the donee.  This is because if a donee wishes to dispose of property to a charity, he can (and must) do so by writing, as required by section 5(1) of the Conveyancing and Property Ordinance, Cap 219. 

22.With respect, that submission runs contrary to Cheung Man Yu, §45.  Moreover, the court looks at all the circumstances, not only at the time the charity was purportedly created but also subsequently: Cheung Man Yu: §45.

23.It should be remembered that facts differ from case to case. Reliance on findings in another case may not be helpful.  I note that in his final submission, Mr Miu no longer relies onLi Kim Sang Victor which in my view is wholly distinguishable on the facts.

F.   CREDIBILITY OF WITNESSES

24.Madam Madalena Tam Lew (alias Tam Guo Shi 譚果式) (“Madam Lew”), Madam Hedy Fu (“Madam Fu”) and Reverend Heng Sure testified on behalf of D1.  Madam Bai, niece of Priest To Lun, testified on behalf of the Plaintiffs. All of these were honest witnesses.

25.The defence witnesses were careful in answering questions and would not pretend to know something that they did not know about.  They frankly admitted that some aspects of their evidence was hearsay and that some parts of their witness statements were but their own opinion (eg last sentence of §8 of Madam Lew’s witness statement; and last sentence of §4 of Reverend Heng Sure’s). 

26.However, not all of Madam Lew’s evidence was correct or reliable.  Paragraph 10 of her witness statement contained a purported quote from what was described as “the Oral Wills” of Priest To Lun:

“I came into the world without anything; when I depart, I still do not want anything, and I do not want to leave any traces in the world. I came from empty space, and I will also return to empty space.”

I place no reliance on that quote because it did not appear in the Oral Wills.  Apparently she was adopting something not laid before the court.

27.Madam Fu was a credible but not precise witness.  She tended to digress to other matters instead of answering the questions directly.  Most of her evidence was hearsay.

28.Mr Miu has tried to show collusion between witnesses because of similar contents in the witness statements:

(i)   §8 of Madam Lew’s witness statement and §11 of Madam Fu’s contained the same error in stating that the Tsz Hing Monastery was built on both Lantau Properties when it was not on Lot 5A.  They were not surveyors.  I do not see how that error should affect their overall credibility.

(ii)   §13 of Madam Fu’s witness statement and §8 of Ronald Epstein’s (which was not adduced in evidence) both stated that “putting the matter into the context of the modern legal framework”, Priest To Lun was holding the properties on trust for D1.  However, those were witnesses’ opinion of the law, which was inadmissible anyway.

I am not satisfied that there was collusion or bad faith. 

29.Unless otherwise specified, I accept the evidence of Madam Lew and Madam Fu.

30.I am most impressed by Reverend Heng Sure.  He had worked closely with Priest To Lun for 20 years until the latter’s death.  I am satisfied that was truthful and he has accurately stated the teachings of Priest To Lun and Buddhist precepts.  I accept his evidence.

31.I posed a series of questions to the defence witnesses after the re-examination of each of them.  They gave spontaneous and direct answers, to which I place the greatest weight.

32.Madam Bai’s evidence was not disputed.  I accept her evidence.  Her indirect knowledge of Priest To Lun, gained through her parents, was consistent with the conduct of Priest To Lun during his lifetime and the evidence of defence witnesses.

G.  ADMISSIONS OF PRIEST TO LUN AGAINST INTEREST

33.In his final submission, Mr Chong invites the court to take into account the admissions of Priest To Lun against his own interest [A167 §8 of Madam Lew and 201 §9 and the First Oral Will]. He submits that those were consistent with the Buddhist precepts and Priest To Lun’s lifelong conduct.  He submits that the court should have no difficulty in finding the intention of Priest To Lun when the Nathan Road Property was acquired in 1958.

34.The so-called admissions and circumstances in which they were made have to be considered in context.  I shall accord such weight to them as I shall specify below.

H.  THE DOCUMENTARY EVIDENCE

35.The acquisition of the Properties took place about 60 years ago.  The evidence necessarily involved some hearsay and circumstantial evidence on which the court may have to draw inferences.  No issue turned on admissibility.  The question was one of weight.

36.Two classes of documents need to be highlighted:

(i)   The book called 《覺海慈航渡香江》(“Exhibit D1”) purportedly containing Priest To Lun’s biography and was published after his death; and the book called《宣化上人事蹟》 (“Exhibit D2”).

(ii)   The documents filed in a prior action in HCMP 748/2002 (“the Prior Action”) whereby D1 purported to propound “Oral Wills” of Priest To Lun.  That action was discontinued and D1 did not seek to revive it here.  The Oral Wills had some significance in relation to the views and intentions that Priest To Lun took of his Properties.

37.In respect of class (i), Madam Lew testified that Exhibit D1 was written based on, amongst others, Exhibit D2 and another book. Priest To Lun had gone through Exhibit D2 and the other book before they were published. She edited part of Exhibit D1 to ensure its factual accuracy. 

38.However, there were obvious errors in Exhibit D1:

(i)   There was a reference to the Happy Valley Property being bought in 1956, when the occupation permit of the building was only issued in 1957, and the opening ceremony (as advertised in the newspaper) was in 1959.  Madam Lew, understandably, could not remember the exact years since she was a teenager then.  She also explained that an opening ceremony could depend on a number of things, including choosing an auspicious day.  However, the alleged first use in 1956 was too far apart from 1959 to justify calling the ceremony an “opening” one.

(ii)   Madam Lew herself spotted an error in Exhibit D2 as to the date of purchase of the Happy Valley Property.  She circled “1950”, replacing it with “1954” but could not tell how 1954 came into being (at page 336).

39.Mr Miu submitted that there was a possibility that certain facts stated in Exhibit D1 have been embellished, consciously or sub-consciously to enhance D1’s prospects of success in these proceedings.

40.With respect to Mr Miu, I find that possibility to be remote.  Exhibit D1 was apparently a religious publication, based on a prior edition.  The witnesses regarded Priest To Lun as a “good monk” who followed Buddhist precepts and led a disciplined life.  He did what he taught. There was no reason why he or the editors needed to mis-state the contents of Exhibit D1 or D2 at a time when litigation was not expected.

41.Further, in my view, a distinction should be drawn between record of events and details (such as dates/time). A person may be able to remember significant events although he may be mistaken as to the exact details.  That would not mean the event did not happen. 

42.I accept Exhibit D1 as evidence of the truth although I read the details therein (such as dates) with caution and unless otherwise specified.

43.In respect of class (ii), there was no challenge as to admissibility and authenticity of the Oral Wills, although it was not clear who put in the footnotes.  I accept the Oral Wills as evidence and place weight on them as evidence coming from Priest To Lun.

44.The First Oral Will was made by Priest To Lun on 26 July 1994, at a hospital in South California in these terms:

「有關所有財產如何處理之事：法界佛教總會（以下簡稱法總）財產，乃十方善信之布施，絕不能由任何一人專權獨斷來控制法總所有財產，不論是出家人1或在家人2都包括在內。處理法總財產所有事務，應設一委員會管理。因為我不願錯因果，所以我自己的財產全部都公開，讓大家知道。法總的財產，誰也不能動，不能一人說了算3。我私人名下，誰也沒權力動4。香港、美國、臺灣、馬來西亞各地的財產都有紀錄。財產可以公佈讓大家知道。不要對外，對內宣佈就可以了。就......。免得有漏洞，我一舉一動，一言一行，都沒有絲毫自私的地方。法總的基金是法總每一個人的，財產不能落到一個人身上。我要把它安排好。我的錢不給一個人，我交給大家，交給法界佛教總會，你們大家做。我的病好了，你們也大家做。病不好，大家繼續來做，你們懂嗎？建立一個財產管理委員會，名單出家人應佔三分之二以上。委員會的名單，在家人要選有德行的，不是有錢的。」

1   比丘、比丘尼

2   居士

3   意謂不能一人攬權

4   上人早期購有物業，仍是上人名下，尚未辦理轉名手續

45.On a true construction of the First Oral Will:

(a)   Priest To Lun made a distinction between the assets of D1 and his own.

(b)   The assets of D1 came from donations. No single person could unilaterally control or dispose of or receive those assets.  Instead, a committee should be set up to do so.

(c)   Priest To Lun’s own money would not be given to a single person but entrusted to every person (probably the listener of the First Oral Will) and D1.  This applied whether or not he would recover from his illness.

46.The Second Oral Will was made by Priest To Lun on 6 April 1995, at his residence in South California in these terms:

「上人再問：有沒有寫下來？（下面接著是譚慕貞手記）

上人：總會的錢不能分，不要給私人。我的產業，不能由個人決定賣就賣。誰也不准要。錢要用來造廟，辦教育及常住之用，你們現在把法界總會的錢分了，將來就餓死。」

47.On its true construction:

(a)   Priest To Lun made a distinction between the assets of D1 and his own.

(b)   The money of D1 could not be distributed or given to an individual.  He emphasized this with a warning of punishment by starvation.

(c)   Sale of Priest To Lun’s own assets could not be decided by a single person.  Nor could a single person receive it.

(d)   Money (not sure if he was referring to his own or D1’s) had to be used for building monasteries, education and living expenses for monks. 

48.The Oral Wills, made 8.5 months apart, consistently showed a good monk following Buddhist precepts with no intention to benefit himself but his sangha(s).  There were clear statements of his intention to apply personal assets to charitable causes.  However, they were far from defining the terms of the trust or the beneficiaries.  There was also no evidence that the “trust” was carried out or that Priest To Lun had effectively divested himself of all beneficial interests in his own assets.

I.   THE EXPERT EVIDENCE ON A BUDDHIST MONK’S ASSETS

49.The principles for adducing expert evidence has been set out by Evans-Lombe J in Barings Plc & Anor v Coopers & Lybrand[2001] P.N.L.R. 22, at §45:

“... expert evidence is admissible ... in any case where the Court accepts that there exists a recognized expertise governed by recognized standards and rules of conduct capable of influencing the Court’s decision on any of the issues which it has to decide and the witness to be called satisfies the Court that he has a sufficient familiarity with and knowledge of the expertise in question to render his opinion potentially of value in resolving any of those issues. Evidence meeting this test can still be excluded by the Court if the Courts takes the view that calling it will not be helpful to the Court in resolving any issue in the case justly. Such evidence will not be helpful where the issue to be decided is one of law or is otherwise one on which the Court is able to come to a fully informed decision without hearing such evidence. (underline added)

50.Paragraph 21 of the Amended Defence was related to implied charity trust and pleaded that “in 1950s, it was a common practice for disciples to donate property directly to their Buddhist master for the purpose of the furtherance of Buddhism.  The Buddhist master to whom the donation was made was a trustee of a charity trust with the purpose of advancing Buddhism.”.

51.I see no justification for D1 to adduce expert evidence at all.  Factual evidence (say, from monks and Buddhist masters) could have been led to show the alleged practice.

52.If I am wrong on admissibility, I have considered the expert evidence in the form of a written opinion (“the Opinion”) of the Venerable Sik Hin Hung (釋衍空), whose expertise was not challenged. 

53.Among the 3 sources of materials consulted, the Venerable Sik Hin Hung very fairly accepted that the first 2 (ie regulations promulgated by the Chinese Buddhist Association and “Relevant Materials from the Religious Affairs Department of the State Council of the PRC”) governed Mainland China but not Hong Kong.

54.He stated in §4(v) of the Opinion that in the recent 20 odd years, the Mainland courts basically respected Buddhist precepts and ordered that Buddhist teachers’ estate to be given to monasteries.  This statement was made without empirical evidence or reference to Mainland judgments. 

55.I do not find those parts of the Opinion concerning the 2 preceding paragraphs to be relevant.

56.The third source of material consulted was a publication by a Buddhist monk: 釋真明法師所著《略述戒律中對亡五眾物的處理》.  The Venerable Sik Hin Hung also gave oral evidence.  He was fair and credible and I accept his evidence.  In addition, Reverend Heng Sure also gave evidence as to some Buddhist precepts.  The sum total of their evidence, in relation to an ordained monk, was that:

(a)   What differentiates a monk from a layman is that the former becomes a member of a sangha (僧團) and takes up the precepts or vows of a monk laid down by the Buddha over 2500 years ago. This applies wherever a person becomes a monk.

(b)   Donation of personal assets to a sangha or monastery before a person becomes a monk is an option and not obligation.  A good monk would follow the Buddhist practice to make such donation or regard himself as holding his assets on behalf of the sangha.

(c)   Whether a monk donates to the sangha is not strictly enforced.  If he does not donate, he would not lose his ordained status and there is no “penalty” for not donating.

(d)   A monk can keep or dispose of personal or “secular” assets.  For example, the Venerable Sik Hin Hung’s keeps assets inherited from his father before he became a monk, which he intends to dispose of by will to non-monastic people (his family members).  He also receives salary from his university teaching job.  He keeps a bank account.  Until he gives them away, the assets remain in his possession.

(e)   If a monk acquires property when he was a monk, the property legally belongs to him under the law of the land, but he would have bought the property for the sangha, not his family.

(f)   Disposal of a monk’s personal property after death is governed by the law of the land.  It was clear that the Venerable Sik Hin Hung knew the difference between secular law and Buddhist precepts that he took the care to prepare a will.

(g)   Looking after parents (eg giving them food or assets) is not inconsistent with Buddhist tradition in upholding filial duties.

57.In view of such evidence, it was clear that there was not even a religious obligation on a monk to donate his personal assets, still less a legal obligation for him to be divested of all his personal assets automatically upon death.  Any donation by a disciple was not to his Buddhist master.  Disposal of a monk’s assets after death is governed by the law of the land.  The expert evidence does not support the pleaded practice.

58.Further, in §5 of the Opinion, the Venerable Sik Hin Hung stated that Priest To Lun’s assets were religious assets belonging to “the Sangha [ie the people] or monastery [ie the place]” (都屬於宗教性財產收入，應當是其所屬僧團或寺廟共有的集體財產).  He explained that as a monk moved, his personal property should move with him to the new sangha.

59.Priest To Lun had preached at different monasteries (ie Tsz Hing Monastery, Buddhist Lecture Hall and 23 monasteries in the Cities of Ten Thousand Buddhas in the USA).  The Venerable Sik Hin Hung testified that it was up to the monasteries to sort out between themselves to whom his assets belonged. 

60.Given such evidence, there was no certainty as to who the beneficiary should be when a monk has served more than one monastery.

61.Moreover, in the present case, the Buddhist Lecture Hall was not a legal entity.  D1 is a legal person but Priest To Lun was not its founder.  Which was Priest To Lun’s sangha?  There was no certainty in the eyes of the law.

62.Furthermore, as revealed from Exhibit D1, Priest To Lun appeared to have wealth at his disposal during his lifetime which had not been donated:

(i)   At page 491: it was said that the Happy Valley Property was purchased at a price of $45,000.  Madam She Guo Man provided $40,000.  Priest To Lun topped up the difference (我和其他人補足餘款).  Madam Lew’s evidence that the funds had come from donations could only be her own belief.  If Priest To Lun had treated all monies as donation not belonging to himself, there was no need to distinguish between himself and others at page 491.

(ii)   Madam Lew knew that there was a property adjoining the Happy Valley Property but it was not used in the past for the Buddhist Lecture Hall.  However, she knew that the adjoining property is now used as a Buddhist Lecture Hall but she did not know how it was acquired notwithstanding that she is a director of D1.

(iii)   At page 491, Priest To Lun purported to have stated that “等我臨來美國的時候沒有錢,我想賣了一層樓好來美國建立道場”.  Apparently, Priest To Lun still retained another property (apart from the Happy Valley Property) and some power over its disposal.

63.In my view, the expert evidence could not establish the pleaded practice or that Priest To Lun was a trustee of his own assets.

J.   THE EXPERT EVIDENCE ON VALUATION

64.The single joint expert’s report (“the Surveyor’s Report”) was not disputed, and I place full weight on it.

K.  AN OVERVIEW OF 60 YEARS SINCE 1954

65.Since Priest To Lun came to Hong Kong, there was no evidence as to his having any source of income as a monk.  Madam Lew’s evidence was that he had had no income bearing job.  Until his death in 1995, Priest To Lun had devoted his whole life as a monk to preaching Buddhism. 

66.All of the 4 properties were registered in Priest To Lun’s name as a Buddhist monk.  For 40 years up to 1995 (and thereafter), their respective uses have not substantially changed.  He had not personally used the 4 Properties except to preach on 4 occasions in 1974, 1978, 1981 and 1988.

67.Priest To Lun led a frugal life, never spending money for his own good.  He taught that “the very best thing for cultivators of the Way is to uphold the precept against touching money”.  There was a Shakya Fund set up by D1 to enable monks and nuns who would not touch money to apply for money, with justification.  Priest To Lun subjected himself to the same procedures under the Shakya Fund, just like his disciples, even to assist fellow villagers in need.  He practiced what he taught.

68.Priest To Lun had provided money to relieve his parents and their village from poverty and flooding.  Such financial assistance differed amongst persons.  The financial assistance to Priest To Lun’s brother was to repay the latter for taking care of their parents, as admitted by Madam Bai.  Priest To Lun also sponsored the trip of his brother and his family to the USA.  No witness could tell the source of such sponsorship.  All of these did not detract from Buddhist precepts.

69.I accept the evidence of Reverend Heng Sure and Madam Fu that people donated because they were impressed by Priest To Lun.  The donations were made to Priest To Lun.  Donors would not ask him to account for the money or ask for receipts from him.  They simply trusted him to use it for advancement of Buddhism.  There was no evidence that he abused that trust.  The Oral Wills pointed in the same direction.

70.When Priest To Lun died, he left no personal assets, whether in Hong Kong or the USA, except the subject properties.  See the Schedule of Properties attached to the grant of letters of administration to his estate and the evidence of Madam Lew and Reverend Heng Sure.

71.I now analyse each of the properties.

L.   THE HAPPY VALLEY PROPERTY

72.The Plaintiffs no longer contest D1’s case regarding the Happy Valley Property.  This concession by the Plaintiffs was important. This Property was held in the name of Priest To Lun without a declaration of trust or any restriction on user. It was inside a residential building with a main gate at the entrance to the building although it had no gate itself and was open to the public. It was purchased in cash, said to be from donations of the Tam family (of which Madam Lew was a member).  Despite the lack of evidence that all donors wanted to donate for a charitable purpose as opposed to donating to Priest To Lun personally, the Plaintiffs conceded that this Property was subject to a public charity for the advancement of Buddhism.

M.  THE LANTAU PROPERTIES

M1. Source of the Lantau Properties

73.The Deed of Gift was the source of the Lantau Properties.  The relevant clauses are:

“... the Grantor [Tung] has been approached by the Donee [Priest To Lun] with the project of developing the [Lantau Properties] into a monastery for the advancement of Buddhist religion which the Grantor has agreed to do so...

...

1. That the Donee shall have no right to dispose of (whether by way of sale or mortgage or otherwise) the said premises hereby first [ie Lot 5A] and secondly assigned [ie Lot 25] during the respective lives of the Grantor and Lo Wan Ting, Chan Mo Ching and Ng Pui Shan (hereinafter referred to as “the Beneficiaries”).

2. That the Donee shall at his own costs develop the said hereby first and secondly assigned premises by the erection of additional buildings thereon and the planting of trees or otherwise. (“Clause 2”)

3. That during the said lifetimes of the Beneficiaries the Beneficiaries shall have free access and liberty to go pass through up and down over and along the said hereby first and secondly assigned premises and any buildings erected thereon without any interruption by the Donee or by any person or persons claiming through under or in trust for the Donee.

4. That during the lifetimes of the Beneficiaries they shall have the absolute use enjoyment of one room on the first floor of the building at present erected on the said premises such said room to be of their own choice.

5. That during the said lifetimes of the Beneficiaries the Donee shall provide food and lodging to the Beneficiaries whenever the Beneficiaries shall choose to reside at the said hereby first and secondly assigned premises.

6 That during the respective lifetimes of the Beneficiaries the Donee shall only use the said hereby first and secondly assigned premises and/or any building erected thereon for the sole purpose of advancing the Buddhist religion and not otherwise.

7. That on the death of the last survivor of the Beneficiaries the said [Lantau Properties] shall become vested in the Donee absolutely free of the hereinbefore recited trusts and conditions and of all other conditions and trusts whatsoever...” (“Clause 7”)

74.On a proper interpretation, these clauses showed that Priest To Lun was the initiator who asked for the gift.  The gift was made to him in the capacity of a monk using his name To Lun.  The common intention of both the donor and the done was that it was not an outright gift but that there was an express trust to carry out a charitable purpose subject to the life interests of the Beneficiaries.  After the death of all the Beneficiaries, Priest To Lun would be free to use the land in any way he liked.

75.Mr Miu does not dispute this interpretation in his closing submission.  He concedes that until the last of the survivor of the Beneficiaries died, Priest To Lun was bound contractually to use the premises for the advancement of Buddhism, and hence the Tsz Hing Monastery was a charity in that period.  If after the Lantau Properties had vested in Priest To Lun absolutely, he had continued to use the premises as a charity, then and only then may it be argued that the public trust was created (or, if I may add, continued).

76.I agree to his submission as a matter of law subject to evidence of any contrary intention. 

M2.   Resources for building the Tsz Hing Monastery

77.The resources for construction of the Tsz Hing Monastery came from 3 sources: (i) the Lantau Properties; (ii) another piece of land; and (iii) money.

78.In respect of source item (i), Lot 25 and Lot 5A are not adjoining properties.  There is a 10-minute walk between them.  At the time of the Deed of Gift, Lot 5A had a 2-storey villa on it but it was in a dilapidated state. 

79.In respect of source item (ii), a monastery (國清禪院) used to stand on the land adjacent to Lot 25, ie the Remaining Portion of Mang Cheung Po Lot No. 5, Man Cheung Po, Lantau Island (“Lot 5RP”), which was not subject to the Deed of Gift.  That monastery was destroyed during the Japanese invasion of Hong Kong. 

80.Priest To Lun obtained the consent of relevant persons of the monastery and took over the dilapidated Lot 5RP.  He kept the villa and built the Tsz Hing Monastery, which stood partly on Lot 5A and partly on Lot 5RP.  (See Exhibit D1 at pp 306-8; surveyor’s report, p 358.)  In fact the size of Lot 5RP occupied by the Tsz Hing Monastery (see the dotted rectangle on B358) was similar to, if not larger than, that of Lot 5A.

81.The East Wing (for male) of the Tsz Hing Monastery stood on 5RP whereas the West Wing (for female) stood on Lot 5A (Exhibit D1, p 308). They were to share common facilities like the main Buddhist hall, guest hall, 齋堂，關房 and 茅蓬.  (These will be termed “the Layout”).

82.In respect of source item (iii), there was no evidence of the source of the money.  Mr Chong’s submission that there were donations from followers of Priest To Lun was premised on the hearsay evidence of Madam Fu who appeared years after the Tsz Hing Monastery was completed and carried no weight. 

83.However, I do not think the source of the money was relevant.  Tung and Priest To Lun contemplated in Clause 2 that the latter had to raise his own funds for building.  The money for building would have formed part of the express trust.

M3. Use of the Tsz Hing Monastery

84.The Tsz Hing Monastery has been put to use since about 1956.  Lot 25 (with an area over 200,000 square feet) was much bigger in size than Lot 5A.  It has a concrete arch depicting the name of the Tsz Hing Monastery, a footbridge and footpath connecting the Tsz Hing Monastery.  Lot 25 was clearly incidental to the use of the Tsz Hing Monastery.

85.Mr Miu concedes that the Tsz Hing Monastery was a charity and had, at least up to 1972 (as borne out by the yearly newspaper cuttings) been open to the general public for the advancement of Buddhism.

86.In recent years the Tsz Hing Monastery has less visitors than before, probably because there is a more convenient alternative in Happy Valley.  However, that could not undermine the fact that it is a place for public worship and advancement of Buddhism.

87.The type of gatherings at the Tsz Hing Monastery has changed from time to time but they were all for the purpose of advancement of Buddhism.  This was borne out by the evidence of Madam Fu, a first-hand witness who has been regularly attending the Tsz Hing Monastery before the death of Priest To Lun and till now.  I accept her evidence.

88.According to Madam Fu, there were/are 2 big annual events, lasting a total of 4 weeks, which could be attended by Buddhist masters, monks, followers and those not yet converted to Buddhism. There are summer youth courses which were not restricted to members of the Buddhist Lecture Hall.  There are small-scale events lasting 1-2 days.

89.Madam Fu testified as to the Buddhist Lecture Hall keeping a mailing list of converted followers, their friends and relatives.  There appears to be no special criteria to be able to get onto the mailing list, except that approval of a Buddhist master has to be obtained. Those on the mailing list would be regarded as “members”.  Notices would be posted up on the notice board or mailed to those on the mailing list.

90.According to Madam Fu, the Tsz Hing Monastery is also used as a retreat house.  The Buddhist masters will go there for meditation.  There is a resident nun.  The Buddhist master, 居士 and monks from the Buddhist Lecture Hall also go there once a month.  There have also been visitors from other monasteries round the world. The Buddhist master will decide who to let in.  From what Madam Fu knew, no one has been rejected by the Buddhist master. 

91.The court is entitled to assume that some benefit accrues to the public from the attendance at places of worship of persons who live in the world and mix with their fellow citizens: Neville Estates Ltd v Madden & ors (1962) 1 Ch 832, at pp 852 & 853, Cross J.

92.Applying Neville Estates, it was clear that the attendees at the Tsz Hing Monastery did not just go for seclusion for their own salvation.  At least the Buddhist masters would continue preaching Buddhism (at the Buddhist Lecture Hall for example) after the retreats and mix with followers and non-followers.  The use of the Tsz Hing Monastery for retreat purpose was to open out to reach the public: Cheung Man Yu,at §§72-73; Li Kim Sang Victor, §§78 & 79.

93.The use of the Tsz Hing Monastery as residence for a nun may be regarded as incidental to the advancement of Buddhism.  Even if it was not, it was at worst breach of the charitable trust (if one existed) but would not undermine the Tsz Hing Monastery as an established place of worship and advancement of Buddhism.

M4.  Whether the Tsz Hing Monastery was or is open to the public

94.It was clear from Section M3 above that the Tsz Hing Monastery was and is open to the public.

95.The Plaintiffs rely on an article from a website which described the Tsz Hing Monastery as “not really open to the public”.  The website was not that of D1 or the Tsz Hing Monastery.  The writer of this article and the source of information were not identified.  In any case, it was against the weight of the evidence.  I place no reliance on this article.

96.Mr Miu also refers to a remark in the Surveyor's Report that the Lantau Properties were “private” properties.  I am unable to place weight on this remark.  Apparently the surveyor was distinguishing private property from eg government land, not personal use and public charitable use.

M5. Whether the Lantau Properties was and is subject to a public charity

97.The date of death of the last survivor of the Beneficiaries was important to ascertain when the beneficial interest in Priest To Lun became absolute, and whether Priest To Lun had continued the land use.

98.The burden of proof is on D1.  This is because Priest To Lun or (after his death) the Plaintiffs have the right to possession of the Lantau Properties against the whole world, even subject to the life interests of the Beneficiaries.  If D1 asserts a better right to possession, it has to prove it.

99.Unfortunately, there was no evidence as to whether any of the Beneficiaries are still alive or what the date of death of the last survivor of them was. 

100.Mr Chong submits that Tung and 董果耆居士 also known as董仲偉爵士 mentioned in page 335 of Exhibit D1 were one and the same person, who died in February 1968.  Mr Miu was prepared to accept that proposition. Still, there was no evidence that Tung was the last survivor of the Beneficiaries. 

101.I note, however, that the Beneficiaries did not appear to be in occupation.  The amended writs had been posted on the Lantau Properties but the Beneficiaries had not come forward to assert their life interests.  On balance of probabilities, they had probably passed away although whether it occurred before or after 1995 was still unknown.

102.D1’s case would fail unless it can show that there was a contrary intention regardless of Clause 7.

103.I find there was evidence of such intention when considering the following factors collectively:

(a)   For 40 years up to 1995, the Tsz Hing Monastery had stood on 2 lots of land from different sources, of which Lot 5RP was not bound by the Deed of Gift. 

(b)   In view of the Layout, it was inconceivable that Priest To Lun would have intended that the Tsz Hing Monastery should be severed so that the part that stood on Lot 5A would be reverted to him when all the Beneficiaries have died, whereas the other part would remain subject to a charity. 

(c)   Priest To Lun’s stated intention in the Deed of Gift to advance Buddhism was not limited in time.

(d)   He devoted his lifetime to preaching Buddhism.

(e)   Reverend Heng Sure’s evidence was that Priest To Lun had always taught that the monasteries and Buddhist Lecture Hall did not belong to him or any individual.  For 40 years, Priest To Lun acted what he taught in not asserting personal right over the Tsz Hing Monastery.

104.The Tsz Hing Monastery satisfies the 3 criteria in Cheung Man Yu, §24, as being built for a charitable purpose, ie for advancement of Buddhism.  It was open to the public and was for the benefit of the public.  It was exclusively charitable, past and present, including its incidental use by a resident nun.  Applying Cheung Man Yu, §45.  Priest To Lun had created a charity even though there was no declaration of trust for the period beyond the express trust.  It was not a case of a landlord lending out his property temporarily for a charitable purpose.  I find that the Lantau Properties was and is bound by that charity even beyond the period of the express trust and regardless of Clause 7.

N.  THE NATHAN ROAD PROPERTY

105.D1’s case is that the Nathan Road Property was acquired with donations.  The original intention of Priest To Lun was to use it as a lecture hall.  Because of the noisy and complicated environment, that intention was never fulfilled. The Nathan Road Property has all along been leased out for rent to support the charitable work of D1. 

106.The Nathan Road Property was purchased in the name of Priest To Lun, ie in his office as a monk.  According to the land search record, it was purchased with cash without the need for a mortgage. Madam Lew and Madam Fu had been told by Priest To Lun that the purchase price came from donations, and Reverend Heng Sure had been told by Priest To Lun that all the properties in his name came from donations. There was no evidence that Priest To Lun had other sources of income.

107.Madam Fu testified that donors like her would make donations to Priest To Lun without specifying how he should use them.  They merely trusted Priest To Lun to be fair and not selfish and do good deeds.  Such evidence was irrelevant as the Nathan Road Property was purchased before she came into the picture.

108.According to the sale and purchase agreement relating to the Nathan Road Property, there were 4 other properties in the same building purchased at the same time.  Madam Fu could not tell whether those 4 were adjacent to the Nathan Road Property and how they were disposed of.  There was simply no evidence as to why Priest To Lun saw fit to keep only the Nathan Road Property but disposed of the other 4.

109.I have alluded to the possibility of Priest To Lun having personal assets at his disposal in paragraph 62 above.  Even if what the defence witnesses said as to original intention and source of purchase money was entirely accepted, a fundamental change of purpose upon completion of the Nathan Road Property would fail to satisfy the 1^st criterion of Cheung Man Yu.

110.The Nathan Road Property was never used for advancement of Buddhism.  The 3^rd criterion of Cheung Man Yu that the institution must be exclusively charitable was not satisfied.

111.According to Madam Lew, a Mr John Man has been handling the Nathan Road Property pursuant to a power of attorney from Priest To Lun.  He received the rental by auto-deposits and applied them to defray expenses (such as taxes and maintenance) and occasionally to donate to charities and needy students.  Mr Man had to ask for D1’s approval to disburse large sums of money, but it never occurred.

112.The power of attorney, bank records of Mr John Man or accounts books of D1 (who has allegedly been “managing” the Nathan Road Property) which could have shed light on the use of the rental were not produced. The 2^nd criterion of Cheung Man Yu that the institution existed for the benefit of the public was not satisfied. 

113.I am not satisfied that the Nathan Road Property was subject to a charitable trust.

O.  FINDINGS

114.I rely on the facts as set out in Sections C and K above.

115.Assuming expert evidence was admissible, I find that there was no religious obligation on a monk to donate his personal assets, still less a legal obligation for him to be divested of all his personal assets automatically upon death.  Disposal of a monk’s assets after death is governed by the law of the land.

116.The Oral Wills were clear statements of intention to apply personal assets to charitable causes.  However, they were far from defining the terms of the trust or the beneficiaries.  There was also no evidence that the “trust” was carried out or that Priest To Lun had effectively divested himself of all beneficial interests in his own assets.

117.By concession, the Happy Valley Property is subject to a charity and does not fall into the estate.

118.The resources for building the Tsz Hing Monastery had come from 3 sources. Two of them, ie the Lantau Properties and money were subject to the express trust.  The 3^rd source, ie Lot RP5 was not.

119.The Tsz Hing Monastery has since its construction always been open to the public for worship and for advancement of Buddhism.  It was a public charity up to 1972, by concession.

120.The Beneficiaries did not appear to be in occupation of the Lantau Properties and have not come forth to assert their life interests.  They have probably died, but there was no proof as to the date of the death of the last survivor.

121.For reasons given in para 103 above, the charity established before 1995 was intended to continue beyond the period of the express trust, regardless of Clause 7.

122.The Tsz Hing Monastery satisfies the 3 criteria of Cheung Man Yu despite the lack of a formal declaration of trust.

123.The Nathan Road Property fails to satisfy all the 3 criteria of Cheung Man Yu.  It was not subject to a charity.

124.Section 12 of the Intestates’ Estates Ordinance, Cap 73 (“IEO”) provides that the IEO shall have effect as regards any person dying intestate after the commencement of the Ordinance (in 1972).  Hence, unless there is some other statute enacting a different law of inheritance applicable to Buddhist monks like Priest To Lun, IEO should apply: Re Jacob Vettichirayil (1989) 2 MLJ 418 .

125.Though the Buddhist precepts have been followed by Priest To Lun, they do not form part of the law.  IEO applied to his assets.  Accordingly, being subject to a charity, the Lantau Properties do not fall into the estate but the Nathan Road Property does.

P.   MESNE PROFITS AND POSSESSION

126.No notice to quit has been served by the Plaintiffs and there was also no plea that the defendants have been in wrongful occupation before issue of the writ.  Counsel have (rightly, in my view) agreed to use the date after the writ (7 June 2007) for computation of the mesne profits. 

127.The period for which mesne profits would thus be from 7 June 2007 to 6 June 2015.  For the one year from 7 June 2015 to 6 June 2016, the parties propose to apply the same rate as the previous two-year period (ie with no adjustment of rent).  The figures for each property are summarized in the Table attached to this judgment.  The total market rents which should be paid for the Nathan Road Property are $1,255,200 + $170,400 per annum from 7 June 2016.

128.Counsel have suggested that in respect of the Nathan Road Property, D1 shall move out within 3 months. 

Q.  JUDGMENT

129.I order as follows:

(1)   That in respect of the Happy Valley Property:

(a)   The court declares that it is subject to a public charity for the advancement of Buddhism and does not form part of the estate of Priest To Lun;

(b)   The court declares that Priest To Lun held the legal title of the Happy Valley Property for and on behalf of that public charity;

(c)   The claim in HCA 1191/2007 is dismissed;

(d)   The counterclaim for a declaration that Priest To Lun held the Happy Valley Property on trust for D1 is dismissed.

(2)   That in respect of the Lantau Properties:

(a)   The court declares that they are subject to a public charity for worship and the advancement of Buddhism and does not form part of the estate of Priest To Lun;

(b)   The court declares that Priest To Lun held the legal title of the Lantau Properties for and on behalf of that public charity;

(c)   The claims in HCA 1192 and 1193/2007 are dismissed;

(d)   The counterclaim for a declaration that Priest To Lun held the Lantau Properties on trust for D1 is dismissed.

(3)   That in respect of the Nathan Road Property:

(a)   The court declares that it forms part of the estate;

(b)   There be judgment in favour of the Plaintiffs against D1 for an order for possession of the Nathan Road Property;

(c)   That D1 shall deliver vacant possession to the Plaintiffs within 3 months from the date of this judgment;

(d)   That D1 do pay damages to the Plaintiffs in the sum of $1,255,200 and at a rate of $170,400 per annum from 7 June 2016 until D1 delivers up vacant possession to the Plaintiffs;

(e)   The counterclaim for a declaration that Priest To Lun held the Nathan Road Property on trust for D1 is dismissed.

R.   COSTS

130.The Plaintiffs have conceded on the Happy Valley Property just a few days before trial, lost on the Lantau Properties and won on the relatively simple Nathan Road Property.  Most of the costs have been spent on the first 2 properties.  The Plaintiffs should bear most part of D1’s costs.

131.The expert evidence was not admissible and in any event did not support the pleaded but abandoned defence.  D1 should bear the costs of and incidental to adducing expert evidence.

132.I would order overall costs to follow the event and that the Plaintiffs should bear 60% of D1’s costs on party-and-party basis.

133.Mr Miu, however, asks for costs.  This was because the Plaintiffs made an open offer by letter dated 21 May 2016, conceding that the Happy Valley Property and Lantau Properties have been held under a public charitable trust and that they should be conveyed to D1, whilst D1 should give up its claim to the Nathan Road Property.  Mr Miu submits that the Plaintiffs decided not to contest the case on the Happy Valley Property because of the late production of relevant documents, only by 29 March 2016 (Exhibit D1 and newspaper cuttings).  Had D1 accepted it, the parties might have spent just a day’s hearing for the court’s approval.  Mr Miu further submits that the Plaintiffs withdrew that offer on 27 May 2016 in respect of the Lantau Properties, only after D1 has “rejected” that offer. 

134.I reject such submissions for the following reasons:

(a)   D1 had by letter dated as early as 13 April 2012 that its case on the Happy Valley Property and Lantau Properties rested on public charitable trust.  At all times, the Plaintiffs could have visited the 2 Properties to verify their uses and asked for discovery to decide whether to concede D1’s case.

(b)   D1 did not reject the open offer but asked for the bases for the Plaintiffs’ concession.  It was, in my view, a pedantic and unnecessary approach.  This court took less than 5 minutes on the first day of trial to ascertain the Plaintiffs’ unequivocal stance in relation to the Happy Valley Property and the terms of the court order to be made.  D1’s approach, however, would not undermine its entitlement to costs.

135.D1 is involved in this action as a “trustee” to protect properties that might belong to a public charity.  It should be entitled to its costs on trustee basis out of the charity’s assets. 

136.The SJ’s costs should also be borne out of the charity’s assets, on indemnity basis.

137.I adjourn the matter on the question of “better administration” of the trust property.  D1 and the SJ shall submit a set of proposed directions within 28 days.  I shall decide whether and when an oral hearing is required after having sight of the proposed directions.

138.My order, nisi, on costs is summarized as follows:

(a)   60% of the costs of D1 shall be borne by the Plaintiffs on party-and-party basis;

(b)   The Plaintiffs’ own costs shall be taxed in accordance with the Legal Aid Regulations.

(c)   D1’s own costs shall be borne out of the charity’s assets on trustee basis.

(d)   SJ’s own costs shall be borne out of the charity’s assets on indemnity basis.

139.I thank counsel for their assistance.

Mr Nelson Miu, instructed by Hobson & Ma, for the plaintiffs

Mr K M Chong and Mr Richard Yip, instructed by Y.C. Lee, Pang, Kwok & Ip, for the 1^st defendant

The other defendants were not represented and did not appear