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HCA 2177/2013
[2019] HKCFI 2161
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 2177 OF 2013
________________________
| BETWEEN |
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| |
WAN HOI YAN |
1st Plaintiff |
| |
PO LOK CHARITY COMPANY LIMITED |
2nd Plaintiff |
and |
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HO CHI HUNG |
1st Defendant |
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SHEK YUEN FAI |
2nd Defendant |
| |
THE SECRETARY FOR JUSTICE |
3rd Defendant |
________________________
| Before: |
Deputy High Court Judge MK Liu in Court |
| Date of Hearing: |
1, 2, 5, 6, 8, 12, 13 & 23 August 2019 |
| Date of Judgment: |
4 September 2019 |
________________________
J U D G M E N T
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INTROUCTION
1.This case concerns the ownership of a property known as Flat C, 10/F, Rex House, Nos.648, 650 & 652, Nathan Road (“Flat 10C”). The 1st Plaintiff and the 2nd Plaintiff (“P1” and “P2”, collectively “Ps”) claim that Flat 10C is beneficially owned by a religious organization known as “Bo Wo Temple” (保和壇) (“the Temple”). Ps claim that the Temple is a public charitable trust, and the 1st Defendant and the 2nd Defendant (“D1” and “D2”) shall transfer the legal title of Flat 10C to P2. D1 and D2 in their pleadings claim that Flat 10C in fact is owned by them.
2.Since Ps are claiming that the Temple is a public charitable trust, the Secretary for Justice (“SJ”) has been joined as the 3rd Defendant in these proceedings, as the SJ is the protector of all public charities and has a say in matters concerning, inter alia, the business and affairs of public charities. The SJ has no knowledge in respect of the factual disputes in this case, and hence has sought leave to be excused from attending the trial. The leave sought was granted. Although the SJ has not appeared in the trial, they have provided written submissions on law concerning public charities. I am grateful for the assistance from the SJ.
3.These proceedings were commenced on 13 November 2013. The matter was set down for a 14-day trial in early 2018. The Pre-Trial Review was held on 7 May 2019. The trial was scheduled to take place on 1-2, 4-9, 12-15, and 21-23 August 2019. Ds were represented by the same legal team in these proceedings from the very beginning until 8 August 2019. From that day onwards, D1 has been acting in person. D2 was represented by another law firm between 9 to 11 August 2019, and from 12 August 2019 onwards D2 has been acting in person. I have to explain what happened in the trial leading to these changes.
(1) It is Ps’ case that in the annual general meeting of P2 held on 22 June 2013, D1 said in the meeting that in the matrimonial proceedings between his ex-wife and him, his ex-wife was applying for an order to sell Flat 10C to pay the maintenance owed by D1 to her. He told the meeting that he had told the Family Court that he would not agree to the sale, for he was an owner of Flat 10C in name only, and Flat 10C was in fact owned by the Temple. Ds denied that D1 had said these in the meeting.
(2) The said matrimonial case is FCMC 6133/2007.
(3) At the beginning of the trial, I asked the parties whether any audio recording or transcripts of the matrimonial proceedings (“the Audio Recording” and “the Transcripts”) had been disclosed, and the answer was in the negative. I told the parties that I would obtain the Audio Recording and the Transcripts and provide the same to the parties, and treat these materials as evidence on de bene esse basis. As to the admissibility of and the weight to be given to these materials, I would hear submissions and make a ruling at the end of the trial.
(4) On 6 August 2019, after the close of the Ps’ case, I provided the Audio Recording to the parties. I adjourned the trial to 8 August 2019, so that the parties would have time to listen to the Audio Recording, and the legal representatives would have an opportunity to take instructions from their respective clients.
(5) On 8 August 2019, counsel for Ds informed the Court that they were unable to continue to act in the best interest of Ds. Counsel for Ds then sought leave that Ds’ legal representatives to cease to represent Ds, and counsel told me that he had already obtained written instructions from Ds allowing him to make this application. I allowed the application.
(6) After the withdrawal of Ds’ legal team, I asked Ds whether they would need time to try to find another legal team to represent them. D1 and D2 then told me that they were going to run different cases in the trial. D1 did not ask for time to find lawyers, but D2 made the request. Counsel for Ps opposed any adjournment of the trial, for the adjournment would be a prejudice to Ps. After hearing D2 and counsel for Ps, I adjourned the trial to 12 August 2019 to give some time to D2 to find another legal team. I told the parties that the trial would be resumed on 12 August 2019, so that D2 would have time to try to find lawyers to represent her, and at the same time the trial would still be finished within the allotted time. I also told D1 and D2 that if any of them wanted to run a case different from the one pleaded in their pleadings, he or she might only do so if he or she made an application to amend the pleadings and the application was granted. I also reminded D1 and D2 that if they needed to call any new witness or wanted any of the witnesses on their list to give some further evidence, they would need to apply for leave to put in new witness statement(s).
(7) On 9 August 2019, a new law firm on behalf of D2 wrote to the Court and applied for adjourning the trial to a date not earlier than 19 August 2019, for they would need time to study the case. I refused the application and directed that the trial would be resumed on 12 August 2019.
(8) On 12 August 2019, both D1 and D2 were acting in person. At the beginning of the hearing, I gave my reasons for refusing the adjournment application made by D2’s lawyers on 9 August 2019, which are as follows:
(a) I appreciated that D2 might want to have an adjournment for a longer period to enable her to get a new legal team to represent her, but I had to bear Ps’ interest in mind at the same time. These proceedings were commenced in November 2013 and have been on foot for almost 6 years. Ps are entitled to have a final judgment in these proceedings as soon as possible.
(b) Further, if the trial is to be resumed at a time not earlier than 19 August 2019, it would be extremely likely that the trial would not be finished within the allotted time. Apart from causing delay in these proceedings, this would also mean that some other timeslots in the Court’s diary which could be used to hear other cases would be occupied by the adjourned trial in this case. That is a prejudice to other court users and I have to bear this in mind as well.
(c) Taking all these into account, I am of the view that the adjournment application made by D2 in her solicitors’ letter dated 9 August 2019 should not be granted.
(9) On 12 August 2019, D2 made another application for an adjournment. For the same reasons, I refused the application. D1 and D2 did not make any application to amend their pleadings or for leave to file any new witness statement.
(10) On 13 August 2019, after the close of D1’s case and D2’s case, I provided the Transcripts to the parties. I heard submissions from the parties on the timetable for the filing of the written final submissions and for the hearing of the oral final submissions. D2 requested for audio recording and transcripts of this trial and sought an adjournment for at least 2 weeks, for she wanted to get some lawyers to help her to prepare the written final submissions. I refused the application. I told D2 that the trial was open to public. If she wanted someone to give her assistance in the preparation of the final submissions, that person should have come to the courtroom to observe the proceedings. Further, for the reasons given by me previously, the trial should be finished within the allotted time. Eventually, I directed the parties to file and to exchange written final submissions on 20 August 2019, and the trial would be resumed on 23 August 2019. In my view, this timetable would afford the parties sufficient time to prepare the written and the oral final submissions.
Ps’ CASE
4.According to the Ps’ case, the background facts are as follows:
(1) A charitable organization called “Tao Tek Benevolent Association Limited” (道德善堂有限公司) (“TTBA”) was established on 28 May 1966 (previously an unincorporated association) for the advancement of the religion combining Confucianism, Taoism and Buddhism (“the Religion”). Madam Cheung Lok Tan (張樂丹) (“Cheung”) was a member of TTBA.
(2) In 1966, Cheung founded the Temple, an unincorporated association, for the dissemination of the Religion. Cheung disseminated, at various addresses in Hong Kong, the Religion through the Temple until her demise on 9 February 2002. Members of the Temple would respectfully call Cheung as “the Founder” (前人).
(3) Since 1949, Cheung started dissemination of the Religion in the following addresses: -
(a) a rented flat at 3/F, 98 Des Voeux Road West, Sai Ying Pun (“the Sai Ying Pun Premises”) (between 1949 and 1965);
(b) a rented flat at 2/F, Yin Hing Building, Yin Hing Street, San Po Kwong (“the San Po Kwong Premises”) (between 1965 and 1969);
(c) a rented premises, Flat 11K, Kwong Yu Building (廣裕大廈), 37 Kam Lam Street (“Flat 11K of Kwong Yu Building”) (between 1969 and 1990);
(d) Flat 10S, Kwong Yu Building, 37 Kam Lam Street (“Flat 10S of Kwong Yu Building”), acquired in 1983 at HK$320,000 (from money donated from members of the Temple for that specific purpose and the property was registered in the names of Cheung, Madam Li Pat Kam (李白金) (“Li Pat Kam”), Madam Lo Chung Choy (羅仲財) (“Lo”) and Madam Ho Kwai Ching (何貴貞) (“HKC”, the elder sister of D1) as joint tenants;
(e) In 1990, upon the termination of the lease concerning Flat 11K of Kwong Yu Mansion by the owner, Cheung decided to dispose of Flat 10S of Kwong Yu Manion and applied the sale proceeds to purchase another flat to continue her dissemination of the Religion.
(4) Since then and at different stages, the following landed properties were acquired by Cheung for the advancement of the Religion: -
(a) Flat A, 8/F, Rex House, 648, 650 & 652, Nathan Road (“Flat 8A”), acquired on 30 May 1990 at HK$930,000, registered in the names of 5 persons as joint tenants (i.e. Cheung, Li Pak Kam, Lo, HKC and Madam Lee Ping Ying (李萍英)); and
(b) Flat 10C, acquired on 13 November 1991 at HK$1,460,000, registered in the names of 4 persons also as joint tenants (i.e. Cheung, Mr Wan Ping Yee (“Mr Wan”), D1 & D2).
(5) In 2010, P2 was incorporated by members of the Temple for the advancement of the Religion. Since its incorporation on 2 June 2010, P2 took over all the assets and all the activities of the Temple. Save and except these changes, everything remained unchanged.
(6) HKC was made a founding director of P2.
(7) P2’s Articles of Association prohibit the distribution of its money and assets to its members. On 26 August 2016, the status of P2 as a charitable organization or trust of a public character was accepted by the Inland Revenue Department for the purpose of taxation. Members of the Temple are members of P2.
5.Flat 8A together with Flat 10C have been used by the Temple (between 1990 and 2010) and continuously (since 2010) by P2 for the advancement of the Religion. The former was used as the main temple and the latter was used as a vegetarian hall (齋堂) in the propagation of the Religion.
6.Ps’ case is that in 2010, members of the Temple intended to use a company limited as a vehicle to hold the properties acquired by them and used by the Temple for the promotion of the Religion. For the purpose of achieving this goal, P2 was incorporated.
7.In respect of Flat 8A, Ps claim upon the death of Cheung on 9 February 2002, the remaining 4 surviving joint tenants assigned their legal title of and in Flat 8A to P2 on 15 July 2010 without any consideration, irrespective of the description that, in the assignment, the transfer was by way of sale at a price.
8.In respect of Flat 10C, shortly after the death of Cheung on 9 February 2002, Wan, one of the surviving joint tenants, invited Mr Chan Yuk Tak (“Chan”), a member of the Temple, to fill in the vacuum by being a registered owner of Flat 10C. This proposal was agreed by D1 & D2. However, in April 2002, on the date appointed for execution of the relevant assignment at a firm of solicitors (“the Law Firm”), D2 failed to show up whilst D1, Wan, HKC and Chan waited for D2 in the Law Firm for 2 hours, without the sight of D2 showing up.
9.On 30 September 2008, Wan passed away and, as a result, D1 and D2 have since then become the only surviving registered joint owners of Flat 10C.
10.Despite repeated demands made by the members of the Temple, D1 and D2 refused to transfer their legal title in Flat 10C to P2.
11.On 5 November 2013, wrongfully and in breach their duties as trustees holding Flat 10C for the Temple, D1 and D2 put a padlock on the door for entrance to and exit from Flat 10C and thereby had prevented members of the Temple from using Flat 10C. Further, in around December 2013, D1 and D2 changed the lock for access to the letter box of Flat 10C and thereby preventing members of the Temple from using the letter box.
12.P1 is the daughter of Wan and Lo, and a member of the Temple. She is also a clerk (辦事員) looking after the matters of the Temple. Ps claim that they have the loci to bring these proceedings against D1 and D2 by virtue of s.57A of the Trustee Ordinance (“TO”). Ps are seeking an order requiring D1 and D2 to deliver possession of Flat 10C to P2 and to transfer the legal title of the same to P2. Ps are also suing D1 and D2 for damages in respect of their alleged wrongful act as set out in paragraph 11 above.
D1 & D2’s CASE
13.Before the commencement of the trial, counsel for Ds have put in written opening submissions on behalf of Ds, in which counsel have set out the following:
(1) In 1949, Cheung set up a private altar for her personal worshipping purposes in her private residence in the Sai Ying Pun Premises, which she named 保和壇 (Bo Wo Tan). Cheung and/or the Temple self-practised 一貫道 (Yi Guan Dao) in a private and secret manner. The Temple was never a follower of or in any way related to the TTBA and it was certainly never a public charitable trust. Only relatives of Cheung were allowed to worship in the Temple.
(2) In or about 1966, Cheung moved to reside at the San Po Kong Premises, which was rented by her mother for private use. She also moved the Temple to the San Po Kong Premises and continued the practice in a private and secret manner. Only people who were introduced and guaranteed by an existing worshipper to be suitable to practise Yi Guan Dao were allowed to worship at the Temple upon going through special ceremonies.
(3) In or about 1969, Cheung rented Flat 11K of Kwong Yu Building from her relative for, inter alia, own residence and worshipping.
(4) In 1974, D2 married with Mr Ku Kwok Ping (“Ku”, nephew of Cheung). D2 would go with her mother-in-law (i.e. elder sister of Cheung) to Cheung’s place/the Temple for worshipping purposes. In or about 1978, when D2’s mother-in-law became sick and was no longer able to assist D2 in taking care of her children, D2 ceased working and became a housewife. Since then D2 visited Cheung and the Temple more often and took care of Cheung as if Cheung was her own mother-in-law. Beginning from 1990, D2 was fully involved with matters of the Temple, including being on duty at the Temple on a weekly basis and regularly preparing vegetarian meals.
(5) On the 1st day of the 3rd month on the Lunar Calendar in 1980, HKC was brought to Flat 11K of Kwong Yu Building for a vegetarian meal by her friend, who knew Cheung. HKC “sought Tao” and became one of the Tao members/believers. She had always been visiting Cheung and the Temple since then, and gradually they developed into a close-knit relationship. Cheung and HKC were in a godmother-goddaughter relationship.
(6) Sometime in 1983, Flat 10S of Kwong Yu Building was acquired for in the sum of HK$320,000 and in the names of Cheung, HKC, Lo and Li Pak Kam. Contributions towards the purchase of this property were as follows:
(a) about HK$15,000 from HKC;
(b) about HK$30,000 from Ku and his relatives;
(c) some money from a female cousin of Cheung, Lo and Li Pak Kam; and
(d) the rest was from Cheung.
(7) The acquisition of Flat 10S of Kwong Yu Building was to allow individuals who worshipped at the Temple to attend vegetarian meal gatherings and it was also the residential home of HKC and D1 between 1984 and about mid-1991.
(8) In or about 1990, since the landlord no longer wished to rent Flat 11K of Kwong Yu Building to Cheung, Cheung decided to purchase Flat 8A as her own private residence and a place for individuals who wished to worship in the Temple. Cheung made a further decision to purchase another flat close to Flat 8A for, inter alia, vegetarian meals and as a residence for her son Mr Chan Pui (“the Son”) whenever he came from Mainland China to Hong Kong to visit her.
(9) On or about 30 May 1990, Flat 8A was acquired in the sum of HK$930,000 and in the names of Cheung, HKC, Lo, Li Pak Kam and Lee Ping Ying as joint tenants. Contributions towards the purchase of this property were as follows:
(a) part of the sale proceeds of a property gifted to Cheung by her female cousin, which was a property located at Bell House, Yau Mei Tei (“the Bell House Property”), in the sum of about HK$640,000;
(b) about HK$60,000 as a gift from the landlord of Flat 11K of Kwong Yu Building;
(c) about HK$30,000 from Ku and his father, Mr Koo Hung Fei, as a gift;
(d) about HK$30,000 from HKC;
(e) some money from other relatives of Ku, and some money from Lo, Li Pak Kam and Lee Ping Ying.
(10) On or about 13 November 1991, Flat 10C was acquired for the sum of HK$1,460,000 and in the names of Cheung, Wan, D1 and D2 as joint tenants. Contributions towards the purchase of this property were made as follows:
(a) about HK$70,000 from D2;
(b) about HK$100,000 from Madam Ho;
(c) some money from Cheung, Ku and his father Mr Koo Hung Fei, some relatives of Ku, and other individuals including but not limited to Wan.
(11) D1 became the registered owner of Flat 10C on the instruction of HKC, where HKC had in fact provided all the financial funding towards the purchase of Flat 10C on the part of D1. D1, as the younger brother of HKC, at all material times has been holding his interest in Flat 10C on trust for and on behalf of HKC.
(12) After the death of Cheung and Wan, D1 and D2 became the remaining joint owners of Flat 10C.
14.In respect of the ownership of Flat 10C, Ds’ pleaded case is as follows[1]:
“On or about 13 November 1991, Flat 10C was purchased at HK$1,460,000. In relation to the purchase of Flat 10C, the Defendants aver as follows;
(a) By an Agreement for Sale and Purchase dated 26 September 1991, the vendor, one Ho Fong Wan Kam, also known as Ho Fong, Wan Kam Belinda (“Vendor”), agreed to sell and one Ho Shu Shing (as 1st Confirmor) (“1st Confirmor”) agreed to Purchase Flat 10C at HK$1,080,000;
(b) By an Agreement for Sub-Sale and Purchase dated 8 October 1991, Ho Shu Shing, the 1st Confirmor, agreed to sell and one Ip Yuk Lin (as 2nd Confirmor) (“2nd Confirmor”) agreed to purchase Flat 10C at HK$1,230,000;
(c) By another Agreement for Sub-Sale and Purchase dated 24 October 1991, Ip Yuk Lin, the 2nd Confirmor, agreed to sell and Madam Cheung and Wan Ping Yee agreed to purchase Flat 10C at HK$1,460,000;
(d) Since Madam Cheung had previously contributed to the Purchase price of Flat 8A in 1990, she did not have the financial Means to wholly pay for the down payment of Flat 10C, Madam Cheung therefore invited other people to contribute to the purchase price of Flat 10C;
(e) Pursuant to Madam Cheung’s invitation, the 2nd Defendant contributed to around HK$70,000 to the down payment of Flat 10C and Madam Ho contributed to around HK$100,000 to the down payment. Insofar as the Defendants are aware, Madam Cheung, Ku, Koo Hung Fei, some relatives of Ku and other individuals, including but not limited to Wan Ping Yee, also contributed to some of the purchase price of Flat 10C;
(f) The balance of the purchase price was paid by a mortgage with Hang Seng Finance Limited which was discharged after about 1 year, in mid-December 1992;
(g) To reflect the 2nd Defendant’s contribution to the purchase price of Flat 10C, the 2nd Defendant requested for and was nominated as a purchaser to take up the Assignment of Flat 10C;
(h) To also reflect Madam Ho’s contribution to the purchase price of Flat 10C, Madam Ho requested for her younger brother, the 1st Defendant, to be nominated as a purchaser to take up the Assignment of Flat 10C because Madam Ho had just gotten married;
(i) On or about 13 November 1991, the Assignment of Flat 10C was therefore executed amongst the Vendor, the 1st Confirmor, the 2nd Confirmor, Madam Cheung, Wan Ping Yee and the Defendants; and Flat 10C was registered in the names of Madam Cheung, Wan Ping Yee and the Defendants
(j) In the premises, at all material times the 1st Defendant held and still holds his interest in Flat 10C on trust for and on behalf of Madam Ho” (Emphasis added)
15.It is trite that joint legal owners of a property may not be joint owners of the same in equal shares in equity. Each case depends upon its own facts. In Jones v Kernott, in the context of a married or unmarried couple, Lord Walker said[2]:
“25. The time has come to make it clear, in line with Stack v Dowden [2007] 2 AC 432 (see also Abbott v Abbott [2008] 1 FLR 1451), that in the case of the purchase of a house or flat in joint names for joint occupation by a married or unmarried couple, where both are responsible for any mortgage, there is no presumption of a resulting trust arising from their having contributed to the deposit (or indeed the rest of the purchase) in unequal shares. The presumption is that the parties intended a joint tenancy both in law and in equity. But that presumption can of course be rebutted by evidence of a contrary intention, which may more readily be shown where the parties did not share their financial resources.”
16.The presumption mentioned in Jones v Kernott only applies in respect of a property purchased in the joint names of a married or unmarried couple for their joint occupation. This presumption certainly does not apply in respect of Flat 10C.
17.According to Ds’ pleaded case, although they are 2 of the 4 joint legal owners at the time of the acquisition of Flat 10C, their respective beneficial interests (or, to be more precise, HKC’s beneficial interest and D2’s beneficial interest) in Flat 10C in fact correlate with their respective contributions to the purchase price of Flat 10C. It has never been pleaded that notwithstanding HKC’s and D2’s relatively small contributions to the purchase price, the 4 original joint legal owners had agreed that HKC and D2 would be entitled to have shares of beneficial interests in Flat 10C which were larger than the portions of their financial contributions. That being the case, in accordance with Ds’ pleaded case, HKC’s and D2’s respective beneficial interests in Flat 10C would be proportionate to their respective financial contributions to the purchase price of Flat 10C.
18.However, on 12 August 2019, Ds told me that they were prepared to run the following cases in the trial:
(1) D1’s new case:
Flat 10C was, and still is, beneficially owned: -
(a) mainly by Cheung and the Temple (where Cheung and the Temple are one entity); and
(b) by whoever have made contributions towards the purchase price of Flat 10C, i.e., HKC, D2 and Wan.
(2) D2’s new case:
Since Cheung and Wan have passed away, Flat 10C is now beneficially owned by HKC and her in equal shares.
19.D1 refused to adopt the written opening submissions previously prepared by his counsel. D2 chose to adopt the same as her own opening submissions.
20.In my judgment, both D1 and D2 are bound by their own pleadings. They are not allowed to put forward a different case without amending their pleadings. The new cases proposed by them in the middle of the trial is materially different from their pleaded case. That difference has an adverse impact on the credibility of their pleaded case and the new cases put forward by them in the middle of the trial.
ISSUES IN DISPUTE
21.At the beginning of the trial, counsel for Ps and counsel for Ds have agreed that the issues in dispute in these proceedings are as follows:
(1) whether Ps have any locus to bring upon these proceedings on behalf of those donated monies towards the Temple;
(2) whether the Temple was a private altar or a public charity;
(3) if the Temple is a private purpose trust, whether it would be void;
(4) the source of funds for the purchase of Flat 10C;
(5) whether any admission as to the ownership of Flat 10C has been made by D1 and if yes, whether the admission(s) would have any consequence in the present proceedings;
(6) whether D1 and D2 are entitled to possession of the title deeds of Flat 10C; and
(7) whether D1 and D2 were denied access to Flat 10C and/or whether P1 and P2 wrongfully occupied Flat 10C since 7 December 2013. If so, any damages should be awarded and to whom.
22.I would analyze the evidence and make a ruling on these issues.
THE PRINCIPLES
23.The boundary of a litigation is defined by pleadings. One cannot slip in an unpleaded issue by saying that there is evidence on the issue. That has been made abundantly clear by the Court of Final Appeal in Kwok Chin Wing v 21 Holdings Ltd [3], in which Ma CJ said:
“21. It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues: Wing Hang Bank Ltd v Crystal Jet International Ltd [2005] 2 HKLRD 795, 799 [6(1)].It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Ltd v Crystal Jet International Ltd at 799 [6(2)]:
(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be ‘slipped in’ when evidence is being given in the hope that the other side is not sufficiently alert to object.
22. … one does not sift through the evidence adduced in a trial in the hope that something was said that can conceivably found a cause of action. Issues, I would reiterate, must be properly pleaded unless for some reason the pleadings have assumed a less significant role in the proceedings.” (Emphasis added)
See also Chan Kong v Chan Li Chai Medical Factory (Hong Kong) Ltd [4], [15] and [16].
24.In respect of whether P1 and P2 have the necessary loci to sue in these proceedings, the crucial statutory provision is s.57A of the TO, which provides:
“Without prejudice to the generality of sections 56 and 57, the court may provide such relief, make such order, or give such direction, as it thinks just relating to a charitable trust upon an application made to it—
(a) by—
(i) 2 or more persons who have the consent in writing of the Secretary for Justice to make the application;
(ii) the Secretary for Justice; or
(iii) all or any one or more of the trustees or persons administering the trust, or persons claiming to administer the trust, or persons otherwise interested in the trust; and (Amended L.N. 362 of 1997)
(b) either—
(i) complaining of a breach of the trust or supposed breach of the trust; or
(ii) for the purposes of the better administration of the trust.”
25.In order to invoke s.57A of the TO, Ps have to show that the Temple is a charitable trust. In Cheung Man Yu v. Lau Yuen Ching & Others, the Court of Appeal held that to qualify as a public charity, 3 conditions must be satisfied, namely[5]:
(1) The purposes of the institution must have charitable character.
(2) The institution must exist for the benefit of the public.
(3) It must be exclusively charitable.
26.In Cheung Man Yu, the Court of Appeal also held that:
(1) Trusts for the advancement of religion and exist for the benefit of the public are public charities[6].
(2) To consider whether a trust is a public charity, one looks at the time when it was formed although subsequent conducts might shed light upon the trust’s character when it was formed[7].
(3) A religious purpose must be shown to have some element of public benefit in order to qualify as a charitable trust. The Court was entitled to assume that some benefit would accrue to the public by attendance at places of worship[8].
(4) The fact that the keeper of an establishment resides at the property of the charitable trust is not inconsistent with the fact that the trust is public in nature where such accommodation is incidental to the purpose of advancement of religion[9].
(5) It would not be for the Court to decide whether the promotion of vegetarianism, per se, would be charitable. If the same is auxiliary to the advancement of religion, this would be consistent with a trust being charitable[10].
(6) A charity is not defined by its scale or resources. A public charity might be small and run by one or a few people. The fact that the organization is small would not detract from its essential religious character[11].
27.As to the assessment of the credibility and/or reliability of a witness’s evidence, the principles are well established. In Star Glory Investment Ltd v Kai Tuo (HK) Tdechnology Co Ltd and Others[12], Andrew Chung J said:-
“12. The assessment of a witness’s credibility and/or reliability is a task frequently undertaken by the court in litigation (in fact, very often an essential task). I consider the following to be the appropriate test to adopt: -
‘There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified: -
(a) whether that part of his testimony is inherently plausible or implausible;
(b) whether that part of his testimony is, in a material way, contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).
Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility. Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony. For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest’.
(See, for example, the decisions in Chiu Chi Tong v Lau Chong Sai & Another, HCA 765/2002 (para 28) and Yu Ming Investment Ltd v Pang Ru Chuan, Richard,HCA 814/2002 (para 13)).”
28.Similar guidance was given by DHCJ Eugene Fung SC in Hui Cheung Fai v Daiwa Development Ltd[13] (HCA 1734/2009, 8 April 2014), in which the learned judge said:-
“77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility ……
78. In deciding whether to accept a witness's account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events ……
79. In determining a witness's credibility, I have also attached importance to the consistency of the witness's evidence with undisputed or indisputable evidence, and the internal consistency of the witness' evidence. The latter type of consistency is often tested by a comparison between the witness' oral testimony and his or her witness statement.
80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses ……
81. The practical approach to assessing credibility of witnesses in a case such as the present may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyd's Rep 1 at 57: -
‘Speaking from my experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth.’
82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness' credibility features prominently in the court's determination…”
29.With these principles in mind, I turn to the evidence in this case.
DOCUMENTARY EVIDENCE
30.I would first mention the essential documentary evidence in these proceedings.
Form E filed by D1 in FCMC 6133/2007 (undated)
31.This is a form filed by D1 in the said matrimonial proceedings, in which D1 disclosed his assets to the Family Court. In this Form E, D1 mentioned that he was one of the 4 joint owners of Flat 10C. He mentioned that Cheung and Wan were the other 2 joint owners, but both of them had passed away. He did not know the name of the remaining surviving joint owner. D1 said that he was an owner in name only for he had not made any contribution to the purchase price. He said that he had no beneficial interest in Flat 10C. He also highlighted that Flat 10C was used by a Buddhist organization (“是佛堂用”).
The Audio Recording and the Transcripts
32.The Audio Recording and the Transcripts show that in the hearing on 30 May 2013, D1 told the Family Court the following under oath:
“官：……好喇，你入咗你個經濟誓章，有一度我唔係幾睇得明嘅呢，你就提到有一個物業，我想知嗰個係乜嘢物業嚟㗎？
答：呢個物業就係好耐之前，我哋一個佛堂……
官：即係喺九龍彌敦道652號10字C座，嗰個係咩嘢物業嚟㗎？
答：係一個佛堂嗰個物業嚟嘅。
官：係。
答：係拜——係愛嚟拜佛嗰個地方嚟嘅。
官：係，咁而家你就話，先前就話有四個人聯名㗎，
答：係。
官：……但係就似乎個個都死晒㗎喇喎，係咪？
答：佢因為呢個物業嗰陣時係講明係叫做長命契，我唔清楚長命契係啲乜嘢嗰個形式...
官：係，咁四個人嘅名喇，四個人名，而家得番幾多個？
答：而家得番——有兩個已經係去咗世㗎喇。
官：咁另外嗰兩——另外一個，你連佢叫咩嘢名，你都唔知嘅？
答：我係唔知，係唔知。
官：咁呢個物業畀人係去拜神嘅。
答：係，拜佛嘅。
官：拜佛嘅，咁呢個物業裡面所有嗰啲開支，邊個負責㗎？
答：係佛堂嗰啲道親，佢係本——佢係好幾——有成幾十年前，佢自己本身係有一個——有人去拜佛呀咁樣，去畀啲香油錢呀咁樣，攞嗰啲錢愛嚟做營運㗎囉。
官：咁係邊個買㗎？
答：係嗰個——係我哋個前人，叫做。”
33.Looking at what D1 has said in the Family Court, in fact D1 has admitted that Flat 10C is a property owned by the Buddhist organization (“係一個佛堂嗰個物業嚟嘅”), and it was purchased by their Founder (“官： 咁係邊個買㗎？答：係嗰個—係我哋個前人，叫做……”). In the light of the other evidence in this case, the Buddhist organization must be the Temple, and the Founder must be Cheung.
34.Counsel for Ps submits that the Audio Recording and the Transcripts are relevant to D1’s ownership in Flat 10C, which is an issue in these proceedings, and hence are materials which ought to be disclosed by D1 in the first place. These materials are certainly admissible evidence in these proceedings. Further, since the part highlighted in the paragraph above is most relevant to the ownership of Flat 10C, considerable weight should be given to this admission.
35.D1 in his final submissions agrees that the Audio Recording and the Transcripts should be admissible evidence in these proceedings. He also confirms that what he has said in the Family Court is the truth.
36.D2 in her final submissions objects to admitting the Audio Recording and the Transcripts as evidence in these proceedings. She submits that she does not know what D1 has said in the Family Court, and the records in the Family Court may not be accurate.
37.In my view, as submitted by counsel for Ps, the Audio Recording and the Transcripts are clearly materials relevant to the ownership of Flat 10C, and I shall give considerable weight to these materials in making factual findings in this case, particularly when D1 has reaffirmed the truth of his words in the Family Court in his final submissions. D2 has been provided with the Audio Recording and the Transcripts, and she has been made known what exactly had happened in the Family Court. There is no valid reason to doubt that accuracy of the Audio Recording and the Transcripts. There is no merit in D2’s objection.
Register of Members of Bo Wo Temple (保和壇登記冊), List of Preachers (點傳師), List of Hosts (壇主), and List of Clerks (辦事員)
38.This is a book produced by Ps, with the words “保和壇登記冊 乙巳年” on its cover. In each entry inside this book, the following information is recorded, namely date, the name of the preacher (點傳師), the name of the instructor (引師), the name of the guarantor (保師), the name of the seeker (求道人), and the gender of the seeker.
39.The earliest records in this book concern matters in 1951 (民國40年), but most of the records cover the period from 1969 (民國58年) up to the 15th day of the 9th lunar month in 1979 (民國68年9月15日).
40.Apart from this register, Ps have also produced the following documents:
(1) List of Preachers (點傳師)
(2) List of Hosts (壇主)
(3) List of Clerks (辦事員)
41.According to Ps, preacher, host and clerk are officers serving in the Temple. Each of these officers is a member of the Temple. I note that the dates of admission to the Temple as recorded in the aforesaid lists match the dates of admission as set out in the aforesaid register.
42.I am aware that on the first page of the said register, there are words saying that a temple called 仸堂壇was established in Kowloon City in 1951. There may be an argument saying that the said register is not a register of members of the Temple but is a register of members of another organization. However, Ps’ case is that the Temple was established in 1966. Further, Madam Lo Yin Chun (“LYC”) has given evidence and said that she was admitted to the Temple, not any other organization, in 1966. Her evidence on this point is not challenged. There is an entry in the said register showing that LYC joined the Temple as a member in 1966. I am also aware that the words “乙巳年” is on the cover of the register. In context, the said “乙巳年” should be referring to the period from early 1965 to early 1966. It is likely that the author of this register started to make the entries therein at a time slightly before the formal establishment of the Temple in 1966. Taking all the evidence into account, I am satisfied that as from 1966 onwards, the records in the said register are the records concerning admissions of the members of the Temple.
Donation Records for the Formal Establishment of the Temple in 1969
43.Ps are able to produce documents showing that the Temple was declared formally established in 1969, and there were over 100 donors donating money in support of the establishment of the Temple. LYC is one of the donors.
Donation Records-Incense & Oil (香油錢) Donation, Monthly Donation (月供), and Special Donation (特別捐獻/募捐)
44.These donation records are produced by Ps. The Special Donation Records show that the total raised by special donation for the purchase of Flat 8A is HK$82,772, and the same records show that the total raised by special donation for the purchase of Flat 10C is HK$101,201.
Minutes Book of P2
45.Ps have produced a minutes book of P2, in which the meetings of P2 are recorded. According to Ps, all these meetings are meetings attended by members of the Temple, and can also be treated as meetings of the members of the Temple.
EVIDENCE FROM WITNESSES
46.Ps have filed witness statements made by 7 witnesses:
(1) P1
(2) LYC
(3) Chan
(4) Mr Lam Lin Hung (“Lam”)
(5) Madam Lee Wai Fong (“LWF”)
(6) Madam Lee Wai Ting (“LWT”)
(7) Madam Yeung Wai Ching (“Yeung”)
47.Ps have called the first 6 witnesses to give evidence in the trial. Counsel for Ps informed the Court that Ps had lost contact with Yeung after filing her witness statement, and Ps were unable to call Yeung to give evidence in the trial. I would exclude Yeung’s witness statement from the evidence.
48.In my view, the 6 witnesses called by Ps are honest and reliable witnesses. In respect of the factual matters upon which these witnesses have personal knowledge, I accept their evidence and attach weight to their evidence. In respect of hearsay evidence told by these witnesses, save and except the matters expressly mentioned by me, I accept that the hearsay evidence mentioned by these witnesses is from reliable sources and give weight to the hearsay evidence as well.
49.Originally, Ds have filed witness statements made by 4 witnesses:
(1) D1
(2) HKC
(3) D2
(4) Ku
50.As mentioned in the above, D1 and D2 split in the middle of the trial, and each of them decided to call his or her own witnesses accordingly. At the end, D1 elected not to give any evidence, and therefore the matters mentioned in D1’s witness statement are not evidence before the Court. D1 called HKC to give evidence. D2 herself gave evidence in support of her case, and she also called Ku to give evidence. In my view, all these 3 witnesses are dishonest witnesses. They are clearly not telling the truth on various material aspects.
P1
51.P1 is the daughter of Wan and Lo. In her evidence, she said the following:
(1) The hierarchy in the Temple is as follows: Founder (前人), preachers (點傳師), hosts (壇主), clerks (辦事員), and members (道親).
(2) She is a clerk looking after the managerial matters of the Temple.
(3) The main altar of the Temple is in Flat 8A. Flat 10C was mainly used as a place for having vegetarian meals. However, there was a Guanyin (觀音) statute and an incense burner (香爐) inside Flat 10C. Members of the Temple and believers from the public may offer incense and worship in Flat 10C. There was also a library in Flat 10C displaying some books relating to the Religion.
(4) Activities of the Temple would be written on the blackboard inside Flat 8A. Members of the Temple would also be notified the same orally or through social media.
(5) There are several types of donations in the Temple:
(a) Merits Donation (功德金)-one-off optional donation to be paid upon one’s admission, subsequently to be paid to TTBA when the latter is in need.
(b) Fruit Money (果金)-a fixed sum of HK$2, to be paid upon admission
(c) Incense & Oil Donations (香油錢)-for the operation of the Temple
(d) Special Donations (特別捐獻)-for a special purpose
(e) Monthly Contribution for Purchase of Property (供屋捐獻)
(6) Cheung was given pocket money by members of the Temple from time to time. Cheung also received Old Age Allowance from the Government.
(7) In respect of the purchase of Flat 10S of Kwong Yu Building, Flat 8A, and Flat 10C, she is not privy to how the purchase prices were paid. She was once asked by Wan whether she was interested in making contributions to the Temple for the purchase of property before the acquisition of Flat 10C and was also told that Wan would be named a registered owner although he had no stake in Flat 10C. Subsequently in 2004, she was told by Wan that there was no longer a need to make contributions for the purchase of property.
(8) P1, after considering the accounting records of the Temple, formed a view that the money used to purchase these properties were originally from loans from a Madam Chan Chong Lan (陳宗蘭) and Incense & Oil Donations. P1 had the impression that the loans were from Madam Chan Chong Lan due to the large number of bank deposit slips kept by Wan. Further, Lo had hinted to P1 that Cheung and Madam Chan Chong Lan had a close relationship and they were just like sisters (情同姊妹).
(9) Such loans were disbursed by donations from (1) Cheung in the sale of her Bell House Property and (2) members of the Temple in the form of Special Donations (特別捐獻) and Monthly Contributions for the Purchase of Property (供屋捐獻) until 2004.
(10) There was a meeting of the Temple on 5 March 2002, in which it was resolved that the Temple would not be a registered association or incorporated. She is not privy to this meeting.
(11) After the demise of Cheung and Wan, Lo came to realize that it would not be desirable for the properties of the Temple being held by individual trustees as joint tenants. After the death of a trustee, it might not be easy to find a new person as a replacement. Further, evidence might disappear or became unclear after a long period of time, and there was a risk that a trustee might claim that the property in fact was his or her own property.
(12) The Temple had a meeting on 22 September 2009, in which it was resolved that the Temple should be a registered association. She was present in this meeting. The purpose of the resolution is to try to form an entity to hold the properties of the Temple, i.e. Flat 8A and Flat 10C.
(13) Later, it was found out that an unincorporated association would not be able to hold properties as a matter of law. Members of the Temple therefore had 2 meetings to discuss the incorporation of the Temple: one to discuss the establishment of P2 and the other, on the anniversary of the Temple on the 10th day of the 4th lunar month in 2010, to discuss matters relating to the memorandum and articles of association of the company to be formed.
(14) After the incorporation of P2, Flat 8A was transferred to P2 in the form of a “sale and purchase” but in fact there was no consideration passing from P2 to the assignors. The consideration on the assignment was said to be HK$1,950,000 after making inquiries from estate agents and having agreement from members of the Temple.
(15) P2 failed to provide information regarding the acquisition of Flat 8A to the auditors from 2010 to 2012 because there was no inquiry from the auditors in respect of properties. Later, P2 was advised by auditors that the HK$1,950,000 should be recorded “amount due to members”, and hence such a record was made in the P2’s report and financial statements for the financial year ended on 31 March 2013.
(16) P1 also mentioned the ownership of the money in Cheung’s bank accounts.
52.P1 strikes me as a truthful and straightforward witness. I accept her evidence save and except the following:
(1) The matter set out in in paragraph 51(8) in the above, which is P1’s opinion based upon her interpretation of documents and something hinted by Lo. P1 is a factual witness and may only give factual evidence, not opinion evidence. Further, the information from Lo is only some hints, which is far from clear.
(2) The ownership of the money in Cheung’s accounts, which will be discussed latter in this judgment.
LYC
53.LYC said the following in her evidence:
(1) She first went to the Temple in 1966 (located in San Po Kong), following a co-worker. Later, she became a member of the Temple in the same year. She became a host (壇主) of the Temple in 1998.
(2) When the Temple was located at Flat 10S of Kwong Yu Building, she would visit the Temple twice a month. After the Temple was relocated to Rex House, PW2 would visit the Temple as often as 5 times a week even before her appointment as a host.
(3) Since 1975 or 1976, Wan and Lo were already responsible for the daily operation of the Temple on voluntary basis. Wan would take care of the Temple’s finances. Lo would look after the Temple’s daily operation.
(4) Flat 11K of Kwong Yu Building was a rented place. Due to the increase of number of members of the Temple, the members decided to purchase through donations Flat 10S of Kwong Yu Building. HKC was permitted to live in Flat 10S of Kwong Yu Building upon payment of rent.
(5) Later, members of the Temple decided to relocate the Temple to Flat 8A as a result of water seepage problem at Flat 10S of Kwong Yu Building. Later, the Temple also acquired Flat 10C. Flat 8A was used for worshipping and ceremonial rituals. Flat 10C was used for holding vegetarian meals, but members might also worship there, for there was a Guanyin statute inside Flat 10C.
(6) Cheung once told her that Lee Ping Ying initially was a resident in Kwong Yu Building. Lee Ping Ying came to know that the Temple was inside Flat 11K of the same building, and went to the Temple on her own volition. Lee Ping Ying later became a believer and a member of the Temple. Later, when the Temple was moved to Flat 8A, with the permission of Cheung, Lee Ping Ying lived in Flat 8A for a period of time to take care of Cheung. Lee Ping Ying left the Temple at a time before 2000. Later, Lee Ping Ying rejoined the Temple’s activities until she was physically unable to do so.
(7) In respect of the types of donations made to the Temple, LYC’s evidence is in line with P1’s evidence.
(8) Cheung discussed with members of the Temple in respect of the acquisition of Flat 10S of Kwong Yu Building and Flat 10C, but LYC did not join the discussion at the time. However, she was informed by the initiator (發起人), one Madam Wong, of these discussions at a later time.
(9) In relation to Flat 8A, Cheung did mention the plan to acquire it to the members and LYC was aware of this.
(10) At one time, Cheung told LYC that a friend of Cheung had provided a loan to assist the purchase of Flat 10C.
(11) Cheung had no work or business. Cheung once said to LYC that all her money was the Temple’s (“我所有錢都係佛堂嘅”), except the Old Age Allowance from the Government and pocket money given to Cheung by members of the Temple.
(12) There was a meeting to discuss the setting up of a society or the incorporation of the Temple in 2002, but the members of the Temple resolved not to do so in that meeting.
(13) On the anniversary of the Temple in 2010, i.e. the 10th day of the 4th lunar month, members of the Temple discussed the incorporation of P2 since it would not be possible for using an unincorporated society to hold properties of the Temple.
(14) The Temple has been continuously preaching the Religion. Photocopied booklets of some Buddhist texts have been placed in some vegetarian restaurants and the management office of Rex House to disseminate the Religion. Further, preaching of religious principles by seniors already started when the Temple was located in Kwong Yu Building.
(15) HKC was not Cheung’s goddaughter. Cheung had only one godson but no goddaughter. After HKC being adjudged bankrupt on 23 December 2014, members of the Temple resolved to remove HKC from P2’s directorship on 23 April 2015 after knowing HKC’s bankruptcy.
54.In my view, LYC’s evidence is clear and cogent. I accept her evidence.
Chan
55.Chan mentioned the following in his evidence:
(1) He was born in 1954. He is a bank manager.
(2) He became a believer of the Religion in about 1963 at the age of 9. At that time, he was admitted as a member of another temple. Later, under Cheung’s influence, he became a member of the Temple in 1965, where the Temple was in San Po Kong.
(3) Chan lived with Cheung when he was young. Cheung had a humble and frugal living style. At all times, Cheung did not have any work or income other than small amounts of pocket money from members of the Temple and the Old Age Allowance from the Government. Chan gave pocket money to Cheung from time to time during Cheung’s lifetime. Upon Cheung’s request, Chan also made a monthly contribution of HK$1,500 for 20 months to enable Cheung to purchase a piece of land to be used as for her grave in Mirs Bay.
(4) At all times, there have been religious talks in the Temple. Those talks were open to public, and Chan recognized that non-members of the Temple had attended these talks from time to time.
(5) In respect of the types of donations made to the Temple, Chan’s evidence is in line with P1’s evidence.
(6) After the purchase of Flat 8A and Flat 10C, Cheung told Chan that the purchase was assisted by loans from a friend of Cheung. He had the impression that the said loans were repaid by donations of the members of the Temple after reviewing the records.
(7) Cheung did not tell Chan anything concerning Cheung’s bank accounts during Madam Cheung’s lifetime. He only learned that Cheung had 4 bank accounts in assisting in the administration of Cheung’s estate. He was told by Wan that the money in one account was Cheung’s personal money, and the money in the other bank accounts belonged to the Temple.
(8) In 2002, Wan invited him to become a joint tenant of Flat 10C to make up the void after Cheung’s demise. He went to the Law Firm to prepare to execute the necessary documents together with Wan, D1 and HKC. Wan told them that he had asked D2 to come, but D2 did not show up. D2 has not attended the Temple ever since that time.
(9) In late 2012, D1 told Chan that D1’s ex-wife was claiming against D1 for maintenance. In April 2013, D1 and HKC attended Chan’s office and showed Chan some documents, including the Form E filed by D1 in the matrimonial proceedings. D1 requested the members of the Temple to discuss whether they could offer him any help. Subsequently, 3 meetings were convened:
(a) Meeting on 20 June 2013:
Chan reported to the meeting what he learned from D1 regarding D1’s divorce. No consensus was reached in the meeting as to whether the Temple should lend money to D1 or not.
(b) Meeting on 22 June 2013
D1 brought along his Form E for other members of the Temple to review. D1 did not mention that HKC had funded the purchase of Flat 10C. No one in the meeting asked D1 to give the Temple time to raise money to help D1.
(c) Meeting on 8 July 2013
Members of the Temple had consensus not to assist D1 financially.
56.I am of the view that Chan is an honest and reliable witness. Save and except the ownership of the money in Cheung’s bank accounts, I accept Chan’s evidence.
Lam
57.Lam said the following in his evidence:
(1) Lam was first brought to the Temple by relatives who were members of the Temple in 1980. He became a believer and was admitted to the Temple on 20 September 1991. There was an admission ceremony at the time of his admission.
(2) PW3 participated in worships, vegetarian meals, religious talks and formal meetings held by the Temple. Friends of members of the Temple could also attend talks and had vegetarian meals in the Temple.
(3) Activities of the Temple would be announced on the blackboard in Flat 8A and would also be made known to others orally through members of the Temple.
(4) Cheung lived in a small room in Flat 8A. The living room of Flat 8A was where members of the Temple had vegetarian meals and worships.
(5) As to the types of donations in the Temple, Lam’s evidence is in line with other Ps’ witnesses.
(6) He started making monthly donations for the purchase of properties in about 2000, recognizing that the Temple’s properties were Flat 8A and Flat 10C. A few years later, he was told by Wan that there was no longer a need to make such contributions
58.Lam is also a straightforward and reliable witness. I accept his evidence.
LWT
59.LWT joined the Temple as a member in 1981. According to her, the Temple was open to public and anyone interested in the Religion was welcome. She took over the accounting works in October 2008 after the demise of Wan. Apart from matters which have already been covered by other Ps’ witnesses, LWT mentioned that in respect of transferring Flat 8A to P2, she signed the assignment together with P1, LYC, HKC and one Ho Yuk Ming on behalf of P2 as assignee. At that time, all of them were directors of P2. Although consideration was stated on the assignment, P2 did not pay anything to the assignors, i.e. the 4 joint owners of Flat 8A. The purpose of the transfer is to pass the trusted property, i.e. Flat 8A, from the 4 joint owners to P2. Flat 8A was the Temple’s property at all times. Hence, there was no need for P2 to pay anything to the 4 joint owners.
60.I am of the view that LWT is an honest and reliable witness. I accept her evidence.
LWF
61.LWF joined the Temple as a member in 1977. Apart from the matters covered by other Ps’ witnesses, LWF mentioned the following in her evidence:
(1) She made donations in support of the purchase of Flat 10S of Kwong Yu Building.
(2) She was told by Cheung that Flat 8A was purchased by using the money realized by selling the Bell House Property and money from Special Donation.
(3) Later, Flat 10C was purchased because more and more believers came to the Temple to worship.
(4) She was told by Cheung that Flat 10C was purchased by using the money realized in selling Flat 10S of Kwong Yu Building, by raising a loan from other(s) and by a mortgage loan from a bank.
(5) There were religious lectures in the Temple in or about 2007 and 2008. Apart from members of the Temple, some other believers and friends of members of the Temple also attended these lectures.
62.LWF is honest and reliable. I accept her evidence.
HKC
63.HKC’s evidence is inherently improbable and is contradicted by Ds’ pleadings and contemporary documents on various material aspects. Her evidence cannot be the truth.
64.HKC claimed that the Temple was a private altar of Cheung and was not open to public. People might only come to worship with the permission of Cheung. However, under cross-examination, HKC could not deny that people were still going to the Temple to worship after Cheung’s death in 2002. HKC said that after Cheung’s death, the permission was given by Wan on behalf of the Son. HKC also said that after Wan’s death in 2008, permission was given by Lo. HKC’s explanation cannot be true.
(1) There is no evidence from the Son showing that he had given the alleged permission through Wan after the death of Cheung.
(2) Apart from HKC’s bare allegation, there is no evidence showing that a person may only go to the Temple to worship after having permission from Cheung, Wan or Lo.
(3) HKC could not answer a crucial question under cross-examination, i.e. who was giving the necessary permission after Lo’s death in 2010. In response to this question, HKC only said she did not know. In my view, HKC having no answer to this question is because the alleged permission is a story made up by her and is not the truth.
65.In respect of the purchase of Flat 10S of Kwong Yu Building in 1983, HKC claimed the following:
(1) She had paid HK$15,000 to Cheung as part of the purchase price for that unit. That unit was purchased as HKC and D1’s residence, but would be used by the Temple for 8 days in each year.
(2) She, Cheung and the other 2 registered joint owners agreed that each of them would have ¼ beneficial interest of the unit, regardless of the size of the share contributed by her to the purchase price.
(3) She and D1 gave HK$2,300 to Cheung every month as a lump sum payment covering all the outgoings of the unit, such as rates, management fee, and electricity fee.
(4) After the sale of the unit in 1992, Cheung offered to give HK$200,000 to her, but she refused. She asked Cheung to keep the money for her own use.
66.Her evidence concerning Flat 10S of Kwong Yu Building cannot be true.
(1) Flat 10S was purchased in 1983 at HK$320,000 and registered under the joint names of Cheung, HKC, Lo, and Li Pak Kam as joint tenants. It was sold in 1992 at HK$1,200,000.
(2) HKC claimed that even though it was agreed that each legal title holder would have ¼ beneficial interest in the unit, the 4 owners agreed that a joint tenancy should be adopted so as to leave the unit eventually to the youngest owner, i.e. HKC herself. However, under cross-examination, HKC could not deny that even though she was the youngest among the 4 legal title holders, that would not necessarily mean that she would be the last surviving owner. HKC then changed her position and said that she did not know that the objective of leaving the unit to the youngest person could not be achieved by adopting a joint tenancy.
(3) HKC claimed that she did not know why the other legal title owners agreed to let her eventually have the unit even though they did not have a personal relationship with her and were only loyal to the Temple.
(4) HKC claimed that although her contribution was less than ¼ of the purchase price, Cheung allowed her to have ¼ beneficial interest in the unit.
(5) In my view, HKC’s claim is inherently improbable. The alleged contribution made by her was less than 5% of the purchase price. There was no convincing reason why the other 3 owners (ie not only Cheung) would allow her to have 25% beneficial interest in the unit notwithstanding that her contribution is far less than 25% of the purchase price. Even if Cheung was her godmother as claimed by her and Cheung intended to give her a favour, there is no sensible reason why the other 2 owners would agree to this arrangement.
67.In respect of Flat 8A, HKC claimed that Cheung, Lo, Li Pak Kam, Lee Ping Ying and her combined funds to purchase that unit to provide Cheung with a place to live in and to relocate the Temple. HKC alleged that she had paid HK$30,000 to Cheung in cash as a contribution to the purchase price of Flat 8A. According to HKC, Flat 8A was initially beneficially owned by the 5 registered owners. In a letter to the trustees in bankruptcy dated 25 August 2016, HKC claimed that she had ¼ beneficial interest in Flat 8A. Clearly, HKC’s stance is that after the demise of Cheung, Flat 8A became beneficially owned by the other 4 registered joint owners, each had ¼ beneficial interest in the property. She claimed that she agreed to sell Flat 8A to P2 because Lo had told her that the Temple would gradually disappear if HKC did not do so. She was chasing P1 for her sale of the sale proceeds.
68.HKC’s evidence concerning Flat 8A is not true.
(1) Flat 8A was purchased in 1990 at HK$930,000 and registered under the names of Cheung, Lo, Li Pak Kam, Lee Ping Ying and HKC as joint tenants. According to HKC, she has only paid about 3.2%[14] of the purchase price. There is no convincing reason that the other registered owners would allow HKC to have a beneficial share in the property which is far more than her contribution to the purchase price.
(2) There is also no convincing reason for the registered owners to agree that the beneficial share of each registered owner would automatically increase after the death of another registered owner.
(3) By an assignment dated 12 August 2010, the 4 surviving registered owners assigned Flat 8A to P2. HKC has acknowledge receipt of the sale proceeds in the assignment. It is inexplicable why HKC would be willing to acknowledge receipt of the sale proceeds if the transaction is a real sale from the 4 registered owners to P2 but HKC has not yet received any money.
69.In respect of Flat 10C, HKC claimed that she had paid HK$100,000 as a contribution to the purchase price of Flat 10C. She was a joint legal and beneficial owner of Flat 10C. Although Flat 10C was registered under the names of D1, D2, Cheung and Lo, D1 was in fact holding the same on trust for her. She and the other 3 beneficial owners agreed to allow the Temple to use Flat 10C on the condition that the Temple would pay HK$2,000 to the owners each time, or each month. After the demise of Cheung and Lo, Flat 10C is now beneficially owned by herself and D2.
70.HKC’s evidence concerning Flat 10C is clearly a pack of lies.
(1) Flat 10C was purchased in 1991 at HK$1,460,000 and registered under the names of Cheung, Wan, D1 and D2. As set out in the above, Ds’ pleaded case is that having D1 as a registered owner of Flat 10C is to reflect HKC’s contribution to the purchase price of Flat 10C. HKC’s alleged contribution is only 6.8%[15] of the purchase price. HKC’s allegation that she is a joint beneficial owner of Flat 10C is clearly inconsistent with Ds’ pleaded case.
(2) In a special meeting of P2 held on 20 June 2013, D1’s matrimonial case was discussed. HKC was present in this case. The contents of the minutes are as follows:
“何志雄先生與王女士在2007年合法離婚。2012年，年尾王女士入稟家事法庭索償贍養費，2013年5月30日法庭判王女士勝訴，何生須付約22萬元贍養費給王女士，由於佛堂10樓何生有業權，所以10樓可能被拍賣，若10樓要拍賣，何生取了22萬元給王女士，餘數要交回佛堂。
(1) 星期六22/6下午出席4時開會，何生必須出席交代事件。
(2) 約王女士見面商討。
(3) 要找古太商量10樓如何處理。”
(3) Under cross-examination, HKC was asked whether the minutes was an accurate record of the decision of the meeting. HKC said that the record was accurate, save and except one sentence, i.e. “若10C要拍賣，何生取了22萬元給王女士，餘數要交回佛堂” (underline added). HKC claimed that this was not discussed or decided in the meeting. HKC was clearly telling lies on this matter. The minutes of the meeting on 20 June 2013 has been disclosed by Ps a long time ago. The allegation that the aforesaid sentence is not anything discussed or decided in the meeting has never been raised by Ds. In my view, HKC put forward this false allegation, for the reason that this sentence has showed that HKC agreed that Flat 10C was beneficially owned by the Temple in the meeting.
(4) In a meeting of P2 held on 22 June 2013, D1’s matrimonial case was further discussed. HKC and D1 were present in this case. The contents of the minutes include the following:
“要求何生交出3份文件
(1) 離婚證明書。
(2) 贍養費證明文件。
(3) 法庭批准拍賣10樓證明文件
(4) 何先生覆述在家事法庭內曾向法官、對方(黃女士)聲稱：「10/F雖然有我的名字，但不屬於我的，是佛堂的，我情願坐監都唔想拖累佛堂，我很無奈。」
在會議上他還說：「我不會賣佛堂嘅野，請佛堂及大家幫下手。」”
(5) Under cross-examination, HKC said that the first 3 items were mentioned in the meeting, but she could not remember whether anything else had been discussed in the meeting. Later, she was referred to her witness statement, in which she emphasized that D1 did not say the matter recorded in item 4 of the minutes. HKC was asked why she could be so sure that D1 did not say the matter recorded in item 4. In reply to this, HKC was evasive and no satisfactory answer could be provided.
(6) Under cross-examination, HKC’s attention was drawn to the Audio Recording, in particular, the hearing in the Family Court on 30 May 2013. HKC was asked why D1 admitted in the Family Court that Flat 10C in fact was owned by the Temple. HKC only said that she did not know and she could not comment on what D1 had said in the Family Court. In my view, this is clearly not a satisfactory answer. Plainly, HKC has no way to explain away D1’s admission made in the Family Court.
D2
71.D2 is an untruthful witness. Her evidence is untrue on several material issues in these proceedings. Save and except the admissions contrary to her case, I refuse to accept her evidence.
72.D2 alleged that the Temple was not an organization and had no members. It was merely a place for the people interested in the Religion to have gatherings. However, under cross-examination, D2 admitted that the Temple was an organization, had a system and had members. D2 also admitted that she was a clerk of the Temple. In the light of the documents produced by Ps, D2’s allegation that the Temple is not an organization and has no member is simply untenable. Further, under cross-examination, D2 in effect has admitted that the allegation is untrue.
73.In respect of Flat 10C, D2 claimed that Cheung had hoped to have her registered as one of the owners of the property as she was very grateful that D2’s in-laws took care of her and provided for her meals and living from 1949 to 1965, and hence suggested to D2 that D2 might contribute HK$70,000 to 10C’s purchase price. D2 claimed that she paid Cheung HK$70,000 in cash in one go as her contribution to purchase price. D2 also alleged that Cheung, HKC, Wan and she herself, met and agreed that they should buy Flat 10C for the purpose of investment, hoping that it would increase in value. They also agreed to allow the believers of the Temple to use Flat 10C, and the use was limited to having meals and rest in the property on the 1st and the 15th days of each month of the Lunar Calendar and on the birthdays of the gods. In return, the Temple would pay HK$2,000 to the 4 registered owners every month from November 1991 onwards as borrowing fee and maintenance fee, and for paying utilities, government rent, rates, and some miscellaneous items. D2 claimed that the amount subsequently increased to HK$2,500 in 1996 and HK$3,000 in 2001. They also agreed to allow the Son to live in the property when he came to Hong Kong from Mainland China for visiting purposes.
74.D2 claimed that at the time of the acquisition of Flat 10C, it was agreed among the 4 owners that they were joint legal owners as well as joint beneficial owners. D2 said that she and the other legal title holders never reached an agreement as to how Flat 10C should be dealt with when it increased in value, but claimed that Cheung allowed them to deal with Flat 10C in whatever way they wanted after her death, for fewer people would visit the Temple then and there might be no need to continue to lend the place to the Temple. D2 claimed that after the demise of Cheung and Wan, Flat 10C should be owned by her and HKC beneficially in equal shares.
75.According to D2, the money for purchasing 10C came from:
(1) Cheung, who paid the largest amount;
(2) Wan;
(3) HKC, who paid HK$100,000 (but the name of D1, her younger brother, was put on the title deed instead);
(4) D2 herself, having paid HK$70,000; and
(5) HK$500,000 mortgage loan from a bank.
76.D2 also claimed that HKC and she herself, each contributed to mortgage repayment by paying HK$2,000 per month for a period of 12 months on the request of Cheung.
77.D2 said that after Cheung’s death, Wan had twice asked her on the phone to meet him at the Admiralty MTR station, the purpose of which was to persuade her to sell her interest in Flat 10C for HK$300,000 and to sign the relevant documents in a law firm. D2 claimed that she refused over the phone on both occasions and did not went to the MTR station to meet Wan, for she thought the offering price was too low. D2 claimed that she did not know why Wan, HKC, D1 and Chan had waited for her for 2 hours in the Law Firm on a date in 2002.
78.I am of the view that D2 is an untruthful witness in respect of all the matters concerning Flat 10C.
(1) As set out in the above, Ds’ pleaded case is that having D2 as a registered owner of Flat 10C is to reflect D2’s alleged contribution to the purchase price of Flat 10C, i.e. the alleged payment of HK$70,000. The alleged contribution is only 4.8% of the purchase price[16]. D2’s allegation that she is a joint beneficial owner of Flat 10C, and is now an owner of 50% of the beneficial interest in Flat 10C, is entirely different from Ds’ pleaded case.
(2) As to the alleged agreement among the 4 owners that they would be the joint legal owners and the joint beneficial owners of Flat 10C, if there is any truth in this allegation, such an important allegation would not be missed in Ds’ pleadings. The absence of this allegation in Ds’ pleaded case shows that this alleged agreement cannot be the truth.
(3) It is inherently improbable that if the 4 registered owners have agreed that Flat 10C is purchased for investment purposes, they would agree that the 4 of them be made as joint beneficial owners of the property, so that the last survivor would have all the fortune. This is particularly so when D2’s contribution is only a tiny portion of the purchase price.
(4) D2’s evidence concerning the agreement among the 4 registered owners was evolving while she was giving evidence. Under cross-examination, she was asked that initially, only Cheung and Wan were the purchasers of Flat 10C, and D2’s name and HKC’s name were only added to the title deed a few days before the date of completion. D2 claimed that Cheung and Wan decided to sign the sale and purchase agreement first as the price of Flat 10C was surging at that time, and it was difficult to have D2 in Hong Kong for she often travelled abroad together with her husband for business purposes. Later, D2 claimed that Cheung’s initial intention for acquiring Flat 10C was to let her son and daughter-in-law have a place to live in whenever they came to Hong Kong, and it was only after a discussion with D2 and her husband that Cheung allowed them to use Flat 10C whenever their office ran out of space, and thus agreed to add D2’s name to the title deed as well. D2 in fact was shifting her stance on the intended use of Flat 10C, i.e. from being used as a living place by the Son, to being used by D2 and her husband whenever their office ran out of space. D2 was also changing her evidence regarding the purpose of adding her as a registered owner of the property, i.e. from making her a joint legal and a joint beneficial owner of Flat 10C, to giving her the entitlement to use Flat 10C as her office. If everything concerning Flat 10C has been agreed among the 4 registered owners before the acquisition of the same, there would be no such evolution. I also note that at nowhere in D2’s evidence, it is mentioned that Wan and HKC has ever agreed to allow D2 to use Flat 10C as her office.
(5) The alleged payment of the HK$70,000, and the alleged contributions to the mortgage repayment by D2 and HKC, cannot be found in all the records of the Temple. Also, the alleged payment of HK$2,000 per month from the Temple to the 4 registered owners, also cannot be found in all the records of the Temple.
(6) Under cross-examination, D2 agreed that the purpose of having registered Flat 10C under a joint tenancy was to ensure that the other registered owners would still hold Flat 10C after the death of Cheung, so that the continuation of the Temple could be ensured. This admission shows that in fact Cheung’s concern was to ensure the continuation of the Temple in Flat 10C after her death. This admission also shows that there is no truth in D2’s allegation that Cheung had allowed the surviving registered owners to deal with Flat 10C in whatever way they wanted after Cheung’s death.
(7) It is undeniable that Wan, HKC, D1 and Chan had waited for D2 to execute documents adding Chan as a joint owner of Flat 10C in the Law Firm on a date in 2002, D2 did not turn up and the 4 persons had waited for D2 for 2 hours. Had D2 unequivocally told Wan that she refused to sign any document adding Chan as a joint owner, no such meeting would have had been scheduled in the Law Firm.
Ku
79.Ku’s evidence is long on peripheral matters but short on the core issues. On the core issues, his evidence is obviously untrue. Save and except the admissions contrary to D2’s case, I do not accept his evidence.
80.Ku is the husband of D2. His mother is Cheung’s half - sister. He claimed that Cheung started a private altar in Kowloon City in about 1950, and he became a believer at that time. Ku claimed that the Temple was established in 1951 with 7 founding members. He became a host of the Temple in 1998. The Temple was a private altar. It was not an organization of any sort and did not have any fixed members or any membership system. According to Ku, the religion of the Temple was Yi Guan Dao, not the Religion as claimed by Ps. Ku claimed that Yi Guan Dao was a politically sensitive religion, the Temple had been practicing Yi Guan Dao in a secret manner and the activities of the Temple were not open to public.
81.Ku’s evidence denying the Temple being an organization cannot be believed. Based upon the evidence produced by Ps and the admission of D2 set out in the above, it is clear that the Temple is an organization having its own members and a clear structure. The book concerning Yi Guan Dao produced by Ku in his supplemental witness statement is not a book kept by the Temple. In all the religious materials kept by the Temple, no material concerning Yi Guan Dao can be found. I prefer the Ps’ evidence and find that the religious belief of the Temple is the Religion, and not Yi Guan Dao as claimed by Ku. I have to add that there is no convincing evidence before me showing that any practice of Yi Guan Dao has to be done in a secret manner in Hong Kong at any time due to any sensitive reason.
82.In respect of Flat 10C, Ku claimed that Cheung suggested to D2 that D2 might contribute HK$70,000 towards the purchase price of Flat 10C. Cheung suggested that Flat 10C should be owned in the form of a joint tenancy by D2, D1, Wan and Cheung herself, so as to make sure the continuation of the efficient use of the property (延續有效使用單位效益). Ku claimed that he gave HK$70,000 to Cheung at night on 5 November 1991. The money was the common asset of D2 and him. Ku claimed that since the money was not a donation to the Temple and was just a contribution to the purchase price, the sum was not written down in the donation records of the Temple. Ku also claimed that Wan had requested him to make a donation in support of the purchase of Flat 10C so as to set an example for other believers of the Temple, and he acceded to the request by making a donation of HK$500. That was written down in the donation records of the Temple.
83.In my view, Ku’s evidence concerning the purchase of Flat 10C is vague and inherently improbable. While Ku mentioned that Cheung’s purpose of adding D2 as a joint owner of Flat 10C was to ensure the continuation of the efficient use of the property, he did not explain what he meant by saying so. Obviously, there is nothing in his evidence providing any support to the alleged agreement among the 4 registered owners concerning the ownership of Flat 10C mentioned by D2. In respect of the nature of the HK$70,000, in Ku’s evidence, it is not clear whether the HK$70,000 should be the Temple’s property. According to Ku, he was willing to set an example to other believers as suggested by Wan and donated HK$500 in support of the purchase of Flat 10C by the Temple. That being the case, there would be no reason why he would not request Wan to record the HK$70,000 or to inform the believers of this contribution, for by contributing HK$70,000, Ku and D2 would have certainly set a very good example to other believers.
84.In paragraph 53 of his witness statement, Ku said:
“由事件可以見到，普樂慈善有限公司的董事私自成立了普樂慈善有限公司，其目的顯然易見。溫靄欣眾人 ( 除了何貴貞，詳見她的證人陳述書 ) 是想要專橫奪斷皇上皇10C的業權，和其他有關神壇的樂助、資金。” (underline added)
85.The plain meaning in this paragraph is that Flat 10C, the donations and the money mentioned are assets owned by the Temple, and P1 and her allies are trying to obtain all these by improper means. Under cross-examination, Ku was asked whether he had made an admission here that Flat 10C in fact was owned by the Temple. In my view, no satisfactory explanation has been offered by Ku. I treat this as an admission by Ku as to the ownership of Flat 10C and attach weight to this admission.
MY FINDINGS
86.Based upon the judgment accepted by this Court, I find that the Temple is an organization with an aim of promoting the Religion, founded by Cheung in 1966 and was declared formally established in in 1969. It is a religious organization open to the public. As shown in the evidence given by Ps’ witnesses, at all times the Temple’s activities were open to the public. Further, members of the public may come to the Temple on their own volition without any invitation or permission, and Lee Ping Ying is an example. Although Cheung resided in the places occupied by the Temple at various times, since Cheung was the founder of the Temple and was the key person for promoting the Religion, Cheung’s residence inside the Temple’s properties was incidental to the purpose of advancement of the Religion.
87.I note that the records of the Temple show that HKC and D1 lived in Flat 10S of Kwong Yu Building from February 1984 to May 1989, and thereafter a person with the surname Chan lived therein for 3 months in 1990. The rentals received were all used in the Temple for the promotion of the Religion. I note that Lee Ping Ying lived in Flat 8A for a period of time to take care of Cheung. I also note that members of the Temple have agreed that the Son may live in Flat 10C if he comes to Hong Kong from Mainland China for visiting purposes. In my view, all these would not affect the fact that the Temple is a public charity, for whether the Temple is a public charity is determined by looking at the matters when it was formed, i.e. the matters in 1966 or in 1969. All the events mentioned above are subsequent events. I do not regard these subsequent events have casted any doubt on the character of the Temple when it was formed, i.e. the Temple being an organization open to the public for the advancement of the Religion.
88.I am satisfied that the Temple is a pubic charitable trust.
89.I am also satisfied that Ps have the loci to bring these proceedings against Ds by virtue of s.57A of the TO:
(1) P1 a clerk of the Temple. In my view, P1 is a “person administering the trust”. Even if I am wrong on this, being a member of the Temple, P1 is certainly a person “otherwise interested in the trust”.
(2) Members of the Temple, in the meeting held on 20 October 2010, have resolved that Flat 10C should be transferred to P2. They intend to use P2 as a vehicle to hold Flat 10C. In my view, P2 is a person “otherwise interested in the trust”.
(3) D1 and D2 in fact are holding Flat 10C on trust for the Temple. Ps’ complaint in these proceedings is that Ds have treated Flat 10C as their own property, and thereby have breached the trust.
(4) By the reason of the above, I am of the view that the criteria in s.57A of the TO have been satisfied, and Ps may sue Ds in these proceedings by virtue of that section.
90.On the basis of the evidence before the Court, there are two matters in respect of which I cannot be sure:
(1) In respect of the purchase of Flat 10C, sources of the down payment and sources of the mortgage repayments are not entirely clear. The donation records produced by Ps show that there is a special donation for the purchase of Flat 10C, and the total of which is HK$101,201. Since I have rejected the evidence given by Ds’ witnesses, I do not accept that HKC has contributed HK$100,000 and D2 has contributed HK$70,000 in relation to the purchase of Flat 10C. However, after all, apart from the aforesaid special donation, there is no clear evidence showing the sources of other money in relation to the down payment and the mortgage repayments of Flat 10C.
(2) In respect of the money in the following bank accounts in Cheung’s estate, it is not clear whether the money therein belongs to estate or belongs to the Temple:
(a) Wing Lung Bank Account;
(b) Shanghai Commercial Bank Account;
(c) HSBC Account A[17];
(d) HSBC Account B[18].
(3) In respect of the first 3 bank accounts, Wan at first in his affidavit to the Commissioner of the Estate Duty dated 12 June 2002 stated that the money in these account was held by Cheung on trust for him. Later, on 20 June 2002, Wan made a corrective affidavit, in which he stated that the money in the 3 bank accounts should be Cheung’s own money. It is not known why Wan stated these matters in the first affidavit and in the corrective affidavit.
(4) I note that Wan stated in the first affidavit that each of the 5 registered owners of Flat 8A had 1/5 share in the property, and each of the 4 registered owners of Flat 10C had 1/4 share in the property. This is clearly incorrect, neither Ps nor Ds are suggesting these in this case. Ps are saying that all the registered owners are trustees holding the properties on trust for the Temple. Ds, on their pleaded case, claim that their beneficial interests in Flat 10C should be reflecting their respective contributions to the purchase price of Flat 10C, while D2 is claiming that she has 50% beneficial interest in Flat 10C in her oral submissions.
(5) The incorrect statements in the first affidavit concerning the beneficial ownership of Flat 8A and Flat 10C serves as an example showing that the information put down by Wan in these affidavits to the Commissioner of Estate Duty may not be entirely correct or accurate.
(6) In respect of HSBC Account B, Wan in her supplemental witness statement said that the money in this account should be Cheung’s personal money. When being asked questions concerning the money in this account during cross-examination, Wan agreed that she had no personal knowledge in respect of the ownership of the money in this account, and she could not confirm whether the money in this account was Cheung’s money or the Temple’s money.
91.Ownership of the money in the aforesaid bank accounts is not an issue in these proceedings. Understandably, the parties may not have fully investigated this matter and put forward all the relevant evidence on this question. As this is not an issue in these proceedings, I refrain from expressing any view on this matter.
92.Notwithstanding the above, in my view, Flat 10C is a property beneficially owned by the Temple. It is beyond doubt that Cheung had devoted a considerable part of her life to the Temple. All the properties owned by the Temple, i.e. Flat 10S of Kwong Yu Building, Flat 8A and Flat 10C, are registered in the joint names of several members of the Temple who are not related in blood. In the light of all the evidence, in my judgment, Cheung intended to use this mechanism to ensure that those properties would be continuously owned by the Temple, generation by generation. Further, it is clear that part of the purchase price of Flat 10C was paid by using the special donations from members of the Temple. It would certainly not be Cheung’s intention to make Flat 10C a property partially owned by the Temple and partially owned by some individuals, for this could not ensure that the Temple would continuously enjoy and use Flat 10C without any interference or restriction from any third party. The interest of the Temple would be in the forefront of Cheung’s mind at any time. In my judgment, apart from the special donation mentioned in the above, Cheung has found money from other sources to pay the down payment and the mortgage repayment of Flat 10C, and it was Cheung’s intention to make the Temple as the sole beneficial owner of Flat 10C.
93.There is no dispute that Ds have locked Flat 10C and do not allow members of the Temple to use the same since 5 November 2013. Members of the Temple have also put a lock on the front door of Flat 10C on 7 December 2013.
94.In my judgment, members of the Temple have resolved to use P2 as a vehicle to hold Flat 10C. Ds must assign Flat 10C and deliver vacant possession of the same to P2.
95.Members of the Temple have been prevented by Ds from using Flat 10C since 5 November 2013. This is a wrongful act by Ds. In respect of this, Ps have claimed damages. I note that Ps have not rented any alternative venue since 5 November 2013. I also note that Ds have derived little or no benefit from Flat 10C since members of the Temple have put a lock on the front door of Flat 10C since 7 December 2013. I have considered whether these facts would have any impact on Ps’ claim for damages.
96.In Inverugie Investments v Hackett[19], Lord Lloyd said:
“Before stating their own conclusions on the facts, their Lordships should say a brief word on the law. The cases to which they have already referred establish, beyond any doubt, that a person who lets out goods on hire, or the landlord of residential property, can recover damages from a trespasser who has wrongfully used his property whether or not he can show that he would have let the property to anybody else, and whether or not he would have used the property himself. The point is well expressed by Megaw L.J. in Swordheath Properties Ltd. v. Tabet [1979] 1 W.L.R. 285 ,288:
‘It appears to me to be clear, both as a matter of principle and of authority, that in a case of this sort the plaintiff, when he has established that the defendant has remained on as a trespasser in residential property, is entitled, without bringing evidence that he could or would have let the property to someone else in the absence of the trespassing defendant, to have as damages for the trespass the value of the property as it would fairly be calculated; and, in the absence of anything special in the particular case it would be the ordinary letting value of the property that would determine the amount of damages.’
It is sometimes said that these cases are an exception to the rule that damages in tort are compensatory. But this is not necessarily so. It depends how widely one defines the ‘loss’ which the plaintiff has suffered. As the Earl of Halsbury L.C. pointed out in Mediana (Owners of Steamship) v. Comet (Owners of Lightship) [1900] A.C. 113, 117, it is no answer for a wrongdoer who has deprived the plaintiff of his chair to point out that he does not usually sit in it or that he has plenty of other chairs in the room.
In Stoke-on-Trent City Council v. W. & J. Wass Ltd. [1988] 1 W.L.R. 1406 Nicholls L.J. called the underlying principle in these cases the ‘user principle.’ The plaintiff may not have suffered any actual loss by being deprived of the use of his property. But under the user principle he is entitled to recover a reasonable rent for the wrongful use of his property by the trespasser. Similarly, the trespasser may not have derived any actual benefit from the use of the property. But under the user principle he is obliged to pay a reasonable rent for the use which he has enjoyed. The principle need not be characterised as exclusively compensatory, or exclusively restitutionary; it combines elements of both.
…………
…… If a man hires a concrete mixer, he must pay the daily hire, even though he may not in the event have been able to use the mixer because of rain. So also must a trespasser who takes the mixer without the owner's consent. He must pay the going rate, even though in the event he has derived no benefit from the use of the mixer. It makes no difference whether the trespasser is a professional builder or a do-it-yourself enthusiast.”
97.In the light of this authority, I do not think the matters set out in paragraph 95 above would have any adverse impact on Ps’ claim for damages. The parties have agreed that the market rental value of Flat 10C as at 1 December 2013 was HK$15,600 per month. Since this is an agreed fact, Ps would be entitled to use this figure as a basis to quantify the amount of damages. Members of the Temple have resolved that Flat 10C should be taken up by P2. These damages should be paid to P2. In my view, Ds are jointly and liable to pay mesne profits to P2 in the way as set out below:
(1) For the period from 5 November 2013 to the date on which the order pursuant to this judgment is made absolute (“the relevant date”)[20], in the sum of HK$15,600 per month. The mesne profit for the period from the 5th day of a calendar month to the 4th day of the next calendar month should be due on the former date. There be interest on these mesne profits at 1% above the best lending rate of HSBC from the respective due dates of these mesne profits until the relevant date, and thereafter at the judgment rate until full payment of the same.
(2) For the period from the date immediately after the relevant date until the delivery of vacant possession of Flat 10C by Ds to P2, the mesne profit should be HK$15,600 per month. The due date of the mesne profit for each month should be same as the above. The interest on these profits should be at the judgment rate from the respective due dates of these mesne profits until full payment of the same.
98.Ds’ counterclaim must be dismissed.
99.The aforesaid would have sufficiently answered the agreed issues in dispute set out in paragraph 21 above.
DISPOSITION
100.For the reasons above, save and except Ps’ claim for damages, I am with Ps and would give judgment to them accordingly.
101.Subject to paragraph 102 below, I make the following order:
(1) there be a declaration that at all material times D1 & D2 held and still hold their legal title of and in Flat 10C as bare trustees for and on behalf of the Temple, which is a public charitable trust;
(2) D1 and D2 shall deliver vacant possession of Flat 10C to P2 within 14 days;
(3) D1 and D2 shall execute an assignment and all necessary documents (if any) at their own costs to transfer their legal title in Flat 10C to P2 within 14 days, failing which Ms Ng Yee Man Michelle, the sole proprietor of the law firm representing Ps in these proceedings, be authorized to execute the assignment and all necessary documents (if any) on behalf of D1 and D2 to transfer the legal title to P2, and the conveyancing costs be borne by D1 and D2 jointly and severally;
(4) D1 and D2 be ordered to pay the aforesaid mesne profits and interests to P2 jointly and severally;
(5) there be liberty to apply for the purpose of carrying out this order; and
(6) D1 and D2’s counterclaim be dismissed.
102.I am aware that the SJ is the protector of all public charities. The order set out in the paragraph above shall not be sealed and would not take effect until the expiration of a 14-day period after the handing down of this judgment or a further order made by the Court. The SJ may provide written submissions to this Court and to the other parties within the 14-day period, in which the SJ may comment on the order set out above. If there is no submission from the SJ, or the SJ has no comment on the order set out above, the order would be sealed and would take effect after the expiration of the 14-day period or at any other time as fixed by this Court.
103.Costs should follow the event. There be a costs order nisi that costs of these proceedings (including all costs reserved, if any) be paid by D1 and D2 jointly and severally to Ps, with a certificate for 2 counsel, to be taxed if not agreed. Costs of D3 in these proceedings (including all costs reserved, if any) be borne by D1 and D2 jointly and severally, to be taxed if not agreed. Unless an application has been made to vary this costs order, the order shall become absolute 14 days after the handing down of this judgment.
104.I direct that this judgment be interpreted to D1 and D2 by a court interpreter at a mutually convenient time at a place inside the High Court Building.
105.Lastly, it remains for me to thank all counsel (including the counsel previously representing Ds) for the assistance rendered to the Court.
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( MK Liu ) |
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Deputy High Court Judge |
Mr K M Chong and Mr K W Lai, instructed by Y. M. Ng & Co. for the 1st and 2nd Plaintiffs.
Mr Matthew Ngai and Ms Mandy Chan, instructed by S. T. Poon & Wong, for the 1st and 2nd Defendants for the hearing on 1, 2, 5 & 6 August 2019.
The 1st Defendant appeared in person for the hearing on 8, 12, 13 & 23 August 2019.
The 2nd Defendant appeared in person for the hearing on 8, 12, 13 & 23 August 2019.
The 3rd Defendant excused from the hearing.
[1] Amended Defence, §6(6).
[2] [2012] 1 AC 776
[3] (2013) 16 HKCFAR 663.
[4] [2009] 2 HKLRD 455.
[5] [2007] 4 HKC 314, [24].
[6] [24] – [26].
[7] [46].
[8] [72] – [73], [75].
[9] [60].
[10] [61].
[11] [63], [90].
[12] HCA 3523/2002, 13 August 2005.
[13] HCA 1734/2009, 8 April 2014.
[14] HK$30,000 / HK$930,000 = 3.2%.
[15] HK$100,000 / HK$1,460,000 = 6.8%.
[16] HK$70,000 / HK$1,460,000 = 4.8%.
[17] The last 3 digits of the account number is “192”.
[18] The last 3 digits of the account number is “401”.
[19] [1995] 1 WLR 713, 717F-718C, 718F-G.
[20] See [102] below.
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