Pioneer Earn Ltd v. Tsuen Wan Tung Po Tor Monastery Ltd and Another

HCMP 1583/2018

[2019] HKCFI 2260

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1583 OF 2018

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REASONS FOR DECISION

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1.The plaintiff (“P”) has since 24 May 2017 been the registered owner of two landed properties known as Flat 5A and Flat 5B of No 127 Caine Road (the “Flat 5A”, “Flat 5B”, and collectively “Properties”). P is concerned, as described by Mr Vincent Law (solicitor advocate who together with counsel Ms Julia Au appeared for P), that there is a “theoretical risk” that an earlier conveyance which forms part of the chain of its title to the Properties was problematic. By Originating Summons dated 2 October 2018 (subsequently amended on 24 May 2019), its seeks to clear that theoretical risk. In particular, it seeks:

“ 1. A Declaration that all legal and equitable title, estate, rights and interests in the [Properties]:

(a) have been properly vested in the 1^st Defendant on 27 February 1986 by the assignment dated 27 February 1986 and registered in the Land Registry by Memorial No. UB2999367 from Sik Liu Chi (釋了知) and Sik Liu Koon (釋了觀) as joint assignors and trustees of the members of Tsuen Wan Tung Po Tor Monastery (荃灣東普陀講寺) also known as Tung Po Tor Temple (東普陀寺) and the 1^st Defendant as the assignee; and

(b) are now wholly vested in [P] through subsequent assignments.

2.  A Declaration that the 2^nd Defendant does not hold, possess, own, retain or otherwise control any subsisting title, estate, rights and interests, whether legal or equitable, individually, severally or collectively, in Flat 5A or Flat 5B.”   

2.At the end of the hearing on 4 September 2019, I refused to grant the Order as sought.  I was however prepared to grant, which I did grant, a more specific Order focusing upon the assignment of 27 February 1986.  I stated that I will give my reasons, which I now do.

Background facts

3.On 28 March 1967, the first owner of the Properties (by the name of Hui Ngai Kit) assigned the Properties to Sik Liu Yat, Sik Liu Chi and Sik Lui[1] Koon (the “Monk Trustees”).  In the relevant assignment (the “1967 Assignment”), the assignees were described as “all c/o Tung Po Tor Temple, Tsuen Wan New Territories in the Colony of Hong Kong Monks”.  They were assigned the Properties as “joint tenants”.

4.On that same day, the Monk Trustees made a Declaration of Trust (the “Declaration of Trust”).  They were similarly described therein as “all c/o Tung Po Tor Temple, Tsuen Wan New Territories in the Colony of Hong Kong Monks”.  In the recital, it was recorded that:

“ …the above mentioned purchase money so paid by us as aforesaid was in fact the moneys belonging to and provided by the Members of TUNG PO TOR TEMPLE (東普陀寺) of Tsuen Wan New Territories aforesaid (hereinafter referred to as ‘the said Beneficiaries’).”

The Monk Trustees then declared that:

“ we stand possessed of the said [Properties] UPON TRUST for the said Beneficiaries as Joint Tenants AND We hereby agree to assign or convey or otherwise dispose of the said premises at the request and cost of the said Beneficiaries to such person or persons at such time or times and in such manner as the said Beneficiaries shall direct or appoint.”

5.On 20 November 1974, one of the Monk Trustees Sik Liu Yat passed away.

6.At the time when the Properties were acquired and the Declaration of Trust made, and for some time thereafter, Tung Po Tor Temple was and remained an unincorporated body.  That changed on 21 November 1980 when the 1^st defendant (“D1”) was incorporated as a company limited by guarantee.  Sik Liu Chi (釋了知) and Sik Liu[2] Koon (釋了觀) (the then 2 surviving Monk Trustees) were 2 of the 7 initial subscribers listed in the Memorandum and Articles of Association.  One of D1’s objects, according to its Memorandum of Association, is:

“ To acquire and take over all or any part of the assets and liabilities of the present unincorporated body known as “TSUEN WAN TUNG PO TOR MONASTERY (荃灣東普陀講寺).”

7.On 27 February 1986, Sik Liu Chi (釋了知) and Sik Liu[3] Koon (釋了觀) as joint assignor executed an assignment (the “1986 Assignment”) and assigned the Properties in favor of D1 as the assignee.  Sik Liu Chi and Sik Liu Koon were described therein as “both of Tung Po Tor Temple, Lo Wai, Tsuen Wan, New Territories, Hong Kong, Buddhist Monks”.  Consideration was stated to be nil.

8.I refer to the recitals in the 1986 Assignment:

(a)  §1 thereof recited the 1967 Assignment;

(b)  §2 thereof recited the Declaration of Trust, and in particular that:

“ …the [Monk Trustees] jointly and severally declared that they stood possessed of the [Properties] upon trust for the members of TUNG PO TOR TEMPLE (東普陀寺) of Tsuen Wan, New Territories, Hong Kong (“the Members”)…”

(c)  §3 recited the demise of Sik Liu Yat;

(d)  §4, that:

“ On the 21 November 1980 the Members, having decided to incorporate the said Tung Po Tor Temple of Tsuen Wan under the Companies Ordinance, incorporated [D1] known as the Assignee.”

(e)  §5, that:

“ The Assignee now requests the Assignor to assign the [Properties] to the Assignee which the Assignor has agreed to do so.”

9.Subsequent to the 1986 Assignment, and after a number of intervening assignments (the “Intervening Assignments”), P became (and has remained) the registered owner of the Properties on (and since) 24 May 2017.  In addition to that, and according to the affirmation of Ho Lok Chiu dated 28 September 2018 filed in support of the present application, P currently owns all the units of the building of which the Properties form part (the “Building”) except Units A2A, 2A1 and A2B, and intends to become the sole owner with a view to demolishing the Building in due course for redevelopment.

10.P is concerned that there is “a theoretic risk”[4] that the 1986 Assignment was problematic.  The main reasons are that (i) there is presently no record showing that in 1980, all members of Tung Po Tor Temple consented to the incorporation of D1 and the transfer to D1 of all assets held on their behalf (or the unincorporated body); and (2) whilst the Memorandum and Articles of Association of D1 contains a list of the initial subscribers, it is not certain that that list is a full list of all members, and there is currently no record of the identities of all members back then.

11.As the 1986 Assignment forms part of the chain of its title to the Properties, and given its intention of redeveloping the Building, P initiated the present action in the hope of clearing its title.  I have recited above the Orders that P seeks to obtain.

Service

12.On 23 May 2019, Deputy Judge MK Liu upon P’s application made an Order permitting substituted service of the Originating Summons and documents subsequent thereto.  I have considered the affirmations of Hon Kin Fai and Tsang Chi Kong dated 3 June 2019 and 10 June 2019.  I am satisfied that service of the Originating Summons has been properly effected.

13.On 7 August 2019, Messrs Y C Lee, Pang & Kwok (“YCLP&K”) wrote to Messrs Mayer Brown, solicitors for P.  In that letter, and with reference to the Notice of Appointment to this Originating Summons, YCLP&K stated that:

“ As solicitors for [D1] and Sik Tak Chi of [D2], we confirm that our clients have no objection to your application referred to in the Notice. In order to save costs of the parties concerned, we propose that our attendance at the upcoming hearing be excused.”

Sik Tak Chi’s evidence

14.In that letter of YCLP&K, Sik Tak Chi was mentioned.  She has filed an affirmation in support of P’s application.  It should be noted that at the time when she filed her affirmation (22 October 2018), the Originating Summons had not been amended, and D2 was described as “Tsuen Wan Tung Po Tor Monastery (荃灣東普陀講寺), also known as Tung Po Tor Temple (東普陀寺)”.  Her evidence has to be understood in that light.  She said therein that:

(a)  she started to be a member of D2 in 1960, became a director of D1 in 1986, and has been a permanent director of D1 since 1989 (§3);

(b)  D1 was incorporated in 1980.  It merged with D2.  Basically members of D1 were members of D2 (§4);

(c)  the lists of members of D1 and D2 have been lost (§4);

(d)  as she was junior at the time, she was not one of the 7 initial subscribers.  But she was present during the first director meeting of D1, and was responsible for keeping the minutes (§4);

(e)  all 7 initial subscribers named in the Memorandum have passed away.  She is the only surviving member of D2 (§4);

(f)  members of D2 voted for the incorporation of D1, and the transfer of all properties to it.  It was a unanimous decision.  But the records and the resolutions of the meeting have been lost (§5);

(g)  she referred to the Declaration of Trusts and in effect confirmed its truth (§6);

(h)  “Members of Tung Po Tor Temple (東普陀寺) of Tsuen Wan New Territories”[5], “Tsuen Wan Tung Po Tor Monastery (荃灣東普陀講寺)”[6] and “members of Tung Po Tor Temple (東普陀寺) of Tsuen Wan, New Territories, Hong Kong”[7] refer to the same unincorporated body and members (§7); and

(i)  the purpose of incorporating D2 into D1 was to wholly take over the position and function of D2, and to take over all the properties of D2 (including the Properties).  To her knowledge, D2 no longer exists, and has no members.  All of D2’s previous members became D1’s members upon its incorporation (§9).

Discussion

15.The service of the Originating Summons has been properly effected.  That included advertisement of the same and affixing a copy at the public noticeboard at the foot of the stone stairs starting at the main entrance of Tung Po Tor Monastery.  Except Sik Tak Chi who described herself as a member before the incorporation of D1, no one has come forward.

16.Since the date of the 1967 Assignment, and for more than 50 years, no one had come forward disputing the title of the Monk Trustees or D1.

17.Sik Tak Chi described herself as the only surviving member of the unincorporated body before the incorporation of D1.  There is no evidence to the contrary.

18.Sik Tak Chi has given direct evidence on the incorporation of D1 and the transfer of all properties used to be held by the unincorporated body to D1.  Again there is no evidence to the contrary.

19.I note that the Courts have in the past and in similar circumstances made similar Declarations clearing certain perceived title problems: see Chap Yick Clansman’s Association Ltd v Mok Fai [1997] HKLR 580, per Le Pichon J and Hong Kong and Kowloon Tailoring Contractors Association Limited v Lau Choi Ming, HCMP 1811/2008 (unrep, 23 December 2008, per Sakhrani J).

20.I however come back to the term of the Order sought in the Amended Originating Summons.  In my view, its terms as drafted is far too wide, and are much wider than the evidence justifies.  On the evidence, I am in no position to give any Declaration in relation to the 1967 Assignment or all of the Intervening Assignments after the 1986 Assignment.  If I were to grant the Order sought (and in particular §1(b)), I would need to clear every link along P’s chain of title to the Properties.  I cannot.  It is not that I am saying positively that there are other problems.  It is just that there is no evidence before me for this Court to grant such a wide order.

21.I bear in mind that this Court is requested to make a declaration on title.  This Court ought to scrutinize the application and evidence in support most carefully, and ought not grant any order which is wider than absolutely necessary.

22.In the end, I grant an amended version of the Order, focusing only upon the 1986 Assignment, as follows:   

“ 1. A Declaration that all legal and equitable title, estate, rights and interests which Sik Liu Chi (釋了知) and Sik Liu[8] Koon (釋了觀) had as joint tenants under the assignment dated 28 March 1967 and registered in the Land Registry by Memorial No.575852 and as surviving trustees of the members of Tsuen Wan Tung Po Tor Monastery (荃灣東普陀講寺) also known as Tung Po Tor Temple (東普陀寺) in the [Properties] was properly vested in the 1^st Defendant on 27 February 1986 by the assignment dated 27 February 1986 and registered in the Land Registry by Memorial No. UB2999367 between Sik Liu Chi (釋了知) and Sik Liu[9] Koon (釋了觀) as joint assignors and trustees of the members of Tsuen Wan Tung Po Tor Monastery (荃灣東普陀講寺) also known as Tung Po Tor Temple (東普陀寺) and the 1^st Defendant as the assignee;

2.  A Declaration that the 2^nd Defendant does not hold, possess, own, retain or otherwise control any subsisting title, estate, rights and interests, whether legal or equitable, individually, severally or collectively, in Flat 5A or Flat 5B.”

23.I make no order as to costs.

Mr Vincent Law (Solicitor Advocate) and Ms Julia Au, instructed by Mayer Brown, for the Plaintiff

YC Lee, Pang & Kwok, for the 1^st Defendant, attendance excused

The 2^nd Defendant was not represented and did not appear