Lam Yui Ming As a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (Cap 97) v. Lam Yui Pun As a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (Cap 97) and Others

HCMP 250/2017

[2020] HKCFI 2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 250 OF 2017

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JUDGMENT

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INTRODUCTION

1.By an originating summons dated 1 February 2017 which was re-amended on 4 August 2020 (the “Originating Summons”), Lam Yui Ming (林裔明) (the “Applicant”) as a manager of Lam Lok Yee Tso (林樂義祖) (the “Tso”) registered under section 15 of the New Territories Ordinance, Cap. 97 (“the Ordinance”) seeks the determination of the Court on four specific questions under Order 85, rule 2 of the Rules of the High Court, Cap.4A.

2.The Applicant is one of the two managers of the Tso. It is established law that managers of a Tso are to be treated as trustees and vested with the legal estate of the Tso’s land. (See Tang Kai-chung v Tang Chik-shang [1970] HKLR 276 at 304 per Mills-Owens J.)

3.The Applicant submitted that he, as manager of the Tso, has to make the present application because one sub-stirpe of the Tso, the安邦 sub-stirpe which is represented by the 2^nd Respondents, challenges the legality of the distribution of both sales proceeds and rental surplus or profits to members of the Tso. As such, pursuant to Order 85, rule 2 of the Rules of the High Court, Cap.4A, the Applicant took out the present proceedings.  

4.There are a number of disputes in the present proceedings, but it is fair to say that the main dispute in these proceedings relates to the distribution of the sales proceeds of the Tso’s lands in 2016.

5.It is not disputed that any action arising from a dispute over the rights and interests of Tsos and Tongs is considered akin to an administration action under Order 85, rule 2 of the Rules of the High Court, Cap.4A as they are proceedings in which the parties are seeking guidance from the court as to how a trust should be administered. (See Tang Chun Kit v Tang Lo Ping, HCMP 5529/2000, unreported, 9 September 2005, at §§13 and 16, per Lam J. (as he then was) and Re Man Sham Chung Wui [2011] 1 HKLRD 427 at 431-432, §§12-14, per Tang ACJHC (as he then was)). Mr Mui for the 2^nd Respondents, who are the real contenders in these proceedings agreed that it is appropriate for the Applicant to commence these proceedings under Order 85, rule 2 of the Rules of the High Court, Cap.4A.

BACKGROUND

Parties

6.A simplified family tree of the Tso as annexed to the opening submissions of the 2^nd Respondents is appended to this judgment as Appendix 1. It can be seen that the Applicant is one of the two managers of the Tso and also a member of the 建邦 sub-stirpe, i.e., the 3^rd Respondent.

7.The 1^st Respondent, Lam Yui Pun (林睿彬), is the other manager of the Tso. He was appointed on 15 January 1991. As a manager of the Tso, the 1^st Respondent is a necessary party to these proceedings (see Order 85, rule 3(1) of the Rules of the High Court, Cap.4A).

8.The 2^nd Respondents are Lam Wing Kwong (林榮光) and Lam Siu Hung (林少雄), in their capacity as managers of Lam Hung Sui (or Sou) Tso (林雄緒祖) registered under section 15 of the Ordinance.

9.By an order made on 18 April 2018, pursuant to Order 15, rule 13, Rules of the High Court, Cap.4A, Madam Justice Lisa Wong ordered that the 2^nd Respondents be appointed to represent all male descendants of 安邦sub-stirpe of 翹萬stirpe of the Tso including those yet to be born, so that all orders, directions, decisions and judgments in these proceedings shall be binding on all those persons.

10.The 3^rd Respondent, Lam Yui Cheung (林裔祥), is a member and representative of the male descendants (including those yet to be born) of the 建邦 sub-stirpe of the 翹萬stirpe. The 3^rd Respondent is the eldest brother of the Applicant.

11.By an order dated 17 March 2017, Master H. Au-Yeung ordered that the 3^rd Respondent be appointed to represent all male descendants (including those yet to be born except the Applicant) of the 建邦sub-stirpe of the 翹萬 stirpe, so that all orders, directions, decisions and judgments in these proceedings shall be binding on all these persons.

12.Lam Lok Yee 林樂義, the focal ancestor of the Tso, belonged to the 7^th generation of the Lam clan which settled in寶安縣石步 (i.e. Yuen Long nowadays) long time ago.

13.At present, only four sub-stirpes are left with male descendants in the Tso:-

(1) 建邦 sub-stirpe of翹萬stirpe, namely, the 3^rd Respondent;

(2) 安邦sub-stirpe of 翹萬stirpe, namely, the 2^nd Respondents;

(3) 緒敬sub-stirpe of 雲萬stirpe, of which the 1^st Respondent is a member; and

(4) 渭安 sub-stirpe of 雲萬 stirpe.

14.There is no dispute that 雲萬stirpe and 翹萬stirpe are not legal entities and there are no bank accounts opened in the name of 雲萬stirpe and 翹萬stirpe.

15.建邦 sub-stirpe and 安邦 sub-stirpe are the only surviving sub-stirpes in 翹萬 stirpe.

16.Presently, there are a total of 111 male descendants of the Tso of which 47 are members of the 安邦sub-stirpe.

Material Facts

17.The Tso owns various lots of land in Yuen Long and Tuen Mun. Most of the land lots are rented out. The total rental income in 2014 and 2015 were HK$460,000 and HK$700,000 respectively. By the end of 2015, the Tso had a net surplus of HK$2,331,762.10.

18.The income generated from the lands is used for, inter alia, ancestral worship. It is common ground that since the 1980s when the Tso started to receive meaningful rental income, with the unanimous consent of all members of the Tso, both rental surplus or profits and proceeds of sale of Tso land were distributed to all members.

19.It is also not disputed that prior to the 1980s, the Tso distributed its rental profits and sale proceeds on a per stirpes basis. As there are only four sub-stirpes of the Tso, the said rental income and sale proceeds were divided and distributed amongst the four sub-stirpes. In the 1980s, before the participation of the current managers of the Tso, there was a dispute as to the proper method of distribution. As a result of such dispute, the heads of the four sub-stirpes discussed and agreed that all the proceeds of sale and rental surplus or profits should be distributed half per capita (分丁) and half per stirpes (家錢) amongst members of the Tso and, in respect of the per stirpes distribution (a) each and every surviving stirpe is entitled to an equal share and (b) within a surviving stirpe, each and every sub-stirpe is entitled to an equal share, and so on (the “Formula”).

20.It is important to note that in respect of the per stirpes distribution, money were directly paid to nominated individuals of the four sub-stirpes.

21.The rental surplus or profits of the Tso have always been distributed according to the Formula. Since the 1980s, there were about 20 distributions of rental profits and the Formula was adopted every time. The Applicant, the 1^st Respondent and the 3^rd Respondent’s evidence which I accept as accurate is that the Formula was applied automatically without the need to apply their mind as to how the rental surplus or profits should be distributed. Once a decision as to distribution is made unanimously, no question would be asked as to the mode of the distribution. There is no need to further consult members of the Tso on how to distribute the sale proceeds and/or rental surplus or profits. The Formula is tantamount to unwritten rules of the Tso.

22.I note that Mr Lam Wing Kwong (林榮光) also testified that insofar as the distribution of rental surplus or profits is concerned, the Formula is a custom of the Tso. He felt obliged to follow the Formula and has no dispute that the Formula should be applied. No question needs to be asked about the application of the Formula.

23.There was only once, in April 2016, when after the rental surplus or profits were resolved to be distributed and the Formula was applied, the treasurer of the Tso, 林海權, a member of the 安邦sub-stirpe, informed the Applicant for the first time that, since the ancestor of the 建邦sub-stirpe of the翹萬stirpe had left the Tso’s village long ago, 建邦sub-stirpe shall not be entitled to the per stirpes distribution of the Tso’s rental surplus in 2015.

24.Mr Lam Wing Kwong (林榮光), during his oral testimony, told this Court that that was only the personal views of林海權and as such does not represent the views of the 安邦sub-stirpe. His view is that the rental surplus or profits should be distributed according to the Formula and both建邦sub-stirpe and安邦sub-stirpe should be able to receive their per stirpes distribution of the rental surplus or profits. 林海權 did not come forward to give evidence in this trial.

25.As far as sale of lands is concerned, the Tso sold its lands in 1993 and 1998. Again, it is common ground that with unanimous consent of members of the Tso, the Formula was applied for the distribution of the sale proceeds in 1993 and 1998. No objection was ever raised on the application of the Formula. It has been applied for at least the past 30 to 40 years. 

26.In early 2016, the Tso sold some of its lands. Sale proceeds in the sum of HK$60,237,746 was received and deposited into the Tso’s bank account. Such sale proceeds did not include the balance of the purchase price of the land Lot No. D.D. 130, as the Applicant’s status as manager of the Tso in respect of such land lot in Tuen Mun had not been approved then and hence the transaction could not be completed. This remaining transaction was eventually completed in December 2017.

27.A meeting of the Tso was called and held on 23 July 2016. It is the Applicant’s case that during the meeting, it was unanimously resolved, amongst other things, that a sum of HK$60,000,000 being part of the proceeds of the sale should be distributed amongst members according to the Formula. That is, the said sum of HK$60,000,000 should be divided into two equal parts of HK$30,000,000, one part for per capita distribution and the other part for per stirpes distribution.

28.After setting aside HK$2,000,000 odd for ancestral worship, maintenance of ancestral temple and the Tso’s management and administration, the Applicant and the 1^st Respondent, as managers of the Tso, announced that the sale proceeds in the sum of HK$60,000,000 would be distributed. The Applicant and the 1^st Respondent then went on to apply the Formula to the sum and decided that HK$30,000,000 would be distributed per capita and HK$30,000,000 would be distributed per stirpes.

29.I should also mention that prior to the meeting, 林海權 and some members of the 安邦sub-stirpe also proposed to divide the sale proceeds into 5 equal shares among翹萬 stirpe, 安邦 sub-stirpe, 施邦 sub-stirpe, 寧邦 sub-stirpe and 建邦 sub-stirpe, notwithstanding that there were no living descendants for施邦 sub-stirpe and寧邦 sub-stirpe. However, such proposal was never agreed to.

30.During the meeting, 林海權 and some members of the 安邦sub-stirpe proposed that 翹萬stirpe’s per stirpes distribution of the sale proceeds be deposited into the bank account of the Lam Hung Sui (or Sou) Tso (林雄緒祖). It is not surprising that members of the建邦sub-stirpe disagreed .     

31.Due to the above objection from the安邦sub-stirpe, the Applicant and the 1^st Respondent have not yet distributed the sum of HK$15,000,000 to the建邦sub-stirpe and the安邦sub-stirpe. The said sum now sits in the bank account of the Tso.

32.The 2^nd Respondents’ case is that :-

(1) During the Tso’s meeting on 23 July 2016, the Applicant proposed the adoption of the Formula for distribution of sale proceeds, if approved by all members. 

(2) Members of Lam Hung Sui (or Sou) Tso (林雄緒祖) who attended the meeting did not object to using HK$30,000,000 for per capita distribution, or the distribution of HK$15,000,000 to雲萬stirpe, but they opposed further distribution of the sale proceeds within翹萬 stirpe.  Hence, no consensus could be reached between the 安邦sub-stirpe and the 建邦 sub-stirpe. As a matter of Chinese customary law, so long as one member, for whatever reason, objected to the distribution, then no distribution should be made.

(3) Hence, the sum of HK$15,000,000 should remain in the Tso and should not be distributed between 安邦sub-stirpe and 建邦 sub-stirpe.

33.On 1 August 2016, half of the sale proceeds in the sum of HK$30,000,000 were distributed to each member of the Tso on a per capita basis. Each member received HK$270,270. No one raised any objection to this distribution. Indeed, all members accept this distribution and do not seek to disturb or reverse this distribution.

34.The Tso also distributed HK$7,500,000 from its bank account to the 1^st Respondent as the representative and a member of the 渭安sub-stirpe of 雲萬stirpe for the 渭安sub-stirpe’s per stirpes entitlement.

35.The Tso further made three transfers in the total sum of HK$7,500,000 from its bank account to certain members of the 緒敬sub-stirpe of雲萬stirpe for the 緒敬sub-stirpe’s per stirpes entitlement.

36.Again, there was and is no objection or challenge to such distributions.

37.The Applicant attempted to resolve the disputes first, by inter alia, obtaining a counsel opinion, before proceeding to distribute the sum of HK$15,000,000 between the 安邦sub-stirpe and the 建邦 sub-stirpe. 

38.On 3 September 2016, the managers of the Tso received a letter signed by 48 members of Lam Hung Sui (or Sou) Tso (林雄緒祖), accusing them of wrongful distribution of sale proceeds to members of the 建邦 sub-stirpe, and threatening to hold the managers responsible if any proceeds were to be distributed to members of the 建邦 sub-stirpe in the future. The Applicant and the 1^st Respondent then decided to convene another Tso’s meeting to resolve the dispute.

39.A Tso meeting was then held on 24 September 2016, members of the 安邦 sub-stirpe reiterated their objection to the distribution and demanded that the per stirpes entitlement of 翹萬 stirpe be deposited in a joint bank account of the 安邦 sub-stirpe and the 建邦 sub-stirpe.  Members of the 建邦 sub-stirpe strongly disagreed with the views of the 安邦 sub-stirpe. 

40.On or about 28 December 2016, the Applicant received a letter dated 22 December 2016 from the 2^nd Respondents’ solicitors, on behalf of Lam Hung Sui (or Sou) Tso (林雄緒祖) to the Applicant and the 1^st Respondent as managers of the Tso.  

41.It is important to note that the stance of the 2^nd Respondents then was if the Applicant and the 1^st Respondent failed to pay the sum of HK$15,000,000 to翹萬 stirpe within 14 days, they would lodge a complaint to the Tso Registry of Yuen Long District for adjudication, as well as commence court proceedings for disqualification and replacement of the Applicant and the 1^st Respondent as managers for their alleged gross and wilful negligence and breach of fiduciary duty, and sue them for the loss and damage suffered. It should be noted that it is not disputed that翹萬 stirpe has no bank account and is not a legal entity.

42.As a result, the Applicant took out these proceedings.

43.In the meantime, the sale of the land lots in Tuen Mun was eventually completed on 18 December 2017, and the Tso received the balance of the purchase price in the sum of HK$11,390,074.00.  This balance was not part of the sale proceeds resolved to be distributed at the Tso’s meeting on 23 July 2016.  The intention is that the Tso will build 4 village houses and collect rental income. There is no dispute in relation to this part of the Tso’s assets.

ISSUES

44.Four specific questions are set out in the Originating Summons as follows:

“Question 1 –

(1) Whether the ancestors of the “建邦” sub-stirpe of the “翹萬” stirpe has left the settlement of the Tso a long time ago.

(2) Whether it is the custom of the Tso that once a member has moved out of the settlement, he and his stirpe cease to be members of the Tso and have no more interest in the assets of the Tso, notwithstanding that his lineal descendants subsequently return to live at the settlement.

(3) Whether the said custom in sub-paragraph (2) hereof is compatible with Chinese law and custom.

(4) Whether the Applicant Lam Yui Ming (林裔明), Lam Tsz Wing (林子榮), Lam Yui Cheung (林裔祥), Lam Yui Fu (林裔富), Lam Hoi To (林海淘), Lam Wing Ho (林泳豪), Lam Horris (林灝為), Lam Ho Fai (林灝暉), Lam Ting Chun (林渟臻) and Lam Chun Him (林晉謙) (collectively the “Questioned Persons”) are members of the “翹萬” stirpe, and hence members of the Tso and entitled to the distribution of the Tso’s proceeds of sale and rental surplus/income.

Question 2 –

(1) Whether the past practice of distribution of the Tso’s proceeds of sale and rental surplus/income, namely:-

“Proceeds of sale and rental surplus/income are distributed half per capita and half per stirpes among members of the Tso and, in respect of the per stirpes distribution:-

(i) each and every surviving stirpe is entitled to an equal share;

(ii) within a surviving stirpe, each and every sub-stirpe is entitled to an equal share, and so on” (“Formula”),

amounts to a custom of the Tso.

(2) If so, whether the custom of distribution of the Tso’s proceeds according to the Formula is compatible with Chinese law and custom.

Question 3 – If the answer to Question 2(1) or 2(2) is “No”, how can/should the Tso’s proceeds of sale and rental surplus/income be applied in a manner compatible with Chinese law and custom?

Question 4 –

If the Tso’s proceeds of sale and rental surplus/income can be applied by distribution in a manner compatible with Chinese law and custom:

(1) Whether the per stirpes entitlement of the “翹萬” stirpes from the sale of the Tso’s land in 2016 in the sum of HK$15 million should be distributed;

(2) If so, how it should be distributed;

(3) If not, how it should be otherwise applied.”

Question 1 

45.As it turns out, this Court needs not answer this question as Mr Mui for the 2^nd Respondents in his opening submissions stated that the 2^nd Respondents no longer take the view that, since the ancestor of the 建邦sub-stirpe had left the village long ago, the 建邦sub-stirpe shall not be entitled to the per stirpes distribution of the Tso’s rental surplus or profits in 2015.  Mr Mui for the 2^nd Respondents submitted that this was not the stance of the 2^nd Respondents, but only some members of the 安邦sub-stirpe who no longer persist in maintaining this view.

46.At the oral closing, Mr Mui for the 2^nd Respondents also confirmed that the 2^nd Respondents have no objection to the making of the declaration that the Applicant seeks on this specific question.

47.In order to put any potential disputes to a rest, on the basis of the evidence, including Professor Chang’s expert evidence, before this Court which have not been challenged by any parties, this Court hereby declares that Lam Yui Ming (林裔明), Lam Tsz Wing (林子榮), Lam Yui Cheung (林裔祥), Lam Yui Fu (林裔富), Lam Hoi To (林海淘), Lam Wing Ho (林泳豪), Lam Horris (林灝為), Lam Ho Fai (林灝暉), Lam Ting Chun (林渟臻) and Lam Chun Him (林晉謙) were and are members of Lam Lok Yee Tso (林樂義祖) and descendants of林建邦.

Questions 2 and 3 

48.In relation to the sale proceeds, in view of the evidence as unfolded during the trial, I am of the view that it is not necessary to answer the specific Chinese customary law issues as posed. If factually there was consensus on the application of the Formula to the distribution of the sum of HK$60,000,000 on 23 July 2016, then the Applicant can simply be directed to distribute the HK$15,000,000 between the建邦sub-stirpe and the安邦sub-stirpe according to the agreed resolution. The major dispute between the parties can then be resolved.

49.I am of the view that the most critical factual issue is what actually happened and what were resolved by the members during the meeting of the Tso on 23 July 2016.

50.Upon careful analysis of the evidence, I am of the firm view that it is clear that a consensus was reached amongst all members of the Tso that the sum of HK$60,000,000 should be distributed according to the Formula. As such the managers of the Tso should simply execute the resolution which was duly passed on 23 July 2016.

51.First, the Applicant, the 1^st Respondent and the 3^rd Respondent gave evidence to the effect that on 23 July 2016, the Formula was never ever discussed because all members agreed to make distribution of the sum of HK$60,000,000 as a matter of custom, the custom being that the distribution would be made according to the Formula. A resolution was unanimously passed to distribute the said sum of HK$60,000,000 according to the Formula. I accept that the Formula was not a subject matter of discussion.

52.Overall, I find the Applicant, the 1^st Respondent and the 3^rd Respondent to be honest and credible witnesses. I find their oral evidence on the key issues straightforward and believable. I have no hesitation in accepting their evidence as stating the correct facts. 

53.What is more pertinent is that Mr Lam Wing Kwong (林榮光) of the 2^nd Respondents, in his oral testimony, confirmed that the Formula was applied as a matter of custom. According to his understanding, it was then already resolved that 建邦 sub-stirpe and 安邦sub-stirpe would be allocated their respective per stirpes entitlement of HK$7,500,000 by the automatic application of the Formula as a custom of the Tso at the 23 July 2016 meeting. He further said that the 安邦sub-stirpe was and is not disputing the 建邦 sub-stirpe’s entitlement to receive their share of HK$7,500,000.

54.He agreed that the half per stirpes part of the Formula means equal distributions to 建邦, 安邦, 緒敬 and 渭安, and managers distributed such equal distributions to the 4 stirpes directly. The安邦sub-stirpe have no say on the建邦 sub-stirpe’s per stirpes entitlement to the sale proceeds and vice versa. What he said was that members of the安邦sub-stirpe proposed that the HK$15,000,000 should not be further distributed pending the 建邦 sub-stirpe’s contribution to a reasonable sum for 翹萬’s ancestral worship and tomb maintenance. The安邦sub-stirpe is not saying that the建邦 sub-stirpe is not entitled to the per stirpes distribution.

55.In fact, contrary to what he stated in paragraph 13 of his affirmation, Mr Lam Wing Kwong (林榮光) informed this Court that the 2^nd Respondents have no objections to the distribution of HK$7,500,000 to each of the建邦 sub-stirpe and the安邦sub-stirpe. It is not the 2^nd Respondents’ case that the entire sum of HK$15,000,000 should not be distributed but that a small sum should be reserved or contributed to ancestral worship and tomb maintenance. He said that as members of the建邦 sub-stirpe were not willing to discuss, the 2^nd Respondents objected to the distribution so as to apply some pressure to the members of the建邦 sub-stirpe. This is contrary to his evidence in affirmation that the whole sum of HK$15,000,000 should not be distributed but should be reserved for ancestral worship and tomb maintenance. Insofar as there are inconsistence between Mr Lam Wing Kwong’s (林榮光) oral testimony and his affirmation evidence, I accept Mr Tam’s submission that there is no reason for this Court not to prefer and accept his oral testimony under cross-examination. I find Mr Lam Wing Kwong’s (林榮光) oral evidence straightforward and believable but inconsistent with this affirmation evidence.

56.The 3^rd Respondent’s evidence is that the 建邦 sub-stirpe has no objection to contribute to tomb maintenance and ancestral worship. In fact, quotations were obtained but tomb maintenance has to wait because there were discussions that the government might build a road in front the tomb of 翹萬 and in any event the 2^nd Respondents have no right to threaten the Tso to stop the agreed distribution to the建邦 sub-stirpe.

57.I need not resolve who is right and who is wrong in relation to the issue of contribution to the ancestral worship and tomb maintenance of翹萬. I also bear in mind that翹萬 is not a Tso. What is crucial is that Mr Lam Wing Kwong (林榮光) confirmed to this Court that the 2^nd Respondents, in the 23 July 2016 meeting, did not and now do not take issue of the 建邦 sub-stirpe and 安邦sub-stirpe’s respective HK$7,500,000 per stirpes entitlement and he does not object that the HK$15,000,000 should be distributed to 翹萬.

58.In the circumstances, I am of the view that there can be no dispute that the Formula was applied and there was consensus during the 23 July 2016 meeting that the HK$60,000,000 were to be distributed according to the Formula.

59.Mr Mui for the 2^nd Respondents specifically confirmed that Mr Lam Wing Kwong (林榮光) gave evidence that after the 23 July 2016 meeting, the 建邦 sub-stirpe and the 安邦sub-stirpe were each entitled to receive HK$7,5000,000 respectively.  However, Mr Mui for the 2^nd Respondents submitted that this is only the personal opinion of Mr Lam Wing Kwong (林榮光) and does not bind the 2^nd Respondents. I have no hesitation in rejecting this submission. First, Mr Lam Wing Kwong (林榮光) gave evidence on behalf of the 2^nd Respondents in these proceedings. Secondly, pursuant to the order of Madam Justice Lisa Wong dated 18 April 2018, the 2^nd Respondents were appointed to represent all male descendants of the安邦sub-stirpe. Thirdly, Mr Mui did not in his re-examination clarify with Mr Lam Wing Kwong (林榮光) that the evidence given by him only represents his personal opinion and is not binding of the 2^nd Respondents.

60.In any event, Mr Lam Wing Kwong’s (林榮光) evidence is very clear to the Court. He fairly and frankly admitted that there was and is no challenge to the 建邦 sub-stirpe and the 安邦sub-stirpe’s entitlement to HK$7,500,000 each. It is just that before the actual physical distribution, members of the安邦sub-stirpe would like members of the建邦 sub-stirpe to contribute to the maintenance of the tomb of and ancestral worship of 翹萬. He confirmed to this Court that the dispute was and is very narrow. He also accepted during cross-examination that the amount that would be required for tomb maintenance and ancestral worship would be in the region of a relatively small sum of about HK$200,000. He stressed that he was not against distributing the HK$7,500,000 to the建邦 sub-stirpe just that they have to make contributions to tomb maintenance and ancestral worship of翹萬.

61.Hence, it is apparent to this Court that a consensus was actually reached on 23 July 2016 that the sum of HK$60 million would be distributed according to the Formula.

62.Mr Mui for the 2^nd Respondents raised three more arguments. First, it is submitted that what was agreed on 23 July 2016 was distribution to the翹萬 stripe and there was no further agreement on the distribution to the建邦 sub-stirpe and the 安邦sub-stirpe. I find this submission factually wrong. All witnesses including Mr Lam Wing Kwong (林榮光) who testified before this Court confirmed that the per stirpes distribution was always made amongst the four surviving sub-stripes. Although 翹萬 is a common ancestor of the 建邦 sub-stirpe and the 安邦sub-stirpe, and references would be made as to the distribution to the翹萬 stirpe and similarly for the雲萬stirpe, distributions were always made directly to the four sub-stirpes. For example, there is a receipt where reference was made to receipt on behalf of the雲萬stirpe, the fact is that the reference was made for identification purpose and there would not be payments to 雲萬 as such. Payments were made directly to nominated individuals of the four sub-stirpes. In fact, Mr Lam Wing Kwong’s (林榮光) confirmation that both the 建邦 sub-stirpe and the 安邦sub-stirpe were respectively entitled to HK$7,500,000 per stirpes distribution necessarily means that it was resolved that distributions were to be made according to the Formula.

63.It will be very different if prior to the consensus to apply the Formula, members of安邦sub-stirpe objected to the distribution based on the Formula unless members of the 建邦 sub-stirpe agreed to安邦sub-stirpe’s demand for contribution to tomb maintenance and ancestral worship of 翹萬 and such demand was refused. In that scenario, there would have been no consensus on distribution.

64.However, given that a consensus had been reached, it is then the duty of the managers of the Tso to execute the said consensus.  A member cannot say that because another member has owed him a certain sum of money, therefore he could direct the managers not to make the distribution unless the said alleged debt is paid or set-off from his share of the distribution first. Similarly, after having agreed to the distribution according to the Formula, members of the 安邦sub-stirpe can demand members of the建邦 sub-stirpe to contribute to the tomb maintenance and ancestral worship of翹萬, but they cannot demand the manager of the Tso to withhold the distribution pending the agreement of the members of the建邦 sub-stirpe.

65.Moreover, Mr Mui for the 2^nd Respondents also referred to paragraph 31 of the affirmation of the Applicant, and submitted that in fact there was a suggestion from the安邦sub-stirpe that the sale proceeds should be divided into five equal shares among翹萬 stirpe, 安邦 sub-stirpe, 施邦 sub-stirpe, 寧邦 sub-stirpe and 建邦 sub-stirpe. As a suggestion was made, therefore there was no consensus as to the distribution according to the Formula. I have no hesitation in rejecting this submission. The fact that suggestions were made does not mean that the members had not in fact resolved to distribute the sale proceeds according to the Formula eventually as confirmed by Mr Lam Wing Kwong (林榮光).

66.Furthermore, Mr Mui for the 2^nd Respondents submitted that there was inadequate notice for the meeting of 23 July 2016. He submitted that the Applicant has not produced the notice of meeting for the 23 July meeting and the 2^nd Respondents’ case is that no notice was given to the members that distribution of the sale proceeds would be discussed during the meeting on 23 July 2016.

67.I am of the view that the issue of notice is irrelevant given that a consensus was actually reached on 23 July 2016 and during the cross-examination, Mr Lam Wing Kwong (林榮光), on behalf of the 2^nd Respondents, did not challenge the application of the Formula so much so that he agreed that the 建邦 sub-stirpe and the 安邦sub-stirpe are entitled to receive their per capita distributions and HK$7,500,000 each as their respective per stirpes distribution.

68.In any event, I accept the evidence of the Applicant that he did physically make telephone calls and informed members of the安邦sub-stirpe that the issue of distribution of sale proceeds would be discussed during the meeting on 23 July 2016.

69.In fact, Mr Mui for the 2^nd Respondents relied on a suggestion of some members of the 安邦sub-stirpe that the sale proceeds should be divided into five equal shares among翹萬 stirpe, 安邦 sub-stirpe, 施邦 sub-stirpe, 寧邦 sub-stirpe and 建邦 sub-stirpe. The fact that such a suggestion could ever be made prior to the meeting must mean that members of the安邦sub-stirpe knew that the issue of the distribution of the sale proceeds would be discussed in the 23 July 2016 meeting.

70.Secondly, in terms of contemporaneous documents, paragraph 3 of the minutes of the 23 July 2016 meeting dated 25 July 2016 stated very clearly that the meeting resolved to adopt the method of distribution which has been used all along, meaning the Formula. The accuracy of this minutes was not challenged by the members of the Tso. There is also a notice of meeting dated 16 September 2016 under which the resolution to adopt the Formula was repeated. Again, there was no challenge to the accuracy of the said notice of meeting.

71.Thirdly, I also take into consideration the conduct of the parties subsequent to the 23 July 2016 meeting. There is no dispute that per capita distributions were made on 1 August 2016. Every member of the Tso received his per capita distribution including the 47 members of the安邦sub-stirpe. No one from the 安邦sub-stirpe is saying that such distribution is wrongful and hence should be reserved.

72.Similarly, HK$7.5 million were distributed to the渭安sub-stirpe and the 緒敬sub-stirpe of 雲萬stirpe respectively. Such per stirpes distribution could only have been made because there was a consensus that the per stirpes distribution should be made amongst the four sub-stirpes. No one including members of the 安邦sub-stirpe is objecting to the per stirpes distribution to the 渭安sub-stirpe and the 緒敬sub-stirpe. In the circumstances, I do not see how the 2^nd Respondents can credibly submit that there was no consensus reached on 23 July 2016 to distribute the sale proceeds according to the Formula.

73.On 22 December 2016, the 2^nd Respondents also instructed their solicitors to issue a letter to the managers of the Tso. In the said letter, the 2^nd Respondents took the position that 翹萬 should be entitled to the HK$15 million and complained that as a result of the failure of the managers to make such distribution, 翹萬 was unable to distribute the said sum to the 2^nd Respondents. As such, the 2^nd Respondents have suffered loss and damage. The 2^nd Respondents could only have demanded for such distribution because there had been a consensus that the Formula was indeed to be applied for the distribution of the sale proceeds.

74.Mr Tam for the Applicant also submitted that according to the Court of Final Appeal’s decision of Re Lau Wai Chau (2000) 3 HKCFAR 98 at 106G-H per Bokhary PJ, the unanimous consent required for the sale of tso lands and distribution of such sale proceeds is that of the heads of all the fongs.  In the Court of Appeal’s decision of Tang Che Tai & Ors v Tang On Kwai & Ors [2008] 3 HKC 521 at 530I-531B, Tang VP (as he then was) held that Lau Wai Chau (supra) is consistent with the view that consent of members could be inferred and would usually be expressed through the respective heads of their fong.  This is not disputed.

75.In any event, pursuant to the orders Madam Justice Lisa Wong and Master H. Au-Yeung, the 2^nd Respondents were appointed to represent all members of the安邦sub-stirpe and the 3^rd Respondent was appointed to represent all members of the建邦 sub-stirpe except the Applicant.

76.For all the reasons stated above, I find that the evidence clearly shows that a consensus was reached at the meeting on 23 July 2016 that the sale proceeds in the sum of HK$60 million were to be distributed to members of the Tso according to the Formula. As such the managers of the Tso, including the Applicant, are entitled to make distribution of HK$7,500,000 each to the 建邦 sub-stirpe and the安邦sub-stirpe respectively. The建邦 sub-stirpe is entitled to receive HK$7,500,000 as its per stirpes distribution pursuant to the consensus reached on 23 July 2016.

Chinese Customary Law

77.By reason of this Court’s findings above, there is no need to deal with the Chinese customary law issues in relation to the distribution of the Tso’s sale proceeds. Mr Tam for the Applicant made an application to withdraw Questions 2 and 3 insofar as they relate to the sale proceeds. Mr Leung for the 3^rd Respondent supported the withdrawal application. Mr Tam for the Applicant submitted that given Mr Lam Wing Kwong’s (林榮光) oral evidence that members of the Tso agreed on 23 July 2016 to distribute the sale proceeds according to the Formula as a matter of custom, there is no need for this Court to resolve the legal issues as set out in Questions 2 and 3. Mr Tam submitted that it is unlikely that there will be any further distribution of sale proceeds in the future as the remaining HK$17 million odd would be used by the Tso for reinvestment and ancestral worship. As such the issue of distribution of sale proceeds will not arise and the Court needs not resolve academic issues.

78.Mr Mui for the 2^nd Respondents, however, submitted that the Court should nonetheless proceed to resolve the Chinese customary law issues as set out in Questions 2 and 3 as they might have relevance for the future management of the Tso and there are current disputes as to whether the Formula is legal under Chinese customary law.

79.I am of the view that the Applicant is at liberty to withdraw the questions that he likes the Court to resolve and I agree that it is not right for the Court to resolve academic issues. However, given that Chinese customary law issues in relation to distribution of sales proceeds have been extensively argued, I will offer my obiter observations herein so that it can minimize potential future disputes in the Tso.

80.First, section 13(1) of the Ordinance provides:

“In any proceedings in the Court of First Instance or the District Court in relation to land in the New Territories, the court shall have power to recognise and enforce any Chinese custom or customary right affecting such land.”

81.Hence, the court must recognise and enforce any Chinese custom or customary right affecting such land. (Tang Kai-chung and Another v Tang Chik-shang and Others [1970] HKLR 276 at 295 per Mills-Owens J.)

82.A Tso is correctly described by Mills-Owens J. in Tang Kai-chung and Another v Tang Chik-shang and Others (supra) at 279-280 as:

“Speaking generally, a Tso may be shortly described as an ancient Chinese institution of ancestral land-holding whereby land derived from a common ancestor is enjoyed by his male descendants for the time being living for their lifetimes and so on from generation to generation indefinitely. Thus every male descendant of the common ancestor automatically becomes entitled at birth to an interest in the land for his lifetime; on his death his interest merges so as automatically to enlarge the interests of the surviving male descendants; thus his interest at any given moment during his lifetime depends on the number of male descendants then living and on his death it forms no part of his estate. But this is speaking generally; some elaboration will be required in the present case. A Tso is named after the common ancestor … A Tso (of the nature which this case concerns) is formed not by the common ancestor but by his son or sons on or after his death, and as a matter, it would seem, of filial duty in accordance with Confucian tradition for the purpose of veneration of the common ancestor.”

83.Secondly, Tso property is deemed to be inalienable, indivisible and perpetual. There can never be a legal sale of Tso property as the sale of the same is not allowed at all. In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat [1987] HKLR 516, Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.540 G-H said:

“As a matter of Chinese customary law, Tso property are intended to be inalienable, indivisible and perpetual, how then can there be a correct mode of distribution?”

See also Tang Che Tai & Ors v Tang On Kwai & Ors [2007] 5 HKC 277 at 317 at §72(1)-(3) per Deputy High Court Judge To (as he then was).

84.Tso property, by its nature, is to remain in the Tso in perpetuity for the purpose of producing benefits for all Tso members, particularly the male descendants to carry out the focal ancestors’ bloodline.

85.However, under some circumstances a Tso can lawfully sell its property, for example, due to some natural or man-made disaster or government requisition it becomes impossible for a Tso to hold onto its property. It can also voluntarily sell its property or a portion thereof in order to buy another piece of property or keep the proceeds of the sale in a special account for the benefit of all its members.

86.Thirdly, as a matter of Chinese customary law, as applied in China, disposition of Tso property by sale, must be by the unanimous consent of members of the Tso subject to local customs to the contrary. Prima facie, in the New Territories, unanimous consent of all members are required unless local customs or the New Territories Ordinance require otherwise. As for local custom permitting sale otherwise than by unanimous consent, there is no evidence. (Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra) at p.536F-G, per Robert Tang, Q.C., Deputy High Court Judge (as he then was))

87.In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra), Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.535A-B said:

“I think it is clear from this decision that as a general rule, alienation must be because of necessity and that unanimous consent of the members of the clan must be obtained though this general rule is subject to local custom being different.”

88.However, it is important to note that a sale of Tso property, even if approved by all qualified members unanimously is not unacceptable. Unanimity does not justify the sale. It only means that there is no existing member of the Tso to prevent the wrongful sale. The sale is wrong because it violates the integrity and purpose of the Tso property. In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra), Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.539B-C said:

“I am of the opinion, just as a member may not force a sale, nor a partition (regardless of s.15), a member may not compel a distribution, as a matter of Chinese customary law.

In my opinion, what one member cannot do, a majority of members cannot do either. I am not aware of any relevant local custom which would displace the general rule that unanimous consent is required. Moreover, I believe it runs counter to the perpetual nature of a Tso, that any member or any number of members may dissolve it by requiring distribution of the compensation or proceeds of sale. Dissolution by unanimous consent might have been tolerated on the basis that there was no legal sanction against it and of course there was no one to object.” (Emphasis added)

89.Fourthly, there cannot be a custom in relation to the mode of distribution of sale proceeds. In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra), Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.546G-H said:

“Nor am I satisfied that the evidence of Mr Dicks shows that there was such a custom in China. I think it is not possible to talk of a custom in this context since distribution was not supposed to take place at all. I do not believe any such ‘custom’ would have been recognised or enforced by any Chinese court. More likely, the litigants would have been sent away with the admonition that sale of Tso land or distribution of proceeds of sale of Tso land or of compensation was impious and the court would have none of it.” (Emphasis added.)

90.In Tang Che Tai & Ors v Tang On Kwai & Ors [2007] 5 HKC 277, Deputy High Court Judge To (as he then was) at 316B-C said:

“Neither Professor Chang nor Professor Dicks SC could offer any expert evidence of the custom of distribution. I think the learned judge must be right. It is just impossible to have any custom on distribution of proceeds of sale of tso property as such property was intended to be inalienable, indivisible and to be held in perpetuity for generation after generation.” (Emphasis added.)

91.In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra), Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.547I further said:

“It is implicit in my finding that the members may by unanimous agreement decide the mode of distribution.”

92.Further, at p.538B-D and F, the learned Judge also said:

“Normally one would expect in the case of sale of Tso land that before giving or withholding consent, a member would be told the purpose of the sale, and he will give or withhold consent according to whether or not he agrees with the purpose. So that if the purpose of the sale is that there should be distribution, in giving their unanimous consents, it can be taken that they were also consenting to distribution….So ordinarily, one would not find any separate agreement relating to distribution….I can see no valid distinction between sale of a capital asset and the distribution of capital. Both are exceptional acts which should require unanimous agreement of all Tso members.” (Emphasis added.)

93.It is for members of a Tso, to decide by unanimous agreement, as to the mode of distribution. No correct mode of distribution, whether as a custom or not, can be imposed on any member. In Kan Fat-tat also known as Kan Fat v Kan Yin-tat also known as Kan Tat (supra), Robert Tang, Q.C., Deputy High Court Judge (as he then was) at p.540D-E said:

“I do not believe the learned judge meant to say it would be oppressive for an individual member to insist on division on a per capita basis such that he may be compelled to do otherwise. I am of the view a member may refuse to agree without giving any reason. I believe, in this context, the position of a member of a Tso can be compared to that of a shareholder in a company. He can exercise his vote as he wishes. He is not accountable to anyone for its exercise.” (Emphasis added.)

94.Fifthly, in relation to sale proceeds, a custom of a specific Tso cannot be equated to a custom on the mode of distribution under general Chinese customary law. It is obvious that different Tsos could have, by unanimous agreement, adopted different modes of distribution.

95.In Tang Che Tai & Ors v Tang On Kwai & Ors [2007] 5 HKC 277, Deputy High Court Judge To (as he then was)  at §§104 and 105 said:

“104. Though I am not prepared to hold that the 1982 Agreement is illegal under the Qing Code or Chinese criminal law, the agreement is obviously unlawful. With the two well established Chinese customary law principles in mind, it can readily be appreciated that t’ong property is intended to be held in perpetuity for the benefit of its present and future members. Any appropriation of t’ong property to the present generation otherwise than under circumstances of necessity would have the effect of depleting the t’ong of its property and depriving the future generations of the use and benefit of the property. Such appropriation would be destructive of the t’ong and would violate the purpose for which the t’ong was set up and therefore unlawful. The purpose and effect of the 1982 Agreement is to make indiscriminate distribution of the Tong’s property by appropriating it to the present generation regardless whether there are circumstances of necessity making the distribution inevitable. The 1982 Agreement is therefore unlawful.

105. The 1982 Agreement is also contrary to public policy of traditional China. This traditional institution of land-holding was encouraged in ancient China because of the social benefit it brought to the clan. This was the public interest referred to by the Da Li Yuan. The social benefit has diminished in modern time, but it does exists. The 1982 Agreement has the effect of dissolving or disintegrating the Tong. The agreement is therefore unenforceable as being contrary to public policy both in traditional China and in modern time.”

96.Applying the above legal principles to the facts of the present case, I am of the view that the Formula, whether amounted to a custom of the Tso or not, is not compatible with Chinese customary law and custom.

Rental Surplus

97.As far as rental surplus or profits of the Tso is concerned, I am of the view that given Mr Lam Wing Kwong’s (林榮光) evidence that林海權’s view did not represent the view of the 2^nd Respondents, the sum of HK$30,000 should be distributed between the 建邦 sub-stirpe and the安邦sub-stirpe.  林海權 does not have the authority to withhold the said sum of HK$30,000.

98.In relation to the legal question posted in Questions 2 and 3, namely, whether the Formula, as far as rental surplus is concerned, is compatible with Chinese customary law and custom, I am of the view that the question is wrongly raised. Fundamentally, as Deputy High Court Judge To (as he then was) said in Tang Che Tai & Ors v Tang On Kwai & Ors [2007] 5 HKC 277 at §72(4):

“distribution of surplus rental income or profit issuing out of t’ong land for the purpose of pai-ji is a matter of internal management of the t’ong and a matter not subject to Chinese customary law, it is governed by rules, if any, or by custom of the t’ong, if there are none.”

99.Hence, Chinese customary law is not engaged at all. Mr Mui for the 2^nd Respondents in his closing submissions fairly accepted that so far as rental surplus or profits is concerned, there is no prohibition under Chinese law and custom against its distribution. In the present case, there are no rules of the Tso which govern the mode of distribution of its rental surplus or profits, so one has to see if the Formula is a set of unwritten rules or custom of the Tso as a matter of fact.

100.First, it is common ground that insofar as rental surplus or profits is concerned, all parties before this Court agree that it is a custom of the Tso. They all treat it as a custom. Mr Mui for the 2^nd Respondents also confirmed that Mr Lam Wing Kwong (林榮光) agreed that the application of the Formula to the distribution of the Tso’s rental surplus or profits is a custom of the Tso. Although the subjective view of the members is not itself determinative, as it is the duty of the Court to find as a matter of fact whether the Formula is a custom of the Tso, I am of the view that such consensus is important in the Court’s fact finding exercise. Given that all representatives of the sub-stirpes of the Tso agree that the application of the Formula is a custom of the Tso and they are ready and willing to comply with it, it is not at all easy for the Court to see how the 2^nd Respondents can now maintain their submission that it nevertheless is not a custom of the Tso. I have already dismissed Mr Mui’s submission that such views are only Mr Lam Wing Kwong’s (林榮光) personal views and not the views of the 安邦sub-stirpe. He gave evidence as a representative of the members of the 安邦sub-stirpe.

101.Secondly, Mr Mui for the 2^nd Respondents submitted that the practice of applying the Formula to the distribution of rental surplus or profits only lasted for 30-40 years. It does not have the attribute of sufficient antiquity. He also referred to the case of Tang Che Tai & Ors v Tang On Kwai & Ors (supra) and submitted that the facts of that case are similar to the facts of the present case and the learned Judge in that case did not find that the agreement reached in 1982 amounted to a custom of the tong in that case.

102.I agree that there is force in Mr Mui’s submission in that the application of the Formula only lasted for 30-40 years. However, every case depends on its own facts. In the present case, all members of the Tso agree that the application of the Formula is a custom and they feel obliged to follow it.

103.In Tang Che Tai & Ors v Tang On Kwai & Ors (supra), Deputy High Court Judge To at §71 said:

“…The other gloss is that a custom is living. It may evolve with changing social, economical and political conditions. The course of evolution is a long one. A new custom is said to have evolved or an old custom modified if the evolving custom has acquired the above characteristics. But by its very nature, an evolving custom or a particular aspect of an evolving custom may not have immemorial existence. However, to have the force of a custom, an evolving custom must have at least had a substantially long period of existence and recognition so that the persons whom this new custom is alleged to affect would feel it an obligation to follow in preference to the old one. Whether a practice had a substantially long period of existence and recognition as to qualify as a newly evolved custom is a question of fact.” (Emphasis added.)

104.In the present case, in practice, the Formula has been applied to the distribution of rental surplus or profits since the 1980s for about 30-40 years. Importantly, so much so that members including Mr Lam Wing Kwong (林榮光) feel it an obligation to follow it. There is no dispute that the Formula has been applied consistently and continuously without any challenge from any member. Mr Mui in his opening submissions referred to the incident where 林海權 refused to distribute the HK$30,000 to the 建邦 sub-stirpe and the安邦sub-stirpe. However, Mr Lam Wing Kwong (林榮光) clarified in his oral testimony that that does not represent the position of the 安邦sub-stirpe and the Formula was applied. In any event, the dispute was not related to the application of the Formula. I find the application of the Formula satisfies the requirements of certainty and continuity.

105.Although this Formula was only applied for 30-40 years, still it has been lasting for two generations. I do not think that there is a hard and fast rule that a practice has to been in existence for a certain number of years before it can be qualified as a custom. As Deputy High Court Judge To said whether a practice has a substantially long period of existence and recognition is a question of fact. In the present case, I am of the view that the Formula has been applied for a substantially long period. Importantly , members of the Tso still  feel obliged to follow it up to the present time.

106.Thirdly, it is pertinent to note that this practice does not spring from nowhere. It evolved and developed from the old custom of distribution based on per stirpes only. The evidence is that in the 1980s, as the rental income started to increase, there were disagreements on the continuous application of the old custom of per stirpes distribution. As a result of which, all heads of the ­sub-stirpes discussed and reached a consensus that the old custom be modified and the Formula be adopted. The Formula has since been applied from the 1980s up to the present. I am of the view that this satisfies the test of substantially long period of existence and recognition or sufficient antiquity and as such amounts to a custom of the Tso.

107.Fourthly, I am of the view that the Formula amounts to a set of unwritten rules of the Tso. Whether a practice has lasted for a substantially long period cannot be viewed in a static way. In modern times and a fast changing world, practice does evolve at a quicker pace than in the past. The fact that this Formula has been consistently applied for the last 30-40 years and all members still feel obliged to observe and apply it in the future is an important consideration for the Court.

108.Fifthly, in respect of the submission that a practice which was the result of a mutual agreement could not be regarded as a custom, I am of the view that that submission is not universally accurate as a statement of law. It depends on when such a mutual agreement was concluded and how it was observed. If a mutual agreement was reached hundreds of years ago and members of the same clan have always consistently observed the said mutual agreement, it is hard to say that just because the practice originated from a mutual agreement, such practice can never qualify as a custom.

109.Sixthly, it is submitted by Mr Mui for the 2^nd Respondents that a custom needs to be a custom of a locality. However, I am of the view that in relation to an internal management of the Tso, the custom that is relevant is the custom of the Tso. Different Tsos may have different customs on matters concerning its own internal management.

110.Finally, I stress that the custom in relation to the distribution of rental surplus or profits still requires the unanimous consent of all members of the Tso, it is just that once it is resolved by all members that rental surplus or profits were to be distributed, the Formula is a custom of the Tso on the mode of distribution.

Question 4

111.By reasons of the matters stated above, I do not think it is necessary to answer Question 4 which is based on the premises that the Tso’s proceeds of sale and rental surplus or profits can be applied by distribution in a manner compatible with Chinese law and custom.

DISPOSITION

112. For all the reasons stated above, I hereby make the following declarations and orders:

(1) It is declared that Lam Yui Ming (林裔明), Lam Tsz Wing (林子榮), Lam Yui Cheung (林裔祥), Lam Yui Fu (林裔富), Lam Hoi To (林海淘), Lam Wing Ho (林泳豪), Lam Horris (林灝為), Lam Ho Fai (林灝暉), Lam Ting Chun (林渟臻) and Lam Chun Him (林晉謙) were and are members of Lam Lok Yee Tso (林樂義祖) and descendants of林建邦.

(2) It is declared that the past practice of distribution of Lam Lok Yee Tso’s (林樂義祖) rental surplus, namely:-

‘Rental surplus is distributed half per capita and half per stirpes among members of Lam Lok Yee Tso; in respect of the per stirpes distribution, each and every surviving stirpe (i.e. 建邦, 安邦, 緒敬 and 渭安) is entitled to an equal share’

is a custom of Lam Lok Yee Tso (林樂義祖).

(3) It is declared that the per capita distributions of 2015 rental surplus of Lam Lok Yee Tso made to Lam Yui Ming (林裔明), Lam Tsz Wing (林子榮), Lam Yui Cheung (林裔祥), Lam Yui Fu (林裔富), Lam Hoi To (林海淘), Lam Wing Ho (林泳豪), Lam Horris (林灝為), Lam Ho Fai (林灝暉), Lam Ting Chun (林渟臻) and Lam Chun Him (林晉謙) are valid and of legal effect.

(4) It is declared that the per capita distributions of the proceeds of sale of Lam Lok Yee Tso’s (林樂義祖) lands in the total sum of HK$2,702,700 to Lam Yui Ming (林裔明), Lam Tsz Wing (林子榮), Lam Yui Cheung (林裔祥), Lam Yui Fu (林裔富), Lam Hoi To (林海淘), Lam Wing Ho (林泳豪), Lam Horris (林灝為), Lam Ho Fai (林灝暉), Lam Ting Chun (林渟臻) and Lam Chun Him (林晉謙) on 1^st August 2016 are valid and of legal effect.

(5) The Applicant do forthwith pay the 2^nd Respondents a sum of HK$7,500,000 and the 3^rd Respondent a sum of HK$7,500,000, both payments to be made from Lam Lok Yee Tso’s (林樂義祖) bank account no. 019-581-1-006774-2 of the Bank of China (Hong Kong) Limited.

(6) The 2^nd Respondents do pay the 3^rd Respondent a sum of HK$15,000 forthwith.

113.As far as costs is concerned, I make the following directions:

(1) The parties are to file and serve their written submissions on costs within 14 days from the day of this judgment;

(2) The parties are to file and serve their reply written submissions on costs within 7 days thereafter.

This Court will determine the issue of costs on paper upon receiving the parties’ written submissions without any oral hearing.

114.Finally, it remains for me to thank Mr Tam for the Applicant, Mr Lam Yui Pun, Mr Nelson Miu for the 2^nd Respondents and Mr Gary C.C. Leung for the 3^rd Respondent for the helpful assistance they rendered to this Court.

Mr Aidan Tam, instructed by Messrs. Lee Chan Cheng, for the Applicant

The 1^st Respondent appeared in person

Mr Nelson Miu, instructed by Messrs. Ken Chiu & Co., for the 2^nd Respondents

Mr Gary C.C. Leung, instructed by Messrs. Chow, Griffiths & Chan, for the 3^rd Respondent