Eastern District Fresh Fish Merchants’ Society and Another v. Ng Chuk Yuen

HCMP 1156/2022

[2024] HKCFI 1271

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1156 OF 2022

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D E C I S I O N

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Introduction

1.By an originating summons dated 19 August 2022 (the “OS”), the 1^st plaintiff (“P1”) and the 2^nd plaintiff (“P2”, and together “Ps”) seek against the 1^st defendant (“D1”) an order that the properties are subject to a trust in favour of Eastern District Fresh Fish Merchants’ Society (the “Society”); and an order appointing Guo Huandong, Lau Wai Tak and Lai Wing Kin (the “3 Replacement Trustees”) as the trustees of the Society in relation to the Properties in substitution of D1, the 2^nd defendant (“D2”) and the 3^rd defendant (“D3”).

2.D2 and D3 had since the issuance of the OS passed away and Ps had wholly discontinued the action against D2 and D3 on 14 December 2023.

Service on D1

3.P had obtained an order for substituted service in relation to D1 as:

(1)  The building on the last known address had been demolished and redeveloped in the 1990s, making it impossible to contact D1 at that address.

(2)  A probate search revealed that there was a grant of probate in respect of a deceased person with the same name as D1 (NG CHUK YUEN (吳卓賢)) who had passed away on 2 January 1993.

(3)  Despite Ps’ attempts to confirm if this deceased person is D1, the firm of solicitors originally responsible for the application for probate had already ceased practice and is no longer on the database of the Law Society.

(4)  Despite Ps’ solicitors having attended the address of the administratrix and a letter having been inserted into the letterbox of the address of the administratrix, there has been no reply.

4.Service of the OS was substituted by placing a Chinese advertisement in Sing Tao Daily on 22 December 2023. Notice of the proceedings had been advertised in Sing Tao Daily on 17 January 2024.

5.No response or acknowledgment of service had been received from D1.

6.Section 58 of the Trustee Ordinance (Cap. 29) (the “TO”) provides:

“Where in any action the court is satisfied that diligent search has been made for any person who, in the character of trustee, is made a defendant in any action, to serve him with a process of the court, and that he cannot be found, the court may hear and determine the action and give judgment therein against that person in his character of a trustee as if he had been duly served, or had entered an appearance in the action, and had also appeared by his solicitor at the hearing, but without prejudice to any interest he may have in the matters in question in the action in any other character.”

7.In the circumstances, I am satisfied that diligent search has been made for D1, and that due to the distinct way that the English name of D1 is spelt, the likelihood that D1 is the deceased person is high. As such, the hearing should go ahead despite the absence of D1.

Background

8.The Society is registered under the Societies Ordinance (Cap 151) and the objective of the Society was to facilitate the welfare of the fish merchants in the Eastern District.

9.The Articles of the Society provide that the committee shall be elected at the General Meeting of the Society and that the committee shall manage the general business of the Society.

10.In 1969, the then committee of the Society decided to acquire with the funds of the Society the Properties in the name of 11 trustees as joint tenants. The ownership of the Properties was at all material times subject to an express trust where the trustees held the Properties on trust for the Society (the “Deed of Trust”). The 11 trustees had agreed to assign the Properties to such person or persons at such time and in such manner as the Society shall direct.

11.Only P2 (and perhaps D1) remain alive out of the 11 trustees.

12.If D1 were still alive, he would have been aged 92 this year.

13.By a resolution of the committee members dated 27 August 2021, it was resolved that among the existing trustees, only P2 would remain and three additional trustees shall be added, namely 郭煥東(Guo Huandong), 劉偉德 (Lau Wai Tak) and 黎永健 (Lai Wing Kin).

14.On the evidence I am satisfied that the resolution was properly passed.

Legal Principles

15.Section 42(1) of the TO provides:

“The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee. In particular and without prejudice to the generality of the foregoing provision, the court may make an order appointing a new trustee in substitution for a trustee who is sentenced to a term of imprisonment or is a lunatic or a person of unsound mind or is a bankrupt or is a corporation which is in liquidation or has been dissolved.”

16.Section 45 of the TO provides:

“In any of the following cases, namely—

…

(b) where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person—

(i) is under disability; or

(ii) is out of the jurisdiction of the court; or

(iii) cannot be found, or, being a corporation, has been dissolved;

…

(g) where land or any interest therein is vested in a trustee whether by way of mortgage or otherwise, and it appears to the court to be expedient,

the court may make an order (in this Ordinance called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct…”

17.Section 56 of the TO provides:

“(1) Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, expenditure, or other transaction, is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument, if any, or by law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, if any, as the court may think fit and may direct in what manner any money authorized to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.

(2) The court may, from time to time, rescind or vary any order under this section, or may make any new or further order.

(3) An application to the court under this section may be made by the trustees, or by any of them, or by any person beneficially interested under the trust.”

18.In 廣西華錫集團股份有限公司 v Cheung Cho Tik[1], Deputy High Court Judge L Chan (as he then was) dealt with a similar application with the present case. Having been satisfied that (1) the defendant therein cannot be found and (2) the defendant is a trustee holding the shares for the plaintiff therein, the learned Deputy Judge made a vesting order under the TO.

Determination

19.I am satisfied that:

(1)  Pursuant to the Deed of Trust, the 11 trustees were holding the Properties as trustees for the Society.

(2)  As at least 9 of the 11 trustees have passed away, only P2 and D1 (if he is still alive) currently hold the Properties as trustees on behalf of the Society.

(3)  The Society has resolved to appoint P2, 郭煥東(Guo Huandong), 劉偉德 (Lau Wai Tak) and 黎永健 (Lai Wing Kin) as the trustees of the Properties.

(4)  As a result, if D1 is still alive, he will be replaced.

(5)  As D1 cannot be found, and it is not possible to confirm if D1 had passed away, it is inexpedient, difficult and/or impracticable for the Society to appoint new trustees in substitution of D1 without assistance of the Court.

(6)  I am satisfied that in the circumstances the court should exercise its discretion to make an order to remove D1 as a trustee of the Properties, so that P2, 郭煥東 (Guo Huandong) ，劉偉德 (Lau Wau Tak) and 黎永健 (Kai Wing Kin) can deal with the Properties without potential difficulties of the unavailability of D1.

Conclusion

20.I thus make the following orders:

(1)  Guo Huandong (郭煥東), Lau Wai Tak (劉偉德) and Lai Wing Kin (黎永健) be appointed as the trustees of the Society in relation to Flats 4 and 5 on 2^nd Floor, Tung Tai House, Nos 144 - 148 Shau Kei Wan Main Street East & Nos 10 - 14 Factory Street, Hong Kong in substitution of Ng Chuk Yuen (吳卓賢).

(2)  There be no order as to costs.

Mr Stephen Siu, instructed by Jisp Cheung & Co, for the 1^st and 2^nd plaintiffs

The 1^st Defendant, acting in person, absent