Ng Chung Ying Daydes v. Tang Man Kit Otherwise Known As Tang Man Kit, Terry and Another

HCMP 1439/2021

[2025] HKCFI 2278

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1439 OF 2021

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J U D G M E N T

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1.This is an application to continue an interlocutory injunction granted ex parte by Mimmie Chan J on 26 July 2024 and continued by consent on 2 August 2024 pending determination of the present session for the continuation of the injunction until judgment or further order.

2.The injunction restrains, in the main, the 2^nd Defendant from placing any vehicles on access roads in various Lots of land in Demarcation District (“DD”) 107 in Yuen Long, New Territories let by Bonus Investment Ltd (“Bonus”) on behalf of the Wah Yan Mo Fan Heung (“Heung”) with a view to blocking the free and unimpeded ingress and egress from those Lots occupied by tenants of Bonus or otherwise howsoever obstructing the access roads.

3.At the hearing, I continued the injunction until the decision herein.

Background

4.The Plaintiff is suing as a member of the Heung and also on behalf of the other members of the Heung listed in the Schedule to the Originating Summons.

5.The Heung is a business T’ong established in 1928 and registered under s.15 of the New Territories Ordinance (Cap.97) (“NTO”).  The Heung is holding lands on behalf of its members.

6.The 1^st Defendant was appointed a manager of the Heung in a members’ meeting on 28 January 1989.  In addition, Mr Foo, a solicitor, was appointed a manager of the Heung on 17 December 1999.

7.After protracted litigation, the status of the Heung was confirmed by the Court of Appeal (CACV 137/ 2002).  The appointments of the 1^st Defendant and Foo were retrospectively registered by the Yuen Long District Office (“YLDO”) on 31 August 2000.

8.In July 2013, an action was commenced by 3 members of the Heung against the 1^st Defendant claiming an account of profits secretly made by him and the removal of him as a manager.

9.On 26 October 2013, a members’ meeting (“2013 Meeting”) was held and a resolutions passed for removing the 1^st Defendant as manager, and appointing Ms Pat Wong as manager in his stead.

10.After the 2013 Meeting, the 1^st Defendant complained to the YLDO that the resolutions passed were invalid because, inter alia, the meeting had not been property advertised in the newspaper.

11.On 23 August 2014, Foo and Pat Wong published in the newspaper the notice for a second members’ meeting to be held on 23 August 2014 (“2014 Meeting”) for the purpose of confirming the resolutions of the 2013 Meeting.

12.After the publication of the notice for the 2014 Meeting, Foo and Pat Wong issued a 2^nd Notice for the resolution requiring the 1^st Defendant to deliver up all the documents and chattels belonging to the Heung.  This 2^nd Notice was not advertised in the newspaper.

13.Both proposed resolutions were passed in the 2014 Meeting.

14.After the 2014 Meeting, Foo commenced proceedings against the 1^st Defendant for delivery up of all the documents and chattels belonging to the Heung (HCMP 3361/2014) (“Delivery Up Proceedings”).

15.On 13 July 2015, the Delivery Up Proceedings were dismissed by DHCJ Yee as the 2^nd Notice was not properly advertised in the newspaper.

16.DHCJ Yee made the observation that it was desirable that the membership of the Heung be determined.  It transpired that in 1994, proceedings were commenced by one Tonkit Development Ltd against the 1^st Defendant and another manager of the Heung at the time for an inquiry into the beneficiaries and their respective interests in the Heung (HCMP 1173/1994). Leading counsel’s advice was obtained but it was not taken up by the then managers, and HCMP 1173/1994 was settled in January 1998.

17.After the decision of DHCJ Yee, the 1^st Defendant sent a copy of the Judgment to the YLDO, and the YLDO decided to shelf the applications to register the removal of the 1^st Defendant and the appointment of Pat Wong as manager.  Hence, the 1^st Defendant remained a registered manager of the Heung.

18.From January 2014 to June 2020, the 1^st Defendant did not take any part in the management of the Heung.  During this time, Foo and Pat Wong appointed Bonus as the leasing agent for the Heung’s lands.

19.As the Delivery Up Proceedings were dismissed, the bank account of the Heung remained under the control of the 1^st Defendant.  Rental income collected by Bonus were deposited, inter alia, into the account of the Messrs Liu, Choi Chan (“LCC”), solicitors for the Plaintiff. The balance held by LCC stood as $16 million as at 31 December 2023 and increasing.

20.On 29 June 2017, Foo took out proceedings under HCMP 724/2017 for the determination of the membership and their rights in the Heung (“Membership Proceedings”).

21.On 17 June 2020, Foo passed away and the 1^st Defendant started to challenge the authority of Bonus and the occupation by the Bonus tenants.

22.On 23 July 2021, the 1^st Defendant entered into a lease with the 2^nd Defendant, leasing all the lands of the Heung for a period of 10 years at the monthly rental of $300,000 (“Tinting Lease”).  The Tinting Lease contained conditions that the capacity of the 1^st Defendant would not be challenged, and the 2^nd Defendant was required to recover possession from the squatters.

23.On 27 September 2021, the Plaintiff took out the Originating Summons herein, asserting inter alia, that the 1^st Defendant had been removed as a manager, and the Tinting Lease was null and void.

24.On 20 October 2021, the Plaintiff took out a Summons for the appointment of an interim receiver.  The application was dismissed by Keith Yeung J on 29 July 2022 (“Interim Receiver Decision”).

25.On 7 August 2022, the 2^nd Defendant commenced 4 actions against 3 of the Bonus tenants for trespass and possession of the lands (HCA 1242/2023, HCA 1245/2023, HCA 1246/2023, HCA 1247/2023).  The actions are at the case management stage at the moment.

26.After the passing away of Foo, Mr KM Chong, of counsel,  was substituted as the applicant to carry on the Membership Proceedings.  The trial has been fixed to commence on 6 November 2025.

27.In December 2023, the Originating Summons herein was converted into a Writ action, and pleadings have been filed.

28.On 18 November 2024, the 1^st Defendant passed away.

Legal Principles

29.The principles on the grant of an interlocutory injunction were set out in the English case of American Cynamid Co v Ethicon Ltd [1975] AC 396: (1) there is a serious question to be tried; and (2) the balance of convenience lies in favour of granting the injunction (see the Hong Kong Civil Procedure 2025 Volume 1 §§ 29/1/9 and 29/1/10).

30.As noted in the Hong Kong Civil Procedure 2025§29/1/11, Lord Diplock has given guidance on the balance of convenience in a series of cases.  In Fellowes& Sons v Fisher [1976] QB 122, 137, Browne LJ set out the guidelines by Lord Diplock  as follows:

“(1) The governing principle is that the court should first consider’ whether, if the plaintiff succeeds at the trial, he would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction. ‘If damages…would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiffs claim appeared to be at that stage’.

(2) ‘If, on the other hand’ damages would not be an adequate remedy, the court should then consider whether, if the injunction were granted, the defendant would be adequately compensated under the plaintiff’s undertaking as to damages. ‘If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction’.

(3) It is where there is doubt as to the adequacy of the respective remedies in damages that the question of balance of convenience arises. It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.

(4) Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo.

(5) The extent to which the disadvantages’ to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies.

(6) If the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party’s case as revealed by the affidavit evidence adduced at the hearing of the application. This, however, should be done only where it is apparent upon the facts disclosed by evidence as to which there is no credible dispute that the strength of one party’s case is disproportionate to that of the other party.

(7) In addition to [the factors] to which I have referred, there may be many other special factors to be taken into consideration in the particular circumstances of individual cases.”

Plaintiff’s case

31.Miss Eu, leading counsel for the Plaintiff, submitted that there is no doubt as to serious issues to be tried.  She referred to the Interim Receiver Decision where Keith Yeung J stated that he was prepared to accept that the Plaintiff had established a number of serious issues to be tried: the validity of the 1^st Defendant’s removal, the validity of the appointment of Pat Wong and Bonus, the validity of the Bonus Tenancies, and the validity of the Tinting lease (including whether it involved any arrangement of maintenance and champerty) (at §86).

32.Further, Miss Eu submitted that in granting and continuing the interim injunction, Mimmie Chan J was clearly satisfied that there was a serious question to be tried.

33.And the conversion of the Originating Summons herein into Writ action and the filing of pleadings also acknowledged there were serious issues to be tried.  And the 4 actions commenced by the 2^nd Defendant against the 3 Bonus tenants are in the same vein.

34.Miss Eu submitted that the registration and deregistration of the manager(s) were shelved by YLDO also illustrated that the root of the matter was the dispute as to the membership and meetings of the Heung, a matter pending determination by the Court in the Membership Proceedings, and the matter cannot be resolved in the interim summarily.  After the dispute is resolved, registration and/or deregistration could be undertaken retrospectively (see Light Ocean Investments Ltd v Enway Development Ltd [1994] 3 HKC 31 per Litton JA (as he then was)).

35.Miss Eu submitted that the Tinting Lease was a sham, in that the 2^nd Defendant was a $100 company with no assets, and was only incorporated 2 months before Tinting Lease, and the rent of $30,000 was at undervalue.  The 2^nd Defendant had not or had stopped paying rent under the Tinting Lease.  Despite repeated demands, 1^st or 2^nd Defendants had not produced any evidence of payment of rent.  There is no evidence that the 2^nd Defendant is good for any damages.

36.That the Bonus tenants have been paying rent to the tune of $16 million must be to the benefit of the members of the Heung, a status quo that should be preserved pending the resolution of the disputes.

37.As such, the balance of convenience is in favour of the Plaintiff.

2^nd Defendant’s case

38.Mr Chan, for the 2^nd Defendant, submitted that the 2^nd Defendant was entitled to protect its land as the Tinting Lease is lawful and valid. Mr Chan submitted that there is no civil wrong by an owner for evicting trespassers by no more than necessary force.

39.Mr Chan submitted that the Heung’s lands are governed by s.15 of the NTO.  Only managers approved and registered by the District Officer under the NTO are empowered to deal with the Heung’s lands.  The approval by the District Officer is not a matter of formality but upon consideration of the law and facts pursuant to the statutory provisions (see Tang Man Kit & Foo Tak Ching (suing as Managers of Wan Yan Mo Fan Heung) v Hip Hing Timber Co Ltd CACV 137/2002 dated 13 May 2005 unrep. per Cheung JA §§37 to 42.)

40.Mr Chan also referred to Tsang Shu Wo v Person Unknown in Occupation of Lot [2020] HKCFI 293 where Anthony Chan J held that leases granted upon lack of unanimous agreement of the managers of a Tso must be void (see §§59 to 60).  The first instance decision was upheld by the Court of Appeal (see [2023] 4 HKC 226).

41.Mr Chan pointed out that Bonus was appointed a leasing agent of the Heung by Foo and Pat Wong, but Pat Wong’s appointment as a manager had not been registered by YLDO.  And notwithstanding the purported removal of the 1^st Defendant as manager by the members’ meeting, he was not de-registered by YLDO and had remained a registered manager of the Heung.

42.When the Tinting lease was granted, Foo had passed away and the 1^st Defendant was the sole registered manager of the Heung and was fully empowered to do so.

43.While Mr Chan relied on fact that the 1^st Defendant was the sole registered manager at the time of the grant of the Tinting lease, he nevertheless recognized that the statutory status of the manager(s) as well as the membership of the Heung could only be resolved after trial of the Membership Proceedings.

44.Mr Chan submitted that the Plaintiff had no locus standi to obtain the injunction.  To start off with, the Plaintiff’s own membership of the Heung was disputed, and he had not explained any interests in representing the Bonus tenants, and the application should have been taken by the Bonus tenants.

45.Mr Chan submitted that the Plaintiff had not made full and frank disclosure or omitted important arguments before Mimmie Chan J:

(1)  There were a contest between two tenancies: the Bonus tenants and the Tinting Lease;

(2)  Bonus’ land agency has been terminated by law upon the death of Foo;

(3)  The unanimity principle under Tsang Shu Wo v Person Unknown in Occupation of Lot;

(4)  Neither the Plaintiff nor Bonus can show good title to the land in question;

(5)  Some of the Bonus tenancies have already expired.

46.Further, Mr Chan referred to the Transcript of the ex parte hearing, where counsel for the Plaintiff informed Mimmie Chan J that the obstruction was both on public road as well as on private road.  Mr Chan pointed out that all the lands involved belonged to the Heung, and it was a wrong impression to the Judge that obstruction occurred on public road.

47.On the balance of convenience, Mr Chan submitted that Keith Yeung J did not see it as such to have granted the interim receivership.

48.Mr Chan submitted that the means of the 2^nd Defendant being a $100 company is relevant, but not pivotal, as Keith Yeung J has observed in the Interim Receiver Decision, while His Lordship took those points into account, there was no evidence that the 2^nd Defendant was unable to perform its obligations under the Tinting Lease at that stage (at §71).

49.Mr Chan also referred to the alluring of a war chest of the huge funds kept by Bonus before Keith Yeung J, but again His Lordship commented that they were clearly not matters that could be resolved at that stage (at §79).

50.In any case, Mr Chan submitted that taking a holistic approach amidst the whole hosts of disputes, it is not unreasonable that 2^nd Defendant has resorted to self help.

Plaintiff’s reply

51.Miss Eu submitted that the root of the matter was the membership issue. The Plaintiff has claimed to be a member, and representing other claiming to be members.  Pending the resolution of the membership issue, everything is in deadlock: no meeting can be held, no petition can be made to the Government, and nothing can be done about the sham Tinting Lease.

52.As to the cases on the NTO cited by Mr Chan, none of them involved any membership disputes as in the present case preventing proper resolutions by the members’ meeting.

53.As to misleading the Court, Miss Eu submitted that although counsel for the Plaintiff did state the obstruction occurred on both public road as well as private road, Mimmie Chan J was clearly made aware that the 2^nd Defendant was claiming to be an owner of the land, and as the injunction order only restrain the obstruction of the tenants of Bonus with the proposed injunction restraining the 2^nd Defendant from claiming to be the owner was deleted.

54.And the so-called non-disclosure are all fine legal arguments which could be resolved at the trial of the issues.  In the meantime, what is just and convenient must be to maintain the status quo.

Discussions

55.That there is a contest between the tenancies under Bonus and the Tinting Lease was just the crust of the matter. The Bonus Agency was granted by Foo together with Pat Wong, and the Tinting Lease was executed by the 1^st Defendant. Deeper down is the validity of the appointment Pat Wong and removal of the 1^st Defendant as managers. And the crux of the matter is the membership of the Heung which impacted on the validity of the resolutions at the members’ meetings.

56.This ultimate question is definitely not a matter that can be decided in the context of an interlocutory injunction, and is squarely the subject matter of the Membership Proceedings in November this year.

57.Mr Chan had raised several questions of law as well as facts which he submitted the Plaintiff had failed to disclose to the Judge at the ex parte application.  Those are matters which could not be resolved without resolution of the crux of the membership dispute.  After listening to Mr Chan’s points, I am of the view that they can be added to the list of issues to be tried in the relevant proceedings.

58.Be that as it may, the Judge had been informed that obstruction by the 2^nd Defendant was purportedly upon the claim of ownership of the land under the Tinting Lease.  That is sufficient for the consideration of the grant of the interlocutory injunction on the crust of the matter.

59.Looking at the matter from another perspective, the 2^nd Defendant has commenced actions against 3 of the Bonus tenants for trespass and possession.  As such, to resort to the so-called self-help of obstruction seems to be flying in the face of the legal actions.  On the other hand, it might perhaps reflect of the mind of the 2^nd Defendant that to pursue the due process of the law might take too long, hence, it took the matter in its own hands.  Unfortunately, it is not how the Court would view the matter.

60.The other consideration is the Plaintiff’s locus.  It must be recognized that after the death of the 1^st Defendant, there is no surviving registered manager of the Heung.  With the dispute as to its membership, the Heung is in deadlock.  The Plaintiff and the other persons represented by him claimed to be members of the Heung.  Out of necessity, they must jump-start the process of resolving the disputes in the light of alleged injury to the Heung. 

61.At least the trial of the Membership Proceedings is in sight.  The fact that it has taken so long is lamentable that Senior Counsel’s advice to have the matter resolved was not taken up back in the 1990’s.  Again, it may also be another reason why the 2^nd Defendant has taken the matter into its own hands, and again, not the view shared by the Court.

62.As to the statutory procedure under the NTO, the YLDO has shelved the registration and removal of the managers and without giving any reasons.  The want of reasons must mean that they have simply taken a wait and see approach pending the resolution of the more involved issues mentioned above.  Hence, nothing much should be attached to the legal status of the managers  at this stage.

Conclusion

63.In the event, the preponderance of justice and convenience must be that the injunction should have been granted, as it was, and be continued, pending the determination of the Membership Proceedings, and then the Originating Summons herein, or until further order.

Costs

64.I make the order nisi that costs be in the cause, with certificate for two counsel, to be made absolute in 14 days.

65.Lastly, may I thank Miss Eu and Mr Chan for their helpful submissions.