Man Chung Lap v. Man Shui Tong Wui With Man Ping-name and Man Tai-sang As Managers
Read the full judgment text of HCA 1736/2024 on BabelCite. This High Court CFI judgment was delivered on 13 March 2026.
1. This case raises an interesting and novel question of law, namely, under customary Chinese laws which are an integral part of the general body of Hong Kong laws, whether the undisputed legal principle that the limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property extends and applies to a business t’ong with a tso as one of its members (the “Issue”).
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HCA 1736/2024 [2026] HKCFI 1495 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1736 OF 2024 ____________ BETWEEN
(by Original Action) AND BETWEEN
(by Counterclaim) ____________
_____________ DECISION _____________ INTRODUCTION 1.This case raises an interesting and novel question of law, namely, under customary Chinese laws which are an integral part of the general body of Hong Kong laws, whether the undisputed legal principle that the limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property extends and applies to a business t’ong with a tso as one of its members (the “Issue”). 2.By a summons dated 8 October 2024 (the “Summons”), the Defendant applies to (1) strike out the Plaintiff’s action, under Order 18, rule 19 of the Rules of the High Court, essentially on the ground that the Plaintiff could not possibly have an adverse possession claim against the Defendant as the relevant limitation period has not run out; (2) determine an issue of law, under Order 14A, rule 1 of the Rules of the High Court, namely, “whether, upon the uncontroversial evidence that the “Man Shiu [sic] Tong Wui” (the “Wui”) is a business t’ong within the meaning of s.15, New Territories Ordinance and that, at all times, it has membership consisting of ancestral tsos and tongs with male descendants born to these ancestral tsos and tongs between 1990 and 2016 with no break in time for more than 12 years, the Plaintiff’s claim for adverse possession against the Wui’s land based upon adverse possession thereof for a continuous period of 12 years immediately preceding the issue of the Writ herein is sustainable as a matter of law”; and (3) upon determination of the issue of law, under Order 27, rule 3 of the Rules of High Court, a judgment be entered upon the Plaintiff’s admission as a consequential relief. 3.During the hearing, both Mr Chong for the Defendant and Mr Lai for the Plaintiff agree that this Court should determine the Issue first and the parties can then seek directions on how best to deal with other related applications. MATERIAL BACKGROUND AND FACTS 4.Mr Lai for the Plaintiff agrees that: -
5.For the present applications, the Plaintiff accepts the existence of the 1986 Tenancy Agreement at its face value and agrees that it was performed by the 4 tenants and the successors. However, the Plaintiff maintains his stance on having adversely possessed the land for more than 20 years or 12 years since sometime on 1 July 1991 as pleaded. 6.As a matter of history,
ANALYSIS AND DETERMINATION The Nature of the Wui 7.Mr Lai for the Plaintiff submitted that whether the Wui is a business t’ong is a matter of expert evidence and hence, this case is not suitable for summary determination, one way or the other. He further submitted that Mr Chong’s reliance on the case of Re Man Un (Yun) Uk Wai (文元屋圍) [2023] 3 HKLRD 869 is misplaced as that case relates the determination of the nature of a Wai and not a Wui. 8.However, Mr Lai also enlightened this Court that as a matter of Chinese customary law, there are only three organs or institutes or entities that can hold landed properties in Hong Kong, namely, ancestral tso, business t’ong and religious t’ong. I agree that tso and t’ong are different. Though some tsos with an ancestral hall are loosely called tso t’ong or t’ong, they remain tsos with members being male descendants from a common ancestor. T’ongs can be business t’ongs or religious t’ongs. In the present case, this Court is concerned with business t’ongs only. 9.The Wui cannot be a tso or a religious t’ong. Hence, it can only be a business t’ong. Mr Lai has no satisfactory answer to this analysis. Indeed, if the Plaintiff would like to adduce expert report to advance a different analysis, it is incumbent upon the Plaintiff to at least suggest what his contention is on the nature of the Wui. If the Wui is not a business t’ong, what is it? I accept Mr Chong’s submission that the Plaintiff has not put forward any suggestion that the expert of his choice would give a different opinion that the Wui is not a business t’ong. The burden rests on the Plaintiff to raise an issue to be tried, not that if expert evidence were directed, there might be an issue to be tried. 10.Importantly, I agree that given that the Wui is a section 15 New Territories Ordinance entity since 1898 (either as a tso or a t’ong) and having regard to the fact that members of the Wui comprise of females and a limited company and the fact that the share of interest is transferrable, it is difficult to see how the Wui could be an ancestral tso. 11.In any event, reasoning from first principles, I have no difficulties in coming to the view that the Wui is a business t’ong as (1) the Wui was formed for a profit-making purpose as evidenced by the bi-annual distribution of rental income from leasing out its landed properties and (2) it is non-ancestral in nature as evidenced by its membership which includes females and a limited company, and members of the Wui who have definite shares of interest which are freely transferrable. 12.In the supplemental written submissions filed pursuant to the directions of this Court, Mr Lai submitted that the Wui is a business t’ong but a business t’ong in the nature of a Chinese partnership. However, upon analysis, I am of the view that this does not take the Plaintiff’s case any further. I accept Mr Chong’s submission that traditional Chinese associations (there being no concept of corporate personality) were accepted as ‘entities’ capable of owning interest in land in the New Territories. Irrespective of whether land ownership is vested in tsos or t’ongs, members of the association are considered collectively as the body aggregate for the purposes of owning land. 13.I am of the view that the analogy with partners or shareholders in a partnership or company under the English common law concept is not apposite. First, title of land is vested in tsos and t’ongs and the power of disposal is conferred upon the registered managers, a statutory creation in line with traditional Chinese concepts. Secondly, unlike partners or shareholders, individual members of tsos and t’ongs are entitled to bring independent action against third parties to recover land owned by tsos and t’ongs. 14.I agree with Mr Chong that Mr Lai’s reliance on the concept of chose in action is not correct. A chose in action is an intangible property right enforceable by its owner. It is a different species. The interest of a member of a tso or a t’ong is liable to be varied constantly and defeasible upon (1) births and deaths of other members; (2) death of the concerned member; and (3) grave sins committed against the tsos and t’ongs (precipitating in the member being ostracized). 15.Further, in the case of Chinese partnership, holders of ‘hung gu (紅股)’ have no interest in the partnership and, hence, no liability to the debts of the partnership. Holders of ‘hung gu (紅股)’ are, strictly speaking, not interested in the partnership except to the share of profit after interest in the capital has been paid. The Issue 16.In Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705, DHCJ Lam (as Lam PJ then was) concluded at §45 that limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property. 17.The issue in this case is whether the principle stated in Leung Kuen Fai applies to a business t’ong with a tso as its member. 18.The core reasoning in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) has to be stated in full.
19.DHCJ Lam (as he then was) remarked in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) at §1 that in this regard there is no distinction between a tso and a t’ong:
20.Mr Lai for the Plaintiff submitted that the t’ong under consideration is not a hereditary t’ong but a business t’ong. He said it is akin to a business partnership. 21.The principle in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) was subsequently applied by the Court of Appeal in Wong Shing Chau v To Kwok Keung [2008] 5 HKC 372 at §9, Tsang Wing Kit Eric v The Occupier(s) (unreported, CACV 157/2009, 28 June 2010) at §20, and Tsang Kwong Kuen v Hau Wai Keung Gaius [2014] 5 HKLRD 622 at §14. Before this Court, the correctness of Leung Kuen Fai is, rightly, not in dispute. 22.In Tang Man Kit v Chong Kee Ting Vicwood (unreported, HCA 1222/2010, 14 July 2011), Recorder A Chow SC (as he then was) applied the principle in Leung Kuen Fai to a business t’ong (Wah Yan Mo Fan Heung) with an ancestral t’ong (Yu Luk Shun Tong) as its member. 23.The reasoning in Tang Man Kit is this: -
24.Later in Tsang Kwong Kuen at §5, Lam VP explained his judgment in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) as thus:
25.Tsang Kwong Kuen concerns a hereditary t’ong: §§2; 8. It is thus unnecessary for the Court to deal with the position of a non-hereditary t’ong (which includes a business t’ong). The judgment of Tang Man Kit was not cited. 26.Nonetheless, the Court remarked obiter at §8 that:
27.It is clear that the Court drew a distinction between a hereditary t’ong and a non-hereditary t’ong.
28.In my view, the key issue arising for determination in the present case is whether the members of a business t’ong are the beneficial owners of the properties owned by the business t’ong. 29.Mr Lai for the Defendant submitted that Recorder A Chow SC was wrong in not making a distinction between a business t’ong and a hereditary t’ong. The emphasis is on common ancestors. 30.First, I am of the view that one must reason from the first principles. Section 15 of the New Territories Ordinance, Cap.97 provides: -
31.The t’ong in Section 15 cannot be construed to be restricted to hereditary t’ongs only. Section 15 includes clan and family. It must therefore also include business t’ongs. In fact, the Wui in the present case is registered under Section 15 of the New Territories Ordinance, Cap.97. 32.It follows that the managers of the Wui are registered to represent the Wui itself, and they are not the equitable owners of the assets (the land) of the Wui. The equitable owners of the Wui are members of the Wui which includes all members of San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖). 33.It is common ground that San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖) are not independent legal entities. They are in fact a floating group or cluster of male descendants from the same common ancestors. 34.It is also common ground that they are entitled to and did receive distribution of rental incomes from letting the landed property of the Wui to third parties at all material times. They each have a share of the equitable interest in the landed property of the Wui. 35.Hence, I am of the view that Recorder A Chow SC (as he then was) is correct in his analysis of the equitable interest of the assets of a t’ong registered under Section 15 of the New Territories Ordinance, Cap.97 (in particular, see §24). It is not confined to hereditary t’ongs. 36.Secondly, whilst in the context of a religious t’ong, Bokhary and Chan PJJ in Secretary for Justice v To Kan Chi (2000) 3 HKCFAR 481 at §§7 and 8 said: -
37.If one were to apply an analogy to unincorporated associations, there are four ways for an unincorporated association to hold land: Pozdnyaev, Denis v Kinvast Ltd [2022] HKCA 1685 at §26 per Barma JA.
38.There can be no joint tenancy as the four unities of time, title, possession, and interest are absent among the members of a business t’ong. They obtain a right in the business t’ong at different times through different ways. 39.The purposes of a business t’ong are not charitable such that no trust can be created for its purposes. 40.There is nothing in the nature of a business t’ong that calls for the application of a form of landholding different from that of a tso and an ancestral t’ong. 41.The Hong Kong Courts have consistently held that members of a tso or a hereditary t’ong are beneficial owners of the assets held by the tso or the hereditary t’ong. The “contract-holding theory” does not apply where there is a specific trust: Chap Yick Clansman’s Association Ltd v Mok Fai [1997] HKLRD 580 at §21 per Le Pichon J (as Le Pichon JA then was). In any event, the “contract-holding theory” is inconsistent with the legal position of Hong Kong and should not be adopted. 42.In my judgment, members of a business t’ong are the beneficial owners of the properties owned by the business t’ong. None of the three other forms of landholding by an unincorporated association as identified in Pozdnyaev, Denis is applicable. 43.As a matter of fact, the properties of a business t’ong are not held by its members as legal owners. The legal title of the properties of a business t’ong is held by its managers. 44.I am of the view that it is incorrect to argue that the Wui is an independent legal entity and its members only have a transferable share in the legal entity akin to the shares of a limited liability company. In the limited company analogy Mr Lai for the Plaintiff advanced at the hearing, shareholders do not have a right to the underlying assets of the subject company. However, in the Wui, its members, including members of the tsos have a direct equitable interest in the assets of the Wui. This is the distinction. 45.This collective group or cluster of individuals, including females, as a matter of analysis, varies with the birth and death of its members. A business t’ong with tsos as members necessarily entails that a newborn member of one of the tsos will acquire a direct beneficial interest in the business t’ong. 46.It follows that where a tso is a member of a business t’ong, as a tso is not a legal entity that can own properties itself, the members of the tso are the beneficial owners of the properties of the business t’ong. Mr Lai for the Plaintiff did not argue that San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖) are the equitable owners of the landed property of the Wui. 47.Mr Lai for the Plaintiff submitted that one looks at the list of members to decide who are the members of the Wui. As an individual member of a tso is not registered on the list of members separately, he cannot be a member of the Wui, a business t’ong, with a share in the equitable interest of the land property of the Wui. I disagree. As a tso is not a legal entity and cannot hold property interests directly, its interests are held by its members collectively. 48.Once the nature of landholding for a business t’ong is ascertained, I am of the view that the principle in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) should be applied in the present case. 49.It is true that unlike a tso, the membership of a business t’ong is freely transferrable, not limited to the male descendants of a common ancestor, and does not directly arise from birth. However, this does not detract from the fact that where a tso is a member of the business t’ong, a new equitable interest in the business t’ong is created by the birth of a member of the tso. In this regard, the reasoning in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) as explained in Tsang Kwong Kuen is applicable on all fours. 50.The interposition of a tso as an additional layer in the structure of a business t’ong does not prevent the members of the tso from being the beneficial owners of the assets of the business t’ong. In Tang Yau Yi Tong v Tang Mou Shau Tso [1996] 2 HKLR 212 (CA) at 219E, Liu JA (with whom Bokhary and Godfrey JJA, as they then were, agreed) held that members of the tso (Tang Mou Shau Tso) are the beneficial owners of the assets of the t’ong (Tang Yau Yi Tong) of which the tso is a member. There is no reason to depart from this line of reasoning in the present case, which is in any event highly persuasive if not binding. This reasoning was also applied in the context of a business t’ong in Tang Man Kit at §25. 51.This Court does not consider that Tsang Kwong Kuen stands for the proposition that Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) cannot apply to non-hereditary t’ongs. There is no conflict between Tsang Kwong Kuen and the conclusion reached in the present case.
52.For the above reasons, I come to the view that as against a business t’ong with a tso as its member, limitation period runs afresh each time a new member of the tso is born, as a new equitable interest in the business tong is created. Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) is applicable in the present case. Male Descendants 53.On the factual issue, there is no dispute that Man Tim Lap (文潻立), the brother of the Plaintiff, has been responsible for managing the business and affairs of the San Yeah Tso (莘野祖) and that, in the course of the discharge of his duties, information and birth certificates of the 5 male descendants were supplied by the heads of the 3 fongs (房) to him. I agree that this is sufficient proof that the 5 male descendants have become members of the San Yeah Tso (莘野祖) since their births. 54.I also note that Man Tim Lap (文潻立) and Man Sum On (文心安) have been the persons responsible for distribution of the shares of rental income to members of the San Yeah Tso (莘野祖) including to the 5 male descendants. 55.The evidence of Man Tim Lap (文潻立) was supported by Man Kwai Sau (文貴壽), the Vice Chairman of the San Tin Rural Committee (新田鄉事委員會) and a member of the San Yeah Tso (莘野祖) responsible for managing its business and affairs since the death of its last manager some 10 years ago. 56.Insofar as the 3 male descendants of the Yee Fong Tso (二房祖) (born between 6 September 1999 and 4 August 2016) are concerned, the Plaintiff only puts the Defendant to strict proof. The Plaintiff has not adduced any evidence to challenge the same. 57.In his affirmation, Man Foo Luen (文富聯), one of the two registered s.15, New Territories Ordinance managers of the Yee Fong Tso (二房祖) responsible for managing its business and affairs for the past 3 decades, has deposed upon the following facts and matters:-
58.On the disputed facts, Mr Lai for the Plaintiff only listed two items, namely (1) there are 5 birth certificates allegedly of lineal male descendants of San Yeah Tso and (2) San Yeah Tso managers were not elected. 59.I am of the view that the above two items do not constitute factual disputes. The Defendant has, in my view, adduced cogent evidence to sustain its case. The Plaintiff merely either suggests a doubt or put the Defendant to strict proof. 60.The 5 male descendants of San Yeah Tso (莘野祖) have received distribution of rental income for years. There is no basis to challenge their membership. 61.Mr Lai for the Plaintiff has not pressed the point that lighting the lantern (點燈) is a necessary requirement for a newborn to become a member of San Yeah Tso (莘野祖) during his oral submissions. This is correct as the Plaintiff has not adduced any evidence to support such an allegation. 62.Mr Chong for the Defendant also drew my attention to the case of Tang Chun Kit & Tang Chung Ming v. Tang Lo Ping, managers of Tang Nam Kai Tso, HCMP 5529/2000, unrep., 10 September 2004, where Lam J (as he then was) at §§14-15 said: -
63.I am satisfied that the 8 male descendants were born to San Yeah Tso (莘野祖) and Yee Fong Tso (二房祖) between 23 January 1990 and 4 August 2016 with no time gap of 12 years, thus there is no question of the limitation period for the purpose of satisfying ss.7(2) and 17 of the Limitation Ordinance. 64.Further, I am of the view that whether San Yeah Tso managers were not elected or not have no material impact on the identity of the 5 male descendants. Once the Defendants have adduced cogent evidence on the identity of the 5 male descendants, the burden rests on the Plaintiff to raise bona fide issues that they are not members of San Yeah Tso. There is no evidence. 65.For the sake of completeness, I am also of the view that the 1986 Tenancy includes the Lot in question. First, since 1989, 25 land lots (inclusive of the Lot) have been registered in the name of the Wui as owner up to the present. Secondly, I agree that the subject matter of letting being ‘將水塘會持有物業田種全部…批租與 (to let all the landed property (Tin Chung) of the Shui Tong Wui)’ necessarily means that all the 25 land lots (inclusive of the Lot) would have been let. Thirdly, in HCA 1207/2023, when Man Whi Chung and Fortune Nine sued the Defendant (and the Plaintiff in HCA 126/2024) for declaratory relief for extension of the 1986 Tenancy, the Lot was expressly pleaded as one of the 25 land lots let under the 1986 Tenancy seeking extension. Fourthly, in HCA 126/2024, Man Whi Chung, in his affirmation resisting Kenwell Limited’s claim for possession of the said land lot, asserted that, by the 1986 Tenancy, the Wui “…agree to let all the land lots owned by the Wui to my late father and the other said individuals for a term of 10 years expressly for [Lot 3065] to be used as fish ponds…”. 66.Thus, both the Plaintiff and Man Whi Chung asserted that the Lot was one of the 25 land lots let by the Wui under the 1986 Tenancy. DISPOSITION 67.By reason of the analysis as set out above, I am of the view that the Plaintiff’s case is not sustainable as a matter of law to maintain a claim of adverse possession since the late 1990s and should be struck out. 68.I am aware of the established legal principles in relation to striking out applications under Order 18, rule 19 of the Rules of High Court as set out in the parties’ respective written submissions which I do not find it necessary to rehearse the same here. Suffice it for me to say that as a matter of the above legal analysis, I am of the view that it is plain and obvious that on the established and existing authorities, the Plaintiff’s claims for adverse possession cannot be sustained. 69.Accordingly, I make the following orders:
70.Finally, it remains for this Court to thank counsel for their helpful assistance.
Mr Thomas Lai, Mr Edward Chin and Mr Arthur Wan, instructed by Alex To & Co., for Plaintiff (by Original Action) and the Defendant (by Counterclaim) Mr K.M. Chong and Mr Alvin Chong, instructed by Samuel Chow Solicitors, for Defendant (by Original Action) and 1st and 2nd Plaintiffs (by Counterclaim) |