Pang Chong Yip and Pang Kwai Choy As Managers and Members of ‘pang Nam Hing Tong’ v. Lui Chan Man Alex and Others

DCCJ 949/2025

[2026] HKDC 1313

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 949 OF 2025

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BETWEEN

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DECISION

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1.This is the appeal of the 2^nd, 3^rd, 4^th, 5^th and 7^th Defendants (collectively “Ds”) against the Decision of Master Vivien Lee dismissing their application to strike out the Plaintiff’s claim against them on 1 December 2025.[1]

2.The dispute concerns PANG NAM HING TONG (彭南慶堂) (“T’ong”), the registered owner of the piece or parcel of land known as “The Remaining Portion of Section B of Taxlord Lot No T4 in Demarcation District No 51 (“Land”). At all material times, Pang Chong Yip (彭創業), the 1^st-named Plaintiff (“PCY”), Pang Kwai Choy (彭貴財), the 2^nd-named Plaintiff (“PKC”), and Pang Kwok Kit (彭國傑), the 7^th Defendant (“D7”), were and still are the three managers of the T’ong duly appointed by the New Territories District Office (North) (“Managers”).

3.By the Writ of Summons endorsed with a Statement of Claim dated 18 February 2025, the Plaintiff, ie PCY and PKC as managers and members of the T’ong, claim against the 1^st to 6^th Defendants (“D1, D2, D3, D4, D5 and D6” respectively) for trespass and sought inter alia orders to recover possession of various parts of the Land which have been wrongfully occupied by them (“Possession Claim”). The Plaintiff also sought a declaration against D7 that he has failed his duty as a trustee for the T’ong by refusing to be joined as plaintiff in the present proceedings (“Breach of Trust Claim”).

4.Before the filing of defence, Ds took out a summons[2] to strike out the Plaintiff’s claim on the ground that it is an abuse of the process of the court in that (1) PCY and PKC had no authority to commence the proceedings and (2) the claim against D7 is frivolous, scandalous and vexatious and/or discloses no reasonable cause of action.

FACTUAL BACKGROUND

5.The factual background is straightforward and largely undisputed.

6.D3 and his son D2 are members of the T’ong. D2 was the registered owner of the parcel of land known as Fanling Lot No 497 in DD 51 where a 3-storey house was built which was sold to D1 in 2021 (“D1’s Land”). At all material times, D2 and D3 operated and still operate a business called “Fanling Store” (粉嶺士多) at an area attached to D1’s Land which was marked pink in the Site Plan enclosed to the Statement of Claim (“Site Plan” and “Pink Area” respectively).

7.D4 is the registered owner of the parcel of land known as Lot No 5128 in DD 51 on which a 2-storey house was built (“D4’s Land”). Attached to D4’s Land are two areas marked Blue and Green in the Site Plan (“Blue Area” and “Green Area” respectively) which were and still are occupied by D4 and D5 who are not members of the T’ong.

8.The Pink, Blue and Green Areas (“encroached areas”) are within the Land and thus owned by the T’ong. It is not disputed that the T’ong has never given consent or permission to D1 to D6 to occupy any part thereof. It is the case of D2 and D3 as well as D4 and D5 that they have been in occupation of the encroached areas for decades and spent money in improving them over the years.

9.In around 2023, the T’ong allegedly received complaints from its members regarding the wrongful occupation of the encroached areas. During a discussion with PCY, D7 expressed that he did not agree to resolve the matter by way of litigation and preferred negotiation.

10.On 23 December 2023 and 8 January 2024, the T’ong issued written notices to occupiers of the encroached areas requesting them to contact the Managers for negotiation and resolution of the matter.

11.In response, D3 proposed to purchase the Pink Area from the T’ong at the price of HK$1,267 per square feet, that being equivalent to government resumption rate, with some details for the proposed sale (“D3’s offer”). D5 also proposed to acquire the Blue Area at a price equivalent to the government resumption rate (“D5’s offer”).

12.On 20 January 2024, a Special Members’ Meeting of the T’ong was convened which was attended by a total of 33 members including PCY, PKC and D2 with D7 absent. It was resolved that possession of the encroached areas should be recovered by the T’ong[3] with 24 voted in favour, 4 including D2 against and 5 abstained.

13.According to the Member’s Register produced by Ds, the T’ong had a total of 413 members as at 29 November 2024.

14.Another meeting was convened by PCY and PKC which was held on 7 April 2024 and attended by 34 members. Similarly, D7 was absent. In that meeting, it was resolved unanimously that:

(1) Due to D7’s unwillingness to participate in T’ong’s recovery of possession of the encroached areas, PCY and PKC shall have the full authority to handle all matters on behalf of the T’ong to recover the same[4]; and

(2) D7 shall provide written explanations as to his absences in the said two Members’ Meetings[5].

15.On 16 April 2024, the Plaintiff’s solicitors, purportedly on behalf of the T’ong, issued demand letters to the occupiers demanding them to reinstate and deliver vacant possession of the encroached areas failing which legal proceedings would be commenced without further notice.

16.By a letter dated 29 October 2024, the Plaintiff’s solicitors, again purportedly on behalf of the T’ong, enquired with D7 if he agreed to join in the proceedings to be commenced by PCY and PKC as a plaintiff to recover possession of the encroached areas. It was further stated that if he refused to do so, he would be joined as a defendant by reason of his failure to discharge the duties of a manager.

17.On 18 February 2025, PCY and PKC commenced the present proceedings in a dual capacity: as a majority of the registered managers and as individual members in their own right.

APPLICABLE PRINCIPLES

18.In Kammy Town Ltd v Super Glory Corporation Ltd[6], the defendant sought to strike out the action for want of authority. A Cheung J (as Chief Justice Cheung then was) said, at §8:

“8. It is common ground that this appeal is a de novo hearing. It is also common ground that although this is a “strike out” application, it is quite different from an ordinary application to strike out a pleading under Order 18 rule 19. Familiar principles like the one that the court should not exercise its discretion to strike out a pleading unless it is a “plain and obvious” case to do so has little if any relevance or application.”

19.The legal principles underlying a challenge to a party’s authority to sue and the proper procedure and approach to it has been clearly expounded by the Court of Appeal in Bold Shine Investment Ltd v Zheng Deli aka Cheang Leu and Cheang Tak Lei[7]:

“27. The following passages in the Kammy Town (at [11], [14], [18] to [21]) are of particular relevance to the present applications:

“11. In short, a point on lack of authority must be taken by a defendant at the earliest opportunity. It should not be raised as a point of defence, for it is not a defence, and for that reason the matter should not be left for determination at trial. Furthermore, given the nature of the point, the matter should not be left to be determined at trial together with the substantive issues between the parties, the determination of which issues at trial would become a total waste of time and resources if the point on lack of authority should be upheld at the end of the day.

13. However, unlike an ordinary application to strike out a pleading, the present type of striking out applications inevitably requires a definitive determination by the court seised of the application on the point. In other words, either the action was authorised by the company or it was not. There is no halfway house. The point has to be decided according to the burden and standard of proof – the burden lies with those suing in the name of the plaintiff to prove authorization. Subject to any subsequent ratification (where necessary) of the action by the company, the action will stand or fall depending on the court’s determination of the question of authority.

14. For those reasons, it is not appropriate for a court, seised of the application, to simply say on the affidavit evidence before it that it is not a “plain and obvious” case of a lack of authority, and therefore the application should be dismissed and the action allowed to proceed to trial. Rather, at the substantive hearing, the court has to see whether the objection raised by the defendant can be summarily disposed of on the affidavit evidence that has been placed before the court for the purpose, and if not, how the objection can be determined and give directions accordingly.

18. However, where the court is unable to decide the question of authority – which is in essence a question of fact (or maybe a mixed question of fact and law), the court should not dismiss the application (as would have been the case in an ordinary application to strike out a pleading), nor should it try to attempt the impossible by making a finding of fact on affidavit evidence without cross-examination. Instead it should adjourn the hearing and give appropriate directions for the determination of the objection at an adjourned hearing, such as the cross-examination of the deponents of the affidavits/affirmations that have been filed by the parties in relation to the objection.

19. As has been pointed out by Kerr LJ in Airways Ltd, one of the possible purposes of an adjournment of the hearing by the court seised of the application would be to allow a meeting of the company to be held to see if the commencement of the action would be confirmed or ratified by either the board or the shareholders (p. 361d to e). However, I do not agree that there Kerr LJ was setting out the only situation where the court, seised of the application, could properly adjourn the hearing. In fact, Kerr LJ expressly referred to the adjournment of the application “in order that an issue may be tried as to whether or not the proceedings were in fact brought with due authority” (p. 361d). In my view, if the court cannot decide the dispute of fact on paper, the proper course to take is to adjourn the hearing, with appropriate directions, to another date when oral evidence will be heard and tested.

20. In some cases, adjourning the hearing with a direction that a meeting of the shareholders be held to see if the company supports the litigation will be the wise course to take (Palmer’s at para. 8.803). But in other cases where there is a deadlock amongst the shareholders and it is alleged that there has been passed a resolution to sue prior to the deadlock, which has never been revoked since (particularly because of the deadlock), adjourning the hearing for the purpose of holding a shareholders’ meeting will not resolve the crucial question of whether there has indeed been made such an alleged resolution (that has never been revoked since).

21. In the authorities (and submission of counsel), there was some mention of the requirement for a “clear consent” (Daimler at p. 327) and that the action should not be allowed to proceed if the authority to commence it is “doubtful” (Airways Ltd at p. 359 d/e). As regards the latter word, in my view, when properly understood, it simply means that if there is any real doubt about the authority to sue, the question must be resolved first, before the case should be allowed to proceed any further; in the determination of the question, the burden is on those suing in the name of the company to establish consent to the commencement of the action, on a balance of probabilities – if the standard of proof is not achieved, then there is no consent and the name of the company must be struck out and the action dismissed. Put another way, either there was authorization or there was not. Any adjective like “doubtful” merely places emphasis on the burden and standard of proof.”

28. Kammy Town demonstrates that even where the challenge to authority to sue involves substantial dispute of fact, the issue must still be determined first and before the case should be allowed to proceed further, even if this should necessitate an adjournment of the proceeding before the court.

29. The principles in Russian Commercial and Industrial Bank, Airways Ltd and Kammy Town were considered by this court[8] in Liquidation Committee of Foshan Hongda Development Ltd v East Legend Investment Ltd [2009] 1 HKLRD 169. In that case, the defendant sought to strike out an action commenced by a Mainland state-owned enterprise for lack of standing to sue. The plaintiff, who was the Liquidation Committee of the enterprise, applied to substitute itself as the plaintiff, whereupon the defendant withdrew the striking out application. At the trial however, the defendant revived the challenge to the plaintiff’s standing to sue. The trial judge allowed the challenge to be made, but held that the plaintiff had the necessary standing and entered judgment against the defendant. This court dismissed the appeal, holding that it was an abuse by the defendant to raise the issue of standing at the trial when as a matter of law it could not have been raised by way of defence and that the trial judge should not have allowed the issue to be reopened.

30. In giving the judgment of the court, Cheung JA summarised the relevant principles on the challenge on the lack of standing to sue after considering the decision in Russian Commercial and Industrial Bank as applied in Airways Ltd and Kammy Town as follows (at [18]):

(1) The challenge cannot be raised by way of defence.

(2) It must be raised at the outset or when it comes to the attention of the court or of the defendant in the course of the proceedings.

(3) Once the issue has been raised it must be decided.

(4) It would be wrong to allow the action to go on without deciding the issue of standing as the defendant will not have a further change to challenge the issue.

31. At [21] of the judgment, the underlying rationale and the importance of observing the above principles were explained:

“The crux of the principles on the challenge of the plaintiff’s standing to sue is the requirement of an early determination of the issue. This makes perfect sense because otherwise the plaintiff would be incurring substantial costs in the preparation of the case for trial which may be totally wasted if the issue was decided against him. If, as in this case, the contest is to be decided only at the beginning of the trial the rationale behind these principles would be defeated. In my view, the importance of the rationale had not been properly recognized in the present case when the Judge decided to deal with the issue at the trial.”

32. As Lam J (as Lam PJ then was) observed in Chu Wai Chun Jackie v Lam Siu Kei (unreported) HCAP 3/2009, 9 June 2010 at [14], although Foshan Hongda concerns a challenge on lack of standing to sue, on true analysis it is a case on the authority to pursue a claim of the company. The term “standing to sue” used in the judgment should therefore be understood in that light. It should also be noted that the principles summarised in the case stem from authorities dealing with authority to sue and are thus relevant and applicable to the present discussions.

33. The procedure and the approach for a challenge on authority to sue is as much a question of practice and procedure as an aspect of procedural law founded on well-established legal principles. The legal principles discussed in the preceding paragraphs should guide the court when exercising any case management power. Parties should also pay due observance to these principles and any agreement on how to deal with an authority challenge should not deviate from them.”

20.If the application is premised upon the proposition that there is no reasonable cause of action, it must be considered simply on the basis that the facts alleged in the statement of claim will be established. Where a pleading is defective only in not containing particulars as to which the other side is entitled, the correct approach is to order particulars rather than strikeout the pleadings: see Polyline Development Limited (in liquidation) v Ching Lin Chuen & Ors[9].

ISSUES FOR DETERMINATION

21.The issues that arise from the arguments advanced by Mr Tam, who appeared together with Mr Liu for Ds, are:

(1) Whether PCY and PKC have the standing to sue as members in their own right; and if so, whether it is necessary for them to join all members of the T’ong as parties to the proceedings which they have failed to do so;

(2) Whether PCY and PKC has the authority to sue as managers when D7 refused to act jointly with them and be joined as a plaintiff; and if so, whether the resolutions passed at the two Members’ Meetings, which were attended by only a small fraction of members, were invalid such that PCY and PKC did not have the necessary authority to sue as managers; and

(3) Whether the resolutions passed, even if valid, gave the authority to PCY and PKC to pursue the Breach of Trust Claim against D7; and if so, whether the claim is unarguable.

ANALYSIS

(1) PCY & PKC to sue as Members

22.Land held in the name of a t’ong is a type of Chinese customary landholding preserved in the New Territories. The relevant part of section 15 of the New Territories Ordinance, Cap 97 (“section 15”) provides:

“15. Whenever any land is held from the Government under lease or other grant, agreement or licence in the name of a clan, family or t’ong, such clan, family or t’ong shall appoint a manager to represent it… who shall … have full power to dispose of or in any way deal with the said land as if he were sole owner thereof, subject to the consent of the Secretary for Home and Youth Affairs…” (emphasis added)

23.The nature of a tso or t’ong and the interests of its members is to be found in the oft-cited dicta of Mills-Owens J in Tang Kai Chung & Anor v Tang On Kwai & Ors[10]

“2. 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 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 life-time; 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…”

24.In Tang Yau Yi Tong & Anor v Tang Mou Shau Tso & Ors[11], the Court of Appeal held that T’ong and Tso are not legal entities, and a declaration was made that the members of the Tso were entitled to beneficial interest in the property and the managers were not entitled to see the property without the consent of the members.

25.In Leung Kuen Fai v Tang Kwong Yu (or U) T’ong or Tang Kwong Yu Tso[12], the plaintiff sought a declaration that he had acquired good possessory title to a property in the New Territories against the defendant, Tang Kwong Yu (or U) T’ong or Tso. The issue at the trial of preliminary issue before DHCJ Lam (as he then was) was whether by reason of births of male descendants to the defendant from time to time or by virtue of Chinese custom or customary right affecting the land, (1) the defendant’s title to the property and (b) the right on the part of the defendant and its managers to recover possession of the property, have been preserved intact notwithstanding any adverse possession thereof the plaintiff might be able to establish.

26.His Lordship having held that the existing members of the Tso have beneficial interests in the Tso property for limitation purpose[13] said:

“33. Moreover, given their positions as beneficiaries, I see no reason why the members of the Tso could not claim for possession of the Tso land against a stranger. Usually, the managers would have taken action and the members do not need to initiate such action. However, if for certain reasons the managers failed to take action, the members should be entitled to commence an action for possession against a trespasser. I reject Mr. Lim’s submission that the member must sue through the managers of the Tso. Of course, the managers as trustees would have to be joined as parties to the action. But that does not mean that a member could not start an action. He would be doing so for the benefit of all members of the Tso. As between the members of the Tso and the trespasser, the equitable estate of the members in the property must prevail over the wrongful occupation of the property by the trespasser.

…

42. Mr Lim also suggested that the members of a Tso could not claim for possession by themselves. He submitted that such a claim could only be brought by the managers as trustees. As indicated in paragraph 33 above, I do not agree. With the fusion of law and equity, beneficial owner is also entitled to seek possession against a stranger. In General Finance, Mortgage & Discount Co. v Liberator Permanent Benefit Building Society [1878] 10 Ch D 15 at p. 24, Jessel M R said,

“... considering especially that the jurisdiction in equity and common law is now vested in every Court of justice, ... no action for ejectment or, as it is now called, an action for the recovery of land, can be defeated for the want of the legal estate where the Plaintiff has the title to the possession ...”

That principle was applied by the Irish Court of Appeal in Antrim County Land Building & Investment v Stewart [1904] 2 IR 357. Palles CB said,

“Where the plaintiff claims to be entitled to any right --- such as here, the right of possession of land --- by virtue of an equitable estate, the High Court, whatever may be the Division of it in which the suit may happen to be, must, so long as the suit remains in the Division, give the same relief as ought to have been given by the Court of Chancery in a suit properly instituted for the like purpose before the [Judicature Act]."

... it would serve no useful purpose were I to discuss the exact form of procedure which, before the Judicature Act, ought to have been adopted by a Court of Equity as ancillary to determining the plaintiff's right of possession. ... Whatever might have been the course adopted, one thing is certain, that through the judgments of two separate courts the plaintiff would have been put into possession, and what then could have effected through two courts can and ought now to be effected by the one court.”

See also Re O'Neill [1967] NI 129 and Mills v Lewis [1985] 3 BPR 9421. In an article published in [1955] 71 LQR 204, Professor Wade examined this rule in the context of equitable mortgage, see in particular p. 214-219 with regard to the historical development of enforcement of an equitable owner's right to possession. In fact, Section 10(2) of the Limitation Ordinance clearly envisages that each beneficiary has an independent right of action to recover land. Hence the estate of the trustee shall be extinguished only when "every such right of action has been so barred".

43. Even before the enactment of Section 10(2), similar views have been expressed by the learned editors of Darby & Bosanquet, A Practical Treatise on the Statutes of Limitations, 2^nd Edn. (1893) in the context of limitation. At p. 420 of that textbook, it was said,

“It may be said too that, as the 34^th section only extinguishes the title of the person whose remedy is barred, leaving the occupant with a title gained by possession and resting on the inability of others to eject him, the extinction of the title of trustee cannot of itself extinguish the title of the equitable owners; that, on the contrary, their title cannot be extinguished by the operation of the 34th section until the prescribed period has elapsed after their right to sue in the name of the trustee has accrued, or would, if such remedy existed, have accrued, having regard to the equitable limitations. If this be right, the trespasser in the case supposed would after the lapse of twelve years have a title subject to be defeated by any existing estate or interest, and there would be actual subsisting equitable estates recognized as such now by all Courts, the persons entitled to such estates or interests being the substantial owners of the land. In these circumstances the Courts would scarcely allow any extreme technical view to defeat the rights of the parties; but in any action for the recovery of land brought by the beneficial and substantial owners in the name of the trustees, or by the equitable owners in their own names, the Courts would not allow the trespasser to make use of the statute to defeat such substantial existing rights. It is believed that the actual point has never been the subject of a legal decision, but the view here advocated would seem to be supported by the judgment of the House of Lords in Scott v Scott [1854] 4 HLC 1065.”

Hence, I hold that members of a Tso do not need to claim through the managers in seeking to recover the Tso land against strangers.”

27.Mr Tam sought to argue that the principles enunciated in Leung Kuen Fai only apply to claims against “strangers” and thus PCY and PKC, as members, have no standing to commence proceedings against D2 and D3 who are members of the T’ong. I do not agree.

28.The reasoning of his Lordship focused on the rights of the equitable owners vis-à-vis the trespasser. The term “stranger” in the judgment could not be read to exclude a trespasser who happens to be a member of the T’ong. I do not think Mr Tam’s argument went so far as to suggest that the equitable owners did not have a cause of action on trespass to T’ong land merely because the trespasser is a member of that T’ong. Rather, his submission was that in order for PCY and PKC to have locus standi, they must sue as representatives of all the members of the T’ong or by joining all of them as either a plaintiff or a defendant in the present action depending on their stance in the matter.

29.It is beyond dispute that PCY and PKC and other members of the T’ong have the same interest in the recovery of the encroached areas from Ds. Under Order 15 rule 12 of the Rules of the District Court, the present action may be continued by PCY and PKC as representing all members except D2, D3 and D7 with the leave of the Court upon application to be made by the Plaintiff.

30.In Leung Kuen Fai, the proceedings was commenced in the name of the Tso (or T’ong), his Lordship did not rule the issue on authority against the plaintiff and invited parties to propose directions to be made for the continuation of the proceedings:

“74. It is not very clear to me whether the Defendants were sued in their capacity as trustees in the present action or as representatives of all the members of the Tso. I do not know whether Tang King Loi, Tang Ka Hei, Tang Pak Hin, or at least one of them, would join or be joined as parties to this action. In view of that, I shall hear parties on the order or direction that I should make in the light of my determination. The matter should be restored before me for that purpose.”

31.In the circumstances, I refuse to strike out the Plaintiff’s Possession Claim against D2, D3, D4, D5 and D6.

(2) PCY & PKC to sue as Managers

32.In light of my finding above, I shall deal with this issue briefly.

33.The main thrust of Mr Tam’s argument was that when there is more than one manager, section 15 requires unanimous acts of all managers in dealing with its land including the commencement of proceedings for recovery of T’ong land. He however accepted that there would be exceptions and cited Lewis on Trust[14], §28-086:

“As to bringing legal proceedings, trustees must in general act jointly when doing so. One or more trustees cannot sue to enforce a right forming part of the trust property, even if the dissenting trustee is added as a defendant, where there is no more than a disagreement in good faith as to bringing proceedings. That course is permissible only where designing trustees is acting in breach of trust and refusing to join in the proceedings or, no doubt, where are the special circumstances apply.”

34.In Tang Kun Nin, Tony Manager of Hung Shing Temple v Cheng Wai Fong and Ors[15], the plaintiff being one of the four managers of the Temple commenced the action against the defendants who are “outsiders”. DHCJ Marlene Ng (as she then was) dismissed the defendant’s striking out application on the ground of lack of authority to sue and said at §95:

“95. As explained above, the present situation is different in that the surviving co-Managers were dealing with the Ds as “outsiders”. The present situation is also not one in which some of the existing appointed and registered co-Managers failed to join in as the plaintiff. In such circumstances, I find Lord Millett NPJ’s observations in the Court of Final Appeal’s decision in Tang Man Kit relevant and pertinent. The authority of Tang KN, Ip and Tang FW to represent the Temple was matter of the internal administration of the Temple (being a t’ong) and had nothing to do with the “outsider” Ds, and D2 and D3 cannot enquire into the propriety of the surviving co-Managers’ authority to act or on such basis strike out the present proceedings. That being the case, I need not consider any custom and practice of the Four Yeuk and the Temple raised in the Chong 2^nd and 3^rd Affs which were internal administration matters beyond the concern of D2 and D3.”

35.Applying Tang Kun Nin Tony, Ds’ argument of the Plaintiff’s lack of authority to sue as managers in the Possession Claim against D1, D4 and D5 who are outsiders must likewise fail.

36.In Tang Kam Wah & ors v Tang Yat Ming & anor[16], the dispute was over the validity of a lease over land belonging to two tsos which was entered into without the consent of and signed by only two out of the six managers. Counsel for the defendants did not take issue with principle of unanimity but argued that since the lease was agreed/approved at a duly convened meeting by the members of the tsos it was valid and binding pursuant to a customary rule. At trial, Chu J (as she then was) heard expert and factual evidence on the pleaded custom alleged by the defendants and held that they have failed to discharge the burden of proving the same on the evidence. At §58, her Ladyship found that it was not necessary to consider whether the Lease, even if accords with the Pleaded Custom, was valid but indicated her views on the argument advanced by counsel and said at §72:

“Under Section 15, the power of dealing with Tso land, including the granting of a lease, is vested in the manager. Accordingly in exercising the power to let, the manager being trustees are required to act unanimously: Lewin on Trust (17^th edn) p.737. The consent of only one manager fropm each of tej two Tsos in question is insufficient to make the Lease a valid and binding one. If follows that the unanimous decision of managers cannot be overridden by the decision of the members of Tso because under Section 15, the power to deal with Tso property is conferred solely on the managers and no one else: per Litton JA (as he then was) in Light Ocean Investments Ltd, at p.40. This being the case, even if the defendants were to succeed in proving the existence of the Pleaded Custom, the Lease remains invalid and unenforceable by reason by Section 15.”

37.It is clear that her Ladyship was considering the validity of a lease and not the commencing of an action by the managers against a trespasser.

38.In Mak Lai Chuen v Lau Kat Yau[17], there were two registered managers in a Tso. On the death of one of the managers, the surviving manager claimed to be the sole manager and commenced proceedings against the defendant to recover possession of the Tso land. At trial, DJ Mimmie Chan (as she then was) had the benefit of hearing expert evidence on Chinese customary law relevant to this particular Tso which has no bearing on the present case. I do not find this case to lean support to Ds’ contention.

39.Mr Tam submitted that the resolutions passed at the two Members’ Meetings, which were attended by only a small fraction of members, were invalid such that PCY and PKC did not have the necessary authority to sue as managers. It is his contention that all resolutions of the T’ong should be passed by an absolute majority of all its members at a duly convened members’ meeting. This however is not an issue raised in any of the affirmations filed by Ds.

40.In Tang Kun Nin Tony, DHCJ Marlene Ng (as she then was) addressed the burden of proof at §63:

“63. Mr Recorder H Wong SC in Billion Express Industrial Limited v Tsang Hung Kong[18] followed Kammy Town Limited in holding that the plaintiff carries the legal burden of proving authority to sue whilst the defendant carries the evidential burden. He referred to Phipson on Evidence[19] and reminded that the evidential burden (which is no more than a burden to adduce evidence of what is asserted that is sufficient to go to the jury, ie that it is on its face believable) must not be conflated with the legal burden. Unless the defendant discharges the evidential burden, there will be nothing to contradict the prima facie effect of the evidence adduced by the plaintiff, but it is not quite the same as saying that the defendant bears the burden of proving his assertions on the balance of probabilities. The legal burden rests with the plaintiff and does not shift.

64. In the circumstances, whilst D2 and D3 carried the evidential burden, it is ultimately for the plaintiff to establish authority to sue on the balance of probabilities.”

41.In the absence of any evidence relating to the practice and convention in relation to the members’ meeting of the T’ong, Ds simply failed to discharge the evidential burden in challenging the Plaintiff’s authority on the ground that the said resolutions are invalid.

42.By reason of the above, I refuse to strike out Ds’ Claim against Ds on the ground that the Plaintiff has no authority to sue as managers.

(3) The Breach of Trust Claim against D7

43.Mr Chan argued that D7 was in breach of his trustee duty by refusing to be joined as a plaintiff. It is not the Plaintiff’s pleaded case that D7 refused to be joined as a plaintiff in recovering possession from the trespassers in good faith. Bearing in mind that Ds did not dispute their ooccupation in the Encroached Areas, and given that the equitable estate of the members in the Tong property must prevail over the wrongful occupation of the property by the trespassers, I am unable to conclude that. that the Plaintiff’s claim against D7 is bound to fail. Further, I find that the legal viability of this cause of action is fact-sensitive and an order to strikeout should not be made.

44.Since I find that the Plaintiff’s claim for breach of trust against D7 is not unarguable, Ds’ challenge on the Plaintiff’s authority to sue as managers would also fail.

45.By reason of the above, Ds’ appeal is dismissed.

46.Lastly, it is clear that this is a straightforward dispute and both parties should take a sensible approach in resolving it. In view of my observations above, I would invite parties to propose directions to be made for the further conduct of the case within 28 days from the date of the order which would be dealt with by way of paper disposal.

Costs

47.Costs should follow the event. I make a costs order nisi that the costs of the appeal with certificate for counsel be paid by Ds to the Plaintiff to be summarily assessed.

48.Any party who seeks to vary the costs order nisi shall file and serve its written submissions within 14 days from the date of the Order. The other party shall file its written submissions in reply within 14 days thereafter. The application would be dealt with by this Court by paper disposal.

49.In the absence of any application to vary the costs order, the Plaintiff should file and serve their Statement of Costs within 28 days from the date of the order. Ds should file and serve its list of objections within 14 days thereafter. Unless directed otherwise, the summary assessment would be conducted without an oral hearing.

Mr Chan Pak Kong, instructed by T H Wong & Co, for the Plaintiff

Mr Tasman Tam and Mr Victor K T Lui, instructed by Pauline Wong & Co, for the 2^nd to 5^th and 7^th Defendants