Tang Kam Wah and Others v. Tang Ming Yat and Another
Read the full judgment text of HCA 10141/1998 on BabelCite. This High Court CFI judgment was delivered on 26 November 2002.
1. In this action, the plaintiffs claim against the defendants in trespass in land. The land in question is in Lau Fou Shan, Yuen Long. It comprises Lot No.24 in D.D.128, Lots No.2387, 2390, 2398, 2405 and 2410 in D.D.129 (collectively referred to as "Property 1") and also Lots No.2407 to 2409 and 2411 in D.D.129 (collectively referred to as "Property 2"). Tang Mung Lau Tso (鄧夢柳祖) and Tang Tsz Hau Tso (鄧子厚祖) are respectively the registered owners of Property 1 and Property 2. The plaintiffs brin
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HCA010141A/1998 HCA10141/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO.10141 of 1998 ---------------------
---------------------- Coram: Hon Chu J in Court Dates of Hearing: 14, 15, 18-20 September 2000, 10-13, 16, 18 and 19 September 2002 Date of Judgment: 26 November 2002 ----------------------- J U D G M E N T ----------------------- 1.In this action, the plaintiffs claim against the defendants in trespass in land. The land in question is in Lau Fou Shan, Yuen Long. It comprises Lot No.24 in D.D.128, Lots No.2387, 2390, 2398, 2405 and 2410 in D.D.129 (collectively referred to as "Property 1") and also Lots No.2407 to 2409 and 2411 in D.D.129 (collectively referred to as "Property 2"). Tang Mung Lau Tso (鄧夢柳祖) and Tang Tsz Hau Tso (鄧子厚祖) are respectively the registered owners of Property 1 and Property 2. The plaintiffs bring this action as managers of the two Tsos. The defendants defend the claim and also counterclaim on the basis that there is a valid and binding lease between the 1st defendant and the plaintiffs, and that the 2nd defendant is a lawful sub-tenant of the 1st defendant. Background 2.Tang Mung Lau Tso and Tang Tsz Hau Tso are two Chinese ancestral Tsos. Tang Mung Lau and Tang Tsz Hau are the two alias of the same person. The plaintiffs and the 1st defendant are his descendants. Since Tang Mung Lau and Tang Tsz Hau are one and the same person, members of the two Tsos, who are his descendants, are the same. 3.Each of the two Tsos consists of two main fongs (房), namely, Kui Tsai Fong (巨濟房) and Kui Yam Fong (巨任房). Within each fong, there are three branches (派). The six branches are Cho Yee Branch (作宜派), Cho Yan Branch (作仁派) and Cho Chiu Branch (作超派) of Kui Tsai Fong, and Cho Ying Branch (作英派), Cho Tai Branch (作泰派) and Cho Ming Branch (作明派) of Kui Yam Fong. 4.Each of the two Tsos should have six managers, with one from each branch. But because Cho Chiu Branch has no living male descendant, none of the managers is from this branch. Instead two of the six managers for each Tso are from Cho Yee Branch. Currently, Tang Tsz Hau Tso only has five managers because one of the managers, Tang Che Cheung (鄧致祥) had resigned in August 1998, after the commencement of these proceedings. Tang Ka Hi (鄧家喜) from Cho Ming Branch is a manager of both Tsos. A chart showing the relevant part of the family tree and the managers is annexed to this Judgment as Appendix I. 5.Property 1 and Property 2 were held from the Government as agricultural land. In 1989 they together with some other lots were let to Tang Ching Fan (鄧禎(or振)潘), the second-named 1st plaintiffs for a term of five years. The lease was renewed for a further three years in 1994 and expired in 1997. 6.In 1990, the Government took aerial photographs of the New Territories, including Property 1 and Property 2. Users that were shown on the aerial photographs so taken were permitted by the Government as existing users and gazetted in the interim development plans. Users other than the existing permitted users constitute "unauthorized development" and become liable to prosecutions : see sections 21 and 23 of the Town Planning Ordinance, Cap.131. 7.When the aerial photographs were taken, part of the land let to Tang Ching Fan, including Property 1 and Property 2, was not used for open storage purpose. Consequently, when it was later used for open storage, the Planning Department in 1993 issued enforcement notices against the managers of the two Tsos. Eventually, Tang Ching Fan surrendered this part of the land to the plaintiffs and the lease when renewed in 1994 was at a reduced rent. Subsequently in February 1997, the enforcement notices were discharged. 8.In October or November 1997, the 1st defendant approached one of the managers, Tang Yuet Nam (鄧月(or乙)南), the fourth-named 2nd plaintiffs, and expressed interest in renting Property 1 and Property 2. Tang Yuet Nam, in his capacity as the treasurer (理數人) of the two Tsos, therefore posted up a notice on the 20th day of the tenth month of the Lunar Calendar to convene a meeting of the two Tsos to discuss the proposed letting. The meeting took place on 30 November 1997 at Cho Yee Hall (作宜堂), which was a meeting place for members of the Tsos. It is common ground that an attendance record was signed by those who had attend the meeting, and that a lease (批約) ("the Lease") together with its duplicate were written out at the meeting by Tang Yue Chung (鄧裕鐘). The Lease was signed by 17 of the elders present and also two of the managers, Tang Ka Hi (鄧家喜), the third-named 1st plaintiffs and the second-named 2nd plaintiffs, and Tang Siu Cheung (鄧兆祥), the first-named 2nd plaintiffs. 9.There are considerable disputes between the parties as to what happened at this meeting and the circumstances leading to the making out and signing of the minutes list and the Lease, which I shall return later. 10.Then on 14 December 1997, a meeting of the members of the two Tsos was convened at the request of Tang Ka Hi and Tang Siu Cheung. At the meeting, the two of them read out a notice declaring that the Lease was invalid for the reason that it was signed by only two of the managers. Tang Yuet Nam was further directed not to accept any rent tendered by the 1st defendant. Accordingly when the 1st defendant tendered the rent to Tang Yuet Nam on 28 December 1997, it was not accepted. 11.By an agreement dated 1 February 1998, the 1st defendant sub-let Property 1 and Property 2 to the 2nd defendant for use as an open storage ground for vehicles for a term of two years commencing 1 March 1998. 12.By a letter dated 2 April 1998, the Planning Department informed the plaintiffs that the use of Property 1 and Property 2 as open storage ground constituted unauthorized development. By another letter dated 20 May 1998, the Planning Department required the plaintiffs to take immediate action either to evict the trespasser or to discontinue the authorized development, failing which prosecution would be brought against them. Subsequent to this, however, the Planning Department granted permission to the occupiers to use Property 1 and Property 2 (except Lot no.2407 in D.D.129) for temporary storage of motor vehicles for a period of 12 months. The 12 months period has since expired and there is no evidence before the court that it has been extended. 13.In December 1998, part of Lot no.24 in D.D.128, being part of Property 1, was resumed by the Government for railway development. The litigation 14.This litigation has a slightly chequered history. On 22 June 1998, the plaintiffs issued the Writ herein. The trial of the action first came before me on 14 September 2000. At the conclusion of the plaintiffs' case, the defendants, through their then counsel, applied to re-amend their defence. I refused the amendment and also the application for adjournment to enable an appeal be brought against the refusal for leave to amend. Counsel and solicitors for the defendants, with the consent of the defendants, then discharged themselves, and the trial had to be adjourned part-heard partly to enable the defendants to secure legal representation and partly because the time allocated for the trial had run out. Before the trial was resumed, the defendants successfully appealed to the Court of Appeal against the Order refusing leave to amend. The Defence and Counterclaim was therefore re-amended. Consequentially, supplemental witness statements and expert reports were adduced by both sides. The trial did not resume until two years later at a time when the Lease has less than four months to run. At the resumed hearing, both sides are represented by differently constituted teams of lawyers. The pleadings 15.The plaintiffs' pleaded case is that under section 15 of the New Territories Ordinance, Cap.97 ("Section 15"), only the respective managers of the two Tsos can deal with or lease out Property 1 and/or Property 2, and the managers' power is subject to the consent of the District Officer. The plaintiffs contend that in about December 1997, the 1st defendant had entered into possession of Property 1 and Property 2 without the consent of the managers or of the District Officer, thereby committing trespass. The subsequent letting by the 1st defendant to the 2nd defendant is therefore unlawful and the 2nd defendant also committed trespass by taking possession under the letting. 16.With regard to the Lease relied upon by the defendants, the plaintiffs' case is that it is invalid and not binding as a result of non-compliance with Section 15. In particular, it is said that the Lease did not have the consent of all the managers of the respective Tsos, and that the consent of the District Officer had not been obtained. 17.The plaintiffs therefore claim for delivery up of vacant possession and mesne profits to be assessed. The plaintiffs further seek an injunction restraining the 2nd defendant from trespassing on Property 1 and Property 2 and an order compelling the 2nd defendant to remove all vehicles and/or articles stored or put on Property 1 and Property 2. The plaintiffs propose and the defendants do not object, to have the assessment of the mesne profits separately dealt with. 18.The defendants' case, as pleaded in the Re-Amended Defence and Counterclaim, is that the Lease was agreed and approved at a duly convened meeting attended by the members of the Tsos. The Lease though signed by only two of the managers is valid and binding pursuant to a customary rule. As to Section 15, the defendants contend that the consent from the District Officer is not required. Alternatively, it is said that there is an implied term that the managers would procure the consent of the District Officer to the Lease. 19.The salient part of the defence is encapsulated in paragraph 8 of the Amended Defence and Counterclaim, which reads as follows :
(The underlined part denotes the re-amendment.) 20.The defendants counterclaim for declarations that the Lease is valid and legally binding on the plaintiffs and that the 2nd defendant is a lawful sub-tenant of the 1st defendant and entitled to the possession and use of Property 1 and Property 2. The defendants further seek specific performance of the Lease and of the implied term requiring the plaintiffs to procure the consent of the District Officer to the Lease. The alternative relief of damages is not pursued. The issues 21.The primary issue in this case is whether the Lease relied upon by the 1st defendant is valid and binding on the plaintiffs. That in turns leads to a number of sub-issues. The issues that arise from the pleadings are :
Additionally, Mr Chong who appears for the defendants at the resumed trial contends that as a matter of law, a claim of trespass is not maintainable against the 1st defendant. The existence of the custom 22.A core question in the determination of the validity of the Lease is whether the Pleaded Custom exists. The burden of proving the existence of the Pleaded Custom and its applicability to the present case, as Mr Chong accepts, falls on the defendants. The defendants seek to discharge the burden by calling Tang Yue Chung (鄧裕鐘) as an expert witness. 23.Tang Yue Chung is an elder (父老) of the Tang family and is a descendant of Cho Tai Fong (作泰房), the same fong as the 1st defendant. He has since 1963 acted as manager. At present, he is a manager of four Tso Tongs in Ha Tsuen (?村), Yuen Long. He has, however, never been a manager of the two Tsos in question. 24.In his expert report dated 30 November 2001, Tang Yue Chung explained that when he succeeded his father to become a manager of the Tang Ching Ng Tso (鄧靜吾祖) in 1963, his father had explained to him in details the duties, rights and responsibilities of a manager, and he reproduced them in the report. The material part of his report reads as follows (at Bundle 8 pp.15-17) :
25.Specifically with regard to meetings held by the two Tsos in question, Tang Yue Chung's report stated that (at Bundle 8, pp.19-20) :
26.In relation to the meeting of 30 November 1997, Tang Yue Chung's report said (at Bundle 8, pp.21-22) :
27.In summary, Tang Yue Chung made the following points in his report :
28.In his closing submissions, Mr Chong only referred to the part of Tang Yue Chung's report at page 23 of Bundle 8 as supportive of the Pleaded Custom. This part of the report states as follows :
29.The essence of this part of the report is that matters concerning the welfare of Tso Tongs, such as letting or sale of land, are to be resolved at meetings ("大會"). 30.Mr Chong submits that meetings mean members in meeting. I cannot agree. I have set out in considerable length the report of Tang Yue Chung so that this part of his report can be read in the context and also in order that Tang Yue Chung's oral evidence can be assessed against what he stated in the report. 31.It is plain that in his report, Tang Yue Chung was throughout talking about "meetings of elders and members" (父老及子孫大會) (emphasis supplied), not meetings of the members. The submission that Tang Yue Chung was referring to "members in meeting" in this part of the report has no foundation. 32.Not only that, in his oral evidence, whether in-chief, under cross-examination or in re-examination, Tang Yue Chung repeatedly said that there are two types of meetings, the elders' meeting (父老會) and the members' meeting (子孫會). Elders' meeting, as the terms connotes, are participated by elders of the Tso Tongs. Though non-elder members may attend, they have no right to vote or decide on the matters discussed in the meeting. Members' meeting, on the other hand, is to be participated by all the members of the Tso Tong and all members are entitled to vote and resolve on matters discussed. Tang Yue Chung further testified that matters on letting of land are resolved at elders' meeting. Members' meeting, he said, is only convened to deal with critical matters that concern the survival of the Tso Tong (關乎祖堂命脈) or only when the Tso Tong is in crisis. As far as his memory and knowledge go, no members' meeting has ever been convened. As for the meeting on 30 November 1997, he said it was an elders' meeting. 33.Tang Yue Chung's oral testimony, if accepted, suggests that as far as he is concerned, there are two types of meetings and that they are different and not inter-changeable. There is therefore no room for arguing that the term "meetings of the elders and members" (父老及子孫大會) used in his report is to be read as meaning members in meeting. 34.Despite that Tang Yue Chung drew a distinction between the two types of meetings in his oral testimony, he did not distinguish between them in his report. The impression one derives from reading his report is that there is only one type of meeting, namely, a meeting participated by both elders and members and that the 30 November 1997 meeting was one of these meetings. More importantly, the report suggests that both elders and members can vote at these meetings. His report is thus fundamentally different from his oral evidence. There is, however, no explanation for the inconsistency, which is a material consideration in assessing the reliability of Tang Yue Chung's expert evidence. This is because he, apart from being tendered as an expert, was also called as a witness of fact with regard to what happened at the meeting on 30 November 1997. He was scheduled as a witness of fact at the trial in 2000, long before he made his expert report in November 2001. As Mr Chan SC for the plaintiffs rightly observed, he is clearly on the side of the defendants and can hardly be viewed as independent, a quality that the court always expects from an expert witness. 35.Mr Chong has submitted that the role of the experts in this trial is to testify on the existence or otherwise of a Chinese custom, and is therefore evidence of fact rather than of opinion. It is submitted that the court should assess the evidence of the experts in the same way as the court assesses the evidence of witnesses of fact. Mr Chan SC has not argued against such a proposed approach. 36.Tang Yue Chung, as I have observed, cannot be described as an independent expert witness. Given that and considering that he has given two completely different versions of the custom or practice of how decisions on letting of Tso land were undertaken, I am driven to the conclusion that his expert evidence cannot be acted upon and no weight can be placed on it. That is particularly so when one considers that he is dealing with the existence or non-existence of a custom, a matter which Mr Chong accepts is one of fact, and that he has given no clue for giving different versions in his oral testimony and in his report. It is to be noted that he had adopted his report as part of his evidence. 37.Even if Tang Yue Chung's evidence is to be acted upon, it does not support the defendants' case as pleaded. In terms of his oral testimony, it is plainly contrary to the Pleaded Custom, namely, "a manager of Tang Mung Lau Tso (or Tang Tsz Hau Tso) directed by a resolution of members passed at a duly convened meeting of members of the Tso has the authority to act for and on behalf of it to lease out its land property". 38.The emphasis of the Pleaded Custom is threefold :
The gist of Tang Yue Chung's oral evidence on the custom is, however, that :
39.Mr Chong submits that Tang Yue Chung's oral evidence on the custom is not a deviation from the pleaded defence because meeting of the elders is effectively a meeting of all the members of the Tso since the elders would represent their families and their votes are the votes of all the members. In my judgment, this submission is wholly untenable when Tang Yue Chung himself repeatedly drew a distinction between meeting of the elders and meeting of the members. In particular, his evidence under re-examination is that when he said that the elders represented the family members, he was referring to elders' meeting, and that when the elders casted their votes, they were voting on behalf of themselves and the Tso Tongs. There is simply no room for reading his evidence on elders' meeting as referable to members' meeting. Neither can it be suggested that a meeting of elders is effectively a meeting of the members. To do so is to ignore the plain oral testimony of the witness and to put words in his mouth. Even if it is Tang Yue Chung's evidence that elders' meeting is effectively members' meeting in that the elders are representatives of their families, the point will have to be specifically pleaded before the evidence can be relied upon. The customs now pleaded concerns a resolution of members passed at a meeting of members. The Pleaded Custom is not about a resolution passed by the elders, acting on their own behalf and as representatives of their families, at an elders' meeting, which, by reason of the representative capacity of the elders, is effectively a meeting of the members. 40.As far as the expert report is concerned, it does not state that the custom has been for members of the Tso to pass resolutions authorizing directly the managers to lease out Tso land, which is an integral part of the Pleaded Custom. 41.Indeed as pointed out by Mr Chan SC, this part of the Pleaded Custom had never been put to any of the plaintiffs' witnesses, including the plaintiffs' expert. Neither was Tang Yue Chung asked about it in his evidence. Additionally, none of the documents before the court reflects or evidences such a custom. Tang Yue Chung had produced documents of other Tongs as showing the custom or practice of recording resolutions passed at meetings of the Tongs. None of them authorizes or directs the managers to lease out Tso property. As for the two Tsos in question, there is no document or written record of any resolution passed at meetings of the Tsos. Tang Yue Chung had claimed that the two Tsos do have such records but they are kept by the managers or treasurer. I entertain doubts about the assertion. These documents, if indeed exist, are proper subject matter of discovery. It is difficult to understand why no attempt has been made to discover them, whether before the trial started in September 2000 or during the two years before the trial resumed in September this year. Alternatively, it would have been open to the defendants to cross-examine Tang Yuet Nam, the treasurer, on this. But the point had never been put to Tang Yuet Nam. 42.In short, the evidence of the defendants' expert, Tang Yue Chung, is fraught with so many difficulties that it cannot be acted upon. That being the case, the defendants have failed to discharge the burden or proving the Pleaded Custom. Mr Chong has made severe criticisms of the expertise and evidence of the plaintiffs' expert, Tang Yan Yip. In my view, it matters not even if the evidence of the plaintiffs' expert is completely disregarded or rejected. The plaintiffs' have no duty to prove any custom or to disprove the Pleaded Custom. 43.Having said that, I will, for completeness sake, deal briefly with the evidence of Tang Yan Yip. In summary, he said that the decision-making power, including the power to lease out Tso property, rests with the managers of the Tso, acting together. The practice has been for meetings to be convened as and when the need arises. The meetings are attended by the managers as well as members and elders; and decisions are carried by the consensus of the managers. As far as leasing out Tso land is concerned, the custom is for the managers to ascertain whether there is any objection to the proposed lease before they come to a consensus on the matter. As soon as the managers have, by consent, decided to let and had signed the lease, the decision and the detailed terms will be made known to the attendees of the meeting. After the rental and deposits are paid by the lessee, the elders will counter-sign on the lease and be paid the tea-money by the lessee. The counterpart copy of the lease will be given to the lessee for retention while the original lease is kept by the treasurer. It is also Tang Yan Yip's evidence that the two Tsos in question do not have the practice or custom of keeping minutes of meetings on leasing of land or records of resolutions passed at such meetings. The decisions of the managers reached at these meetings are all reflected in the lease. 44.I accept that Tang Yan Yip had employed some emotive words or terms in his expert reports, especially in the supplemental report. I also agree that one may not find him a very impressive witness. He is at times argumentative and his answers are not always relevant to the questions asked. But it does not necessarily follow that he is evasive or untruthful. For one thing, it is clear that he is hard of hearing. There were episodes when it was discernable that he did not hear the questions either clearly or at all. Secondly, he is not an articulated or sophisticated person. He obviously did not quite appreciate the purpose and importance of cross-examination, and therefore felt frustrated by the many questions asked of him. He genuinely did not think the questions asked in cross-examination to be relevant. 45.Objectively speaking, I consider Tang Yan Yip's evidence on the custom and practice of the two Tsos with regard to meetings and leasing of Tso property to be inherently more probable. 46.On the first issue, I therefore hold that the existence of the custom pleaded in paragraph 8(g) of the Re-amended Defence and Counterclaim has not been proved. It follows that insofar as the defence is on the basis that the Lease is valid and binding on the managers by reason of the Pleaded Custom, that must fail. The 30 November 1997 Meeting and the Lease 47.Having decided the core question against the defendants, it would have effectively also disposed of the primary issue against the defendants. I need therefore only deal briefly with the factual dispute over what transpired at the 30 November 1997 meeting and the circumstances leading to the making out of the Lease and the minutes of the meeting. 48.According to the plaintiffs' witness, Tang Yuet Nam, there were about 20 odd people present at the 30 November 1997 meeting. He was the convenor of the meeting. After he mentioned the reason for the meeting, there were some discussions about the amount of rent and the duration of the letting and so on. Then an elder, Tang Fat (鄧發), who was from the same branch as the 1st defendant and Tang Yue Chung, told Tang Yue Chung to write out a lease. When this was done, Tang Yuet Nam was asked to sign, but he refused. Then the other elders present proceeded to sign and received tea money from the 1st defendant. Tang Yuet Nam felt that he was not being respected so he left. He estimated he had stayed for about 45 minutes. He explained that he did not sign and approve the Lease because, inter alia, he was afraid of being prosecuted and he felt the rent was unreasonable. 49.As for the other plaintiffs' witness, Tang Ka Hi, he said he arrived at the village late, at about 1 pm, on 30 November 1997. He has moved out of the village and is living on Hong Kong Island. When he arrived, he noticed Tang Yuet Nam was inside the meeting hall. Although he had signed on the attendance list, he did not join the meeting. Shortly afterwards, Tang Yuet Nam left the hall angrily. Tang Siu Cheung, who is a manager of Tang Tsz Hau Tso, then went inside the hall and left shortly afterwards. He then went in to find out what happened. The 1st defendant then handed him the Rent Roll and told him to sign on the Lease, saying that he would secure the signatures and consent of the other managers later on. So he signed, received the tea money and then left the village. Subsequently he learnt that Tang Yuet Nam and other managers had not signed on and did not agree to the Lease. He therefore asked Tang Yuet Nam to convene a meeting. At the meeting which was held on 14 December 1999, he and Tang Siu Cheung read out the notice declaring the Lease to be invalid. It was also at this meeting that Tang Chi Cheung expressed his intention to resign as a manager of Tang Tsz Hau Tso. In cross-examination, he explained that he preferred not to let out Property 1 and Property 2 for fear of enforcement action and prosecution by the Town Planning Department. However, because he and the 1st defendant were from the same Fong, he felt he was caught in the middle when the 1st defendant asked him to attend the meeting. He also felt he was obliged to attend. Owing to this, he deliberately hanged around outside the meeting hall so as not to take part in the discussions. In signing on the Lease, he was influenced by the fact that Tang Siu Cheung had signed and also by the 1st defendant's promise to secure the other managers to sign. 50.The 1st defendant, on the other hand, said that Tang Ka Hi and Tang Siu Cheung were present inside the hall throughout the meeting. After some 15 minutes of discussions on the rent and other terms, including the need for a guarantor, the meeting resolved to grant a lease to the 1st defendant. Tang Yue Chung then wrote out the Lease, which took several five minutes because further things were said in the course of it. When the Lease was ready, Tang Ka Hi and Tang Siu Cheung signed on it first, followed by the elders. The 1st defendant described the meeting as harmonious and said no one had raised any objection to the Lease. He said Tang Yuet Nam did not say he would not sign, though he left without signing. And when he left, he told the 1st defendant to keep both sets of the Lease and that he would look for the 1st defendant later. 51.Tang Yue Chung supported the 1st defendant's account. He said that after Tang Siu Cheung had signed, Tang Ka Hi also signed. At that time, Tang Yuet Nam was still present and he said nothing. Although Tang Yuet Nam had not signed the Lease, he did not mention the reason. As to the minutes of the meeting (Exhibit D1 at p.2), which was controverted by the plaintiffs, Tang Yue Chung said in-chief that it was written out as the meeting progressed, a position which he appeared to retract from in cross-examination. I shall return to this later on. 52.In my judgment, the account given by the plaintiffs' witnesses is to be preferred to that of the 1st defendant and his witness. I find it inherently improbable that Tang Yuet Nam would storm out of the meeting without signing the Lease had it been a harmonious occasion. It would be very odd for Tang Yuet Nam to say nothing about whether he agreed or disagreed to the letting, but simply left without signing. This is particularly so when one bears in mind that the 30 November 1997 meeting was proceeded by a meeting on 9 November 1997 during which the question of letting to the 1st defendant was first raised but objected to by the attendees. There is also no convincing reason why Tang Yuet Nam would depart from the usual practice and asked the 1st defendant, who was the lessee under the Lease, to keep both sets of the Lease. If it were a harmonious meeting, there is no reason why Tang Yuet Nam could not have waited until after the signing process was completed and then retain a set of the Lease. 53.As to the circumstances under which Tang Ka Hi came to sign the Lease, I consider the explanations he gave to be both plausible and convincing. Being a manager of both Tsos on one hand and being from the same Fong as the 1st defendant on the other hand, Tang Ka Hi was clearly in an unenviable position over the question of letting Property 1 and Property 2 to the 1st defendant for open storage purpose. Understandably, he would opt for an easy way out of the matter if such a course presented itself. It is therefore quite convincing and perhaps convenient too for him to arrive late and to avoid taking part in any discussion by hanging around outside the meeting hall. When he saw that Tang Yuet Nam, who opposed the letting, left and that another manager Tang Siu Cheung had signed, he was persuaded to sign by the 1st defendant's assurance to obtain the other managers' signatures subsequently. This is because he knew that the Lease would only be effective if the other managers also agree and sign. In my view, he may also be influenced by the fact that he would be paid signing fee or tea money for attaching his signature to the Lease. 54.It is also to be noted that although both the 1st defendant and Tang Yue Chung maintained in their oral evidence that Tang Ka Hi and Tang Siu Cheung were present throughout the meeting and signed on the Lease before Tang Yuet Nam left the meeting, none of these was put to Tang Ka Hi and Tang Yuet Nam when they were cross-examined. As a matter of fact, the 1st defendant and Tang Yue Chung did not specifically mention this in their witness statements. 55.As to the minutes of the meeting, according to Tang Yue Chung's evidence-in-chief, he wrote it out in the course of the meeting. The plaintiffs disputed this. In cross-examination, when Tang Yue Chung was asked about whether similar minutes had been drawn up for the previous meetings of the two Tsos, Tang Yue Chung prevaricated and seemed to suggest that the minutes came to be prepared after there was challenge to the validity of the Lease. His evidence on the point is highly doubtful. Indeed as observed in dealing with his expert evidence, Tang Yue Chung's oral evidence differs so fundamentally from his expert report that his credibility or reliability as a witness is greatly in doubt. This not only affects his expert evidence but also his evidence on the 30 November 1997 meeting and the matters surrounding the Lease. 56.In short where the evidence differs between the two plaintiffs' witnesses and the 1st defendant and his witness, I prefer the former. In particular, I find that Tang Yuet Nam did express at the 30 November 1997 meeting that he would not sign the Lease, that it was towards the end of the meeting that Tang Ka Hi arrived at outside the meeting hall, that Tang Siu Cheung and Tang Ka Hi signed the Lease after Tang Yuet Nam had left the meeting hall, and that before Tang Ka Hi signed, he was told by the 1st defendant that the latter would secure the consent and signatures of all the other managers. I also find that the minutes of the meeting (exhibit D1) was not made out during the meeting but subsequently. 57.Therefore, irrespective of the difficulties the defendants have in proving the Pleaded Custom, the evidence does not establish that there was a valid decision to let Property 1 and Property 2 to the 1st defendant. Among other things, it is Tang Yue Chung's own evidence that the decision of the elders at the elders' meeting has to be unanimous. Yet Tang Yuet Nam and one other elder present, Tang Kap Shui (鄧甲水), had not signed. Indeed, the 1st defendant's position, as appeared from his former solicitors' letter to the plaintiffs' solicitors dated 5 June 1998 and confirmed by him in evidence, is that the decision to let was reached only by the majority of the members of the Tso present. There being no unanimous decision to let, the Lease cannot be valid and binding even if acting on the evidence of the defendants' expert witness. Section 15 New Territories Ordinance 58.The dispute under Section 15 arises in two ways. The first relates to the power of managers to let or deal with land. The second concerns the consent of the District Officer to any letting or dealing with land. The Section 15 issues strictly speaking do not arise given my finding that the defendants have failed to prove the existence of the Pleaded Custom and the validity of the Lease, whether an account of the Pleaded Custom or as a matter of evidence. It is not necessary to consider whether the Lease, even if accords with the Pleaded Custom, is valid under Section 15. However, since considerable legal submissions had both advanced by counsel, and since Mr Chong has contended that important points of law are involved, I would indicate my views on the arguments advanced. 59.The relevant part of Section 15 provides :
60.The plaintiffs contend that Section 15 is a mandatory provision and applies to any dealing with the land, which includes a tenancy in respect of land. Referring to section 7(2) of the Interpretation and General Clauses Ordinance, Cap.1, which provides that words and expressions in the singular include the plural, the plaintiffs further contend that references to "manager" and "sole owner" in Section 15 mean all the managers acting together. The plaintiffs further argue that on the principle of unanimosity, the managers of the two Tsos, being trustees, are required to act unanimously in the exercise of their power. Hence, the Lease, being not signed by all the managers, is incapable of binding the trust. 61.Mr Chong does not take issue with the mandatory nature of Section 15 nor the principle of unanimosity. What is being argued is that a "manager" is not a trustee, but denotes only a representative of a Tso. The submission is built on the first sentence of Section 15, which states "..., such clan, family or t'ong shall appoint a manager to represent it". The use of the words "represent it" is contrasted with section 18 of the same Ordinance, which expressly uses the word "trustee" when referring to appointment of person as trustee for minor. It is argued that the court should not equate "manager" with "trustee" in the context of Section 15 or to import the English legal concepts of "trustee" when construing Section 15. 62.In my view, the issue is to be approached by ascertaining the nature of a Tso , the interests its members have in the Tso property and the purpose behind Section 15. 63.As early as 32 years ago, Mills-Owens J held in Tang Kai-Chung & Anor v. Tang Chik-Shang & Ors [1970] HKLR 277, 279-80 that :
Mills-Owens J further concluded that a Tso is a trust and the manager registered under Section 15 is a trustee within the meaning of the Trustee Ordinance : p.304. 64.In Kan Fat-tat v. Kan Yiu-tat [1987] HKLR 516, Deputy High Court Judge Robert Tang QC, referring to Mills-Owens J's judgment in Tang Kai-Chung, also considered a Tso to be in the nature of a trust and that Tso property is trust property : p.533. 65.In the recent case of Leung Kuen Tai v. Tang Kwong Yu & Ors [2002] 2 HKLRD 705, Deputy Judge Lam, after reviewing the relevant authorities, concluded that in the context of Hong Kong law, it has been established that the concept of trust is applicable to a Tso with the managers as trustees and the members as beneficiaries. Deputy Judge Lam further noted that this is an instance of applying the concepts of trust in English law to a Chinese customary institution, but that having regard to the local circumstances, certain of the concepts, such as the rule against perpetuity had been modified by being rendered inapplicable : p.717C-E. Specifically in the context of the Limitation Ordinance, the case holds that the members only have a life interest in the Tso property. 66.The Court of Appeal had also in Tang Yau Yi Tong v. Tang Mou Shau Tso [1996] 2 HKLR 212, held that members of a Tso were entitled to the beneficial interest in the property and to object to a sale of the Tso property. Liu JA (as he then was) further observed that "manager, trustee and sze lei (司理) are synonymous". 67.As to the rationale behind Section 15, it had been explained by Briggs J in Lai Chi Kok Amusement Park Co. Ltd (No.2) v. Tsang Tin-sun [1966] HKLR 124, 130 :
The passage was applied in the Court of Appeal's case of Light Ocean Investments Ltd v. Enway Development Ltd [1994] 3 HKC 31. 68.In my judgment, the following are well accepted principles of law with regard to Tso, Tso property and the managers appointed under Section 15 :
69.The reliance on the word "represent" in the first sentence of Section 15 does not assist Mr Chong in his argument that a manager is not a trustee. It is true that a manager is appointed to represent the Tso and as such can be regarded as a representative of the Tso. But the question that remains to be answered is : what are the duties and power of such a representative? The answer to that question depends on an assessment as to the nature of a Tso and Tso property as well as the relationship between members of the Tso and Tso property. And when one considers these issues, the inevitable conclusion to be drawn, as demonstrated in the cases cited above, is that a manager stands in the position of a trustee not only vis-a-vis the Tso members but also in relation to Tso property. 70.Mr Chong has submitted that "manager" is a concept created by Section 15 by reference to Chinese custom and practice. Therefore considering that the purpose of the New Territories Ordinance is to give effect to Chinese custom on matters relating to land in the New Territories, the court should not import into Section 15 concepts of English law. It is further argued that whenever Chinese customary law applies, the corresponding English law would not apply. This line of submissions assumes that "manager" is a concept in Chinese custom and practice that denotes duties and power different from those of a trustee. However, there is simply no material before the court to substantiate such assumption. There is also no material to show, as a matter of Chinese customary law, what are the role, duties and power of a manager, in terms of his being a "statutory representative". In the absence of such material, there is no basis for contending that English law should not apply. 71.It follows that the submission that a manager is not a trustee must fail. 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 (17th edn) p.737. The consent of only one manager from each of the two Tsos in question is insufficient to make the Lease a valid and binding one. It also 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. 73.I turn now to deal with the District Officer's consent. It is plain from reading Section 15 that the consent is required. The defendants' expert, Mr Robinson, also stated in his report that "... unless and until such consent is in fact given, the manager lacks the capacity to enter into a binding contract involving Tso land - consent being a pre-condition to such capacity". 74.In Light Ocean Investment Ltd, Litton JA held (at p.39) that before the consent of the District Officer was given, any agreement relating to Tso land can at best be a conditional agreement. At p.40, it is additionally pointed out that lack of District Officer's consent is not a trivial matter and, for the purpose of a binding agreement in respect of Tso land, it cannot be disregarded. Nazareth JA was of the same view when he said (at p.37) that consent is, on the plain meaning of Section 15, necessary and cannot be dismissed as surplusage or insignificant. 75.In the present case, it is not disputed that the consent of the District Officer had not been sought and this remains the position up to now. I do not agree that it is mala fide for the plaintiffs to dispute the validity of the Lease on the basis that there is no consent from the District Officer especially having regard to the factual dispute over the 30 November 1997 meeting. It is also irrelevant that consent of the District Officer may be given retrospectively. The fact is no such consent has been given even by now. 76.As to the defence that it is an implied term under the Lease that the plaintiffs would procure the consent of the District Officer, I am unable to agree that such a term can be implied into the Lease. It is the defendants' case that it has never been the practice of the two Tsos to obtain the consent of the District Officer to the letting of Tso property and that the question of the District Officer's consent never crossed their minds when the Lease was agreed to. The 1st defendant's evidence is that he did not think that it is necessary to obtain District Officer's consent and he did not expect the managers to obtain the consent. That being so, it is not possible for such a term to be implied as a matter of giving business efficacy to the Lease : Chitty on Contracts (28th edn), Vol.1, p.643. 77.Mr Chong however argues that the term can be implied on the basis of the presumed intention of the parties. Reliance is placed on several passages in Chitty on Contracts (28th edn), Vol.1, paras.13-003-13-0013. In my view, these passages do not advance the defendants' defence of implied term. There is no factual nor legal basis for contending that the obligation of the plaintiffs to obtain the District Officer's consent is a term generally implied in such a lease such that it has become more or less a standard term and is to be readily implied as a matter of law. 78.In the premises, even if the Lease is granted in accordance with the Pleaded Custom, the non-compliance with Section 15 will render it invalid. Action of trespass against the 1st defendant 79.Mr Chong submits in his closing submission that the action of trespass cannot be maintained against the 1st defendant in that he stands in the position of a co-owner. It is a defence which should have been pleaded but has not. It is therefore, strictly speaking, not open to the 1st defendant to take this point. 80.Quite apart from the pleading point, this defence is in my judgment unsustainable. It is clear from the authorities that the members of a Tso only enjoy a life interest in the Tso property, an interest that is incapable of being passed on by succession. A member cannot be regarded as co-owner of the Tso property in the sense as understood in law. Neither is his interest in any way similar to or analogous to that of a joint tenant. 81.Additionally, it must be obvious that the 1st defendant by granting a tenancy to the 2nd defendant thereby conferring exclusive possession on the 2nd defendant, has ousted the other members of the two Tsos from possession. Conclusion 82.For the reasons set out above, the plaintiffs have succeeded in establishing their claims in trespass against both defendants. There will accordingly be judgment for the plaintiffs as claimed, namely,
83.The counterclaim of the defendants is dismissed. 84.I also make an order nisi that the plaintiffs shall have the costs of the action and the counterclaim, to be taxed if not agreed. 85.I further order that the amount of money paid into court by the 1st defendant pursuant to my order of 20 September 2000 be paid out to the plaintiffs together with any interest accrued in partial satisfaction of the mesne profits to be assessed.
Representation: 14, 15, 18-20 September 2000 Ms Audrey Eu, SC and Mr Stanley Siu, instructed by Messrs George Y.C. Mok & Co., for the 1st and 2nd Plaintiffs Mr Benjamin Chain, instructed by Messrs Kitty So & Tong, for the 1st and 2nd Defendants 10-13, 16, 18 and 19 September 2002 Mr Warren Chan, SC and Mr Richard Leung, instructed by Messrs George Y.C. Mok & Co., for the 1st and 2nd Plaintiffs Mr K.M. Chong, instructed by Messrs Christopher K.Y. Wong & Associates, for the 1st and 2nd Defendants Appendix I |
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under HCA 10141/1998