Yau Kwai and Others v. Yau Kar Siu and Others

HCA007129/1997

HCA7129/1997 and HCMP1363/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7129 OF 1997

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AND

MISCELLANEOUS PROCEEDINGS NO.1363 OF 2003

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(Consolidated by the Order of
The Honourable Mr Justice Reyes dated 17 October 2003)

Coram: Hon Tang J in Court

Dates of Hearing: 23, 25, 28-30 June and 2 July 2004

Date of Judgment: 23 July 2004

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J U D G M E N T

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1.Yau Luk, the Deceased, was the registered owner of Lot 1497, Section B in DD76 ("the Lot"). The Deceased died in the late 1950s. The 1st plaintiffs, the 2nd plaintiffs and the 3rd defendant are now the registered owners of the Lot. The devolution of the Lot to the plaintiffs and the 3rd defendant is important to the understanding of the dispute.

2.The Deceased had four sons, Yau Ma Ying (丘馬英), Yau Ma Yeung (丘馬養), Yau Sang (丘生) and Yau Fat (丘發). The 1st defendant, Yau Kar Siu, alias Yau Lam Sung (丘家少/丘林送), is the son of Yau Ma Yeung and that the 2nd defendant, Yau Loi, alias Hiew Fook Loi (丘來/丘福來) is the son of Yau Fat.

3.On 20 September 1960, by Memorial No.142764, the Lot became registered in the names of Yau Sang, Yau Ma Ying and Ng Kiu as trustees for Yau Lam Sung and Yau Loi. Ng Kiu was the mother of Yau Lam Sung. Presumably, by 20 September 1960, Yau Ma Yeung and Yau Fat had died.

4.The registration in 1960 was made pursuant to the then section 17 of the New Territories Ordinance, Cap.97 ("the Ordinance"). The appointment of Ng Kiu was made pursuant to section 18 of the Ordinance. Ng Kiu was also trustee for the 1st and 2nd defendants in respect of other lots of land, not the subject of these proceedings.

5.Yau Ma Ying died on 1 October 1973. There was an application for succession by Yau Tin Sung (丘天送) and Yau Tin Sang (丘天生), Colin (the 1st and 2nd named 2nd plaintiffs) dated 16 July 1996. They were registered as having succeeded to Yau Ma Ying as tenants-in-common in equal shares on 23 December 1999 although the application was approved on 12 November 1999 (E586).

6.Yau Sang passed away on 18 December 1962. There is an undated application for succession by his three sons, namely, Yau Kwai (丘貴), Yau Ah Bing (丘亞炳) and Yau Fui (丘魁). Yau Ah Bing died on 31 December 1997. Yau Ah Bing had three sons, Yau Chi On (丘志安), Yau Chi Wing (丘志永) and Yau Che Wai (丘志偉).

7.By an instrument dated 30 December 1999 and registered on 11 March 2000, the following persons were registered as tenants-in-common in relation to Yau Sang's share as follows :

(1) Yau Kwai, one-third; (the 1st named 1st plaintiffs)

(2) Yau Fui, one-third; (the 2nd named 1st plaintiffs)

(3) Yau Che Wai, one-ninth; (the 3rd named 1st plaintiffs)

(4) Yau Chi Wing, one-ninth; (the 4th named 1st plaintiffs); and

(5) Yau Chi On, one-ninth. (the 5th named 1st plaintiffs)

8.Yau Kwai died on 7 May 2004 leaving two children, Yau Wai Keung (丘偉強) and Yau Mei Fun. By order of Reyes J dated 25 May 2004, they were appointed to represent the estate of Yau Kwai in these proceedings.

9.To complete the devolution of the Lot, I turn to the defendants. It will be recalled that in 1960 Ng Kiu was registered as trustee for Yau Lam Sung and Yau Loi, the 1st and 2nd defendants respectively. Ng Kiu was removed as trustee under section 43 of the Trustee Ordinance by order of Deputy Judge Pang (as he then was) dated 23 September 1996. The order provided that :

"The estate and interest and benefit of and in all that one equal undivided fourth part or share of and in [the Lot] ... presently vested in Ng Kiu as trustee ... do vest in (Yau Lam Sung) ... absolutely."

Ng Kiu was removed as trustee for Yau Loi on 12 March 1997 by order of Master O'Donnell in similar terms.

10.On 26 June 1997, the 2nd defendant, Yau Loi purported to assign one equal undivided fourth share in the Lot to the 3rd defendant for $420,000. On the same day, the 1st defendant purported to assign one equal, undivided fourth share in the Lot to the 3rd defendant, also for $420,000. Earlier, by a tenancy agreement dated 1 February 1994, the 1st defendant purported to grant a 10-year lease in relation to the Lot to Hau Koon Sang and Wan Ma Sing, directors and shareholders of the 3rd defendant. The tenancy was automatically renewable for 10 years ("the Lease"). The rent for the 10 years was $50,000.

11.HCA7129/1997 was commenced on 9 July 1997. In this action, the plaintiffs seek a declaration that the Lease and the sale of the 1st and 2nd defendants' respective interests in the Lot are null and void according to Tsing Law. There is also a claim for damages for trespass. There is no claim for an account of the rent received.

12.In HCMP1363/2003, the plaintiffs seek partition of the Lot. The earlier claim for partition in HCA7129/1997 was abandoned.

13.The Lot is about 1,238.6 m² in area. It is part of the Hung Leng Village and is situated to the north of Sha Tau Kok Road. Part of the Lot is contiguous to the Sha Tau Kok Road. It is bisected roughly in the middle by what appears to be an access road to Sha Tau Kok Road for the Hung Leng Village ("the Access Road"). The plaintiffs have produced a coloured plan prepared by Leung Shou Chun, Authorized Land Surveyor dated 9 June 2000 ("the Plan"). The Lot is shown in three colours : yellow, green and pink. The yellow area is approximately 309.7 m² and is contiguous to the Sha Tau Kok Road. The green area is 309.6 m2, it is also contiguous to the Sha Tau Kok Road. The area, coloured green, includes the Access Road, which is shaded green. It has an area of 69.2 m². The pink area is 619.3 m². It depends on the Access Road for access to the Sha Tau Kok Road. The pink area is at the northern end of the Lot. In the yellow area, which lies at the southern end of the Lot, are two substantial buildings. They were built in 1973 and 1977 respectively. According to Yau Fui, the first house was built by Yau Ah Bing in 1973, the second house was built by him in 1977. He told me Yau Ah Bing's house cost approximately $60,000 to build whereas his house cost about $20,000 to build.

14.It is the plaintiffs' case that the erection of the two houses was with the consent of Ng Kiu.

15.After this rather long introduction, I turn to consider the issues in the proceedings. The first and most important issue is the plaintiffs' claim that the sale by the 1st and 2nd defendants of their interests in the Lot to the 3rd defendant was null and void according to Tsing Law. It is common ground that I am not concerned with section 15 of the Ordinance. The Lot is not, and has never been, held "in the name of a clan, family or tong", nor was the Lot held for ancestral worship purpose.

16.The plaintiffs' case is that under Chinese customary law, the Lot was family property, and that neither the 1st nor the 2nd defendant prior to the division of the family had any share in the Lot, and therefore they had nothing to sell. Alternatively, any such share could not be disposed of without the consent of all the co-owners. It is said that that is the effect of section 13 of the Ordinance which requires the court to recognize and enforce any Chinese custom or customary right affecting land in the New Territories.

17.Professor Chang Wejen, a well-known expert in Chinese customary law, was called as a witness in support of the plaintiffs' case. Professor Chang accepted that the plaintiffs' case depended on the concept of family property being applicable to land in the New Territories.

18.Professor Anthony Dicks, QC, who was called on behalf of the defendants, is of the opinion that the disposition by the 1st and 2nd defendants of their shares in the Lot was valid under Tsing Law.

19.Mr K.M. Chong, who appears for the defendants, submitted that the concept of family property has never been part of the law of Hong Kong, whether in the New Territories or otherwise.

20.As long ago as 1969, in In re Tse Lai Chiu, deceased [1969] HKLR 159, Sir Michael Hogan, CJ said at page 192 :

" There are, however, no similar decisions and no such accepted tradition and practice withholding or restricting the power and right of Chinese to make wills under English law. On the contrary, anyone discharging the functions of a probate judge in Hong Kong can be only too well aware that testamentary capacity in accordance with English law has been assumed and acted upon by many Chinese members of the community for a long time past, just as individual rather than family ownership has been widely accepted amongst all sections of the community. ..."

21.In re Tse Lai Chiu, deceased was concerned with the testamentary capacity of a Chinese person whose estate on intestacy would devolve according to Chinese customary law. It was held by the Full Court that a Chinese person had testamentary capacity. In support of the contrary argument, the concept of family property was given as the reason why under Tsing Law there was no general power of testamentary disposition (see page 166). Thus, the rejection of the concept of family property being applicable to Hong Kong was relevant to the Full Court's decision.

22.In my opinion, the concept of family property was not part of the law of Hong Kong. If that be correct, the very foundation of Professor Chang's opinion is gone.

23.In Wu Koon Tai & Anor v. Wu Yau Loi [1996] 3 HKC 559 ("Wu v. Wu"), at 566, Lord Browne-Wilkinson said :

" In their Lordships' view, the devolution of title to land in the New Territories, whether by inter vivos transaction or on death, is regulated by the registration system and the general law of Hong Kong. ..."

And at page 566 :

"... It is plain that, after the Peking Convention, the whole system of land tenure in the New Territories was fundamentally altered. Leases from the Crown were substituted for old titles under the pre-existing law. A system for deducing title to such leases was imposed, dependent upon the registration of deeds. To allow the old customary land law to cut across and to trump the new system would be to defeat its whole purpose."

24.Here, on 20 September 1960, the Lot became registered in the names of Yau Sang, Yau Ma Ying, Yau Lam Sung and Yau Loi, the latter two with Ng Kiu as trustee. The registration of successors in the New Territories was governed by section 17 of the Ordinance (since repealed). Section 17 provides that upon registration of successor :

".... the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Officer against the entry of the name of the successor. ..."

25.Also under section 17, the registered successor "shall be liable for the debts of the deceased in the same manner and to the same extent as if a grant of probate or administration had been made to him".

26.Ng Kiu was appointed as trustee under section 18 of the Ordinance which provides :

"... With the consent of the Land Officer a trustee may buy, sell, mortgage, lease or otherwise deal with or dispose of any property to the like extent as if he were the beneficial owner thereof, anything in the Trustee Ordinance (Cap.29) to the contrary notwithstanding. ..."

27.Mr Barlow, for the 1st and 2nd plaintiffs, submitted that there is no distinction between devolution of title and succession and that both are governed by Chinese customary law. But that is inconsistent with Wu v. Wu, and is, in my opinion, unsound.

28.It will have been noted from paras. 7 and 9 above and as the record at the Land Registry shows, the parties have been regarded and registered as tenants-in-common. I have no doubt that conveyancing practice in the New Territories have been conducted on the basis that persons in the position of the parties here hold their respective interests as tenants-in-common and that the devolution of their interests and title is governed by the general law. Any decision to the contrary would cause havoc. I have no doubt that the Lot could not be family property in the sense that according to Professor Chang, prior to division, none of the parties could be said to have any share. Or that none could sell his share without the consent of all. I am so firmly of the view that Chinese customary law has no application that I will deal with the evidence of Professor Chang and Professor Dicks on Chinese customary law as briefly as I can.

29.I have to say, on the evidence available before me, I am not persuaded that under Chinese customary law, a son had no identifiable interest in his father's estate, or that such interest could not be disposed of by him without the consent of his brothers.

30.This is what Professor Chang said in his report :

"12. According to substatutes in Ta-Qing lyu-li 大清律例(the Qing code), after the death of a person, his estate is to be divided among his sons - all sons born to his wife, concubine(s) and female servant(s) in his household shall receive equal shares, an illegitimate son born to a woman outside of his household shall receive one half of a share. If a son died before receiving his share, it will be passed on to his son(s). If a married son died without a son, one should be adopted for him to carry on his line.

13. The devolution is not automatic. An established custom requires it be carried out by a procedure known as fen-jia 分家 (the division of a family into financially independent branches, or fongs, each headed by a son). This procedure must first be approved by the surviving widow, and then go through two steps: a careful negotiation among the representatives of all the fongs, and a formal act of composing and signing a jiu-shu 鬮書 (deed of division of family property) by those representatives.

14. Sometimes a person or family designates a piece of property as 'ancestral worship property' (ji-tian祭產) or 'family charity property' (yi-chan義產) and registers it under the name of a tong (堂) or tso (祖), an artificial entity essentially like a trust in the Western legal system although traditional China did not have an equivalent term for 'trust.' The purposes are to make public the desire of keeping the property permanently in the family for the benefit of the ancestors, the living members and the future generations and to spare the property from the misuse and misfortune of any individual family member.

15. But actually even ancestral property of a tong or tso can be lawfully divided and distributed among the fongs if they so agree. On the other hand, before being divided, property bequeathed from a patriarch is characterized as his 'family property' and protected from misuse by a family member even if it is not registered as 'tong property' or 'ancestral property.' The property remains in the name of the deceased patriarch. Every male descendant of his has a direct or indirect expectant interest in the property. As the interest is latent and unspecified, none of the beneficiaries can point to any part of the property and claim it to be his. The property as a whole is to be managed for the whole family by its most senior member or someone selected by the fongs or by the fongs taking turns. The management is limited to preserving the property and putting it to ordinary, routine use, such as cultivation and collection of rental from tenants with whom the family has entered a contract of lease.

16. Any extraordinary, non-routine use of the family property has to be properly authorized. Customarily, certain modes of disposition of family property, including spending large amount of its proceeds and, particularly, outright selling (jue-mai絕賣), mortgage-selling (dian典) and leasing (dzu租) the property, fall in this category. Under a Qing statute, a junior member who disposes of any part of family property without the authorization of the senior member in charge of the family affairs is punishable with twenty to one hundred blows of the bamboo, depending on the value of the property disposed of. If there is not such a senior member, the disposition must be authorized by all the fongs. An unauthorized disposition, as a result of a crime, is of course, unlawful and void or voidable.

17. In the present case, if the traditional Chinese law and custom are applied, the legal owner of the estate is the Yau family. All its members are beneficiaries, although eventually the lion's share of the property will be divided among the four fongs. But before the division, none of the fongs could claim ownership of any definite part of the property. Each of them has only an equal, undefined expectant interest in it. There is not an equivalent concept of 'tenants-in-common' in traditional Chinese law and custom."

31.Professor Dicks identified the issue as whether, under Chinese customary law, a co-owner of undivided property is entitled to dispose of his own share notwithstanding that the property remained undivided. He said in his report :

"33. I have yet to find direct evidence of such transactions in the Qing period, although further research in collections of legal documents may well produce such examples. However, in the early Republican period when, prior to the enactment of the Civil Code in 1930-1931, the Qing code and the customary law remained in force as the 'Civil Law Temporarily in Force', a number of judgments given by the Da Li Yuan (the Supreme Court) show clearly that whereas a single co-owner could not sell or encumber the undivided property or any part of it without the consent of the other co-owners, he was free to dispose of his own share without such consent. Thus in one case decided only four years after the end of the Qing period, the court held as follows:

'Co-owners are free to dispose of their own shares of the undivided property, and a donation made by a co-owner to some other person or the use of the share as a security are both valid whether or not he has previously sought the agreement of the other co-owners, and the other co-owners cannot interfere on the ground of the co-ownership.' (Appeal No.2032, 4th year (1915)).

A similar judgment was delivered in the following year. In several other cases the point was made that a disposition by one or more co-owners of the property itself, or a definite part of it, without the agreement of the remaining co-owners, was invalid. Cases in which the principle of selling or encumbering individual shares in undivided property appears to have been accepted without objection can be found in the records of some of the extraterritorial courts of the Qing period.

34. It should also be said that once the father and mother of a family had died and the statutory impediment which the Qing code imposed on division without their consent had been removed, the co-owners of the family property were able to insist on division of the family property, unless it was specifically dedicated to such common purposes as ancestor worship. Huang Lin-Hung, a Qing official who was the author of a manual for magistrates in the last decade of the 17th century, wrote as follows:

'The statute provides that when the parents of a family die without dividing the family estate among their sons, the sons, irrespective of whether they were borne by the legal wife, the concubines, or the handmaids, shall enjoy the inheritance equally. In case of controversy, the magistrate should order the head of the clan and the village elders to make an inventory of the family estate and present it to him. The magistrate then orders the family property divided equally among the brothers ...' (Djang Chu (transl.): A Complete Book Concerning Happiness and Benevolence (1984), 451).

In 1914 the Da Li Yuan gave judgment that partition could be demanded at any time unless there was an agreement to the contrary (Appeal No. 35, Year 3).

35. In the light of these authorities it is hardly surprising that the sale of shares in undivided property in the New Territories was fairly common many years before the sale agreement in the present case was executed in 1997 and, to the extent that the question falls to be determined by customary law, in my view may be regarded as in accordance with local custom."

32.When Professor Chang gave his oral evidence, he said that the decisions of the Da Li Yuan were influenced by Japanese jurisprudence which was in turn influenced by the German, and they were inconsistent with the traditional view. I was taken through a number of these summarized judgments and told that it is important to distinguish between two different concepts, namely, 分別共有(separately co-own) and共同共有(jointly co-own). 共同共有literally means "to jointly co-own". He said it might seem tautological but the significance of this term is that it refers to a group of people who together own something of which none of them has independent ownership of any part and, therefore, each co-owner could not do anything to the property which would significantly interfere with the interests of other owners without their consent. The other expression 分別共有is "to separately co-own". He said this appears to be an oxymoron but it signifies persons who have placed under common management several pieces of land, each individually owned by one of them. He said, in the eyes of outsiders the land would be considered as one piece of property and a person who placed individual pieces of land together would be categorized as a co-owner. But because each person still has separate ownership, each of them has the right to dispose of his own piece of land. He said the judgment relied on by Professor Dicks was concerned with property which was separately co-owned.

33.I am afraid I have difficulty with such concepts. The authorities referred to by Professor Chang and Professor Dicks are the briefest of summaries (although approved by the Da Li Yuan for publication), and they are quite equivocal. I regret to say that I have difficulty in concluding what is the true position according to Chinese customary law. It may be that there was no fixed position and that in the event of dispute, the authority would seek a just solution according to the circumstances. Thus, according to Professor Chang, the creditor of a son could force the debtor son to seek a division of family property, and after division, the creditor would be able to enforce his debt against the separate property of the son.

34.If so, it is difficult to see why a son might not mortgage or dispose of his "share" prior to division. I am inclined to the view that under Chinese customary law the sale or disposition of a son's share could be effective. Whether it was indeed effective would depend on the circumstances. If, today, the court were called upon to enforce Chinese customary law, I have no doubt that the court would, as a general rule, permit disposition prior to division.

35.However, in my opinion, the devolution of title in the New Territories is not governed by Chinese customary law.

36.Since 1960, the Lot has been registered in the names of the sons and grandsons of the Deceased. As such, they are the beneficial owners of the Lot and hold their shares as tenants-in-common.

37.That being the case, in my opinion, the sale by the 1st and 2nd defendants of their undivided share in the Lot to the 3rd defendant is valid. It follows that the declaration that they are invalid according to Tsing Law is refused.

38.I turn to deal with the Lease made by the 1st defendant in favour of the directors and shareholders of the 3rd defendant. It is common ground that I can treat the Lease as being made in favour of the 3rd defendant although the 3rd defendant had not been incorporated at the material time. The defendants sought to uphold the validity of the Lease by reference to Chinese customary law. I have no doubt that Chinese customary law has no application. The 1st defendant was a tenant-in-common and his rights and obligations depended on that. I cannot accept the argument that the validity of the Lease depended on Chinese customary law.

39.Mr Barlow argues that the mere making of the Lease amounted to an ouster of the plaintiffs such that the plaintiffs became entitled to damages for trespass or mesne profits. I do not believe the Lease can have that effect. The lease described the subject as being the Lot. However, according to both Mr Hau and the 1st defendant, the intention was that the yellow area should not be included. Mr Barlow says that that is not admissible because it contradicts the language of the lease. I do not agree. The issue is whether the description of the Lot correctly represented their agreement. Just as in a claim for rectification, evidence would be admissible to show, for example, that the parties never intended or agreed that the yellow should form part of the subject of the tenancy, such evidence is admissible here. But it does not matter. It is common ground that no attempt had been made to evict the 1st plaintiffs from the yellow area. As I have said, the mere making of the lease would not be an ouster of the plaintiffs. The 1st plaintiffs were left in possession of the yellow area.

40.Moreover, as Mr Chong has pointed out, the plaintiffs have not pleaded a case of ouster or, somehow, trespass by the mere making of the Lease. The plaintiffs' claim in relation to the Lease is that it is invalid according to Chinese customary law. I have held Chinese customary law has no application to the validity of the Lease.

41.I turn to consider the plaintiff's claim on trespass. This is pleaded in para. 13 of the Re-Re-Amended Statement of Claim :

"13. In or about July or August, 1996 agents or servants of the 3rd Defendant committed, inter alia, the following acts of trespass on or to the Land.

Particulars

(a) Forcibly took possession of the Land;

(b) Despite strong protest by the 1st and the 2nd Plaintiffs, the 3rd Defendant by its agents or servants wrongfully erected wire fences ("the said fences") around the Land to the exclusion of all residents of Hung Leng Village including the 1st and the 2nd Plaintiffs.

(c) By its agents or servants the 3rd Defendant claimed to be entitled to exclusive use and possession of the Land."

42.Now on this issue, there is conflict of evidence between the witnesses called on behalf of the plaintiffs and the defendants. I have to say that for reasons unknown and unexplored at the trial, the descendants of the deceased seemed to have divided into two camps with the 1st and 2nd plaintiffs in one camp and the 1st and 2nd defendants in the other camp. Their enmity seemed to be deep-seated and not confined to the Lot.

43.According to the 1st defendant, in 1996, he authorized the 3rd defendant to fence off the green and the pink areas in order to avoid any encroachment on the Lot. That followed a survey and discovery that there had been encroachment of the green area by a development called the "Tin Yee Leung Development". Yau Tin Sung (PW3), the 1st named 2nd plaintiffs was involved with that development. His evidence is not very clear but it seems he has the right to occupy one floor of one of the houses fronting the green area.

44.Yau Tin Sung admitted that there was indeed encroachment on the green area by a wall as well as certain open drainage from the Tin Yee Leung Development. According to him, when the encroachment was discovered, the wall was moved so that it no longer encroached on the green area but that the drainage was not moved though it has been covered .

45.The evidence of the 1st defendant and Mr Hau for 3rd defendant is that it was because of such encroachment that the 1st and 3rd defendants decided to cause the green and the pink areas to be fenced off. While that was being done or after that was done, Yau Tin Sung erected a fence across the Access Road. The police was called and eventually Yau Tin Sung was persuaded to remove or to allow that fence to be removed. According to Yau Tin Sung, he put up a fence across the Access Road to protest the fencing of the green and pink areas.

46.According to Yau Tin Sung, thereafter, the 3rd defendant caused gates to be built, manned by guards during the day and locked at night, so that he could not gain access to his flat at Tin Yee Leung from Sha Tau Kok Road via the Access Road.

47.The erection of the gates is admitted by the 3rd defendant but, according to Mr Hau, that was done in order to avoid theft of building material which had been stored in the pink area. Mr Hau also denied that Yau Tin Sung was denied access or that the gates were locked.

48.I have to say that I am not impressed with Yau Tin Sung, Yau Fui, the 1st defendant or Mr Hau as witnesses. I should perhaps mention that Mr Hau is also an indigenous villager from the Hung Leng Village and these witnesses had known one another all their lives. Their enmity seems to go back a long time. I have the distinct impression that they have each decided to take a firm position and refused to see that there is any merit in the other side's case. I do not believe that Yau Tin Sung was denied access at night or that access was only available to the occupiers of the development called "Victory Garden".

49.Now the Tin Yee Leung Development was built on Lot 1498, section C which is to the north of the Lot and contiguous to the yellow and the green areas. The Victory Garden Development is a larger development which is erected on several different lots to the north of the Tin Yee Leung Development. It was developed by the 3rd defendant.

50.As I have said, I do not believe that Yau Tin Sung was denied access or that access was only available to the occupiers of Victory Garden. Had Yau Tin Sung been denied access I would be surprised if he had not reported the matter to the police or that the other residents of Tin Yee Leung (who, according to Yau Tin Sung, were also denied access) would not have complained. HCA7129/1997 was only commenced on 9 July 1997, and the claim for trespass made in para. 13 of the Re-Re-Amended Statement of Claim is quoted in para. 41 above.

51.The claim for trespass is made now against the 3rd defendant. In 1996, the 3rd defendant was acting under the authority of the 1st defendant. The 1st defendant was a tenant-in-common. A tenant-in-common is entitled to possession of the entirety of the land. He has unity of possession with his co-tenants. He can maintain an action for trespass on his own against a trespasser. However, a co-owner must not exclude his co-owner from possession, if he does he will be liable to the excluded co-owner. So, here, the question is whether there have been acts of exclusion by the 1st defendant (acting through the 3rd defendant or otherwise) of other co-owners from the Lot. So far as residents of Hung Leng Village are concerned, although the plaintiffs complained of their exclusion, the 3rd defendant was entitled to exclude them from the Lot. The residents of Hung Leng Village have no right to possession of the Lot. Here, I am not dealing with the Access Road. The complaint is exclusion from the Lot. I do not decide whether anyone has any right of way over the Access Road.

52.But what was the position of the plaintiffs? Now, the plaintiffs were not registered as owners of the land until the year 2000. Prior to their registration as such, should they have been regarded as equitable tenants-in-common? Under common law, they would not be so regarded. See Lord Sudeley v. A.G. [1897] AC 11. See also Commissioner of Stamp Duties v. Livingston [1965] AC 694. But in Wu v. Wu, Lord Browne-Wilkinson had this to say at page 567 :

" Next Mr Oliver relied on the principle of English law that, whilst the estate of a deceased person is in course of administration, no beneficiary under the will or intestacy has any beneficial interest in any specific asset of that estate; he has only a right to have the estate duly administered : Lord Sudeley v. A-G [1897] AC 11. Therefore, Mr Oliver submits, since in 1934 the land was part of the estate of the father, the son could not validly contract to sell the land as a specific item of property. Even assuming (without deciding) that the principle in Sudeley has any application to a case such as the present where, as is common ground, succession on death is regulated by Chinese law, the argument is unsound both factually and legally. The son did not purport to sell the land until 13 years after the death of the father. In the absence of any evidence to the contrary, the correct factual inference must be that after that lapse of time the estate of the father had been fully administered and the son was entitled to land in specie by implied assent. Even if, contrary to this view, the estate of the father had not been administered by 1934, there can be no doubt that it has at some time been administered. In principle, there is no reason why a devisee of land comprised in an unadministered estate cannot enter into a binding contract to sell that land. True, until completion of the administration and the vesting of the property in the devisee, the devisee cannot convey the land in specie. But the Lordships were referred to no authority to suggest that such devisee cannot validly contract to sell the land at a time when his interest is a mere chose in action or expectancy. Their Lordships can see no distinction in principle between such a contract and a contract for value to assign a future chose in action. As and from the date when the chose in action comes into existence, the contract becomes specifically enforceable."

53.I have to decide whether the same approach is applicable here such that the 1st plaintiffs and the 2nd plaintiffs could be regarded as equitable tenants-in-common so that their exclusion, if indeed there was exclusion, by the 3rd defendant from the green and the pink areas could be regarded as the exclusion of an equitable tenant-in-common. It is to be noted that Yau Ma Ying (the father of the 2nd Plaintiffs) died in 1973. Whereas Yau Sang (the head of the 1st plaintiffs' branch) died as long ago as 1962.

54.Here, of course, prior to the removal of Ng Kiu as trustee, the 1st and 2nd defendants were themselves equitable tenants-in-common. Ng Kiu was removed as trustee in relation to the 1st defendant on 23 September 1996 and in relation to the 2nd defendant, on 12 March 1997.

55.The alleged acts of trespass took place in July or August 1996. At that time the 3rd defendant was supposed to have acted on the authority or consent of the 1st defendant who was an equitable tenant-in-common. Moreover, even if the 1st defendant had no authority to lease the Lot, the Lease could have effect as a lease of the 1st defendant's undivided interest in the Lot, and that would carry with it the 1st defendant's right to possession of the Lot together with the other co-owners.

56.In England, after 1925, tenancy-in-common could only exist in equity. In Bull v. Bull [1955] 1 QB 234, a decision of the English Court of Appeal, a son and his mother were equitable tenants-in-common. Denning LJ (as he then was) said at page 237 :

"... I realize that since 1925 there has been no such thing as a legal tenancy in common : see section 1(6) of the Law of Property Act, 1925. All tenancies in common now are equitable only and they take effect behind a trust for sale : see section 36(4) of the Settled Land Act, 1925. Nevertheless, unless a sale takes place these equitable tenants in common have the same right to enjoy the land as legal tenants used to have. There position was well stated by Maugham J in In re Warren. 'There is no doubt that, since the coming into force of the Law of Property Act, 1925, the position of undivided owners is different from that for what it was before. That Act, for the purpose of simplifying the law, has introduced provisions for undivided shares, and has made partition actions unnecessary and obsolete. But in substance the beneficiary interests of the undivided owners in regard to the enjoyment so long as the land remains unsold have not been altered, and it is true to say that the ordinary layman possessed of an undivided share in land would be quite unaware of any alteration in his rights as a result of the Act.'

My conclusion, therefore, is that, "when there are two equitable tenants in common, then, until the place is sold, each of them is entitled concurrently with the other to the possession of the land and to the use and enjoyment of it in a proper manner; and that neither of them is entitled to turn out the other."

57.So, there is no doubt that whilst the 1st and 2nd defendants were equitable tenants-in-common, they were entitled to possession of the Lot. The question then is : what is the position of the plaintiffs prior to the succession in the year 2000? Could they be regarded as equitable tenants-in-common such that they were entitled concurrently with the 1st and 2nd defendants to the possession of the Lot?

58.I have not found this an easy question, but having regard to the passage from Wu v. Wu cited in para. 52 above and the decision in Wu v. Wu, I have come to the conclusion that they could be regarded as such. As in Wu v. Wu, presumably if the plaintiffs had purported to sell their interest in the Lot, specific performance could have been obtained against them, even if they never arranged for succession to their fathers' estate. Also, having regard to the long lapse of time since the death of their respective fathers, on the facts too, it is possible for one to find that there has been implied assent.

59.That being the case, had there been physical exclusion of the 1st and 2nd plaintiffs from the Lot then, in my opinion, a claim in trespass would have been maintainable against the 1st and 3rd defendants.

60.However, on the facts, I do not find that there had been any exclusion. In the oral evidence, the complaint concentrated on the denial of access. I do not find that there has been denial of access. As for physical exclusion from the Lot, there is no evidence that the 2nd plaintiffs ever wanted to use the green or pink area but were not allowed to do so. Nor is there such evidence from the 1st plaintiffs. In the case of the 1st plaintiffs, I do not have to go on to consider whether, having regard to their exclusive possession of the yellow area, they had the right to use the green and pink areas as well.

61.The plaintiffs also complained of the fact that the pink area had been covered with tarmac by the 3rd defendant and that the 3rd defendant allowed vehicles to be parked there. The 3rd defendant admitted to storing building material in the yellow area. So far as tarmac was concerned, I do not believe that can amount to trespass. Waste might have been a possible complaint. But no claim has been made on that. If the 3rd defendant had not excluded any of the co-owners from possession there can be no claim for damages for such exclusion. Tenants-in-common have unity of possession. In practice, it can be difficult to decide what amounts to exclusion of possession. Refusal to allow a co-owner to come on to the property is an obvious case. What is more problematic is the actual occupation of the land by a co-owner. Suppose the property consists of one room and there are two co-owners, would the fact that one co-owner sleeps in the room amount to exclusion of the other? I do not think so, provided he does not forbid the other to share the room with him and he does not by conduct or otherwise constructively exclude his co-tenant. The matter can become more complicated - suppose a flat has two co-owners but which has only one carparking space. Each owner has a car. Is it first-come-first-served? Do they take turns? Or that neither could use the carpark without being guilty of exclusion? And what is the position of licensees? Suppose two persons co-own a flat with two rooms. Each occupies one. Can either of them invite someone to share his room? What if the other co-owner objects? I do not need to provide an answer to these interesting questions. In each case, it is a question of fact which depends on the particular circumstances of the case. That may be why often an order for partition or sale is the only solution. Here, even assuming that the 3rd defendant allowed some vehicles to be parked in the pink area, that would not necessarily amount to the exclusion of a co-owner. Here, the 3rd defendant admits to storage of building material on the Lot. That, in itself, would not necessarily be trespass. There is no evidence that the entire Lot (apart from the yellow area) was taken up. Nor is there evidence that the plaintiffs wanted to use any of the green or pink area but could not. The 3rd defendant denies that it used or authorized anyone to park vehicles on the Lot.

62.On 12 January 1998, the plaintiffs applied for and obtained an ex parte injunction restraining the 1st and 3rd defendants "from converting, using, causing, permitting or suffering to be used .... [the Lot] ... or any part thereof as a car park or for storage of vehicles." That order has been continued to date. As I understand it, the basis of the injunction was the plaintiffs' claim that the 1st and/or 3rd defendants was allowing at least the pink area to be used for carparking purposes. Although at the time of the injunction the plaintiffs had not yet succeeded to the shares of their respective branches, I am of the view that they had sufficient interest in the Lot to apply for the injunction. There were some photographs showing the presence of a substantial number of vehicles at the pink area, and possibly the green area too. Such users would have contravened the outlined zoning plan applicable to the Lot. The plaintiffs relied on a sales brochure of Victory Garden which showed laid out carparking spaces at the green and pink areas. Mr Hau, in his evidence, pointed out that there are some fine print at the back of the brochure saying that the brochure was for reference only. However, I must say I agree with Mr Barlow who said that the impression given in the brochure is that the residents of Victory Garden could park their vehicles on the Lot. Indeed, I believe it is likely that but for the injunction, the 3rd defendant would have used the green and pink areas for that purpose. I do not believe the 3rd defendant would have incurred the expense of tarmacing the area unless it wanted to use it for carparking purposes. Although there is no evidence on the costs of tarmacing the area, there is evidence that it would cost about $100,000 to remove the tarmac. So one has some idea of its scale. But even using the green and yellow areas for parking would not necessarily amount to trespass unless there was exclusion of the co-owners from the Lot. So far as the 1st plaintiffs are concerned, they continued to occupy the yellow area. So far as the 2nd plaintiffs are concerned, I do not find that there has been any actual exclusion or any desire on the part of the 2nd plaintiffs to use the Lot (as opposed to access which I have dealt with separately).

63.I turn to consider HCMP1363/2003. In these proceedings, the plaintiffs seek partition of the Lot, and Mr Barlow has confirmed that the 1st and 2nd plaintiffs are willing to be treated as one party for the purpose of the partition and that they wish to be allotted the green and the yellow areas. In support of this, the 1st plaintiff relies on the fact that Yau Fui and Yau Ah Bing had built two houses on the yellow area way back in the 1970s, expending substantial sums in the process. That, according to the plaintiffs, was done with the consent or understanding of Ng Kiu that the yellow area would be allotted to the 1st plaintiffs.

64.In support of that, a document dated 10 November 1976 which purported to bear the thumb print of Ng Kiu was produced. The authenticity of this document is not admitted by the defendants. Although, from the correspondence with the District Office, it appeared that they do not have a copy of this document, I believe this document to be genuine. I would be very surprised if before the 1st plaintiffs expended the substantial sums in the erection of the two houses, there was not some understanding or agreement that their branch should be allotted the yellow area. As I have said, approximately $80,000 was spent in the building of the two houses. At that time it was not an insubstantial sum. I have no evidence on the valuation of the yellow area in 1973 and 1976, but having regard to their supposed value today, I have to say that it is highly unlikely that anyone would have been prepared to spend $60,000 in 1973 and about $20,000 in 1976 to build two houses on the yellow area without some agreement or understanding that the yellow area would in due course be allotted to the 1st plaintiffs' branch. Moreover, there is some support for such understanding from the defendants' evidence, in particular, para. 4 of Hau Koon Sang's statement, where he said :

".... I was advised by the 1st and 2nd Defendants that each of them occupied one portion of the Land while Yau Sang and Yau Ma Ying occupied the other portions of the Land. Yau Sang and Yau Ma Ying had erected on their own portions of the Land 2 houses in which they occupied as their residence. I was advised by the 1st and 2nd Defendants that although they had no formal Deed agreeing which portion of the Land should be occupied by each of the 4 owners, the Land had at all material times been under the control of the 1st Defendant."

65.Although Mr Hau's statement is not entirely factually correct, it supports the case that there had been some informal partition of the Lot.

66.I should also mention that there is a dispute over the use of the rental income from the green and yellow areas. Those areas were tenanted until the 1980s. I have to say I find neither the plaintiffs' nor the defendants' evidence convincing. According to the plaintiffs, the rents were all used for ancestral worship. According to the 1st defendant, all of it was paid to him. I regret to say I do not believe either side's witnesses. However, it is unnecessary for me to make any finding. There is no claim for an account of such rents. It is not contended that there was any ancestral worship trust. The defendants have also dropped their case of an oral gift by the deceased of the entire Lot to Yau Ma Yeung.

67.Now, as Mr Chong has submitted, no formal partition had taken place and the letter of 1976 does not say in terms that Ng Kiu agreed to the building of the two houses. However, it referred to Yau Ah Bing and Yau Fui by name and contained this statement : "祈派員前來劃分并分割契據". Also, I have no reason to doubt that the District Land Office were aware of the existence of these two houses and that they had either been approved or tolerated by them. That is Ng Fui's evidence and is supported by a letter dated 18 January 1977 from the District Land Office to him.

68.So far as partition is concerned, I should order partition unless I am satisfied that partition would not be beneficial to all the parties. Here, having regard to the size of the Lot, I can see no reason why partition should not be beneficial to all the parties. As to how the partition should take place, that is of course more problematical. However, given that I could order equalization money and the fact that the 1st and 2nd plaintiffs are prepared to be treated as one entity, I can see no reason why partition should not be ordered in this case. Now, if there had been an understanding, even an informal one, that the 1st plaintiffs' branch of the family should be allotted the yellow area, it is something which I am entitled to take into consideration when considering how the Lot should be partitioned. I believe there was indeed such an understanding. I would allot the yellow area to the 1st plaintiffs.

69.The 2nd plaintiffs' branch wishes to be given the green area. It is said, although quite vaguely, that that was also the understanding. Insofar as the family seemed to have been divided into two camps, one represented by Ng Kiu on behalf of the 1st and 2nd defendants, and the other made up of the 1st and 2nd plaintiffs' branches of the family and, having regard to the fact that the Lot could be divided into two halves roughly by the Access Road and that the green area is next to the yellow area and both are on the same side of the Access Road, I am inclined to the view that there might well have been some understanding that the 2nd plaintiffs' branch should have the green area. In any event, if the 2nd plaintiffs were to be allotted some land in the pink area, there would be difficulty in partitioning the pink area having regard to access, unless it were to be partitioned into two long strips.

70.But I do not believe there was any understanding that the Access Road which is the shaded green area should be allotted to the 2nd plaintiffs. The Access Road occupies an area of approximately 69.2 m2 (745 sq.ft.).

71.Indeed, having regard to the fact that there is no access into the pink area from Sha Tau Kok Road except through the Access Road, I think it is more likely that if the parties had thought about it at the time they might well have agreed that the shaded green area should be allotted to the pink area. The fact that Yau Tin Sung lives in a flat at the Tin Yee Leung Development is not a good enough reason for the shaded green area to be allotted to him. I am also skeptical of his evidence that he chose a flat facing the green area because he thought he was entitled to the green area. In any event, his flat does not face the shaded green area.

72.Some evidence was called on behalf of the plaintiffs on the valuation of the different portions of the Lot. The Lot falls within the Ping Che and Ta Kwu Ling Outlined Zoning Plan ("OZP"). Roughly, the yellow and the green areas fall within the village type development zoning, the pink area falls within the agriculture zoning.

73.The valuer called on behalf of the plaintiffs, Mr Loi Wai Chuen of Good Rich Planners and Surveyors Limited, valued the Lot on the basis that the development potential of the Lot depended on its Lease conditions which, in his opinion, would override the provisions of the OZP. I am afraid I do not believe that is correct. That being the case, I do not think I can rely on the valuation placed on the Lot by Mr Loi.

74.The Lot is held under a Block Government Lease and is described in the Block Government Lease as Padi use. However, according to the Rent Roll "A Book" in the Lands Department, the Lot has 0.04 acre house lot status. In other words, rent was payable on the Lot on the basis that 0.04 acre of the land was land on which houses had been or might be built. The two houses on the yellow area occupies about 831 sq. ft., made up of 481 sq. ft. for the house built by Yau Ah Bing and 390 sq. ft. in relation to the house built by Yau Fui. Now the status of the Lot as house lot, so far as 0.04 acre is concerned, is something that should be explored further when the question of equalization money is considered.

75.According to Mr Loi, of the 0.04 acre house lot roughly 0.02 acre had been used on the yellow area. According to him, in the event of partition, the remaining 0.02 acre house lot could be allotted to the pink area. This is a matter which has to be investigated further because, as I understand it, the 0.02 acre of house lot might well be more valuable if it is allotted to the green area rather than the pink. That is because under the OZP, the green area with its village type zoning "House (other than New Territories exempted house) to be built" was a possible column 2 user whereas so far as the pink area is concerned under column 2, only "New Territories exempted houses" were permissible. In other words, the 0.02 acre house lot status would be wasted if it were allotted to the pink area because only exempted houses could be built on the pink area.

76.The plaintiffs are willing to give an undertaking that in the event that the green shaded area were allotted to them, they will dedicate the shaded green area as a public right of way. But I agree with Mr Chong that this can give rise to difficulties, for example, the maintenance of this right of way. And given the relationship between the plaintiffs and the 3rd defendant and as the pink area depended on the shaded green area for access to the Ta Kwu Ling Road, the 3rd defendant obviously does not wish to have to rely on the cooperation of the plaintiffs.

77.Having regard to the fact that it seems likely even on the evidence of Mr Loi that the green and the yellow areas together would have a higher value than the pink area, I can see no reason why the shaded green area should not be allotted to the 3rd defendant. Neither the green nor the yellow area depend on the shaded green area for access, so I will not require the 3rd defendant to provide an access in favour of the green and the yellow areas. That is of course not to say that the shaded green area which seems to serve as a right of way for the village would not have to remain open as such. I make no finding and naturally my order cannot affect any existing right over the shaded green area. Whether the residents of Tin Yee Leung and others have a right of way over it is outside the ambit of these proceedings.

78.So I would order a partition of the Lot so that the yellow and green areas as shown on the Plan be allotted to the 1st and 2nd plaintiffs. The shaded green area as well as the pink area be allotted to the 3rd defendant. I do so on the understanding that the 1st and 2nd plaintiffs are prepared to pay equalization money which may be substantial. Otherwise I would order a sale which is what the 3rd defendant prefers. I will hear the parties on equalization money as well as on the implementation and wording of my order. I will hear the parties on costs in the light of my judgment.

Representation:

Mr Barrie Barlow, instructed by Messrs Ko & Chow, for the 1st and 2nd Plaintiffs

Mr K.M. Chong & Ms Emma Wong, instructed by Messrs Norman M.K. Yeung & Co., for the 1st, 2nd and 3rd Defendants