Cheung Man Yu v. Lau Yuen Ching and Others

HCMP 2421/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

NO. 2421 OF 2000

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BETWEEN

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Before: Deputy High Court Judge Saunders in Chambers

Date of Hearing: 7 April 2005

Date of handing down judgment: 22 April 2005

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J U D G M E N T

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1.These proceedings revolve around an unincorporated association which has, for many years, being engaged in Buddhist activities.  As is usual, such activities, being long standing, have not been carried out by entities fully recognized by modern law, but rather on a more traditional and informal basis.  As so often happens, a consequence of such arrangements are disputes between those involved in the association over money.

2.The central question for determination appears to be whether or not Lin Fat Tong, the 4^th Respondent, is a charitable organization, as that concept is known to English law.

3.The factual circumstances giving rise to dispute are largely not at issue.  The Applicant, (Madam Cheung), and the 2^nd Respondent, (Lau Chun Yau), held a bank account in their joint names containing some $20 million.  That sum is said to have arisen from the resumption by the Government of land occupied by Lin Fat Tong, and the payment of compensation for that land.  As Lin Fat Tong was an unincorporated association, with no separate legal entity, it did not have a bank account, and so an account was opened in the joint names of Madam Cheung and Lau Chun Yau, for the purpose of receiving the funds.

4.It is contended that Lau Chun Yau and Lau Yuen Ching, the 1^st Respondent, then changed the name of a limited liability company to Lin Fat Tong Company Limited, that company being the 3^rd Respondent.  Following that, as a result of certain steps that were taken in relation to who may sign on the joint account, a sum of approximately $19 million was transferred from the joint account held by Cheung Man Yu and Lau Chun Yau, allegedly on behalf of Lin Fat Tong, to Lin Fat Tong Company Limited, and then subsequently to the personal accounts of Lau Yuen Ching and Lau Chun Yau.  It is readily apparent from that scenario why Madam Cheung is concerned about the situation.

5.Acting upon that concern, Madam Cheung has issued an Originating Summons pursuant to section 57A, Trustee Ordinance, Cap. 29 and O.120 of the Rules of the High Court.  The relief sought is that, first, Lau Yuen Ching, Lau Chun Yau and Lin Fat Tong Company Limited, disclose the whereabouts of the sum of money, second, that Lau Yuen Ching and Lau Chun Yau be removed as trustees or members of Lin Fat Tong and third, that Lin Fat Tong be administered by a scheme of trust to be prepared.

6.Lau Yuen Ching, Lau Chun Yau and Lin Fat Tong Company Limited, sought an order that the Originating Summons be continued, as if begun by writ, and that a formal Statement of Claim be prepared and filed.  In affirmations filed by Lau Yuen Ching and Lau Chun Yau, the issue as to whether or not Lin Fat Tong was a charitable organization was clearly raised.

7.The question as to whether or not the matter should continue as if begun by writ came first before the Master, where the application was declined.  Then on a directions hearing before a deputy judge of the High Court, the question was raised again, and an order made that the action be continued as if begun by writ.  Appropriate consequential directions were given at the same time.  That matter was subject to an appeal to the Court of Appeal and the appeal allowed, and the order of Deputy High Court Judge was set aside.  Thus the matter continues as a Originating Summons.

8.On a further application to Chu J, an order was made pursuant to O. 18 r.  I 12 that each party shall file and serve a statement of their case.  Those documents have now been served and the Respondents now seek further and better particulars of the case filed by Madam Cheung.

9.Proceedings begun and continued by Originating Summons are quite different to proceedings begun and continued as a writ.  Where a writ is filed it is usually necessary that there should be a formal statement of claim, in which the facts and matters upon which the plaintiff relies are formally pleaded.  In such a pleading, it is essential that the document be confined to the facts and matters upon which the Plaintiff relies, and not the evidence that it intends to put before the court to prove those facts and matters.  As the document which contains the essence of the proceedings, it must fully and fairly set out the particulars upon which the plaintiff relies in order that the defendant may be properly informed of the case that he must meet.

10.When an Originating Summons is filed it is supported by affidavits which disclose the position of the party seeking the orders.  Those affidavits set out not only the facts and matters upon which the applicant relies for the basis of the order he seeks, but also the evidence he relies upon to prove those facts and matters.  Those responding then file their affidavits, setting out their position.  Although an order requiring the applicant in an Originating Summons to file, in addition to affidavits, a formal statement of his case, under Order 18 rule 12 is not usually sought on an originating summons, it is open for the court, as has been done here, to order that such a further document be filed.

11.In my view, a statement of the case filed under O. 18 r. 12, must not be confused with a Statement of Claim.  It would not be on every occasion that a statement of the case will be required in an originating summons, for in most circumstances, the case will be clear from the affidavits.

12.When approaching a request for further in better particulars of the statement of case, in the context of an originating summons, it is necessary for the court to look both at the statement of the case that has been filed, and the affidavits that have been filed in support of the originating summons.  In this case, it is abundantly plain from such a reading that the Respondents that are, notwithstanding Mr Chain’s entreaties to me, fully alive to the precise nature of the case upon which the Applicant relies.  That that is so is clear from the terms of the affidavits that are filed, which precisely join in issue on the necessary questions.  I am satisfied that all of Mr Chain’s complaints really amount to nothing more than a complaint about the quality of the evidence that has been filed in support of the case, and not true complaints that the papers do not properly disclose the case that the Respondents must answer.

13.It may be that the matters Mr Chain has raised will, at the end of the day, be such that the judge trying the matter will not be able to come to a conclusion that the Lin Fat Tong constitutes a charitable trust.  But that is a matter for the judge at the end of the day, and a risk that the Applicant takes should she proceed on a state of the evidence as it is now. 

14.It is necessary to go through the schedule to the summons to deal with each of the applications for further particulars.  The paragraph references are to the paragraphs in the statement of the case to which exception is taken..

Paragraph 1(d):

15.I am satisfied of the facts and matters in support of the allegation complained of, and any documents relied upon, are adequately set out in the affidavits.  No further particulars are required in the statement of the case.

Paragraph 1(e):

16.Again the facts and matters are set out in the affidavits.  As to the requirement that the Applicant should state who was “the 4^th Respondent” for the purpose of receiving the alleged donations, the answer is clear.  It has already been stated in the statement of the case that the 4^th Respondent does not have a separately legal entity, and therefore the lots were registered in the name of Cheung Tim and Cheung Oi.  It matters not, as to who the precise members of Lin Fat Tong were, at the time any donations or land resumption compensation were paid.

Paragraph 1(f): 

17.The same answer applies.

Paragraph 1(g):

18.It is plain that the expression “it”, refers to the Kik Lok Tung Benevolent Society and that it is that society which gave its consent.  It is quite irrelevant as to who constituted that society at the time.  Whether that society gave its consent will be a matter of the trial judge.

Paragraph 2:

19.It is clear from the statement of the case, and the affirmations that a reference to “the 4^th Respondent”, is a reference to the unincorporated of the association of persons who comprised the 4^th Respondent.  It is quite vexatious and irrelevant to require the individual names of the members of that association.

Paragraph 2(a):

20.All the facts and matters upon which the Applicant relies to establish that Kuan Yim Temple, and the Tin Hau Temple, have become places for public worship are matters stated in the evidence.  No further particulars are required.  The Applicant will, of course, be confined to the evidence that it has filed prior to the trial, and will not be entitled to adduce any new matters at the trial.  Consequently, no issue of the Respondents being taken by surprise arises.

Paragraph 2(c):

21.It is absolutely plain from the evidence that the expression “they also accepted disciples” is a reference to the Abbot, that is the temple keeper, for the time being.  As both the 1^st and 2^nd Respondents themselves contend to be disciples in their affidavits, they both know what the concept of a “disciple” is.  It is vexatious and irrelevant to require the names of all the disciples if that is what the request is aimed at.

Paragraph 2(e):

22.It is a matter of evidence as to what constituted the 4^th Respondent’s public charitable activities and functions and the Applicant relies upon the evidence filed.  No further particulars are required in the statement of the case.  Again, the Applicant will be confined at trial to the evidence it has filed.

Paragraph 5(a):

23.Mr Chong accepted that is this allegation is irrelevant.  Having regard to the connotations of the expression “maiden maid”, in Chinese, it is appropriate that the allegation should be struck out.  I so order.

Paragraph 10:

24.No further facts are required to be pleaded as all matters upon which the Applicant relies in relation to the donation of the land lots to Lin Fat Tong are set out in the affidavits.  Again, as in other respects, the Applicant will be confined to the evidence it has filed at trial. The constitution of Lin Fat Tong is sufficiently answered by reference to its existence as unincorporated society.  Mr Chain’s argument was that he did not know whether or not to Madam Cheung relied upon any document to constitute the society.  She has adverted to none in her affidavits, no document has been asserted in the statement of claim, and Lin Fat Tong is described as an unincorporated society.  It is abundantly plain that no document is relied upon.  Madam Cheung would not be allowed to produce any such document at trial.

Paragraph 16:

25.Sufficient facts have been set out in this paragraph of the statement of the claim, in any event both Lau Yuen Chun and Lau Chun Yau admit that Lau Yuen Chun made a proposal to incorporate a limited company to carry out the wishes of Madam Lau.  All parties know precisely what they are talking about and no further particulars are required.

Paragraph 18:

26.Lau Yuen Chun and Lau Chun Yau seek information as to the source of $19 million transferred to the bank account of Lin Fat Tong Company Limited.  On their own affidavits, they know well that the source of the money was compensation money, paid by the Government for the resumption of the land lots, which money had been deposited into the joint bank account of Madam Lau and Lau Chun Yau.  No further pleading or particulars are required.

27.With the one exception, that the allegation intended in paragraph 5(a) of the Applicant’s case, that Lau Chun Yau was the “maiden maid” of Lau Hing Lin should be struck out, the application for further and better particulars fails.

28.They will be an order nisi that the costs on the application for further and better particulars will be Applicant’s costs in the cause. 

Mr K M Chong, instructed by Messrs Ho & Partners, for the Applicant

Mr Benjamin Chain, instructed by Messrs Louis K Y Pau & Co., for the 1^st to 3^rd Respondents

Appeal by the 1st to 3rd Respondents to Court of Appeal dismissed. Please refer to CACV161/2005 dated 28 December 2005