Tang Chun Kit and Another v. Tang Lo Ping

HCMP5529/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 5529 OF 2000

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BETWEEN

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Coram : Hon. Lam J in  Chambers

Date of Hearing : 9 September 2005

Date of Judgment : 9 September 2005

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J U D G M E N T

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1.Today’s hearing is a sequel to my judgment on 10 September 2004.  In paragraph 35 of that judgment, I have set out the two options that the court can proceed in view of the fact that counsel has not addressed me on the position of distribution under the general law at the trial.

2.Subsequently, on 3 December 2004, counsel indicated that they would like to pursue option 2 and, as a result, I gave directions for further submissions from counsel as to the manner of distribution.

3.It is perhaps convenient for me to identify the precise scope of the dispute which I asked counsel to give further submissions.  I think that has been set out in paragraph 43 of my judgment.

4.In paragraph 43 I indicated that I will grant a declaration in terms of paras 1 and 3 and I also expressed the belief that, in the light of my conclusion with regard to the status of the 2nd Plaintiff, there cannot be any dispute as to his entitlement in the future.

5.I am happy to hear from counsel for the Defendant and there is no dispute from Mr Wu as well that, as from the date of my judgment, that is 10 September 2004, the 2nd Plaintiff has been distributed full share with regard to income from the Tso.

6.As a matter of fact, I have decided in my judgment that there should not be any retrospective claims by these plaintiffs.  (See paragraphs 38, 40 and 41 of my judgment).  So there is no question of this court now reopening that and to grant declaration in terms of distributions prior to the date of the judgment.

7.In the case of the 2nd Plaintiff, given the fact that the manager had already been making distribution to him on a full share basis as from 10 September 2004, there is no need to grant any further declaration.

8.Turning to the case of the 1st Plaintiff, having had the opportunity to consider the matter, it is now the common position of the parties that the 1st Plaintiff, even though he is an illegitimate child, he should also be entitled to a full equal share as other members of the Tso.  Counsel have furnished a draft declaration in those terms but there is still a dispute as to the date from which his entitlement should run.

9.Notwithstanding that the share of entitlement is a matter that has not been clarified at the time when I handed down my judgment on 10 September 2004, I do not see any reasons why he should be prejudiced as a result of that uncertainty.  In fact, Mr Yeung quite fairly accepts in his latest submissions that it is very difficult to find any justification as a matter of law for any differentiation between legitimate and illegitimate child in terms of distributions.

10.In the circumstances, I think the manager should have no difficulties in terms of paying the 1st Plaintiff the equal share as from 10 September 2004.  Regarding whether he should be entitled to any retrospective claims prior to 10 September 2004 I have in fact decided already in my judgment of 10 September 2004 that there should not be any retrospective claims.

11.Mr Wu has argued this morning that any entitlement should run from the date of the originating summons and he submitted that that was the date from which the cause of action accrued.

12.Bearing in mind how the proceedings has been formulated and the prayers in the originating summons and bearing in mind that it is not a claim for a monetary sum, I do not think one can pinpoint the date of the originating summons as the date when the cause of action accrued.  That would not be a very useful analysis.

13.I would prefer to view these proceedings as an action akin to an administration action under Order 85 in which, to some extent, the parties are seeking guidance from the court as to how a trust should be administered.

14.Hence, in the absence of any unreasonable conduct on the part of the trustee, and in this case the manager, and in the absence of information as to distributions in the past and also bearing in mind what I have said as to the manager’s entitlement to observe the administrative practice regarding the requirement of registration in usual cases as prerequisites for distribution in my judgment, I do not think the manager should be criticised for withholding distributions to the 1st Plaintiff prior to the date of my judgment.

15.In the circumstances, I would decide that the date from which the 1st Plaintiff should be entitled to a distribution is from 10 September 2004.

16.Hence, I would declare that the 1st Plaintiff is entitled to be paid an equal share of the distribution of proceeds or money made to members of Tang Nam Kai Tso by the Tso as from 10 September 2004, and this is the only additional declaration I will make apart from those I have already granted in paragraph 43 of my judgment.

(Submissions by counsel)

17.On the question of costs, as I have said in the course of my above reasons as to the declaration that should be granted in favour of the 1st Plaintiff, I consider the nature of these proceedings more akin to an Order 85 application in terms of seeking guidance from the court as to how the property of the Tso should be administered.

18.I heard what Mr Yeung submitted as to the Plaintiff’s conduct of these proceedings.  It is right to say that the Plaintiff has not chosen to pursue the matter under Order 85 to an extent that may have contributed to the increase of certain costs of these proceedings.  However, I bear in mind that this is a dispute about a Tso and it has not been so readily appreciated by legal practitioners that as far as Tso in Hong Kong are concerned, the court has said from time to time that they are actually a kind of trust and therefore proceedings concerning the Tso are actually proceedings with regard to the administration of trust properties.

19.But I am convinced that as far as the present proceedings are concerned, justice requires me to look at the substance rather than the form and, as a matter of substance, as I have said just now, I consider that it is in the nature of the parties coming to court seeking directions as to how the trust should be administered, given the difficulties arising from situations perhaps not anticipated at the time when the Tso was set up and this is quite understandable.

20.I have considered whether either parties have proceeded unreasonably so as to justify this court from departing from the general rule, that is an action seeking direction on administration of trust usually the costs should come from the trust fund.  No doubt either the Plaintiff or  the Defendant could have taken some steps to reduce the costs of these proceedings, but I would not classify failures in that regard as so unreasonable that they should be penalised in terms of costs.

21.So, in the circumstances, I think a fair order is that the costs of these proceedings should be borne by the trust fund, that is it should come from the Tso properties, and this is the order I make.  The costs are to be taxed if not agreed.

(Submission by counsel)

22.The Plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.

Mr Paul Wu, instructed by Messrs Lau & Chan, for the 1st and 2nd Plaintiffs

Mr Keith Yeung, instructed by Messrs Wong, Hui & Co., for the Defendant