Man Ping Nam v. Man Tim Lup and Others

HCMP 2417/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2417 OF 2007

____________

____________

BETWEEN

_____________

Before: Mr Recorder A Ho, SC in Chambers

Dates of Hearing:  12 and 13 May 2009

Date of Judgment:  21 January 2010

_______________

J U D G M E N T

_______________

Background

1.These proceedings concern a customary Chinese unincorporated association, the Man Sham Chung Wui (文深涌會) (“the Wui”). The Applicant, Man Ping Nam (文炳南), has been a manager of the Wui since 1949. Upon the death of his co-manager in the 1980s’, the Applicant has become the Wui’s sole registered manager.

2.By an Originating Summons issued on 30 November 2007 (and later amended on 24 June 2008), the Applicant sought directions from the Court on the mode and manner of the sale of 4 pieces of land, namely, Lot Nos. 733RP, 674RP, 669RP, and 661CRP, all in Demarcation District 99 in San Tin (“the Properties”). The Properties are registered in the name of the Wui.

3.The Properties extend over a vast area totalling about 6,899,199 square metres. They form a substantial part of the Wui’s assets.

4.The Properties are located within what is called the “Shum Chun River flood plain”. About 90% of the area is now fish pond and about 9% is being used for open storage.

5.Under the current zoning in the Outline Zoning Plan, the Properties are permitted only for uses specified under “Other Specified Uses (Services)”, “Other Specified Uses (Comprehensive Development and Wetland Enhancement Area)” and “Village Type Development”. Under the prescribed permitted usages, the development potential of the Properties is substantially curtailed.

6.According to the Applicant, the Properties are occupied not only by tenants and licensees, but also by squatters. The presence of squatters is perhaps not surprising given the very large size of the land and their location in the remote areas, hence difficulty in policing. Apparently, apart from the parts occupied by tenants under various tenancies, the Wui has little information as to the number of squatters, their identities or the extent of their occupation of the land.

7.Given their location within the Shum Chun River flood plain, a large part of the Properties could only be used for fish-farming, and the rental yield thus generated is low compared with land for cultivation of crops. Despite their vast area, the total annual rental income derived from the letting of the Properties was, according to the Applicant, only in the region of about $3.5 million. Just to give some idea of the value of the Properties, a valuation report obtained in March 2009 suggested that the Properties on an “as is” basis (that is, without delivery of vacant possession) were worth about $647 million.

8.The low rental yield was unattractive to the members. A majority of the members had wanted to sell the Properties so as to realise their interest in the Wui. In response to the wishes of the majority, legal advice was obtained as to the manner in which the sale of the Properties could be taken forward.

9.A meeting of the members of the Wui was convened to discuss the proposed sale and the consequential procedures. According to the Applicant, notice of the meeting was served on all the members. In the case of the 1^st to 9^th Respondents, I would infer that the notice had been given to the t’sos or t’ong (as the case may be), rather than to the individual members of such t’sos.

10.Pursuant to the notice, a meeting was held on 19 March 2007 (“the Meeting”). According to the minutes of the Meeting, matters regarding the proposed sale of the Properties were discussed. The minutes further recorded that a majority of the members had voted in favour of the following resolutions to authorise the Applicant to sell the Properties (“the Resolutions”):

“決議

甲、就授權本會司理人以公開或私人招標形式出售本會所擁有之全部土地(即在第99約661號C分段餘段、669號餘段、674號餘段及733號餘段)(簡稱“該地段”)，而其售價將不低於由本會委托之兩間獨立估價公司所作出之估價價值，並以現狀及不交吉之形式出售之投票：本會會員以 58.48石(即佔本會所擁有之石份的 91.403%)支持及沒有反對之情況下(即以多於半數同意)通過是項提議。

乙、就下列各項主要條款出售該地段：

一、有意購買該地段之投標人士必須以港幣五千萬元正存放於本會之律師行作為其投標保証金，否則該標書被現作無效；若該標書不獲接納，其保証金將可獲全數退回但並不包括利息；

二、本會只可基於以下之先決條件才會接受最高價的標書(簡稱“該標書”)：

1.  在召開是次表決會議七天前，沒有任何本會會員以書面形式通知本會司理人

(i)  表達其意欲出價不低於該標書購買該地段；

(ii)  存放於本會律師行港幣五千萬元正保証金；及

2.  該標書沒有在是次會員大會上被投票否決。

三、若有本會會員在不少於表決會議七天前以書面形式通知本會司理人

(i)  表達其意欲出價不低於該標書購買該地段；

(ii)  存放於本會律師行港幣五千萬元正保証金，

本會必須將該地段售予該會員。若有多於一位本會會員意欲出價購買該地段並符合上述條款，該地段將售予出價最高之會員。

之投票：本會會員以 58.98 石(即佔本會所擁有之石份的 92.185%)支持及沒有反對之情況下(即以多於半數同意)通過上述一至三項之提議。

丙、就為了執行上述甲乙兩個部份之決議，本會授權司理人行使下列所有或部份權力：

一、聘用專業人士，包括律師、估價師等來協助處理一切所需事項及附帶事宜以成功出售該地段；

二、根據新界條例第15條向政務司申請同意書出售該地段；

三、向法庭及/或其他政府機構申請一切所需要之頒令及指示以求成功出售該地段；及

四、本會司理人認為合適的條款提出招標。

之投票：本會會員以 58.98 石(即佔本會所擁有之石份的 92.185%)支持及沒有反對之情況下(即以多於半數同意)通過上述一至四項之提議。

丁、就本會司理人認為有需要及適當的話，他有權作出任何行動以促使上述決議得以執行及完成之投票：本會會員以 58.98 石(即佔本會所擁有之石份的 92.185%)支持及沒有反對之情況下(即以多於半數同意)通過上述之提議。”

11.It appears that before the resolutions were put to the vote, the legal adviser explained that under paragraph 乙、二、1. of the proposed resolutions, it was contemplated that after tenders were received from potential purchasers, a second meeting would be convened to allow members an opportunity to bid amongst themselves at a price equal to or higher than the highest tender.

12.Subsequent to the Meeting and relying on the authority conferred on him by the Resolutions, the Applicant applied to the Secretary for Home Affairs for his consent to dispose of the Properties, as was required under section 15 of the New Territories Ordinance.

13.In the meantime, the District Officer had received objections from members of the Man clan against the proposed sale. Correspondence with the Applicant ensued. The District Officer indicated that he would require to be satisfied that the interest of the members of the Wui was safeguarded and the proposed sale fully reflected the wishes of the members. He intimated that he would have to adopt a cautious approach and proposed that the matter be taken forward in stages. I do not propose to set out the details of the correspondence here. It suffices to note that the application for consent had not progressed as smoothly as the Applicant might have wished. Eventually, the District Officer and the Applicant had reached an understanding that the application for consent would be put on hold pending the outcome of the Applicant’s present application to the Court.

14.It can be seen from the summary of the background that questions relating to the validity and effect of the Resolutions are central to the determination of the present application. But before dealing with these questions, it is necessary first to discuss briefly the nature of the Wui and its landholdings.

The Wui and its landholdings

15.Members of the Man clan have for a long time settled in the San Tin area in the New Territories. The Man clan had extensive landholdings in area. In addition to land owned by individual members of the clan, much of the land was held in the name of various t’sos and t’ongs.

16.There is no dispute that the Wui was one of the associations formed by the indigenous residents of the Man clan. There is no evidence before the Court as to when the Wui was founded. It is, however, clear that the Wui was an owner of land, and by virtue of the Block Crown Lease (dated 27 March 1905), Lots 661, 669, 674 and 733 in Demarcation District 99 became registered in the name of the Wui. Together with the name of the Wui, the names of the then “sze lei” (司理) also appeared and were described as “trustees”.

17.According to the Applicant, the Wui was an institution in the nature of a business t’ong. Despite the fact that it was formed by indigenous members of the Man clan, the Wui was not an ancestral t’ong or t’so founded for the purpose of veneration of the ancestors of the clan. Rather, the Wui was an association formed by its members who pooled their resources together in pursuit of causes for their mutual benefit.

18.The lands of the Wui were let to tenants for cultivation and rents were collected from them in the form of crops. Hence, the extent of the members’ interests in the Wui were denoted by way of the weights of the crops which they each was entitled to receive in proportion to his share of the interests in the Wui. The weights of the crops were expressed in terms of the traditional Chinese measures of “shek (石)” and “dou (斗)”.

19.According to the List of Members produced by the Applicant (current as of September 2007), the total interest of the Wui was expressed as 63.98 sheks. The List contained a total of 28 entries. Among them, 8 were names of t’sos, 1 was a t’ong and the rest were apparently names of individuals of the Man clan. Against each entry, the respective member’s share of his interest was specified. It would be noted that there were a number of entries of the same name on the List. For instance, the Applicant’s name appeared twice and his interest was stated to be 1 dou in one entry and 1.33 shek in another. Altogether, there were 24 names on the List. Apart from the Applicant, the other 23 members were joined as Respondents in these proceedings.

20.There is little direct evidence to enable one to trace the founding history of the Wui or its original membership. Whilst, perhaps, owing to the lapse of time it may not now be easy to ascertain with certainty the purpose for which the Wui was originally set up. But a document described as the “Land Entitlement Book” (which will be discussed further) suggested that properties belonging to the Wui were pooled together by members and dedicated for the development of the Wui’s own business and affairs. No reference was made to ancestral worship or some such purpose. Articles 1 and 3 of an older version of the Land Entitlement Book are relevant:

“(一) 本會所有業主同意將深涌潮田六十四担毛種組織聯合一齊成為今日的深涌會員各分發田份部為証。

(二) …

(三) 本會司理人沒有權力將本會任何物業出賣司理人只能將本會業務發展利益以造福本會為宗旨。”

21.On balance, therefore, it would appear that the Wui was an association akin to a co-operative society where members held distinct shares of interest in it. There is no evidence to suggest that the association was ancestral in nature or that its properties were in any way tied to ancestral worship.

22.In this connection, I take note that the nature of Man Sham Chung Wui (that is, the Wui in the present application) was previously the subject of discussion in the judgment of Deputy Judge A Cheung (as he then was) in Man Ping Nam v Man Mei Kwai (HCA 9852 of 1998, 1 February 2002) and in the judgment of Le Pichon JA in the Court of Appeal in the same case (CACV 193 of 2002). The dispute in that case concerned whether the District Officer’s consent was required in relation to the manager’s letting of the Wui’s land. The learned Judge had before him expert evidence, which was quoted in the judgment as follows (pp.14 and 15 of judgment):

“24.  In the unchallenged expert report on the relevant Chinese law and custom prepared by Professor Wejen Chang whose expertise in the subject I accept, the nature of a wui or ‘hui’ is further elaborated as follows:

‘15.  What is a Wui (or hui會)?  In traditional China people created hui for different reasons, thus there were hui of businessmen, craftsmen, religious groups, and so on.  Generally the hui members wanted to pool their resources to form a greater, more powerful entity to further their causes more efficiently.  For better management of land people used to form two types of hui, one by those who owned separate pieces of land, the other by those who contributed money to purchase the land.  In the first case the land owners would form a hui, place their land in the hands of a manager and receive from him shares of profit proportionate to the size of their still separately identifiable pieces of land.  The land would be registered under the name of the hui but each member remained the real owner of his separate piece.

16.  In the second case the contributors would also form a hui, the land would also be registered under the name of the hui and placed in the lands of a manager, and the contributors would receive from him profits proportionate to their contributions.  But a contributor would not gain ownership of any specific, identifiable part of the land.  He got only a share of interest in the land proportionate to his contribution.

………’

25.  As regards the Wui in the present case, on the material available to Professor Chang, he had this to say:

‘23.  Wui members have interests in the Wui land.  But I cannot tell whether in the present case how clearly identifiable and ‘direct’ the interests are.  …… And I cannot tell whether the members of the Wui in question are ‘separate co-owners’ or ‘joint co-owners’ because it is not made clear to me how the Wui land came into existence.  Was it formed from pieces separately owned by individuals who later created the Wui?  Or was it purchased with money contributed by prospective Wui members?  In the former case the Wui members are ‘separate co-owners’, in the latter case they are ‘joint co-owners”.

…..”

The learned judge then remarked that (p.15 of the judgment):

“26.  I should add here that at trial the evidence adduced was no better in quality than that available to Professor Chang when he wrote his report, and it was equally unsatisfactory as to how the present Wui was formed many hundreds of years ago, so as to enable a finding to be made either way as to its mode of formation.”

23.The Court of Appeal also referred to the Wui as an unincorporated association or a business t’ong (para. 3 of the judgment). Paragraphs 15 and 16 of Professor Chang’s report were alluded to in the judgment (para. 6 of the judgment).

24.In the present application, I am content to note that the findings of the Court in Man Ping Nam v Man Mei Kwai(supra) do not contradict what I have said in paragraphs 20 and 21 concerning the nature of the Wui, although I have received no expert evidence on the question.

25.I should mention that I have considered the affidavit evidence of Lewis Shan Chu Man (dated 12 March 2008) (the solicitor previously representing the managers of Man Sung Yeh Tso (文莘野祖) although there remains some controversy concerning his authority to represent the t’so). In paragraph 26 of his affidavit, he asserted that the Properties “remained ancestral land belonging to the Man clan”. However, I have seen no evidence to support such an assertion. There is nothing to suggest that the Properties, whatever their origin, remained tied to the purpose of veneration of the Man ancestors after they had been put into the hands of the Wui. As already noted, the older version of the “Land Entitlement Book” suggested otherwise.

26.I have also considered the affidavit evidence of Man Ying Lam (文英林). Regardless of the controversy surrounding his status as a manager of Man Sung Yeh Tso (文莘野祖) at the relevant time, it suffices to say that I do not derive much assistance from his evidence regarding the nature of the Wui or its landholdings. I will, however, return to his evidence in relation to the next question I have to discuss.

Authority to sell the Properties

27.As already noted, the Court would need to be satisfied as to the validity of the Resolutions, which according to the Applicant has vested him with the authority to proceed to sell the Properties.

28.The evidence revealed that at least one of the members, Man Lai Shek (文麗石) (the 11^th Respondent who held 1 shek), was not present at the Meeting. He was neither present nor represented at this hearing. He had not indicated consent to the sale of the Properties.

29.In addition, no vote was cast by representatives of the Man Chuen Yeh Tso (文存野祖)at the Meeting (that is, the t’so of which the 8^th Respondents were managers).

30.Moreover, questions have arisen as to the genuineness of a few of the signatures on the ballot papers. And in the case of some of the t’sos, not all their managers had signed on the votes.

31.As is apparent from the minutes of the Meeting, not all who attended the Meeting voted in favour of the Resolutions, although a substantial majority did.

32.In short, the Resolutions fell short of a unanimous vote of all the members of the Wui.

33.The question whether decisions on dispositions of its landed properties require members’ unanimous consent must, in the first place, be answered by reference to the customs of the Wui itself. Whilst the fact that the Wui’s properties were not tied to ancestral worship is undoubtedly a relevant consideration, that is not determinative of the question.

34.Mr Neoh, SC (appearing together with Mr Chong and Mr Koo for the Applicant) referred to the Land Entitlement Book. It contained a section described as the “Constitution of the Wui” (深涌會業主章程). There are 2 versions of this constitution. From the dates of the entries in the older version, one could infer that the current version only came into existence sometime after 1995. The current version differs from the older version in some important respects.

35.As already noted, Article 3 of the older version is in the following terms:

“(三) 本會司理人沒有權力將本會任何物業出賣司理人只能將本會業務發展利益以造福本會為宗旨。”

It provided that managers had no authority to dispose of properties belonging to the Wui.  The managers were only authorized to develop the business of the Wui in furtherance of its interest.

36.Under the current version, “the majority rule” was introduced. Article 3 of the current version provides:

“(三) 當選為本會司理人祇能將本會業務發展利益，造福本會為宗旨，如有買賣時必定召開業主大會商討事宜，以多數票選為決定，至於小數票反對者作為無效。”

The essence of the current Article 3 is to render it valid and binding on members resolutions that are passed by a majority of votes at a meeting of the Wui in respect of any sale and purchase transaction.  It provides specifically that any objections of the minority are to be disregarded.

37.In the present case, apart from the 2 versions of the Land Entitlement Book, there is no other evidence, expert or otherwise, showing any established customs on the sale of the Wui’s landed properties. Indeed, the Court has not been told whether there had been any such dispositions in the past.

38.As already noted, the purported introduction of “the majority rule” was a comparatively recent event in the long history of the Wui. In this connection, it is noteworthy that Man Ying Lam (文英林), who at least until October 2007 was a manager of Man Sung Yeh Tso (文莘野祖), had queried whether the current Article 3 had been properly adopted as the Wui’s constitution. He stated in his affirmation that despite his being the manager of the t’so which was a member of the Wui, he was not aware of any meeting of the Wui held for the purpose of discussing the adoption the current Article 3.

39.A question therefore arises as to when and how Article 3 came to be amended and adopted. The evidence before me, however, does not provide a satisfactory answer.

40.Mr Neoh referred me to the decision of Lam J in Man FongHang v Man Ping Nam and others (HCA 7935 of 1998, 11 December 2003). It was submitted that the learned judge’s observations in paragraphs 161, 176 to 185 and 187 to 190 supported “a convention” of the Man clan which would effectively preclude any argument that members’ unanimous consent was required for disposition of the Wui’s land.

41.However, it must be noted that the Man Fong Hang’s case concerned the Man Shek Chung Wui (文石涌會), which is a different wui of the Man clan although the membership of the 2 associations apparently overlaps. More importantly, in the Man Fong Hang’s case the sale of the land had already been effected. That case therefore was concerned not so much with the validity of the sale, but rather the liability of the manager arising from the transaction. The learned judge was there dealing with the question whether the relevant article in the land entitlement book could be construed as implicitly imposing a duty on the managers to consult its members in the sale. He said:

“183.  Hence, this question as to the legal effect of the articles in the Land Entitlement Books is only relevant in the context of the duty of the Defendants in obtaining the approval of the members of the Wui as to the sale of the land.”

42.It was in that context that the learned judge made the following observations based on the evidence adduced before him:

“161.  The fact that no-one raised objection to the idea of selling the land which was the only property of the Wui and no-one demanded for measures to be in place to avoid the disintegration of the Wui after the land were to be sold were indications that there was no such Chinese custom.  The provisions in the Land Entitlement Book … also evidenced that members contemplated that land of the Wui could be sold with the approval of the majority.  On the evidence before me, interests in a Wui could be transferred and sold to outsiders.”

On the evidence before him, the learned Judge was able to draw the inference “that the parties had been dealing with each other on the basis that the articles were binding on them” (see para. 184).

43.In the circumstances, the observations as to the effect of the land entitlement book in the Man Fong Hang’s case is, I think, of limited assistance in my determination whether effect should be given to the current Article 3 of the Wui’s Land Entitlement Book in the present application.

44.I have not received evidence as to the manner in which the current Article 3 was introduced. Absent satisfactory evidence, I feel unable to conclude that “the majority rule” has been validly adopted as the rule governing disposition of the Wui’s landed properties. I may also add that in considering the validity of “the majority rule”, the Court will further need to be satisfied that the adoption of such a rule was not precluded by any customs or customary law applicable generally to an institution of this nature (on which there is presently no evidence before the Court).

45.It follows, therefore, that I will be unable to conclude that the Resolutions had been validly passed at the Meeting to vest the Applicant with the authority to proceed with the sale of the Properties.

46.I wish to stress, however, that it is not my finding that there was a custom, whether of a general nature or specifically applicable to the Wui, to require the unanimous consent of its members in the disposition of landed properties. My conclusion is based on the state of the evidence before the Court. Questions as to the existence or otherwise of such a custom may have to be revisited when the evidence is available.

47.The above conclusion would have been sufficient to dispose of the present application. However, in the course of the hearing, counsel has helpfully addressed me on questions relating to the jurisdictional basis of the present application. As it is now unnecessary for me to form a concluded view on the questions, I will only discuss them briefly.

Section 56, Trustee Ordinance

48.The Applicant invoked the Court’s jurisdiction under section 56 of the Trustee Ordinance. Section 56 (1) provides:

“Where in the management or administration of any property vested in trustees, any sale, ….. or other disposition, ….. is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument, if any, or by law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, if any, as the court may think fit …..”

49.The first question that arises is whether the Applicant, as manager of the Wui, should be treated as a trustee in whom the Properties are vested. Initially it had occurred to me whether it might not be argued that a manager should not be so treated, having regard, first, to the wording of the current section 15 of the New Territories Ordinance (and its predecessors) which refers to land being“held by” or “held in the name of” a clan, family or t’ong, as opposed to its being held by the “sze lei” (司理) or manager; and secondly, to the deeming of the instrument signed by the manager as equivalent to its having been “executed or signed by all the members of the said clan, family or t’ong”.

50.However, I believe the following passage in Mills-Owens J’s judgment in Tang Kai-chung v TangChik-shang [1970] HKLR 276 at 304 represents the authoritative view on the question:

“…. The first question is whether the Tso is a ‘trust’, and the registered managers ‘trustees’ within the meaning of the Trustee Ordinance.  The parties to the Crown Lease are the Crown of the one part and the ‘the several persons, clans, families and ‘tongs’ whose names are set out in the Schedule’ of the other part; the Lease then proceeds: ‘and each of whom and whose respective Heirs, Executors, Administrator, Managers and Assigns are where not inapplicable hereinafter included under the designation ‘the Lessee’’.  In the Schedule the registered managers are termed ‘trustees’, immediately preceding their names and designation as ‘trustees’ is the name of the Tso; and the grant is expressed to be ‘unto each Lessee’.  I would conclude that the grant has the effect of vesting the lands in the registered managers as trustees for the Tso.  Accordingly, subject to the provisions of the N.T. Ordinance, the provisions of the Trustee Ordinance apply to the Tso and the registered managers are trustees within the meaning of the Trustee Ordinance.  But their powers as such are to be found in section 15 of the N.T. Ordinance. …..” (emphasis added)

51.Also, in the Court of Appeal judgment in Man Ping Nam v Man Mei Kwai (supra), Le Pichon JA said:

“3.  ….. The schedule to the Block Crown Lease contained the names of the owners of the relevant lots.  The relevant entries named the Wui as lessee of the land, followed by the names of 4 individuals with the surname ‘Man’, collectively described as ‘司理’, transliterated as ‘trustee’.  As the Wui is not a legal entity, legal title to the Crown Lease would have vested in the trustees.”

39.  Under Chinese customary law, land belonging to a t’ong could only be conveyed if all the members joined in the execution of the conveyance.  Section 13 of the 1905 Ordinance was therefore enacted to facilitate land transactions by vesting the legal estate in registered managers who could then give good title to land held under a Crown Lease.”  (emphases added)

52.It is thus established by these authorities that managers are to be treated as trustees and vested with the legal estate of the land.

53.Mills-Owens J in Tang v Tang(at pp.304-305) went on to discuss the application of section 56 of the Trustee Ordinance. He said:

“In my view section 56 of the Trustee Ordinance is designed to empower the Court to confer on trustees powers which they lack but are prepared to exercise if conferred on them.  No doubt the section extends to the conferment of a power of partition.  ….. The section does not provide that any power conferred shall be duly exercised; compare the provisions of section 30 of the Law of Property Act, 1925.  In short, as I see it, the section aims at the conferment of powers, otherwise lacked, but not being powers in the nature of a trust, or otherwise coupled with a duty to exercise them.  Can it be said, having regard to the powers conferred on the registered managers by section 15 of the N.T. Ordinance that they, as trustees, lack any necessary powers?  In my view not.  For these reasons I would hold that section 56 of the Trustee Ordinance has no bearing on this case.”

54.Section 56 of the Trustee Ordinance is modelled on the English provision, section 57 of the Trustee Act, 1925. On the scope of the provision, Wynn-Parry J said the following in Municipal and General Securities Co. Ltd. v. LloydsBank Ltd. [1950] Ch 212 at 223:

“It appears to me that there must be some limit to the scope of this section.  It cannot be construed as having such wide import as would allow a complete re-writing of a trust deed or a substitution of a completely different object from that for which the trust was brought into being.

I find support in that view that there must be some limit to the scope of the section in the opening words, which are: ‘where in the management or administration of any property vested in trustees ….’  If those words, ‘management or administration’ are to have no significance, it would have been the easiest thing in the world for the section to have opened with the words: ‘Where any property is vested in trustees ….’ .....” (emphasis added)

55.Given that the scope of section 56 is not so wide as to allow the court to completely re-write the trust, it follows that if the adoption of a “majority rule” for the disposition of the Wui’s land would be objectionable as a fundamental departure from any customary law, it may well be outwith the power of the court to grant an order under the section. In the present case, as I have already alluded to the absence of expert evidence on customary law, I am not in a position to form a view on this question.

56.Further, the English authorities show that the power of the court under the section is not to be exercised where the transaction could be effected without praying in aid the court’s jurisdiction under the section: Re Pratt’s Will Trusts [1943] Ch 326; Re Basden’s Settlement Trusts [1943] 2 All ER 11. The view expressed by Mills-Owens J in Tang vTang (supra) is consistent with that approach. As the learned judge said, the manager’s power is to be found in section 15 of the New Territories Ordinance. Under section 15, it cannot be said that the manager lacks the power of sale, although the Secretary of Home Affairs would usually require to be satisfied that the necessary consent of the members are obtained before he approves the sale. Exactly how this principle will impinge on the exercise of the Court’s jurisdiction in present case will, I think, require further consideration. As I have not had the benefit of submissions on the point, I would prefer not to express a view on this question.

Order 85, Rules of the High Court

57.The alternative basis upon which this application is made is Order 85 of the Rules of the High Court. The Applicant considered it desirable to seek directions from the Court in view of the opposition to the sale by some members of the Man clan, and also because of his previous experience in having to defending accusations against him in the sale of the Man Shek Chung Wui’s properties in Man Fong Hang v Man Ping Nam.

58.That a trustee is entitled to seek guidance from the court in a genuine case of difficulty is not in doubt, as is explained by Lord Oliver in Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198 at 201:

“In the first place, there has always to be borne in mind the position and duties of a trustee who applies to the court for directions.  A trustee who is in genuine doubt about the propriety of any contemplated course of action in the exercise of his fiduciary duties and discretions is always entitled to seek proper professional advice and, if so advised, to protect his position by seeking the guidance of the court.  If, however, he seeks the approval of the court to an exercise of his discretion and thus surrenders his discretion to the court, he has always to bear in mind that it is of the highest importance that the court should be put into possession of all the material necessary to enable that discretion to be exercised……”

59.In the case of managers of t’sos and t’ongs, by treating them as trustees in whom the land is vested (see Mills-Owens J in Tang v Tang (supra)), they must be subject and amenable to the supervisory jurisdiction of the Court. Indeed, in Tang Chun Kit v Tang Lo Ping (HCMP 5529 of 2000, 9 September 2005), Lam J treated the proceedings before him concerning distribution of the t’so’s income as akin to an administration action under Order 85.

60.In the case of disposition of land of a t’so or t’ong, while the Secretary for Home Affairs has been entrusted with the role to grant or refuse approval, I do not believe such role should displace the jurisdiction of the Court in giving guidance to the managers in appropriate cases. Indeed in the present application, as Mr Neoh pointed out, the Court is being asked only to give directions on the mode and manner of the sale. Even if the Court grants the application, the Applicant will still have to seek the Secretary’s approval for any proposed sale of the Properties.

61.In the event, and for the reasons given earlier in this Judgment, the Court is not in a position to grant the directions sought by the Applicant.

Conclusion

62.Accordingly, the application is refused.

63.On the question of costs, unless any party wishes to present oral submissions to the Court (in which case he should notify my clerk within 3 days), I would give leave to all parties to file and serve written submissions within 21 days of the handing down of this Judgment. Any reply submissions on costs should be filed 14 days thereafter. I will rule on the question on the basis of the written submissions.

64.The adjourned summons on wasted costs (dated 30 April 2009) may be restored for hearing in the usual manner, if so advised.

Mr Anthony Neoh, SC, Mr K M Chong and Mr Ernest Koo, instructed by Messrs Peter Mo & Co, for the Applicant

Mr Aidan Tam, instructed by Messrs Wong & Poon, for the 2^nd, 4^th, 6^th, 9^th, 10^th, 13^th, 16^th, 17^th, 20^th, 21^st & 22^nd Respondents

11^th Respondent: Man Lai Shek (文麗石), absent

12^th Respondent: Man Yuk Moon (文玉滿), absent

14^th Respondent: Man Lin Hei (文連喜), absent

15^th Respondent: Man Chang Ying (文燦英), absent

18^th Respondent: Man Yau Sheung (文有常), absent

23^rd Respondent: Man Whi Chung (文偉昌), absent

Appeal by the applicant to Court of Appeal allowed. Please refer to CACV39/2010 dated 13 December 2010