Read the full judgment text of HCMP 2417/2007 on BabelCite. This Court of First Instance judgment was delivered on 21 January 2010 before Mr Recorder A Ho, SC.
Civil practice and procedure – customary Chinese unincorporated association – business t'ong (hui/會) – Man Sham Chung Wui (文深涌會) – land held in the name of the Wui registered under s.15 New Territories Ordinance – proposed sale of 4 lots in Demarcation District 99 San Tin (Lots 733RP, 674RP, 669RP and 661CRP) totalling about 6,899,199 square metres – low rental yield of about HK$3.5 million annually versus market value of about HK$647 million on an 'as is' basis – application by sole registered manager for directions on the mode and manner of the sale – meeting of members on 19 March 2007 passing Resolutions authorising the sale by majority vote representing over 91% of the Wui's sheks – current Article 3 of the Land Entitlement Book introducing the 'majority rule' – whether the majority rule was validly adopted as the rule governing disposition of the Wui's landed properties – whether the Resolutions validly authorised the sale – absence of satisfactory evidence on the manner of adoption of the current Article 3 – whether unanimous consent of all members was required – application of Tang Kai-chung v Tang Chik-shang [1970] HKLR 276 and Man Ping Nam v Man Mei Kwai (HCA 9852/1998; CACV 193/2002) establishing managers as trustees – scope of section 56 Trustee Ordinance modelled on section 57 Trustee Act 1925 – limits of the section: cannot be used to completely re-write the trust – Re Pratt's Will Trusts [1943] Ch 326, Re Basden's Settlement Trusts [1943] 2 All ER 11, Municipal and General Securities Co. Ltd. v Lloyds Bank Ltd. [1950] Ch 212 – court's power not to be exercised where the transaction could be effected without praying in aid the section – whether manager's power of sale is to be found in section 15 New Territories Ordinance – jurisdiction of the court under Order 85 Rule 2 Rules of the High Court to give directions to managers as trustees – Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, Tang Chun Kit v Tang Lo Ping (HCMP 5529/2000) – Man Fong Hang v Man Ping Nam (HCA 7935/1998) of limited assistance – application refused because majority rule not shown to have been validly adopted and at least one member (11th Respondent) and one t'so (8th Respondent) had not voted – court left open whether a custom of unanimous consent exists – leave to all parties to file written submissions on costs within 21 days with reply 14 days thereafter – adjourned summons on wasted costs may be restored – Court of Appeal subsequently allowed the applicant's appeal in CACV 39/2010 dated 13 December 2010.
Legal issues: Validity of the majority rule and the Resolutions for sale of the Wui's landed properties · Status of the Wui manager as a trustee under the Trustee Ordinance · Court's jurisdiction under Order 85, Rules of the High Court to give directions to the manager
Outcome: Application refused; the court was unable to conclude that the majority rule had been validly adopted and the Resolutions validly passed to vest the Applicant with authority to sell the Properties. Court of Appeal subsequently allowed the applicant's appeal in CACV 39/2010 dated 13 December 2010.
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