Lee Charles Goon Lok v. Lee Kwok Ching and Others

On 1 September 2026, Deputy High Court Judge Gary CC Lam handed down judgment in HCA 2366/2015, Lee Charles Goon Lok v Lee Kwok Ching and Others, dismissing the Plaintiff's claim and the 3rd Defendant's cross-claim against the 1st and 2nd Defendants, save for an order that the three Brothers, as managers of the Li Wa Fuk Tso, provide accounts of rental income from 11 remaining properties. Mr Jonathan Chang SC leading Mr Timothy Lam acted for the successful 1st, 2nd, 4th and 5th Defendants.

The dispute concerned the Li Wa Fuk Tso (李華福祖), a traditional Chinese ancestral clan property holding entity in Yuen Long. The Plaintiff Charles, born in 1996 as the son of one of the three Brothers who became managers of the Tso in 1992 after their father Lee Wai Kwong passed away, claimed that the Brothers had breached their fiduciary duties as managers by disposing of 25 Tso properties between 1993 and 1996, mostly without actual consideration, to companies controlled by themselves. Kwok Chi, the 3rd Defendant, cross-claimed against his elder brothers alleging fraudulent misrepresentation and breach of duty to disclose.

The court held that:

(1) Charles has no standing to challenge the disposals. Unborn and infant members cannot sue managers for acts done before their birth, and Kwok Chi's consent as Charles' father binds Charles (§§111-132).

(2) "Real necessity" is not a requirement for disposal of Tso properties under Chinese customary law; only unanimous consent of the living members is needed (§§142-145). This follows the Court of Appeal's reasoning in Tang Kap Wing Tso v Tang Leuk Tso.

(3) The disposals were distributions to the Brothers as the only members at the time, and were therefore justified (§§153, 155).

(4) No fraudulent breach of trust arose because the Brothers consented to the disposals, and Kwok Chi's consent was not vitiated by any misrepresentation (§§154-155).

(5) No resulting or constructive trust arises over the sale proceeds of voluntary disposals, distinguishing the position from compulsory resumption compensation (§§156-165).

The only remedy granted is an order requiring the Brothers to provide accounts of rental income from Properties 26 to 36, supported by ledgers and bank statements verified by affirmation.

For practitioners advising on Tso disputes: the judgment confirms that the consent of living members is sufficient for Tso property disposals, and that future or infant members have no standing to challenge such disposals. Any challenge must focus on whether the consenting members' consent was vitiated, not on absence of "real necessity". The case also illustrates the limits of expert evidence on Chinese customary law where the experts cannot point to a settled practice.