MAN CHUNG LAP v. MAN SHUI TONG WUI with MAN PING-NAME and MAN TAI-SANG as Managers

HCA 1736/2024

[2026] HKCFI 1495

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1736 OF 2024

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BETWEEN

(by Original Action)

AND BETWEEN

(by Counterclaim)

____________

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DECISION

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INTRODUCTION

1.  This case raises an interesting and novel question of law, namely, under customary Chinese laws which are an integral part of the general body of Hong Kong laws, whether the undisputed legal principle that the limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property extends and applies to a business t’ong with a tso as one of its members (the “Issue”).

2.  By a summons dated 8 October 2024 (the “Summons”), the Defendant applies to (1) strike out the Plaintiff’s action, under Order 18, rule 19 of the Rules of the High Court, essentially on the ground that the Plaintiff could not possibly have an adverse possession claim against the Defendant as the relevant limitation period has not run out; (2) determine an issue of law, under Order 14A, rule 1 of the Rules of the High Court, namely, “whether, upon the uncontroversial evidence that the “Man Shiu [sic] Tong Wui” (the “Wui”) is a business t’ong within the meaning of s.15, New Territories Ordinance and that, at all times, it has membership consisting of ancestral tsos and tongs with male descendants born to these ancestral tsos and tongs between 1990 and 2016 with no break in time for more than 12 years, the Plaintiff’s claim for adverse possession against the Wui’s land based upon adverse possession thereof for a continuous period of 12 years immediately preceding the issue of the Writ herein is sustainable as a matter of law”; and (3) upon determination of the issue of law, under Order 27, rule 3 of the Rules of High Court, a judgment be entered upon the Plaintiff’s admission as a consequential relief.

3.  During the hearing, both Mr Chong for the Defendant and Mr Lai for the Plaintiff agree that this Court should determine the Issue first and the parties can then seek directions on how best to deal with other related applications.

MATERIAL BACKGROUND AND FACTS

4.  Mr Lai for the Plaintiff agrees that: -

(1) The membership of Man Shui Tong Wui (文水塘會), (the “Wui”) consisted, and still consists of: -

(a) Ancestral tso/t’ongs;

(b) Business t’ongs;

(c) Individuals including male and females; and

(d) A limited company.

(2) The managers of the Wui are Man Ping Nam and Man Tai Sang.

(3) Members of the Wui include 18 ancestral tsos as per the 1^st Schedule of the Defence and Counterclaim.

(4) San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖) were members of the Wui.

(5) Whether a Wui is a business t’ong would be a matter of judicial determination.

(6) The Plaintiff is and was at all material times a member of the San Yeah Tso (莘野祖).

5.  For the present applications, the Plaintiff accepts the existence of the 1986 Tenancy Agreement at its face value and agrees that it was performed by the 4 tenants and the successors. However, the Plaintiff maintains his stance on having adversely possessed the land for more than 20 years or 12 years since sometime on 1 July 1991 as pleaded.

6.  As a matter of history,

(1) On 1 July 1898, by Block Crown Lease of 1905, 25 land lots, inclusive of Lot 3065 in DD 102 (the “Lot”), were registered in the name of the Wui under the present s.15, New Territories Ordinance, Cap.97 with its managers. San Yeah Tso (莘野祖), an ancestral tso, a member of the Wui, held 15 Dau (斗) interest therein. Yee Fong Tso (二房祖) (otherwise known as ‘Yee Fong Tung Sheung Tso (二房通常祖)), an ancestral tso, a member of the Wui, held 10 Dau (斗) interest therein.

(2) On 17 October 1949, Man Chu Shui (文珠水), the father of the Plaintiff, was registered as 1 of 4 trustees (managers) of the Wui.

(3) On 12 July 1970, Man Chu Shui (文珠水) passed away and his office as a s.15, New Territories Ordinance manager was replaced.

(4) In 1986, the Wui granted a 10-year tenancy to 4 tenants (one of them being Man Ching Yip (文正業), the father of Man Whi Chung (文偉昌)) in respect of all its land lots (consisting of 48 Dam (擔) in area inclusive of the Lot) to be used as fishponds (the “1986 Tenancy”).

(5) On 23 January 1990, Man Ka Hou (文家豪), a male descendant of the San Yeah Tso (莘野祖), an ancestral tso and a member of the Wui, was born.

(6) On 12 February 1991, Man Jui Bon, a male descendant of the San Yeah Tso (莘野祖), was born.

(7) On 20 September 1992, Man Ka Pou (文家寶), a male descendant of the San Yeah Tso (莘野祖), was born.

(8) On 24 February 1993, Man Chee Ho (文子豪), a male descendant of the San Yeah Tso (莘野祖), was born.

(9) On 13 July 1993, the Wui filed ‘List of Members’ with the Tso Tong Branch (祖堂科) of the Yuen Long District Office showing the Wui had 38 members (holding a total share of interest of 47.97 Dam (擔)) consisting of:-

(a) tsos and t’ongs (inclusive of the said San Yeah Tso (莘野祖) and Yee Fong Tso (二房祖));

(b) a limited company;

(c) natural persons; and

(d) females.

(10) On 7 December 1994, Man Ka Chun (文家俊), a male descendant of San Yeah Tso (莘野祖), was born.

(11) On 6 September 1999, Man Hei (文禧), a male descendant, a member of Yee Fong Tso (二房祖), was born.

(12) On 17 October 2006, Man On (文安), a male descendant of the Yee Fong Tso (二房祖), was born.

(13) On 4 August 2016, Man Yik To (文奕滔), a male descendant of the Yee Fong Tso (二房祖), was born.

(14) On 8 January 2018, the Wui filed ‘List of Members’ with the said Tso Tong Branch (祖堂科) showing the Wui had 36 members holding a total share of interest of 47.97 Dam (擔) and held by:-

(a) tsos and t’ongs (inclusive of San Yeah Tso (莘野祖) and Yee Fong Tso (二房祖));

(b) natural persons; and

(c) a female.

(15) On 23 June 2023, the Wui granted a tenancy of 3 years and 2 months of all its 25 land lots to Kenwell Ltd. (the “2023 Tenancy”).

(16) On 1 August 2023, Man Whi Chung (文偉昌) and Fortune Nine (HK) Co. Ltd. (“Fortune Nine”), a company controlled by him, sued (under HCA 1207/2023) the Wui (through its managers) seeking a declaration that they were entitled to exercise the option in the 1986 Tenancy to renew and their tenancy (upon extension) would have priority over the 2023 Tenancy.

(17) On 19 January 2024, Kenwell Ltd., by HCA 126/2024, sued Fortune Nine for recovery of the Lot.

(18) On 4 March 2024, HHJ Harold Leong granted summary judgment in DCCJ 3616/2023 to Kenwell Ltd. to recover part of Lot 764 in DD 99 with costs. In the Order 14 proceedings, Man Whi Chung (文偉昌) filed an affirmation and produced documents to support the defence of his sub-tenants asserting that the 1986 Tenancy had been extended and the defendants being his lawful sub-tenants.

(19) On 5 March 2024, Kenewell Ltd. applied for summary judgment in HCA 126/2024 against Fortune Nine seeking possession of the Lot.

(20) On 29 August 2024, the Plaintiff issued specially endorsed Writ of Summons in HCA 1736/2024 against the Wui claiming adverse possession of the said land lot ‘…since the late 1990s…’.

(21) On 3 September 2024, the Plaintiff applied to join HCA 126/2024 as an interested party.

(22) On 30 September 2024, the Wui filed ‘List of Members’ with the Tso Tong Branch (祖堂科) of the Yuen Long District Office showing the Wui had 47 members holding a total share of interest of 47.97 Dam (擔) and held by: -

(a) tsos and t’ong’s (inclusive of San Yeah Tso (莘野祖) and Yee Fong Tso (二房祖));

(b) natural persons; and

(c) a female (with a surname Au (歐)).

(23) On 2 October 2024, the Wui (joined Kenwell Ltd., its tenant of all the 25 land lots, as co-plaintiff by counterclaim) filed a Defence and Counterclaim in HCA 1736/2024 seeking possession of the Lot against the Plaintiff.

ANALYSIS AND DETERMINATION

The Nature of the Wui

7.  Mr Lai for the Plaintiff submitted that whether the Wui is a business t’ong is a matter of expert evidence and hence, this case is not suitable for summary determination, one way or the other. He further submitted that Mr Chong’s reliance on the case of Re Man Un (Yun) Uk Wai (文元屋圍) [2023] 3 HKLRD 869 is misplaced as that case relates the determination of the nature of a Wai and not a Wui.

8.  However, Mr Lai also enlightened this Court that as a matter of Chinese customary law, there are only three organs or institutes or entities that can hold landed properties in Hong Kong, namely, ancestral tso, business t’ong and religious t’ong. I agree that tso and t’ong are different. Though some tsos with an ancestral hall are loosely called tso t’ong or t’ong, they remain tsos with members being male descendants from a common ancestor. T’ongs can be business t’ongs or religious t’ongs. In the present case, this Court is concerned with business t’ongs only.

9.  The Wui cannot be a tso or a religious t’ong. Hence, it can only be a business t’ong. Mr Lai has no satisfactory answer to this analysis. Indeed, if the Plaintiff would like to adduce expert report to advance a different analysis, it is incumbent upon the Plaintiff to at least suggest what his contention is on the nature of the Wui. If the Wui is not a business t’ong, what is it? I accept Mr Chong’s submission that the Plaintiff has not put forward any suggestion that the expert of his choice would give a different opinion that the Wui is not a business t’ong. The burden rests on the Plaintiff to raise an issue to be tried, not that if expert evidence were directed, there might be an issue to be tried.

10.  Importantly, I agree that given that the Wui is a section 15 New Territories Ordinance entity since 1898 (either as a tso or a t’ong) and having regard to the fact that members of the Wui comprise of females and a limited company and the fact that the share of interest is transferrable, it is difficult to see how the Wui could be an ancestral tso.

11.  In any event, reasoning from first principles, I have no difficulties in coming to the view that the Wui is a business t’ong as (1) the Wui was formed for a profit-making purpose as evidenced by the bi-annual distribution of rental income from leasing out its landed properties and (2) it is non-ancestral in nature as evidenced by its membership which includes females and a limited company, and members of the Wui who have definite shares of interest which are freely transferrable.

12.  In the supplemental written submissions filed pursuant to the directions of this Court, Mr Lai submitted that the Wui is a business t’ong but a business t’ong in the nature of a Chinese partnership. However, upon analysis, I am of the view that this does not take the Plaintiff’s case any further. I accept Mr Chong’s submission that traditional Chinese associations (there being no concept of corporate personality) were accepted as ‘entities’ capable of owning interest in land in the New Territories. Irrespective of whether land ownership is vested in tsos or t’ongs, members of the association are considered collectively as the body aggregate for the purposes of owning land.

13.  I am of the view that the analogy with partners or shareholders in a partnership or company under the English common law concept is not apposite. First, title of land is vested in tsos and t’ongs and the power of disposal is conferred upon the registered managers, a statutory creation in line with traditional Chinese concepts. Secondly, unlike partners or shareholders, individual members of tsos and t’ongs are entitled to bring independent action against third parties to recover land owned by tsos and t’ongs.

14.  I agree with Mr Chong that Mr Lai’s reliance on the concept of chose in action is not correct. A chose in action is an intangible property right enforceable by its owner. It is a different species. The interest of a member of a tso or a t’ong is liable to be varied constantly and defeasible upon (1) births and deaths of other members; (2) death of the concerned member; and (3) grave sins committed against the tsos and t’ongs (precipitating in the member being ostracized).

15.  Further, in the case of Chinese partnership, holders of ‘hung gu (紅股)’ have no interest in the partnership and, hence, no liability to the debts of the partnership. Holders of ‘hung gu (紅股)’ are, strictly speaking, not interested in the partnership except to the share of profit after interest in the capital has been paid.

The Issue

16.  In Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705, DHCJ Lam (as Lam PJ then was) concluded at §45 that limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property.

17.  The issue in this case is whether the principle stated in Leung Kuen Fai applies to a business t’ong with a tso as its member.

18.  The core reasoning in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) has to be stated in full.

(1) “[O]n the authorities cited earlier, it is obvious that the existing members of the Tso have beneficial interests in the Tso property. In my judgment, such interests come within the meaning of equitable interests in land in Section 10(1) of the Limitation Ordinance. The definition of “land” in the Limitation Ordinance includes, inter alia, rentcharges and any legal or equitable estate or interest therein. The annual or periodic distribution that a Tso member is entitled to receive falls within the meaning of a rentcharge. According to Section 2, rentcharge means any annuity or periodical sum of money charged upon or payable out of land. Under Section 2(3), a right of action to recover land includes a right to enter into possession of the land or, in the case of rentcharges, to distrain for arrears of rent (which includes the amount payable by way of rentcharges, see definition of “rent”). Further Section 2(4) provides that regarding rentcharges, references to the possession of land shall be construed as references to the receipt of the rent. Hence, it does not matter that in the normal course of event, a Tso member would not enter into possession of the Tso land. His entitlement to receive a periodic distribution is sufficient, for the purpose of the Limitation Ordinance, to classify his interest as an interest in land. His claim for such “rent” is a right of action to recover the land under Section 10(2) of the Ordinance”: §32. (Emphasis added.)

(2) “Moreover, given their position as beneficiaries, I see no reason why the members of the Tso could not claim for possession of the Tso land against stranger. Usually the managers would have taken action and the members do not need to initiate such action. However, if for certain reasons the managers failed to take action, the members should be entitled to commence an action for possession against a trespasser”: §33. (Emphasis added.)

(3) “A member of a Tso acquires his interest in the Tso property upon birth and he does not claim through any other person for the purposes of the Limitation Ordinance”: §40.

(4) “It follows that on the question of limitation, the interests of the members have to be considered independently from the rights of the managers”: §44.

(5) “Whenever a new member is born, a new equitable interest in the Tso property is created. A new limitation period under ss.7(2) and 22 would start to run. The new limitation period would not expire until six years after the member ceases to be an infant”: §45. (Emphasis added.)

(6) “By reason of s.10(2) of the Limitation Ordinance, the title of the trustees would not extinguish so long as there is at least one beneficial owner whose right to recover the land is not barred”: §46.

19.  DHCJ Lam (as he then was) remarked in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) at §1 that in this regard there is no distinction between a tso and a t’ong:

“For present purposes, it does not matter whether it is a T’ong or Tso. I shall call it “the Tso” in this decision. Whether it is T’ong or Tso, there is no dispute that it is a type of Chinese hereditary landholding preserved in the New Territories.”

20.  Mr Lai for the Plaintiff submitted that the t’ong under consideration is not a hereditary t’ong but a business t’ong. He said it is akin to a business partnership.

21.  The principle in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) was subsequently applied by the Court of Appeal in Wong Shing Chau v To Kwok Keung [2008] 5 HKC 372 at §9, Tsang Wing Kit Eric v The Occupier(s) (unreported, CACV 157/2009, 28 June 2010) at §20, and Tsang Kwong Kuen v Hau Wai Keung Gaius [2014] 5 HKLRD 622 at §14. Before this Court, the correctness of Leung Kuen Fai is, rightly, not in dispute.

22.  In Tang Man Kit v Chong Kee Ting Vicwood (unreported, HCA 1222/2010, 14 July 2011), Recorder A Chow SC (as he then was) applied the principle in Leung Kuen Fai to a business t’ong (Wah Yan Mo Fan Heung) with an ancestral t’ong (Yu Luk Shun Tong) as its member.

23.  The reasoning in Tang Man Kit is this: -

(1) “[T]he Heung cannot be regarded as a mere unincorporated association, but is a t’ong under s. 15 of the New Territories Ordinance. It is, however, not a legal entity. The legal estate in the Lots is held by the managers, but they are not the beneficial owners, or the only beneficial owners, of the Lots. At any point in time, the members of the Heung would be the beneficial owners of the Lots or, to put it in the language of s. 10(1) of the Limitation Ordinance, the equitable estates of the Lots would be vested in the members of the Heung”: §24. (Emphasis added.)

(2) “Since Yu Luk Shun Tong is also not a legal entity, the members of Yu Luk Shun Tong should be regarded as having a beneficial interest, or an equitable estate, in the Lots. It is true that no member of the Heung would, it seems, be entitled to claim physical possession of the Lots. However, they would be entitled to share in the rents received from letting the Lots to third parties”: §25. (Emphasis added.)

(3) As held in Leung Kuen Fai, “the definition of “land” in the Limitation Ordinance includes, inter alia, rentcharges and any legal or equitable estate or interest therein, and the annual or periodic distribution that a tso (or t’ong) member is entitled to receive falls within the meaning of a rentcharge. Thus, his entitlement to receive a periodic distribution is sufficient, for the purpose of the Limitation Ordinance, to classify his interest as an interest in land, and his claim for such “rent” is a right of action to recover the land under s. 10(2) of the Limitation Ordinance”: §26.

(4) “I do not consider that the principles relating to adverse possession established in [Leung Kuen Fai] are not applicable to the present case merely because the Heung is a Chinese business t’ong whose memberships are freely transferrable, or because the new born members of Yu Luk Shun Tong are only members of a member of the Heung (as opposed to being direct members of the Heung)”: §28. (Emphasis added.)

24.  Later in Tsang Kwong Kuen at §5, Lam VP explained his judgment in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) as thus:

“The essence of the relevant principle is that due to the peculiar characteristic of a t’so or t’ong (preserved by Chinese customary law and s. 13 of the New Territories Ordinance (Cap. 97) with a new equitable interest stemming from each new member being admitted upon birth by reason of his hereditary link with the focal ancestor, a person who is in adverse possession cannot extinguish the title of the t’so or t’ong under the Limitation Ordinance (Cap. 347) unless he can establish the requisite limitation period against all the living members of the t’so or t’ong.” (Emphasis added.)

25.  Tsang Kwong Kuen concerns a hereditary t’ong: §§2; 8. It is thus unnecessary for the Court to deal with the position of a non-hereditary t’ong (which includes a business t’ong). The judgment of Tang Man Kit was not cited.

26.  Nonetheless, the Court remarked obiter at §8 that:

“This principle [in Leung Kuen Fai] is only applicable to a hereditary t’ong”.

27.  It is clear that the Court drew a distinction between a hereditary t’ong and a non-hereditary t’ong.

(1) The Court specifically referred to the t’ong in Tsang Kwong Kuen as a hereditary t’ong: §§2; 4; 8; 9.

(2) The Court recorded the plaintiff’s submissions that the judge below failed to discuss “the possibility of the t’ong being of a non-hereditary nature”. The Court accepted that the judge should refer briefly to the relevant evidence on this issue: §10.

(3) Although the Court referred to “a customary hereditary institution like a t’ong” (§12), it is clear that the Court was only referring to a hereditary t’ong.

(4) Strictly speaking, the dictum of the Court of Appeal does not form part of the ratio that binds this Court as a matter of stare decisis. However, it goes without saying that the considered remarks of the Court of Appeal ought to be treated with the greatest respect.

28.  In my view, the key issue arising for determination in the present case is whether the members of a business t’ong are the beneficial owners of the properties owned by the business t’ong.

29.  Mr Lai for the Defendant submitted that Recorder A Chow SC was wrong in not making a distinction between a business t’ong and a hereditary t’ong. The emphasis is on common ancestors.

30.  First, I am of the view that one must reason from the first principles. Section 15 of the New Territories Ordinance, Cap.97 provides: -

“Whenever any land is held from the Government under lease or other grant, agreement or license in the name of a clan, family, or t’ong, such clan, family or t’ong shall appoint a manager to represent it.” (Emphasis added.)

31.  The t’ong in Section 15 cannot be construed to be restricted to hereditary t’ongs only. Section 15 includes clan and family. It must therefore also include business t’ongs. In fact, the Wui in the present case is registered under Section 15 of the New Territories Ordinance, Cap.97.

32.  It follows that the managers of the Wui are registered to represent the Wui itself, and they are not the equitable owners of the assets (the land) of the Wui. The equitable owners of the Wui are members of the Wui which includes all members of San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖).

33.  It is common ground that San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖) are not independent legal entities. They are in fact a floating group or cluster of male descendants from the same common ancestors.

34.  It is also common ground that they are entitled to and did receive distribution of rental incomes from letting the landed property of the Wui to third parties at all material times. They each have a share of the equitable interest in the landed property of the Wui.

35.  Hence, I am of the view that Recorder A Chow SC (as he then was) is correct in his analysis of the equitable interest of the assets of a t’ong registered under Section 15 of the New Territories Ordinance, Cap.97 (in particular, see §24). It is not confined to hereditary t’ongs.

36.  Secondly, whilst in the context of a religious t’ong, Bokhary and Chan PJJ in Secretary for Justice v To Kan Chi (2000) 3 HKCFAR 481 at §§7 and 8 said: -

“7. The t'ong is an institution of Chinese law and custom. At least as they are generally understood, t'ongs are essentially in the nature of unincorporated associations composed of individuals and with continuous succession through patrilineal descent from their founding members. A t'ong's type depends on its purpose and activities. Generally, if not invariably, the context in which the Hong Kong courts have dealt with t'ongs has been that of land in the New Territories.

8. One of the matters in respect of which Chinese law and custom has application in Hong Kong is New Territories land unless exempted from the provisions of Pt II of the New Territories Ordinance, Cap. 97. (The land here in question is non-exempt land.) T'ongs have received legislative recognition. Section 15 of the New Territories Ordinance requires the registration of a manager of any clan, family or t'ong in whose name land is held from the Government. And as Mills-Owens J noted in Tang Kai-chung v. Tang Chik-shang at p.288: "It appears that tso lands have always been treated as 'clan, family or t'ong' lands".” (Emphasis added.)

37.  If one were to apply an analogy to unincorporated associations, there are four ways for an unincorporated association to hold land: Pozdnyaev, Denis v Kinvast Ltd [2022] HKCA 1685 at §26 per Barma JA.

(1) Property can be held by all members of the association as joint tenants.

(2) Property can be held by the trustees on trust for the members.

(3) Property can be held by the trustees on trust for the purposes of the association.

(4) Property can be held by the members subject to their contractual rights and liabilities to each other as set out in the rules of the association.

38.  There can be no joint tenancy as the four unities of time, title, possession, and interest are absent among the members of a business t’ong. They obtain a right in the business t’ong at different times through different ways.

39.  The purposes of a business t’ong are not charitable such that no trust can be created for its purposes.

40.  There is nothing in the nature of a business t’ong that calls for the application of a form of landholding different from that of a tso and an ancestral t’ong.

41.  The Hong Kong Courts have consistently held that members of a tso or a hereditary t’ong are beneficial owners of the assets held by the tso or the hereditary t’ong. The “contract-holding theory” does not apply where there is a specific trust: Chap Yick Clansman’s Association Ltd v Mok Fai [1997] HKLRD 580 at §21 per Le Pichon J (as Le Pichon JA then was). In any event, the “contract-holding theory” is inconsistent with the legal position of Hong Kong and should not be adopted.

42.  In my judgment, members of a business t’ong are the beneficial owners of the properties owned by the business t’ong. None of the three other forms of landholding by an unincorporated association as identified in Pozdnyaev, Denis is applicable.

43.  As a matter of fact, the properties of a business t’ong are not held by its members as legal owners. The legal title of the properties of a business t’ong is held by its managers.

44.  I am of the view that it is incorrect to argue that the Wui is an independent legal entity and its members only have a transferable share in the legal entity akin to the shares of a limited liability company. In the limited company analogy Mr Lai for the Plaintiff advanced at the hearing, shareholders do not have a right to the underlying assets of the subject company. However, in the Wui, its members, including members of the tsos have a direct equitable interest in the assets of the Wui. This is the distinction.

45.  This collective group or cluster of individuals, including females, as a matter of analysis, varies with the birth and death of its members. A business t’ong with tsos as members necessarily entails that a newborn member of one of the tsos will acquire a direct beneficial interest in the business t’ong.

46.  It follows that where a tso is a member of a business t’ong, as a tso is not a legal entity that can own properties itself, the members of the tso are the beneficial owners of the properties of the business t’ong. Mr Lai for the Plaintiff did not argue that San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖) are the equitable owners of the landed property of the Wui.

47.  Mr Lai for the Plaintiff submitted that one looks at the list of members to decide who are the members of the Wui. As an individual member of a tso is not registered on the list of members separately, he cannot be a member of the Wui, a business t’ong, with a share in the equitable interest of the land property of the Wui. I disagree. As a tso is not a legal entity and cannot hold property interests directly, its interests are held by its members collectively.

48.  Once the nature of landholding for a business t’ong is ascertained, I am of the view that the principle in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) should be applied in the present case.

49.  It is true that unlike a tso, the membership of a business t’ong is freely transferrable, not limited to the male descendants of a common ancestor, and does not directly arise from birth. However, this does not detract from the fact that where a tso is a member of the business t’ong, a new equitable interest in the business t’ong is created by the birth of a member of the tso. In this regard, the reasoning in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) as explained in Tsang Kwong Kuen is applicable on all fours.

50.  The interposition of a tso as an additional layer in the structure of a business t’ong does not prevent the members of the tso from being the beneficial owners of the assets of the business t’ong. In Tang Yau Yi Tong v Tang Mou Shau Tso [1996] 2 HKLR 212 (CA) at 219E, Liu JA (with whom Bokhary and Godfrey JJA, as they then were, agreed) held that members of the tso (Tang Mou Shau Tso) are the beneficial owners of the assets of the t’ong (Tang Yau Yi Tong) of which the tso is a member. There is no reason to depart from this line of reasoning in the present case, which is in any event highly persuasive if not binding. This reasoning was also applied in the context of a business t’ong in Tang Man Kit at §25.

51.  This Court does not consider that Tsang Kwong Kuen stands for the proposition that Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) cannot apply to non-hereditary t’ongs. There is no conflict between Tsang Kwong Kuen and the conclusion reached in the present case.

(1) The Court in Tsang Kwong Kuen was considering non-hereditary t’ongs generally and did not have in mind the specific scenario of a non-hereditary t’ong with a tso or a hereditary t’ong as its member. This is a novel situation.

(2) Without a tso or a hereditary t’ong as its member, the principle in Leung Kuen Fai which is engaged where a “new member being admitted upon birth by reason of his hereditary link with the focal ancestor” (Tsang Kwong Kuen at §5) does not come into play. Tsang Kwong Kuen must be correct in this regard.

52.  For the above reasons, I come to the view that as against a business t’ong with a tso as its member, limitation period runs afresh each time a new member of the tso is born, as a new equitable interest in the business tong is created. Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso (supra) is applicable in the present case.

Male Descendants

53.  On the factual issue, there is no dispute that Man Tim Lap (文潻立), the brother of the Plaintiff, has been responsible for managing the business and affairs of the San Yeah Tso (莘野祖) and that, in the course of the discharge of his duties, information and birth certificates of the 5 male descendants were supplied by the heads of the 3 fongs (房) to him. I agree that this is sufficient proof that the 5 male descendants have become members of the San Yeah Tso (莘野祖) since their births.

54.  I also note that Man Tim Lap (文潻立) and Man Sum On (文心安) have been the persons responsible for distribution of the shares of rental income to members of the San Yeah Tso (莘野祖) including to the 5 male descendants.

55.  The evidence of Man Tim Lap (文潻立) was supported by Man Kwai Sau (文貴壽), the Vice Chairman of the San Tin Rural Committee (新田鄉事委員會) and a member of the San Yeah Tso (莘野祖) responsible for managing its business and affairs since the death of its last manager some 10 years ago.

56.  Insofar as the 3 male descendants of the Yee Fong Tso (二房祖) (born between 6 September 1999 and 4 August 2016) are concerned, the Plaintiff only puts the Defendant to strict proof. The Plaintiff has not adduced any evidence to challenge the same.

57.  In his affirmation, Man Foo Luen (文富聯), one of the two registered s.15, New Territories Ordinance managers of the Yee Fong Tso (二房祖) responsible for managing its business and affairs for the past 3 decades, has deposed upon the following facts and matters:-

(1) Yee Fong Tso (二房祖) has over 1,000 members;

(2) Between 6 September 1999 and 4 August 2016, the 3 male descendants were born to members of the Yee Fong Tso (二房祖); and

(3) Man Whi Chung (文偉昌), one of the two plaintiffs in HCA 126/2024, has been a member of the Yee Fong Tso (二房祖) since birth.

58.  On the disputed facts, Mr Lai for the Plaintiff only listed two items, namely (1) there are 5 birth certificates allegedly of lineal male descendants of San Yeah Tso and (2) San Yeah Tso managers were not elected.

59.  I am of the view that the above two items do not constitute factual disputes. The Defendant has, in my view, adduced cogent evidence to sustain its case. The Plaintiff merely either suggests a doubt or put the Defendant to strict proof.

60.  The 5 male descendants of San Yeah Tso (莘野祖) have received distribution of rental income for years. There is no basis to challenge their membership.

61.  Mr Lai for the Plaintiff has not pressed the point that lighting the lantern (點燈) is a necessary requirement for a newborn to become a member of San Yeah Tso (莘野祖) during his oral submissions. This is correct as the Plaintiff has not adduced any evidence to support such an allegation.

62.  Mr Chong for the Defendant also drew my attention to the case of Tang Chun Kit & Tang Chung Ming v. Tang Lo Ping, managers of Tang Nam Kai Tso, HCMP 5529/2000, unrep., 10 September 2004, where Lam J (as he then was) at §§14-15 said: -

“14. On the first issue, the Defendant’s own expert Professor Weijen Chang testified that membership of a Tso is a birthright. On the other hand, Mr. Yeung relied on the report of the Plaintiff’s expert Dr. Henry Hu and suggested that a male descendant needs to go through the ceremony of lighting the lantern to be admitted as a member. The relevant paragraph in Dr. Hu’s report was dealing with the position of illegitimate child. I do not think Dr. Hu testified to the effect that even for legitimate child, lighting of the lantern is essential.

15. Mr. Yeung readily accepted that the authorities are in line with the view of Professor Chang, see Tang Kai Chung v. Tang Chik Sang [1970] HKLR 276 at p.279-80; Leung Kuen Fai v. Tang Kwong Yu Tong [2002] 2 HKLRD 705 at pra.38 to 40.”

63.  I am satisfied that the 8 male descendants were born to San Yeah Tso (莘野祖) and Yee Fong Tso (二房祖) between 23 January 1990 and 4 August 2016 with no time gap of 12 years, thus there is no question of the limitation period for the purpose of satisfying ss.7(2) and 17 of the Limitation Ordinance.

64.  Further, I am of the view that whether San Yeah Tso managers were not elected or not have no material impact on the identity of the 5 male descendants. Once the Defendants have adduced cogent evidence on the identity of the 5 male descendants, the burden rests on the Plaintiff to raise bona fide issues that they are not members of San Yeah Tso. There is no evidence.

65.  For the sake of completeness, I am also of the view that the 1986 Tenancy includes the Lot in question. First, since 1989, 25 land lots (inclusive of the Lot) have been registered in the name of the Wui as owner up to the present. Secondly, I agree that the subject matter of letting being ‘將水塘會持有物業田種全部…批租與 (to let all the landed property (Tin Chung) of the Shui Tong Wui)’ necessarily means that all the 25 land lots (inclusive of the Lot) would have been let. Thirdly, in HCA 1207/2023, when Man Whi Chung and Fortune Nine sued the Defendant (and the Plaintiff in HCA 126/2024) for declaratory relief for extension of the 1986 Tenancy, the Lot was expressly pleaded as one of the 25 land lots let under the 1986 Tenancy seeking extension. Fourthly, in HCA 126/2024, Man Whi Chung, in his affirmation resisting Kenwell Limited’s claim for possession of the said land lot, asserted that, by the 1986 Tenancy, the Wui “…agree to let all the land lots owned by the Wui to my late father and the other said individuals for a term of 10 years expressly for [Lot 3065] to be used as fish ponds…”.

66.  Thus, both the Plaintiff and Man Whi Chung asserted that the Lot was one of the 25 land lots let by the Wui under the 1986 Tenancy.

DISPOSITION

67.  By reason of the analysis as set out above, I am of the view that the Plaintiff’s case is not sustainable as a matter of law to maintain a claim of adverse possession since the late 1990s and should be struck out.

68.  I am aware of the established legal principles in relation to striking out applications under Order 18, rule 19 of the Rules of High Court as set out in the parties’ respective written submissions which I do not find it necessary to rehearse the same here. Suffice it for me to say that as a matter of the above legal analysis, I am of the view that it is plain and obvious that on the established and existing authorities, the Plaintiff’s claims for adverse possession cannot be sustained.

69.  Accordingly, I make the following orders:

(1) The Plaintiff’s claims in the present action be struck out;

(2) A costs order nisi that the Plaintiff pays the Defendant’s costs of and occasioned by the present action and costs of the striking out application, to be taxed on a party to party basis if no agreement can be reached, with a certificate for two counsel. This costs order nisi will be made absolute unless an application is taken out to vary the same within the 14-day period.

(3) Liberty to apply for directions with this Court in relation to other aspects of the Summons.

70.  Finally, it remains for this Court to thank counsel for their helpful assistance.