IP (or YIP) CHEUNG (or CHIANG) KWOK v. IP SIU BUN

Headnote

(1)         Consideration of:

BETWEEN

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JUDGMENT ON SUBSTANTIVE ISSUES

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Clough, J.A.:

1. In judgments delivered and handed down respectively on the 25th October and the 28th November 1989 we dealt with preliminary issues arising on this appeal. We now deal with the substantive issues. A general outline of the procedural events and the pleaded issues in this action is contained in my judgment delivered on the 25th October 1989.

2. This must have been a difficult case to try. It began with the pleadings and representation of interests in a state of disarray. The Bank and the first defendant did not stand together as trustee defendants and the first defendant had refused to join as co-plaintiff with the Bank in its counterclaim to which he had therefore been made a defendant.

3. At the trial and on appeal the Bank sought to uphold the validity of the trusts upon which it claimed to hold the trust property by contending, in substance, that the trusts were charitable trusts, (this was also the Bank's contention in the 1977 action) or, alternatively, valid private trusts. At both stages of these proceedings the plaintiff contended that the trusts were perpetuitous and non-charitable and therefore void.

4. It was common ground between the plaintiff and the Bank on appeal that the trust properties were held by the Bank and the first defendant upon trusts declared in rules made and signed on the 31st December 1875 by the settlor (Ip Koo Chi) who had (as the Bank admitted on appeal but not at the trial) procured the purchase of the trust property with his own moneys and the assignment of the property to trustees by two Assignments on the 28th September 1875. The trustees (Yip On and Yip Yuen) had taken No. 152 Queen's Road under one of the Assignments as "Trustees of the Yip Cheong Kwong Tong Loan Association for and on behalf of the said Association". They had taken Nos. 154 and 156 Queen's Road under the other Assignments as "Trustees of the Tung Yun Sheen Tong Loan Association for and on behalf of the said association".

5. The first defendant's position shifted during the proceedings. He had originally been represented by counsel who had settled an amended defence on behalf of the first, second and third defendants. In that defence it was denied that the settlor had any beneficial interest (by way of resulting trust or otherwise) in the trust properties. It was pleaded that the 1875 Assignments had been made to Yip  On and Yip Yuen, in respect of No. 152 as trustees for the "Yip Cheong Kwong (or Kong) Tong", and in respect of Nos. 154 and 156 as trustees for the "Tung Yun Sheen Tong". These tongs were alleged, insofar as might be necessary, to be charitable trusts. It was pleaded that the tongs in question were situate in Gut Ta (also known as Gut Ling or Gut Ta Brigade) in China and were entitled under Chinese law to hold land, wherever situated.

6. Reliance was placed in this pleading on a Judicial Pronouncement made on the 18th May 1978 by the Middle Rank People's Court of Fu Shan District, Kwantung Province holding that Yip Cheong Kwong Tong (also known as Tun Sheen Tong) and Tun Yun Sheen Tong were community welfare organisations of Gut Ta Brigade and entitled to the trust properties. It was further pleaded inter alia that in so far as the trusts were for the benefit of the members of the Gut Ta Brigade, the beneficial interest in the trust properties was vested in the members (for whom the properties were held by the first defendant and the Bank as trustees) to be dealt with in accordance with the rules of the two tongs.

7. I have dealt, in my judgment delivered on the 25th October 1989, with the outcome of the attempt of the first defendant to plead to the Bank's counterclaim. In the 1977 action (which had been conducted by two officers of the Bank's parent company as representatives of the Yip Cheong Kwong Tong and Tung Yun Sheen Tong) the first defendant had filed a defence settled by counsel which did not admit the claim of the tongs to be charities. The defence had denied that either of the tongs were beneficiaries under the trusts affecting the trust properties. It was pleaded that the beneficiaries named in the Assignments were the Ip Cheong Kong Tong Loan Association and the Tung Yun Sheen Tong Loan Association. The first defendant also made an affidavit in the 1977 action deposing to the effect that his ancestors had provided the funds for the purchase of the trust properties.

8. However, as indicated in my earlier judgment, in the process of settling the 1977 action the first defendant had given undertakings confirming the beneficial interest of the two tongs in the trust property. It was for this reason that he felt inhibited from pleading adversely to the Bank's Counterclaim in the present action. Any inhibition of the first defendant in the conduct of his case in person at the trial was, however, lifted on Day 16 when as counsel informed this court, the judge released him from his undertaking.

9. By Day 16 the plaintiff's Witnesses had been called and the first defendant had been called upon to make his defence. He gave evidence and called one witness, Mr. Ip Tong Chiu, whose evidence was interposed during the first defendant's evidence. By the end of the first defendant's evidence on Day 20 and at the conclusion of his submissions on Day 30 it was clear that he was contending inter alia that the trust property was not at any time the property of the settlor but that it was always the property of the Ip Cheung Kwong Tong and that he had an interest in that tong. He had applied unsuccessfully on Day 18 and Day 20 for a representation order for the members of the Ip Cheung Kwong Tong. Later on Day 20 the judge made an order (which Mr. Ching for the Bank had opposed appointing the first defendant to represent the members of all three relevant tongs, but the first defendant objected to this subsequently on the same day. The sequel was that the judge appointed him on Day 20 (the 13th April 1988) to represent all persons for the time being claiming to be members of the Ip Cheong Kong Tong.

10. The judge summarised the first defendant's ultimate case in the following passage in his judgment:

"The first defendant, as well as being a trustee, claims that he is or may be beneficially interested in the properties. He does not claim to be a direct descendant of the settlor, but he does claim to be a descendant of one Ip Sze-shing (of whom I shall have more to say later), a common ancestor of the plaintiff and of the first defendant. In 1875 there was already in existence an ancestral fund founded for the veneration of ancestors of the Ip Clan beginning with Ip Sze-shing and known as Ip Cheong Kwong Tong. The first defendant, on the footing that the Ip Cheong Kwong Tong has or may have an interest in the properties or one or some of them, claims to be one of the persons interested in the Ip Cheong Kwong Tong, and accordingly, in the course of the trial, on 13th April 1988, I appointed the first defendant to represent, for the purposes of these proceedings, all persons for the time being claiming to be members for the time being of the Ip Cheong Kwong Tong. The first defendant also says that if the  trusts on which the properties or one or some of them are held are found to be charitable trusts (see below) or valid private trusts then he is one of the persons entitled directly or indirectly to benefit under those trusts."

11. The second defendant's position was more straight forward. The plaintiff did not pursue any of his claims against her at the trial, but on Day 16 (the 6th October 1987) the judge made an order appointing her to represent all persons for the time being claiming to be members of the Ip Cheong Kong Tong Loan Association and the Tung Yun Sheen Tong Loan Association. Having regard to the terms of the 1875 Assignments under which the original trustees acquired the trust property on behalf of the Associations it was clearly desirable that the members of the Associations (if they existed) should be represented in the proceedings. The second defendant appeared in person at the trial. When asked to make her defence as a representative party on Day 22 and in her closing submissions on Day 30 she insisted that the tongs were not the same as the Loan Associations but she was, for understandable reasons, unable to make any material contribution to the proceedings.

12. The action was discontinued against the third defendant at an early stage. The position of the fourth defendant, the Attorney General, has given rise to one of the issues on appeal. The Attorney had been added, against his will, as a defendant in the 1977 action. For reasons which it is not relevant to inquire into here, counsel for the Attorney General had taken the view on the material before him (which included a translated version of the settlor's Rules), that the trust property was not subject to charitable trusts. However, the Attorney was nevertheless added as a defendant by order of a master. The Attorney filed a defence in which he did not admit the plaintiffs' allegation that the two relevant tongs were charitable trusts. In the event the 1977 action was stayed by the consent order mentioned in my previous judgment.

13. After the present action had begun, the Bank's solicitors sent a letter dated the 27th April 1985 to the Attorney General enclosing copies of the pleadings including the Bank's original defence and counterclaim both of which contained various allegations of the charitable character of the relevant tongs and trusts. The Attorney was invited to be joined as a party in the proceedings as they involved a dispute concerning the validity of allegedly charitable trusts. By his reply dated the 1st May 1985 counsel for the Attorney General was not encouraging but understandably non-committal. He undertook to give immediate consideration to whether the Attorney General wished to apply to be joined as a party to the proceedings.

14. A period of apparent inactivity on the part of the Attorney General was followed by his being added as a defendant to the Bank's counterclaim by virtue of a master's order made, presumably on the Bank's application, without notice to the Attorney General who was not heard. The Attorney did not appeal the master's order but filed a defence to the Bank's amended counterclaim which denied that the relevant tongs were charitable trusts. This defence was never amended to deny in terms all versions of charity subsequently pleaded by the Bank. But counsel for the Attorney General (Mr. Hinchin) made it clear to the judge on Day 2 (the 15th September 1987) that the Attorney General's stance was that "in fact it is not a charitable bequest".

15. On Day 2 Mr. Hinchin was given leave to withdraw from the proceedings on his undertaking to return to assist the court if required. By then Mr. Hinchin had (in the course of declining the judge's invitation to argue in support of valid private trusts) indicated that counsel for the Attorney General had attended the trial only as courtesy to the court. Although the Attorney General was denying charity Mr. Hinchin seemed to be content to leave the Bank to substantiate its claim that the trust property was held on charitable trusts. He said:

"But my own view is that the two interests - it is a question of whether or not there is a charitable bequest will be argued before your Lordship. We have the Fourth Defendant to say: 'This is a charitable bequest' and we have the Plaintiff to say it is not. If your Lordship is in doubt on any matters or wishes any assistance from the Attorney General, then you could request me to be re-called."

16. A similar view was expressed by the judge later on Day 2 in the course of his judgment giving reasons for dismissing the Bank's application to strike out the plaintiff's claim on the locus issue. The judge observed:

"But if I proceed with the hearing of this action without entertaining further applications of a preliminary character, I can do so without adding anybody to represent any other interest and because, as it seems to me, the interests with which I am immediately concerned are all before the Court. I ought perhaps earlier to have added that the Attorney General is before the Court too, but he seeks to argue not in support of charity but, if anything, against it. Although he is present, it may be that I shall hear argument from him against the interests of charity, which would surprise me in the extreme, but at least I see from the papers that I am not going to hear an argument from him in support of charity. That fills me with no concern since that argument is pleaded by and will be argued by the Bank."

17. After the delivery of this judgment Mr. Hinchin withdrew on the terms indicated above. Counsel for the Attorney General was never recalled during the trial.

18. In the course of the 32 day hearing below the judge listened to a substantial volume of evidence addressed to both the genealogical and trust issues. The voluminous exhibits which were produced included photographs and a sketch plan of the settlor's village Gut Tai in Kwantung north of macau. Photographs of various family graves of members of the Ip clan including Ip Sze Shing (the founder of the village in the 15th century) and the settlor (Koo Chi) were also produced. The plaintiff gave evidence and called six witnesses including an expert on Chinese family and kinship matters (Dr. Baker) and an expert on Chinese law and custom (Mr. Henry Hu). The Bank called seven witnesses including one expert on Chinese law and custom (Mr. Anthony Dicks). Five of the Hank's witnesses gave evidence about the relevant tongs' affairs during their life time. There were also numerous statements and documents which were admitted in evidence as a result of hearsay notices by the Bank.

19. The most important evidence before the judge was the settlor's Rules which the plaintiff and the Bank agreed had been executed by the settlor on the 31st December 1875. A copy of the Chinese version of the Rules had been appended to a letter contained in a collection ("Pak Hang's Collection") of correspondence relating to the affairs of the relevant tongs and the trust property between 1920 and 1928 collated in 1928 by Ip Pak Hang, a member of the Ip clan who had been a trustee of the trust properties between 1901 and his death in 1951. The letter to which the copy of the Rules was an appendix was written by Pak Hang to his nephew Chi Sun acknowledging receipt of the Rules from his nephew. The Collection as a whole was admitted in evidence pursuant to a hearsay notice of the Bank.

20. The translation of the Rules which was eventually agreed at the end of the trial (on Day 30 in the course of Mr. Chang's closing submissions for the Bank] by the plaintiff's and the Bank's experts (Dr. Baker and Mr. Dicks) was the fifth version. Before that there were before the court four different translations, two of them certified for purposes of section 27 of the Evidence Ordinance (Cap. 8). The agreed translation of the Rules contained two passages as alternatives. It was in the following terms:

This version of the translated Rules was agreed together with an accompanying literal columnar translation. It was common ground between the plaintiff and the Bank that Chuk Kai referred to in the Rules was the same person as Yip On, one of the trustees named in the 1875 Assignments. However it was disputed whether Fai Shek named in the Rules was the same person as Yip Yuen named in the 1875 Assignments.

21. The broad facts of this matter are succinctly identified in the judge's findings of fact in the following passage in his judgment reported in [1988] HKLR 247 at p.250 G-H:

22. Before embarking in his judgment upon consideration of the merits of the Bank's case that the trust properties were held on charitable trusts the judge took a jurisdictional point. In his view, once counsel for the Attorney General had indicated that he was not prepared to argue in favour of charity, it was not open to the court to find that any of the trust properties were held upon charitable trusts. The judge put the matter thus at p.250E:

"The fourth defendant should not, in my judgment, have attempted in these circumstances to shoulder the burden of an argument in favour of the court's declaring that the trusts upon which the properties, or one or some of them, are held were charitable trusts. The Attorney General is the only person who can represent the general body of beneficiaries under a charitable trust (see Tudor, Charities, 7th ed., 1984, at p.337; Ware v. Cumberledge (1855) 20 Beav 503, per Romilly, M.R. at 511; re King [1917]2 Ch 420; and most recently Hauxwell v. Barton-upon-Humber UDC [1974] Ch 432, in which Brightman, J. said (at p.450) that he was able to discern nothing in the cases cited to him to indicate that anyone save the Attorney General was entitled to maintain an action to establish the existence of a charitable trust. I would therefore hold that it is not open to me in these proceedings to find that any of these properties are held upon charitable trusts, in the teeth of the refusal of the Attorney General, the proper party to represent the interest of charity, so to argue."

23. In case he was wrong on the jurisdictional issue the judge went on to consider the merits of the Bank's case on the charity issue. Applying Lau Leung-shi v. Lau Po-tsun (1911) 6 HKLR 149 he held that the court could not uphold a trust of indefinite duration for the application for ancestral worship of the income of immovable property in Hong Kong. He concluded that in so far as the Rules.provided for the application of the whole or part of the rents of the trust properties "to supplement any shortfall in the ancestral worshipping fund" of Ip Sze-shing the trust failed.

24. The judge also found that the trust under both alternatives in the Rules "to assist in common welfare in the village" failed for lack of the essential element of public benefit. After citing Goodman v. Saltash Corporation (1882)7 App. Cas. 63 (H.L.) he observed:

"If a gift for the benefit of a village is charitable (as it is) I am not prepared to hold that a gift for the welfare of a village is not."

25. If a gift for "work for the welfare of cats and kittens needing attention" was a valid charitable gift (re Moss [1949]1 All ER 495) the judge could see no reason why a gift for the welfare of a village should not be likewise. However, he said that construing the words "to assist in the common welfare of the village" with reference to the context in which those words appeared, he concluded that the settlor's intention was not to benefit the inhabitants in the village, whoever they might be, but his clan in the village. His reasoning in arriving at his decision that this was not a charitable trust was as follows:

"In 1875 the village of Gut Tai was a clan village. It had been settled by the Ip clan. There was already in existence in the village the grand ancestral hall of the Ip clan; and (to the extent that the two do not overlap anyway) the Ip Cheong Kwong Tong. At some time before 31st December 1875 the Tun Shin Tong and the Tung Yan Sheen Tong (referred to in the introductory words of the 1875 Rules) had been set up by the clan. The Rules provide that the managers are to be elected by and from amongst members of the clan. The settlor addresses his exhortation to 'the descendants of the clan in the village'. I conclude that the settlor's intention was to benefit his clan in the village, and not the inhabitants of the village as such whoever they might be. If that conclusion is correct, the trust assumes the character of one for the welfare of relations rather than of one for welfare of a particular locality. And a trust for the welfare of relations (unless limited to the relief of poverty, which this is not) is not charitable because there is not sufficient of an element of public benefit about it: see re Compton [1945]Ch 123."

26. The judge seems to have had no difficulty in rejecting the Bank's contention that the trustees held the trust properties on valid private trusts for corporate or alternatively quasi-corporate entities known respectively as Tun Shin Tung in the case of No. 152 and Tung Yan Sheen Tong in the case of Nos. 154 and 156. He could find no evidence to prove that the tongs had ever been clothed with a separate legal personality and, went on to say at p.253E-F:

"I do not overlook the provisions of Article 6 of the Law governing the application of the General Principles of the Civil Code (of the Chinese Republic) under which a foundation which came into existence before the coming into force of the General Principles of the Civil Code and whose object was for the promotion of public welfare and which possesses independent property, is regarded as a juristic person. But the object of the Tongs is not the promotion of public welfare and the operation of Article 6 is in my judgment excluded anyway in the present case by the provisions of Article 9, which declares that its provisions are not applicable to ancestral halls, monasteries and temples and those independent properties used for the purpose of maintaining a family. Even if I had found it possible to hold. that the Tongs were corporate entities, it would have been of no assistance. A gift to a corporation, not for its general purposes but, as here, for particular purposes is governed by exactly the same rules as a gift to individuals for such purposes. If the gift is a gift of income for a period of indefinite duration the gift (unless exclusively charitable) will fail even if the donee is a corporation.

27. The argument based on the quasi corporate entity was rejected in the following passage at p.253H-I:

28. As to the first defendant's case, the judge could find no basis for finding that the properties were held for the Ip Cheong Kwonq Tong. He concluded at p.254B-C:

"Either the trusts on which the properties are held are those declared by the Rules (as the plaintiff and the fourth defendant, but no other party, accept), or they are not. If the trusts are so declared, on no permissible construction of the Rules could the court hold that the properties were declared to be held for the benefit of the Ip Cheong Kwong Tong, as the first defendant argued. Even if the court were so to hold, the trusts would fail for the same reasons as are given in this judgment in relation to the trusts which on the correct construction of the Rules are in fact thereby created. And if the trusts on which the properties are held are not those declared by the Rules, then they fail anyway; for then, on the evidence, the trusts (whatever they might be) cannot be said to have been declared in writing by the settlor, as required by the Statute of Frauds. (There is no evidence, apart from the Rules, of any such writing at all.)"

29. Finally the second defendant's representative case on behalf of the two loan associations mentioned in the 1875 Assignments was held to have no substance, for want of any evidence that the loan associations ever existed at all.

30. Accordingly the judge found that the trust properties were held on resulting trusts for the settlor's estate.

31. On appeal the Bank raised broadly the same issues as below (save that it accepted the judge's finding that the settlor had provided the trust property from his own resources) and sought to establish its entitlement to argue the charity issue notwithstanding the attitude of the Attorney General.

32. The plaintiff filed a respondent's notice in which he contended that the judgment should be affirmed on the additional or alternative ground, in effect, that even if the religious and welfare trusts were otherwise charitable, they were nevertheless void because they were perpetual trusts which were not exclusively charitable and/or were too indefinite, vague and uncertain to be enforced.

33. The first defendant attended the hearings of the appeal. He filed no respondent's notice but was allowed to be heard as a litigant in person and to submit a written summary of his submissions which attacked both the judge's judgment and the cases of the plaintiff and the Bank. He contended against the Bank that the trust properties were not held on charitable trusts. He challenged the plaintiff's locus in the proceedings, thereby raising an issue which has now been resolved in an earlier judgment of this court. He also attacked the judgment, adopting an earlier submission of the second defendant that there was no concrete evidence to prove that the trust property belonged to Koo Chi and that he was the settlor. This latter point was made to support his subsequent submissions to the effect that the trust property belonged to the Ip Cheung Kwong Tong.

34. The second defendant also attended the hearings of the appeal with her husband, the first defendant. She filed no respondent's notice and at the stage when she was invited to make submissions she said that she had nothing to say.

35. The Attorney General was represented on appeal, initially by junior counsel (Mr. Eric Lau) and, from the afternoon of the third day, by leading counsel Mr. Marshall who gave assistance regarding the involvement of the Attorney General in the 1977 action and these proceedings. He also made helpful submissions on the role of the Attorney General in charity matters. On behalf of the Attorney General Mr. Marshall adhered to the denial of charity contained in the Attorney's pleaded defence to the Bank's amended counterclaim and supported the judge's decision to the effect that it was the exclusive right of the Attorney General to assert charity. However no attempt was made at any stage of the appeal by either Mr. Marshall for the Attorney General or Mr. McDonnell for the plaintiff (who also supported the judge's decision on this matter) to prevent Mr. Chang from asserting charity on behalf of the Bank.

THE BANK'S APPEAL

The issues

36. The issues arising on the Bank's appeal in the order in which they were argued by Mr. Chang were :

37. I mention that the Bank also challenges the orders for costs made against it in the action. This matter has been left over to be dealt with after judgment has been given on the substantive issues.

38. As the hearing of the appeal progressed certain areas of common ground emerged. The Bank's original grounds of appeal included the contention that the judge erred in holding that the relevant trusts were trusts of indefinite duration (ground 4), in holding that the English common law rule against perpetuities applied to land in the Central District of Hong Kong (ground 7) and in applying the English concept of charity to the tongs in question (ground 8). Mr. Chang, for the Bank, indicated at an early stage of the hearing of the appeal that he would not be arguing ground 4, except in the limited context of issue (3) above, and that ground 8 would only be pursued to the extent of contending that in considering the public benefit aspect of charity in relation to the relevant trusts and tongs a more flexible test should be adopted than that laid down in In re Compton [1945] Ch 123 (C.A.). Mr. Chang abandoned ground 7 but reserved the right to contend. If this matter should be taken further, that the common law principles of perpetuity (presumably both in relation to remoteness of vesting and inalienability) did not apply in Hong Kong in 1875 when the relevant trusts were constituted.

39. Under the circumstances it becomes unnecessary to deal with the detailed submissions of Mr. McDnnell in support of the proposition that in 1875, when the relevant trusts were constituted, the English law of perpetuity and charity was applicable by virtue of section 7 of the Supreme Court Ordinance, 1873 (No. 12 of 1873) which provided:

"7.    Such of the laws of England as existed when the Colony obtained a local legislature, that is to say, on the 5th day of April, 1843, shall be in force within the Colony, subject to the provisions of Ordinance No. 11 of 1865 and except so far as the said laws shall be inapplicable to the local circumstances of the Colony or of its inhabitants."

Ordinance No. 11 of 1865 merely repealed certain English enactments in a number of Hong Kong Ordinances relating to criminal offences.

40. The subject of the application of English law in colonial territories and in Hong Kong in particular, has given rise to a considerable body of learning (see for example Appendix 1 to the Strickland Report published in 1953 and the learned article by Professor Wesley-Smith in HKLJ (1988) 183 on the Reception of English Law in Hong Kong).

41. However, subject to Mr. Cnang's reservations mentioned above, the appeal was conducted as between the Bank and the plaintiff on the footing that this court was required to determine the nature and validity or otherwise of the relevant trusts by applying the principles of the English law of perpetuity and charity as at the 5th April 1843 subject to any changes in that law having effect in Hong Kong on the 31st December 1875 when the relevant trusts were declared and subject to any subsequent English or Hong Kong judicial authorities elucidating principles of common law or equity as at the 5th April 1843. There were in fact no such changes in the law. The passing of the Chancery Procedure Ordinance (No. 7 of 1856), which inter alia applied the procedural provisions of sections 18, 28 and 43 of the charitable Trusts Act 1853 (16 & 17 Vict. c. 137) to Hong Kong, made no changes in the substantive law.

42. It was common ground between the Bank and the plaintiff that, although the settlor was domiciled in China in 1875, the trust property, being immovable property situate in Hong Kong, was governed by Hong Kong and not Chinese law: Freke v. Lord Carbery (1873)L.R. 16 Eq. 461, applied in Lau Leung Shi v. Lau Po Tsun (1911) HKLR 149. The bank did not contest on appeal that the settlor had purchased the trust property with his own money and procured it to be assigned to the original trustees Yip On and Yip Yuen, nor did the Bank contest that there was no evidence that the two loan associations named in the 1875 Assignments ever existed. It seems to be clearly implicit that in accepting that the Rules contained the trusts affecting the trust property the Bank was accepting, as the judge had in effect found that, until the Rules were made under the hand of the settlor, the original trustees under the 1875 Assignments held the trust property upon resulting trust for the settlor.

43. There was one further area of agreement by the time Mr. Chang had made his reply on the hearing of the appeal. The judge, at pp. 252C and 253 G-H of his judgment, regarded the trusts constitutes by the Rules as purpose trusts. Mr. McDonnell for the plaintiff supported this conclusion. By the time he came to his reply Mr. Chang's primary argument in support of charity also supported the judge's conclusion. In his written submissions Mr. Chang said:

"Our primary submission is that the trusts were and are purpose (or income] trusts (i.e. endowments made to the Tongs for the specified purposes) which purposes are charitable."

44. As I have already indicated above, in relation to issue (2) (charity) Mr. Chang accepted for the purposes of the appeal, that the trusts in question were perpetuitous (i.e. "or indefinite duration" as found by the judge at p.252C and 253H and J of his judgement.)

45. Having identified the common ground I come, at last, to the issues which were argued on the Bank's appeal.

46. It was common ground that in Hong Kong the Crown and the Attorney General exercise a similar function in relation to charity as the Crown and the Attorney General in England, so that the statement of the law in the following passage in Halsbury's Laws of England, 4th edition. Vol. 5 at paragraph 870 accurately states the position in Hong Kong as well as in England:

"The Crown as parens patriae is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern. The Attorney General, who represents the Crown for all forensic purposes, is accordingly the proper person to take proceedings on behalf of and to protect charities."

47. In Hong Kong there is no equivalent of the Charity Commissioners and no equivalent of the Charities Act 1960. The Charities Procedure Act 1812 (52 Geo.3 c.101) has effect by virtue of the Application of English Law Ordinance (Cap. 88), but proceedings under that Act are not competent unless formally allowed by the certificate of the Attorney or Solicitor General which is required under section 2 of the Act. The only other legislative provision relating to charity proceedings is Order 120 of the Rules of the Supreme court Rules 1, 3 and 4 of that Order provide as follows:

48. Rules 1 and 3(upon which the plaintiffs relied in the 1977 action) stem (by a legislative route which was not explored on appeal) from the former Chancery Procedure Ordinance to which I have already referred. Although that Ordinance only applied sections 18, 28 and 43 of the Charitable Trusts Act 1853, the proceedings contemplated by the Ordinance, and now by Rules 1 and 3 (assuming the vires of the Rules) must, as Mr. McDonnell contended, be taken not to include proceedings (expressly excluded by section 41 of the Act) in which adverse beneficial claims are being made against trustees purporting to hold property on charitable trusts.

49. There being no statutory basis upon which the Bank can rely for maintaining its claim that it holds the trust property on charitable trusts is it prevented from advancing such a claim (by way of defence to the plaintiff's claim or for the purposes of its counterclaim for a declaration) by the denial of charity by the Attorney General, as the judge held? There can be no doubt that the authorities cited by the judge substantiate the principles which he mentioned in his judgment. Thus the passage at p.337 of Tudor on Charities, 7th edition, at p.337 that the Attorney General is the only person who can represent the general body of beneficiaries under a charitable trust simply echoes the dictum of Sir John Romilly M.R. in Ware v. Cumberledge (1855)20 Beav 503 at p.511 that:

"In case the gift is for charity generally, no one can represent it but the Attorney General, and he must be here to represent such general charities."

50. In re King [1917]2 Ch 420 was a case in which Younger J. applied the passage of Sir John Romilly's judgment in which that dictum appeared when holding that where certain charities which had been cited in probate proceedings (to which the Attorney General was a party) but did not appear, the absent charities were bound by a compromise between the parties present at the hearing to which the Attorney General had assented on their behalf.

51. The proposition, relied upon by the judge, that the Attorney General is the only person who can represent a charity and sue on its behalf to establish the existence of a charitable trust, was upheld by Brightman J. (as he then was) in Hauxwell v. Barton-upon-Humber U.D.C. [1974]Ch 432 and by Pennycuick J. in the earlier case of In re Belling, decd. [1966] Ch 425 in which Brightman J. had appeared as leading counsel for the defendants. The Belling case was concerned with a home made codicil to the will of a testator which the plaintiffs, the Enfield London Borough Council (who were the local education authority for Enfield), contended created a charitable trust relating to the use of the testator's farm land at Enfield for a technical training college. The plaintiffs claimed to be the body designated by the testator as a potential recipient of his bounty and as a participant in his scheme. The executors' solicitors took the matter up with the Treasury Solicitor who indicated that counsel for the Attorney General had advised that the codicil was merely precatory and that the Attorney General did not propose to claim that it constituted a charitable gift.

52. Upon the executors contracting to sell the farm land as part of the testator's residue, the plaintiffs issued a writ against the executors seeking a declaration that the farm land and a sum of £1 million were held upon valid charitable trusts and for an injunction to restrain the sale of the land by the executors. The Attorney General was not joined as a defendant. On the hearing of the plaintiffs' motion for an interim injunction restraining the sale the executor defendants inter alia contended that the plaintiffs had no locus standi in the matter because even if the codicil created a charitable trust the Attorney General was not only a necessary party but normally the proper plaintiff. It was further contended that the plaintiffs had no proprietary or beneficial interest under the trust that could give them any locus standi.

53. On this issue Pennycuick J. began by saying at p.432 E-F:

"The real question on the present motion is, it seems to me, whether the council has such a locus standi. When a testator creates, or purports to create, a new charitable trust, in contradistinction to making a gift to an existing charity, he does not seek to confer a beneficial interest on any person. He seeks to dedicate part of his estate to a purpose and, in legal theory, the Sovereign, as parens patriae, has the right to compel the testators' personal representatives to set aside the assets directed or required to meet that purpose."

54. In the next ensuing passage, cited by Brightman J. in the Hauxwell case at p.448 A-B, Pennycuick J. continued as follows:

"In this connection the Attorney General acts on behalf of the Sovereign and in the ordinary course the Attorney General takes whatever steps may be necessary, including the institution or defence of proceedings by originating summons for the construction of a will alleged to create a charitable trust. Upon this point I refer to Strickland v. weldon (1885) 28 Ch.D. 426, where Pearson J. said at p.446 'The Attorney General is the only person who can really represent a charity and sue on its behalf.' For a concise statement of principle I refer to Halsbury's Law of England, 3rd ed., vol. 4 (1953), at p.446, where it says: 'As a rule the Attorney General is a necessary party to all actions relating to charities. It is the duty of the Queen, as parens patriae, to protect property devoted to charitable uses, and that duty is executed by the Attorney General as the officer who represents the Crown for all forensic purposes. He represents the beneficial interest, in other words the objects, of the charity.' No case has been cited to me in which anyone, other than the Attorney General, has been admitted to institute proceedings of this type and it is difficult to see how, apart from some statutory provision, anyone other than the Attorney General could so assume the mantle of the Sovereign."

55. Pennycuick J. went on to consider and reject the plaintiffs' leading counsel's argument that the council had tile necessary locus standi on the grounds that it was named in and interested under the codicil and that it was the local authority responsible for education in its area. In rejecting the plaintiffs' claim to have the necessary locus standi for the declaratory relief they sought Pennycuick J. observed:

"Here the whole question is whether the council has a necessary interest in the subject-matter of the declaration sought; and for the reasons which I have given I do not think it has that interest."

56. In the Hauxwell case Brightman J. was concerned with the locus standi of two inhabitants of an urban district who issued an originating summons against the urban council and a county council for inter alia a declaration that a strip of land forming part of a park, which the urban council had conveyed to the county council for road widening purposes in 1970, was subject to charitable trusts. The strip of land in question was part of a recreation ground which had been conveyed to the urban council by way of gift in 1930. The plaintiffs contended that the urban council held the land upon charitable trusts which applied to the strip of land which had been transferred to the county council. The Charity Commissioners had refused the plaintiffs' application for an order authorising the proceedings under section 28 of the Charities Act 1960. The question of the locus standi of the plaintiffs was determined by Brightman J. on the hearing of the motion of the plaintiffs for an interim injunction (ex parte relief having been obtained earlier) and a motion by the defendant councils to strike out the originating summons under Order 18 rule 19 as disclosing no cause of action. Prior to the hearing the originating summons was amended by adding the Attorney General as a defendant. Counsel for the Attorney contended that the plaintiffs had no locus standi to bring the proceedings.

57. Much of the argument in the Hauxwell case was concerned with the questions (1) whether the proceedings were "charity proceedings" within the meaning of section 28 of the Charities Act 1960 and (2) whether, because the charity was a local charity and the plaintiffs were inhabitants of the locality they were entitled to sue on the authority of In re Bedford Charity (1819) 2 Swan. 470 and Attorney General v. Magdalen College, Oxford (1854)18 Beav. 223. On the third question, which Brightman J. said at p.449F was "whether the proceedings should be struck out on the ground that the plaintiffs are incompetent to bring them", counsel for the councils had relied primarily on In re Belling, decd and it seems clear from his citations from that case that Brigntman J.'s views coincided with the views of Pennycuick J. when he concluded in the Hauxwell case at p.450 F-G that he was ".... able to discern nothing in the cases which have been cited to me to indicate that anyone save the Attorney General is entitled to maintain an action against supposed trustees to establish the existence of a charitable trust, ...."

58. The present case being one in which the Attorney General was a party and had actually denied charity in his pleading (although his counsel did not actually argue against charity at the trial), Mr. McDonnell sought to support the judge's decision by emphasising the absolute nature of the Attorney General's jurisdiction in relation to charity. He cited L.C.C. v. Attorney General [1902] AC 165 (H.L.) (by way of analogy) and Attorney General v. Ironmongers'Co. (1840)2 Beav 313 with particular emphasis upon the comment of Lord Langdale M.R. at p.328 (when considering the propriety of the Attorney General appearing on behalf of a defendant to oppose the information in relator charity proceedings) regarding the control of the relator proceedings by the Attorney General, that:

"he did not recognise the relator as distinct from the Attorney General; that the suit was the suit of the Attorney General, though at the relation of another person upon whom he relied and who was answerable for costs; and that he could only recognise the counsel for the relator as the counsel for the Attorney General, and could hear them only by his permission; that the suit was so entirely under the control of the Attorney General that he might desire the court to dismiss the information, and that if he stated that he did not sanction any proceeding, it would be instantly stopped."

59. Mr McDonnell drew our attention to the fact that this passage was cited with evident approval by Lord wilberforce in Gouriet v. Union of Post Office workers [1978] AC 435 (H.L.) at p.479 E-F and immediately followed by the comment that:

"The Attorney General (Sir John Campbel 1) referred to Shore v. Wilson, 9 Cl. & F. 355 and apparently maintained his position, but it is certainly clear from Lord Langdale's judgment that, apart from the question of appearance by counsel, the Attorney General and not the relators remains totally in control of the suit.''

60. I would readily accept, as Mr. McDonnell contended, that the authorities so far considered would have provided conclusive support for any move by the Attorney General, had he been so minded, to put an end to the 1977 action brought by the nominees of the tongs who appear to have had no locus standi to bring the proceedings resulting in the consent order and appointment by which the Bank became the co-trustee of the first defendant. Furthermore the present proceedings were not administration proceedings of the same character as were contemplated by Uthwatt J. (as he then was) in the practice note reported in (1945) W.N. 38 where the Attorney General is not universally a necessary party and other parties are permitted, without joining the Attorney as a party, to support the validity of a disposition on the basis that it is charitable: see for example the proceedings at first instance in In re Faraker [1912]2 Ch 488 (C.A.); In re Hummeltenberg [1923] Ch 237 (where Uthwatt J. appeared as counsel for residuary legatees); Gilmour v. Coates (1949] AC 246 (H.L.) and Oppenheim v. Tobacco Securities Trust Co. Ltd. [1951] AC 297 (H.L.) (where the Attorney General's counsel appeared as amicus curiae).

61. The Attorney General was actually a party to the Bank's counterclaim and he had denied charity. The only reported case not involving revenue issues to which we were referred where the Crown, (by the Solicitor General due to there being a vacancy in the office of Attorney General) had opposed charity and been overruled by the court was Wallis v. Solicitor General for New Zealand [1903] AC 173 (P.C.). In that case the Solicitor General did not advance the argument that he had jurisdiction (when executing the duty of the Attorney General in charity matters) to oppose and put an end to proceedings maintained on appeal by the trustees of the relevant property to establish that it was held on charitable trusts.

62. The proceedings took the form of an application for a scheme cy-pres and the primary basis for the Privy Council's judgment delivered by Lord Macnaghten was (see p.186) that the order (in favour of the Crown's contention that the property was not held on charitable trusts) under appeal had not been made on a proper application and in a suit properly constituted, so that "...... the validity of the charitable trust was not in issue in the suit. There could be no issue in that suit between the Crown and the charity."

63. No question of locus standi, as such, in fact arises in this case, certainly as regards the plaintiff's claim against the Bank. The plaintiff had properly joined the Bank as a necessary party because it held the trust property as the co-trustee of the first defendant. I fully accept that, in the absence of any statutory right, the weight of authority already cited is against any party to litigation being entitled to advance a case for charity on behalf of the beneficial interest or objects of the charity (which is exclusively represented by the Attorney General), particularly when the Attorney General has denied that the relevant trusts are charitable.

64. However, it is well settled that a trustee is entitled to contend that property is held on charitable trusts if he is doing so to protect the interest of the trust against a third party. An obvious example is where trustees appeal against an assessment to income tax or stamp duty on the basis that the trusts are charitable. In these cases the Inland Revenue Commissioners in England and the trustee tax payers are the parties. The Attorney General often represents the Commissioners, but he is not a party to the proceedings and is not bound by the decision of the court. It seems to me that the justification for the trustees being permitted to argue in favour of charity in such circumstances must be that. they are seeking to enforce the legitimate interests of the trust against the Commissioners, namely entitlement to statutory exemption from tax or duty.

65. Similarly where the issue, or one of the issues, in vendor and purchaser proceedings is whether or not the vendor is a charity (requiring the consent of the Charity Commissioners to the transaction) the parties have been held to be entitled to have the issue decided as between them in the absence of the Attorney General: see Neville Estate Ltd. v. Madden (1962] Ch. 832 where Cross J. said:

"It was further suggested that the fact that the plaintiffs were arguing that the property in question was not held on a charitable trust made it necessary for the Attorney General to be a party. I do not agree. The plaintiffs are not saying that they are the beneficial owners of the trust property - that it is held on trust for them and not on trust for charity. They are third parties who have entered into a contract with the trustees, and I cannot see why they should not have this question whether or not the trust is charitable decided as between them and the trustees in the absence of the Attorney General, just as the question whether or not a trust is charitable is decided for income tax purposes between the Commissioners of Inland Revenue and the trustees without the Attorney General being a party. Such a decision does not, of course, bind the Attorney General, but that is a different point." (Emphasis supplied)

66. The revenue cases and Neville Estates do not, in my opinion, assist the Bank when faced with a claim by the plaintiff that the property is held on resulting trust for the settlor's estate and not for charitable purposes. The only person entitled to protect those charitable purposes is the Attorney General on behalf of the Crown as parens patriae. But there is another important facet of this case to which my Lord Cons adverted in the early stages of the argument which seems to me to give the court jurisdiction. As he pointed out this is not a case where the Bank is advancing an argument for charity as a plaintiff. The Bank is a defendant in the action. It seeks to raise an argument in support of charity by way of defence to the plaintiff's claim.

67. Furthermore this is not a case in which the plaintiff seeks to have determined whether the trusts constituted by the settlor's Rules are void or charitable or otherwise valid in circumstances where there has been no distribution. The trusts in question have been supposed to exist for over a century and the rents of the trust properties have been distributed (albeit from time to time irregularly) during that period. As far as the Bank is concerned the plaintiff claimed not only declaratory relief against it but also an account of what was due to the settlor's estate. As might be expected, the judge's order made on the 17th October 1988 included a direction for an inquiry as to what had become of the rents and profits of the trust property which had come to the hands of the Bank. The order also included a direction that any sums found due from the Bank upon the account and inquiry be paid into court to the credit of the action.

68. The inquiry into the accounts is already being prosecuted. If the Bank's appeal fails the Bank will undoubtedly have to pay substantial sums to the settlor's estate. On the Bank's own admission, by the affirmation of the Bank's senior clerk filed on the 10th November 1988, the Bank distributed $610,116 to the two tongs in China between the 7th April 1979 (when it first assumed control from the first defendant of the rents payable in respect of the trust property) and the 19th January 1984 when it made the last payments to the two tongs. The cessation of these payments was no doubt due to the fact that no rent was received by the Bank after the last payment of $50,950.60 on the 2nd November 1983.

69. There is also the matter of the remission on the 28th July 1979 of $100,000 to the tongs in respect of costs and expenses incurred in the conduct of the 1977 action. No doubt there will be questions raised regarding the payment of the Bank's principal company's fees and the fees of the first defendant in that action which was stayed under the consent order made on the 31st March 1979 under which no order was made as to costs save that the Attorney General's costs were to be paid by the plaintiffs out of the trust property.

70. On any view the Bank must be liable to pay a substantial sum of money to the plaintiff as administrator pendente lite of the settlor's estate if its appeal is unsuccessful. When the Bank defended the plaintiff's claim in the action it was not, in all the circumstances, merely purporting to assume the mantle of the Crown as parens patriae but seeking to avoid being substantially out of pocket if it were held that it had applied or distributed income of the trust property in breach of trust.

71. When my Lord Cons put the matter in this way to Mr. McDonnell in the course of argument I understood him to accept that the Bank could not be prevented from advancing an argument that the trusts were charitable as a defence to the plaintiff's claim for an account. Mr. McDonnell again indicated at the end of the hearing when dealing with Mr. Chang's cases cited in his reply that he did not challenge the proposition that when a party needs to argue charity to protect his private interest he may do so. Mr. Marshall was somewhat non-committed on this point.

72. For my part, I consider that Mr. Chang was right when he contended that this case should not be equated with one where, as in the Gouriet case, a member of the public seeks to enforce a public right without having any sufficient interest to do so. The nearest reported authority cited to this court which has any bearing on the issue as it arises in the circumstances of this case seems to me to be Chichester Diocesan Fund and Board of Finance (Incorp.) v. Simpson [1944] AC 341 (H.L.) to which I have already referred in my previous judgment. In that case the executors of Caleb Diplock (who were alleged in the Diplock actions to have distributed his residuary estate to charities in breach of trust) had issued an originating summons to determine the validity or otherwise of the trusts of the testator's will relating to residue. By the time the matter reached the House of Lords the executors had dropped out of the proceedings because the claim against them in the Diplock actions had been compromised.

73. This left the charities which had received the residue as the only parties vulnerable to the claims of the plaintiffs in the Diplock actions. When the Simpson case was argued in the House of Lords the appellant was a representative charity whose counsel argued for the validity of the trusts on the basis that they were charitable. The Attorney General was also a party and supported charity. The testator's next of kin were the respondents whose counsel argued successfully against the validity of the trusts.

74. The only judgment to touch on the representation of the parties and interests is that of Lord Simonds who had this to say in the opening passage of his judgment at p.367:

"In the ordinary case it is the Attorney General alone, representing the Crown as parens patriae, who is heard on the question of validity or invalidity of such a bequest as that now under consideration. In the present case the actual distribution of the testator's estate and the pendency of proceedings by the next-of-kin for its recovery, in which this very question of validity would be vital, made it necessary to take the unusual course of adding the appellant institution as a defendant as representative of all the institutions which had received a share of the estate, but this fact is irrelevant to the construction of the will."

75. It seems to me that Lord Simonds was here recognising the right of a party who is alleged to have been paid money in breach of trust to defend himself against a claim for re-payment of the money by contending that the payment was made in execution of a valid charitable trust. Put another way, the charities concerned were regarded as having a sufficient private interest which they were permitted to protect by contending for charity - not on behalf of the public interest which the Attorney General represents exclusively, but on behalf of their own pockets. It is true that the Attorney General did not oppose but also supported charity, but I can see no reason why the representative charity should not have been permitted to protect its private interest by arguing for charity even if the Attorney General had not supported or had opposed it.

76. By analogy, unless prevented by authority from so doing, I would hold that in the present case the Bank was entitled to defend the claim for an account made against it by contending, in protection of its own private interest, that the trust property was held on charitable trusts. This seems to me to be also in accordance with the approach of Pennycuick J. in the Belling case where he considered very carefully whether the plaintiff authority had any interest which it was entitled to protect by contending for charity. I am fortified in this conclusion by what seems to me to be the unjust result of a contrary conclusion because it would involve the Bank being deprived of a possible defence to what amounts to a money claim by the unassailable decision of the Attorney General and not the court.

77. If the Bank was, as I would hold, entitled to plead and argue charity as a defence to the plaintiff's claim, if follows that the court had jurisdiction to determine the issue. It would also follow that the Bank's counterclaim was competent against the plaintiff and the first defendant who was simply joined so that he would be bound by the Court's order. I am inclined to think that it was also competent for the purpose of binding the Attorney General. Be that as it may, it is only necessary on this appeal to determine the question whether or not the court had jurisdiction to determine the charity issue in the face of the Attorney General's denial. For the reasons I have already given I consider that it is possible to give an affirmative answer to the question by reference merely to the plaintiff's claim and the Bank's defence.

78. I add that the judge would have been better advised to re-open the case on this jurisdictional issue rather than taking the course he did of deciding it without hearing counsel further and making his decision toe primary basis for his judgment. The point had not been taken by the plaintiff or the Attorney General. Moreover both the judge and counsel for the Attorney General had made it clear on Day 2 of the trial that they regarded the issue of charity as arguable by the Bank. The plaintiff's counsel made no objection and the trial was conducted on that basis.

79. It was not until Day 30 of the trial that the judge took the point in the course of Mr. Ching's closing submissions. It was understandably not dealt with in any depth by Mr. Ching at that stage and I apprehend that, when the judge did not pursue it, the impression must have been created that it was merely one of the numerous points canvassed but not pursued by the court at the trial. In all the circumstances I venture to think that the judge might have come to a different conclusion if he had re-opened the case on the jurisdictional issue, re-called counsel for the Attorney General and heard full argument on the point.

80. There is an important preliminary matter regarding the effect of the agreed translation of the Rules which it is convenient to deal with at this stage. The judge decided the charity issue after construing the agreed translation of the Rules which I have set out in this judgment without the accompanying columnar literal translation. The agreed translation was agreed by Dr. Baker and Mr. Dicks, the expert witnesses of the plaintiff and the Bank respectively on Day 30 of the trial. The judge when referring at p.251B of his judgment to the two alternative passages in the agreed translation of the Rules (both of which contained the identical phrase "to assist in common welfare in the village") was clearly regarding the agreed translation with its two alternatives as the version of the Rules which he had to construe. When at page 253 A-D he construed the words "to assist in [the] common welfare of the village" (inadvertently inserting the word in square brackets which does not occur in the agreed translation), the judge was manifestly construing the Rules within the four corners of the agreed translation having regard to the surrounding circumstances mentioned by him.

81. No respondent's notice has been filed to contend that the judge's interpretation of "to assist in common welfare of the village" (which the judge held to indicate the settlor's intention "to benefit his clan in the villager, and not the inhabitants of the village as such whoever they might be") could also be supported on the basis that he should have had regard to the evidence of Dr. Baker that the Chinese character "heung", which was translated as "village" in the agreed translation, could be interpreted as referring only to the section of Gut Tai in which the Yips lived, there having been other families in the village with their own ancestral halls.

82. Instead Mr. McDonnell for the plaintiff contended in his written submissions that whilst the court had to construe the agreed translation it could "go behind it to the extent that expert evidence has been given as to the meaning of the original Chinese documents." He then prayed in aid the evidence of Dr. Baker to which I have referred. I am unable to accept this contention. Dr. Baker's evidence about the meaning of "heung" had been given before the agreed translation had been agreed. The evidence was given at a time when, in the absence of agreement, the judge was going to have decide in the light of the expert evidence which translation of the Rules he would accept. In the event Dr. Baker actually agreed the translation of "heung" as village. The fact that "heung" could in Dr. Baker's view be translated in an appropriate context as a section of the village in which the Yip clan lived seems to me to be neither here nor there once Dr. Baker had agreed that "heung" was to be translated as village in the agreed translation.

83. Mr. McDonnell informed the court that the plaintiff refused to agree the agreed translation at the trial unless accompanied by the columnar translation, which referred to "Village (Heung)" in the relevant passage. In his closing submissions on Day 31 Mr. McDonnell reminded the judge about Dr. Baker's evidence and relied on it. However the judge made no finding regarding the possible meanings of "heung" in the Chinese version of the Rules in reliance on Dr. Baker's evidence given before the agreed translation was agreed by Dr. Baker. In my judgment he would have been wrong to do so once the translation had been agreed, albeit with the literal columnar translation attached. In this connection I agree the firm and clear reasons given by Rhind J. in Ng Chi-fong v. Hui Ho Pui-fun [1987] HKLR 462 for refusing to entertain submissions on the subtleties of meaning of Chinese characters as an aid to the construction of an agreed translation of a will written in Chinese characters. At p.482 Rhind J. said:

"Mr. Lai for the nephews and grandnephews, sought to draw my attention to the subtleties of meaning which could be detected by resorting to the original Chinese characters in the text of [the] will. I refused to heed this siren call. There is an agreed English translation of the will, and for better or worse, all parties are bound by it. To have recourse to the original Chinese characters would drive a coach and horses through Hong Kong's long established principles to the effect that the translation alone is to be looked at. (For the relevant Practice Direction, see (1905-08) HKLR 70). There is no scope for any half-way house. If Mr. Lai did not like the translation, it was up to him to challenge it in the conventional way by calling an expert to put forward an alternative translation as a matter of evidence. So long as English remains the language of the court in Hong Kong, vital policy considerations dictate that there should be no undermining of the present rules about translations. Otherwise, unnecessary uncertainties will creep into the administration of the law, and cases will be prolonged while counsel advance their preferred meaning for the Chinese text."

84. Mr. McDonnell made no attempt to resile from the agreed translation of the Rules but contended that his attempt to persuade this court that the judge's construction of "village" as "clan in the village" was in some way supported by an acceptance of Dr. Baker's evidence about the meaning of "heung", was consistent with Rhind J.'s reasoning. I disagree and accept Mr. Chang's argument that once the translation was agreed the court should not have been drawn into arguments based upon the niceties of meaning of Chinese characters but should, (as the judge rightly did), have construed the English words in the agreed translation in the light of the surrounding circumstances. When considering hereafter the judge's interpretation of "to assist in common welfare in the village" I have accordingly disregarded Dr. Baker's evidence on the meaning of "heung", as indeed I consider the judge must have done.

85. Mr. Chang strongly opposed Mr. McDonnell's attempt to rely on Dr. Baker's evidence on this point and made no attempt when presenting the Bank's appeal to rely on the columnar translation. However, when replying to Mr. McDonnell's arguments on the "welfare" issue he sought for the first time to rely, in relation to the expression "welfare" in the agreed translation of the Rules, on the reference to "common benefit" in the columnar translation and in Dr. Baker's evidence given before the translation was agreed. For the reasons I have given in relation to Mr. McDonnell's arguments relating to the meaning of "heung", I would not entertain such submissions. I would hold both parties to the words appearing in the agreed English translation of the Rules, as I consider the judge did.

86. A substantial part of Mr. McDonnell's submissions were directed to supporting the judge's finding that the Rules created purpose trusts of indefinite duration. As I have indicated already, Mr. Chang did not argue in relation to the charity issue that the trusts were not of indefinite duration and in his reply he stressed that his primary submission was that the trusts were purpose trusts. It is in the light of this common ground that I have considered the arguments on the charity issue.

87. Mr. Chang for the Bank contended, in reliance on dicta in the judgment of Helsham J. in Re Stone (Deceased) (1970)91 W.N. 704 (N.S.W.) that where there is a trust for the benefit of a foreign community the test to determine if the trust in charitable is whether the trust is beneficial to that community and not inimical to the English concept of charity. I agree with Mr. McDonnell that this proposition is an over simplification of the relevant passage in the judgment of Helsham J. and does not state the correct test.

88. In Re Stone Helsham J. had to consider the validity of a gift of a share of residue by a testator to the Jewish National Fund of New South Wales absolutely for the general purposes of that institution which was an unincorporated association in New South Wales and a constituent of the federal body known as the Jewish National Fund of Australia and New Zealand. The principal object of the federal body was to raise funds for an Israeli company the principal object of which was to acquire land in Israel for the purpose of settling Jews thereon, it being a cardinal religious duty for Jews to settle in Israel. Helsham J. held inter alia that this was a valid charitable gift, being a trust for a purpose beneficial to the community within the spirit and intendment of the preamble to the Statute of Elizabeth (43 Eliz. 1 c.4) as being beneficial to the community of the State of Israel and not inimical to the general concept of a legal charity as understood by the law of New South Wales.

89. Mr. Chang relied on a passage in Helsham J.'s judgment at pp.717-8 where, having accepted that the proper test to determine whether the trust was charitable was "to see whether the purpose of the trust is beneficial to the foreign community and is not inimical to the general concept of legal charity as understood in our law", Helsham J. went on (at p.717F) to say:

"It seems to me that if one finds in relation to a foreign charity a purpose capable of being performed which will operate in relation to a sufficient number of people in a way that is for the benefit of those people as a community, then if the purpose is directed to the relief of poverty or the advancement of religion or of education or to some other object of a type which if properly characterized in relation to our own community would be regarded as charitable then this will prima facie give the purpose a sufficient element of public benefit to enable it to be stamped with the validity of a charitable trust according to our law. I say prima facie because there may be reasons why a trust would not so be given validity as a charitable trust even if it met the requirements I have thought necessary, and considerations of public policy seem to furnish one such reason; another may lie in the nature of the person in the foreigh country to whom the administration is to be given over. ......... [There may even be reasons for holding valid a foreign charity of a type which might not qualify as a charitable trust here - for example, to support a commercial undertaking in an under-developed country."] [Emphasis and square brackets supplied]

90. After citing Verge v. Somerville [1924] AC 496 (P.C.) Helsham J. observed, in a further passage at p.718D relied upon by Mr. Chang:

"And if the trust is in the present case therefore prima facie a charitable trust by reason of its character viewed by local standards there is nothing to prevent the court from setting the seal of validity upon it from considerations of public policy or otherwise."

91. Whilst I am unable, with respect to Helsham J., to agree with his obiter dictum enclosed in square brackets, I agree with Mr. McDonnell's contention that, properly understood, the passages cited from Helsham J.'s judgment by Mr. Chang, particularly the words emphasised, indicate that Helsham J. was not making the error of holding that any purpose of public benefit which was not inimical to New South Wales would satisfy the necessary requirements of cnarity in the case of a trust for foreign purposes: see the dictum of Lord Simonds in Williams Trustees v. I.R.C. [1947] AC 447 (H.L.) at p.455 (to which I will revert hereafter] emphasing that to be charitable under English law a trust for the benefit of the community within Lord Machaghten's fourth class in Income Tax Commissioners v. Pemsel [1891] AC 531 at p.583 must be beneficial in a way which the law regards as charitable i.e. within the spirit and intendment of the preamble to the Statute of Elizabeth.

92. Helsham J. was clearly applying the same test as he would when determining whether a New South Wales trust was charitable, but doing so on the footing that public benefit was to be considered by reference to the foreign community. The implication is that if the trust in question had not been found to be within the spirit and intendment of the preamble to the Statute of Elizabeth it would not have been held to be charitable.

93. I accept Mr. McDonnell's submission that, as was common ground in Camille and Henry Dreyfus Foundation Inc. v. I.R.C. [1954] Ch. 672 (C.A.) by reference to the meaning of "for charitable purposes" in section 37(1)(b) of the Income Tax Act 1918, subject to considerations of public policy in appropriate cases, the test for determining whether a trust for foreign objects or purposes is charitable is the same as for a local English or Hong Kong trust.

94. As was pointed out in the Dreyfus case by Lord Evershed at p.684 and by Jenkin's L.J. at p.704, cases such as Pemsel and In re Robinson [1931] 2 Ch 122 are inconsistent with the proposition that the ingredient of public benefit must be found in relation to the English (or Hong Kong) community to establish foreign charity. There seems to have been no judicial consideration in the English courts of this question before or since Dreyfus. Mr. McDonnell was content to argue his case on the footing that Helsham J. was right in Re Stone in considering public benefit by reference to the foreign community. For the purposes of this appeal it is not therefore necessary to decide this question, and I have considered the issue of charity on the basis that the public interest which is material is that of the public or a section of the public in China in 1875. I mention, however that Mr. McDonnell reserved the right, should this matter go further, to rely on the judgments of Wallace P. and Holmes J.A. in Re Lowin (deceased) [1967] 2 N.S.W.R. 140 (C.A.) adopting at p.146 a New South Wales public interest test in relation to a foreign charitable trust.

95. There was no challenge to the judge's finding that in the second half of the 15th century Ip Sze-shing (referred to in the Rules as "the First Ancestor SZE SHING") had settled in the village of Gut Tai, that by 1836 the great ancestral hall of the Ip clan had been constructed and that by 1875 an ancestral worshipping fund of Ip Sze-shing known as "The Ip Cheong Kwong Tong" had been constituted. Likewise there was no challenge of the judge's finding, fully in accordance with the evidence of the expert witnesses on both sides regarding lineage tongs in China, that:

"A 'tong' of this character is one the primary object of which is the veneration of ancestors, any surplus income being used to provide welfare benefits for male descendants."

96. Although he heard evidence from experts given on behalf of both the plaintiff and the Bank and heard counsel's submissions on that evidence and on passages in Pak Hang's Collection, the judge made no relevant findings about the character or purposes of the two tongs referred to in the Rules, namely the Tun Sheen Tong and the Tung Yan Sheen Tong. He merely found that the two tongs were in existence in 1875 and that (at p.253 I) if the tongs:

"are unincorporated associations, they are not of that type of unincorporated association the beneficial interest in the property of which is by contract vested in the 'quasi-corporators' for the time being".

There were no findings whether either of the tongs were membership tongs or mere funds.

97. For convenience I will consider the judge's findings regarding the character of the trust to supplement the ancestral worshipping fund (and the welfare trust) without regard to the complication of the alternative versions in the agreed translation. Counsel disagreed about whether the first alternative was really the preferred translation of the experts, but this is not a question which I find it necessary to determine.

98. The judge did not describe the ceremonies associated with the Chinese cult of ancestor worship of which it was common ground that Ip Sze-shing's ancestral worshipping fund and tong (the Ip Cheong Kwong Tong) was typical. Dr. Baker had given an account to the judge of ceremonies he had witnessed when living for about 18 months between 1963 and 1965 in a clan village in the New Territories for the purpose of carrying out field work to obtain material for a book on Chinese family and kinship over the last two decades.

99. In chief he said that in the case of a large clan of 1,000 or more people, 100 to 200 men would attend the ritual which would take place at least twice a year, once in the ancestral hall and once by the graves on the festival days such as Ching Ming. Offerings in the form of food, whole roast pigs, fresh and dried fish and cut meats, fruit etc would be made to the generations of ancestors. When the ancestors had savoured the food the descendants would finish up what was left.

100. Dr. Baker described the presentation of the offerings and the paying of respects to the ancestors as a collective and formal ritual led by the titular heads of the villages concerned and with a master of ceremonies giving instructions and a formal address being read to the ancestors by one of the clan heads. It was a formal ceremony with music and could last for anything up to five hours. Dr. Baker had not come across circumstances where anyone from outside the family (apart from himself who was admitted as a Westerner) would be present or be able to take advantage of the offerings. These were clan affairs and only clan people worshipped.

101. During the course of the hearing of the appeal the expert witnesses of the plaintiff and the Bank agreed a note on certain expressions mentioned in a number of cases decided in the former Straits Settlements. It was agreed in that note inter alia that the "Sin Chew" ceremonies referred to in some of those cases were essentially the same ritual as that described in the expert evidence at the trial as taking place in the Great Ancestral Halls of the Yips at Gut Tai, in the lesser Ancestral Halls of the sub-branches of the family and at the grave of Sze-shing. Evidently the expression "Sin Chew" was used in the Straits Settlements cases in relation to ancestor worship in home as well as in the ancestral hall.

102. A classic description of the Sin Chew ceremonies, closer to the date when the settlor's Rules were made, was given in 1869 by Sir P. Benson Maxwell Chief Justice of Singapore in Choa Choon Neon v. Spottiswoode (1869) Kysne 216. In that case (the report of which appears as Appendix 4 to the Strickland Report) the Chief Justice held that a direction by a testator that the rents and profits of his land should be expended on Sin Chew ceremonies for the commemoration of the memory of the testator and his wives, (which was conceded not to be charitable) was void as being perpetuitous and not a charity. The Chief Justice said of the Sin Chew ceremonies:

"Several Chinese, men of learning, have been examined for the purpose of ascertaining what are the nature and object of this devise, and the substance of their evidence is as follows: The word Sin-Chew is composed of Sin, which means spirit, soul or ghost; and Chew, which means ruler; and the composite word means the spirit ruler or spiritual head of the house. When a man dies, his name, with the dates of his birth and death, is engraved on a tablet; this is enclosed in an outer casing, on which a new name, which is now for the first time given to him, and the names of his children, are engraved. This tablet is kept either in the house of the worshipper, or in that which has been set apart for the Sin-Chew. It is sacred, and can be touched only by the male descendants or nearest male relatives of the deceased, who alone may look upon the name on the enclosed tablet. It is the representation of the deceased. At certain periods, viz., on the anniversary of his death, and once in each of the four seasons, his son or sons, or if he has none, his nearest male relative, but never his daughters or other females, go to the place where the tablet is, and lay on a table in front of it a quantity of food, such as pigs, goats, ducks, fowl, fish, sweetmeats, fruit, tea and arrack. They light joss-sticks, fire crackers, burn small squares of thin brown paper in the centre of each of which is about a square inch of gold or silver tinsel, they bow their hands (sic) three times, kneel, touch the ground with their foreheads, and call on the Sin-Chew by his new name to appear and partake of the food provided for him. The food remains on the table for one or two or even three hours, during 'which time the spirit feeds on its ethereal savour; and to ascertain whether it is satiated or satisfied, two pitis [Chinese coins] or two pieces of bamboo are thrown on the table or on the ground in front of it, and if they both turn up with the same face, the offering is considered insufficient, and more food is laid on the table. After the lapse of a sufficient time to allow the spirit to partake of it, the same test is again resorted to, and so, until the coins or bamboos, by turning up different laces skew that the spirit has had enough. The food is then removed, and eaten or otherwise disposed of by the relatives, but there is no distribution of it in charity or among the poor. Indeed the Chinese have a repugnance to food which had been offered in this way, except when they are members of the family. The papers which are burnt supply the spirit with money and clothing, the gold and silver tinsel turning into precious metal. No prayers are offered to the spirit; the person who makes the offering of food asks for nothing whatever. The primary object of the ceremony is to show respect and reverence to the deceased, to preserve his memory in this world, and to supply his wants in the other. Its performance is agreeable to God, the supreme all-seeing, all-knowing, and invisible being, who assists and prospers those who are regular in this duty; and its neglect entails disgrace on him whose duty it is to perform it, and poverty and starvation on the neglected spirit, which then leaves its abode [either the grave or the house where the tablet rests] and wanders about, an out-cast, begging of the more fortunate spirits, and haunting and tormenting his negligent descendant, and mankind generally. To avert the latter evil, the wealthier Chinese make, in the seventh month, every year, a general public offering, or sacrifice, called Kee-too or Poh-toh for the benefit of all poor spirits."

103. In Yeap Cneah Neo v. Ong Cheng Neo (1875) L.R. 6 P.C. 381 the Privy Council approved Choa's case. Yeap's case was an appeal from the Supreme Court in Penang to the Privy council which held inter alia that a direction by a testator "that a house termed ('Sow Chong') for performing religious ceremonies to my late husband and myself be erected" by her executors, was void as being a devise which was perpetuitous and not charitable. The judgment of the Privy Council, delivered by Sir Montague Smith, dealing with this direction was in the following terms (emphasis supplied) at p.396:

104. In Lau Leung-shi v. Lau Po-tsun (1911)6 HKLR 149 (which the judge applied in the present case) the Full Court in Hong Kong (Pigott C.J. and Gompertz J.] had to consider inter alia the validity of a gift of leasehold property in Hong Kong by a Chinese testator, who was domiciled in China, "for ancestral Sacrificial Fund". It appears from the Chief Justice's judgment at p.153 that there was evidence that the testator:

"..... had his ancestral temple in his native village near Canton, and that after he came to reside in Hong Kong he went there annually for the purpose of ancestral worship."

105. Gompertz J. referred to evidence from which it appeared that the testator:

"......was a native of a village near Honam, canton, where his ancestors' graves were situated and where he himself has been buried by his own request.... He had, at the time of his death, a considerable amount of property in China, and he used to return to that country every year for the purposes of ancestral worship.''

106. Both judges of the Full Court held, applying Freke v. Carbery, that the disposition of leaseholds (which were immovable property) was governed by Hong Kong law and that, whilst the law as to superstitious uses was not applicable in Hong Kong, the rule against perpetuities was in force and rendered the disposition void. It seems from the dicta of both judges at pp.161 and 168 respectively that prior to this case ancestral worship had been treated in the Hong Kong court as coming within the law against superstitious uses, but both judges held that such law did not apply in Hong Kong because they regarded themselves bound by the reasoning of the Privy Council in Yeap's case at p.394 approving the decision of Sir P. Benson Maxwell in Choah's case to the effect that the Chanteries Act 1547 (1 Edw. 6, c.14) did not apply in the Straits Settlements.

107. Both judges seemed to consider it obvious that if the rule against perpetuities was applicable in Hong Kong (as they held to be the case at pp.163 and 167 respectively) it rendered the disposition of leaseholds void. The Chief Justice said at p.156:

108. Mr. McDonnell conceded for the purposes of this appeal that. the purposes of Sze Shing's ancestral worshipping fund (to the extent that they did not relate to the welfare of male descendants of Sze Shing) were religious but contended that. they were not charitable within the spirit and intendment of the preamble to the Statute of Elizabeth because the necessary requirement of public benefit was lacking. Mr. Chang's argument for the Bank was directed to establishing such public benefit. He complained that in simply applying Lau's case the judge had failed to consider the distinction between essentially inwardly looking private and selfish endowments, such as those with which Choah's case (Sin Chew ceremonies for the testator and his wives) and Yeap's case (Sin Chew ceremonies for the testatrix and her husband) were concerned, on the one hand, and on the other hand the traditional lineage ancestral worship by the entire Ip clan of Gut Tai. If this is a sound distinction in relation to the law of charity it would also seem to give a valid ground for criticism of the judgments in the Lau case in Hong Kong which seems to have been concerned with the same type of traditional lineage ancestor worship associated with Chinese villages in Canton during the last century of which the Ip Cheong Kwong Tong was typical.

109. Mr. Chang sought to pray in aid a line of authorities in the former Straits Settlements starting with Yeoh Him v. Yeoh Cheng Kang (1889)4 Kyshe 500 which recognised as charities certain surname associations known as Sehs or tribal Kongsis. None of the Seh cases were cited below. Mr. McDonnell complained that their relevance could not be properly assessed in the absence of expert evidence. However, as I have already mentioned, in the course of the hearing of the appeal the expert witnesses for the plaintiff and the Bank agreed a helpful note on Sehs.

110. The experts agreed that Sehs:

111. This and other material in the note satisfies me that these surname or tribal organisations were distinguishable from the typical village lineage ancestor worshipping tong in China and also clearly distinguishable from the Ip Cheong Kwong Tong which was confined in membership to the male descendants of Ip Sze Shing in the village of Gut Tai. In my judgment the Seh cases, if correctly deciding that the Sehs with which they are concerned are charities, as to which I express no view, can be of no assistance in determining whether the trusts under the settlor's Rules for supplementing Sze Shing's ancestral worshipping fund are charitable.

112. I begin with Yeap's case which held that the performance of the pious duty in the Sin Chew ceremonies for deceased family members (albeit specified deceased persons and their deceased spouses) was not charitable. The basis of that decision was that the performance of the pious duty can lead to no public advantage and can benefit or solace only the family itself. The analogy was drawn with gifts for masses for the repose of the souls of the dead which were, at the time Yeap's case was decided, regarded as void as being for superstitious uses rendered illegal under the Chanteries Act 1547 and as not being charitable: West v. Shuttleworth (1835)2 My. & K 684 and Heath v. Chapman (1854)2 Drew.417. A lot of water has since flowed under the bridge regarding gifts for masses for the dead, but I do not think that the basis for the decision in Yeap's case is affected by anything that was said in the House of Lords in Bourne v. Keane [1919] AC 815 or Gilmour v. Coats [1919] AC 426.

113. In expressing this view I gratefully adopt the statement of the present relevant law by Sir Nicolas Browne-Wilkinson V.C.(whose experience in this branch of law is such as to cause me to accord the most profound respect to his views) in In re Hetherington, decd. [1989] 2 WLR 1094. In that case the Vice Chancellor had to consider the question whether gifts by a testatrix of (1) "£2,000 to the Roman Catholic Church Bishop of westminster for Masses for the repose of the souls of my husband and my parents and my sisters and also myself when I die" and (2) her residue "to the Roman Catholic Church, St. Edward's, Golders Green, for Masses for my soul", established valid charitable trusts.

114. The Vice Chancellor concluded that both gifts established charitable trusts. In the course of his judgment he stated the law in the following passage at p.1100 G-H:

115. As regards the question of benefit to the public generally which was found to be absent in the Yeap case, in Hetherington the Vice Chancellor had earlier in his judgment considered the effect of Gilmour v. Coats on the ratio decidendi of Luxmoore J. in In re Caus [1934] Ch 162 having regard to the reservations expressed concerning that case in Gilmour v. Coats. The Vice Chancellor concluded at p.1100D:

"In my judgment Gilmour v. Coats does not impair the validity of the decision in In re Caus. Certainly the passage from the judgment of Luxmoore J. which I have quoted which suggests that public benefit cat be shown from the mere celebration of a religious rite is no longer good law. The same in my judgment is true of Luxmoore J.'s first ground of decision, if it suggests that the performance in private of a religious ritual act is charitable as being for the public benefit. But in my judgment there is nothing in the House of Lords' decision which impugns Luxmoore J.'s second ground of decision, namely that the public benefit was to be found in the endowment of the priesthood. Therefore the decision in In re Caus is still good law and I must follow it. I do so without reluctance because it accords with my own views on the matter, though the reasoning by which I reach that conclusion is rather different.''

116. It seems to me that in the present case the assumption of public benefit from the performance of the ritual of ancestral worship by clan members in the ancestral hall or halls is rebutted by the fact that the ceremonies are conducted in private by descendants of Ip Sze Shing, to the exclusion of other members of the public who are not permitted to attend and take part in the worship. The public cannot be proved in the legal sense to derive indirect edification from the ceremonies or the example set by the Ip clan of Gut Tai at private worship of their own ancestors. This court is, in my opinion, bound to arrive at this conclusion by Yeap and Gilmour v. Coats.

117. Mr. Chang relied on the weighty authority of Cross J. (as he then was) in the Neville Estates case where, at p.853, he distinguished Gilmour v. Coats in favour of a private congregation of persons of the Jewish faith in Catford on the basis that :

"the members of the Catford Synagogue spend their lives in the world, whereas the members of a Carmelite Priory live secluded from the world."

118. Cross J. began with the assumption of public benefit (which is required to be made in the case of a trust for the advancement of religion) and then seems to have been able to find no basis for rebutting that assumption but, on the contrary, reasons for supporting it. Adverting to Gilmour v. Coats he said at p.853:

"As Lord Greene said in the Court of Appeal [1948] Ch 340, 345; 64 TLR 193; [1948]1 All E.R. 521 C.A.): 'Having regard to the way in which the lives of the members are spent, the benefit is a purely private one.' But the court is, I think, entitled to assume that some benefit accrues to the public from the attendance at places of worship of persons who live in this world and mix with their fellow citizens. As between different religions the law stands neutral, but it assumes that any religion is at least likely to be better than none."

He was troubled by a "self-help" argument based on the analogy of a private association in a district for the education of the children of members, but reminded himself of the danger of reasoning by analogy in this field of the law and drew comfort from the fact that it had never been questioned that trusts affecting dissenting chapels for congregations or societies of dissenters were charitable provided the members for the time being could not put an end to them. He was also influenced by the provisions of section 4 of the Religions Disabilities Act 1846 which applied the same laws as were applicable to Protestant dissenters to persons professing the Jewish faith in respect inter alia of their places of religious worship. He went on to say, before holding the trusts with which he was concerned to be charitable:

119. Mr. McDonnell contended that the reasoning of Cross J. in Neville Estates was inconsistent with Gilmour v. Coats and Hetnerington and suggested that it would have been open to Cross J. to uphold charity in Neville Estates on the basis that the Catford association was a constituent of the united Synagogue or, alternatively, that the association provided worshipping facilities for all persons of the Jewish faith who joined it.

120. For my part I regard Neville Estates as a case rightly decided on its own special circumstances, with particular reference to the legislative treatment of persons of the Jewish faith by the Religious Disabilities Act 1846 and to the fact that Parliament and the Charity Commissioners had assumed when constituting the United Synagogue in 1870 (by a scheme of the Charity Commissioners confirmed by an Act of Parliament: 33 & 34 Vict. c. cxvi) that the four synagogues which became its constituents were charitable bodies. In the present case I can see no special circumstances that justify departing from the application of Yeap and Gilmour v. Coats. Moreover, (apart from the fact that it is not a common or any God which is worshipped but private ancestors) the circumstances are in my opinion more comparable to those pertaining to a gift for a private family chapel for Divine service which was held not to be charitable in Hoare v. Hoare (1886)56 L.T. 147 (cites in Hetherington).

121. Mr. Chang also relied on the fact that the ceremonies of worship which took place at the graves were conducted "in public" at regular intervals of the year on days which were public holidays and which were not fixed by the clan but by a common tradition of all those clans who practised the religion of ancestor worship. He also stressed that the shared beliefs of those who practised ancestor worship was one religion (not a series of separate religions) in which there were a large number of cults. Ancestor worship was, he said an indispensable element in the religious life and social structure of the Chinese. He further maintained that religious observance generally tends to the stability and cohesion of society, representing an additional element of public benefit.

122. As to the grave side ceremonies being performed in public, it seems to me, applying the approach of Lord Reid in Gilmour v. Coats at p.459 cited in Hetherington at p.1101A, that the officious bystander who witnessed such ceremonies being performed by other families or clans cannot be proved to obtain any edification from them because he would not be attending in the sense of participating in them, nor would he or be permitted to participate in the worship of ancestors other than his own.

123. As to the promotion of shared belief in ancestor worship, such worship was encouraged from the 11th century A.D. in China. It was clearly a bulwark in the religious life and social structure of the Chinese, but, as Mr. McDonnell rightly emphasised, this does not mean that it was charitable in the eyes of Hong Kong law (which applies Yeap and Gilmour v. Coats) in the absence of legally provable public benefit. This means that however socially desirable ancestor worship may have been considered in China and however socially desirable it might have been for the rest of the public to have a private group of persons following a religious life in their midst, Hong Kong (and English law would not regard ancestor worship as charitable unless its ceremonies tended, in the words of Sir John Wickens V.C. in Cocks v. Manners (1871) L.R. 12 Eq. 574 at p.585, "directly or indirectly towards the instruction or the edification of the public." I can discern no such public benefit in that sense in the present case.

124. Then it was contended on the Bank's behalf that the public benefit requirement of charity had been satisfied because the Ip clan in Gut Tai in 1875 was an appreciably important class of the community or section of the public for the benefit of which the worshipping trust has been constituted. On this issue Mr. Chang stressed that Sze Shiny had lived in the 15th Century and that the clan was already numerous in 1875. In this connection there was, for understandable reasons', no evidence of the number of the clan living in Gut Tai in 1875. However a witness called by the Bank, Mr. Ip Sau Heung, who was born in 1918, said that when ne was a child there were 1200 people in the village of whom about 850 were Ips.

125. Mr. Chang relied on passages in the judgments of Viscount Simonds and Lord Somervell respectively in I.R.C. v. Baddeley [1955] AC 572 (H.L.) which indicate that the law has developed in such a way that a different degree of public benefit is or may be requisite according to the class of charity under consideration and that a lesser degree of public benefit may suffice in the case of a trust for religious purposes. The passage (to which I refer below) in the judgment of Lord Simonds upon which Mr. Chany relied occurred in the following context. Lord Simonds had held that the trusts in question (which could only nave fallen within Lord Macnaghten's fourth class) were not charitable. He was embarking on consideration of the difficult question (upon which Lords Simonds and Reid differed in the event and none of the other member of the House expressed any view) whether, if, contrary to his view, the trusts would have been charitable if the beneficiaries had been the community at large or a section of the community defined by some geographical limits, they would nevertheless have been excluded from the fourth class because confined to members or potential members of a particular church within a limited geographical area. Lord Simonds said at pp.589-90 (the passage relied upon by Mr. Chang being emphasised):

"The starting point of the argument must be, that this charity (if it be charity) falls within the fourth class in Lord Macnaghten's classification. It must therefore be a trust which is, to use the words of Sir Samuel Romilly in Morice v. Bishop of Durham (1805)10 Ves. 522, 532, of "general public utility," and the question is what these words mean. It is, indeed, an essential feature of all 'charity' in the legal sense that there must be in it some element of public benefit, whether the purpose is educational, religious or eleemosynary: see the recent case of Oppenneim v. Tobacco Securities Trust Co. Ltd. [1951] AC 297; [1951]1. T.L.R. 118, [1951]1 All E.R. 31 and, as I have said elsewhere, it is possible, particularly in view of the so-called 'poor relations' cases," the scope of which may one day nave to be considered, that a different degree of public benefit is requisite according to the class in which the charity is said to fall."

126. I apprehend that Lord Simonds' reference in this passage to what he had said elsewhere was to similar observations made by him in Gilmour v. Coats where he said at p.449:

"But it is I think, conspicuously true of the law of charity that it has been built up not logically but empirically. It would not, therefore, be surprising to find that, while in every category of legal charity some element of public benefit must be present, the court had not. adopted the same measure in regard to different categories, but had accepted one standard in regard to those gifts which ate alleged to be for the advancement of education and another for those which are alleged to be for the advancement of religion, and it may be yet another in regard to the relief of poverty."

127. The passage in Lord Somervell's judgment in Baddeley relied upon by Mr. Chang occurred after Lord Somerville had held that the trust in question was not "for the public" because it did not satisfy his test that to be charitable a trust under Lord Macnaghten's fourth head would normally have to ''.... be for the public or all members of the public who needed the help or facilities which the trust was to provide." It was in this context that Lord Somerville made the following observations at p.615 upon which Mr. Chang relied:

"I cannot accept the principle submitted by the respondents that a section of the public sufficient to support a valid trust in one category must as a matter of law be sufficient to support a trust in any other category. I think that difficulties are apt to arise if one seeks to consider the class apart from the particular nature of the charitable purpose. They are in my opinion, interdependent. There might well be a valid trust for the promotion of religion benefiting a very small class. It would not at all follow that a recreation ground. for the exclusive use of the same class would be a valid charity, though it is clear from the Mortmain and charitable uses Act, 1888, that a recreation ground for the public is a charitable purpose."

128. Given that (as Cross J. indicated in Neville Estates at p.854 in relation to societies of Protestant dissenters) a religious trust conferring benefit on a small body of persons practising their religion in public may be held to be charitable as meeting the condition of public benefit, it seems to me that in the present case where, for the reasons, I have already given, ancestor worship has not been proved to confer any benefit (in the sense contemplated by Yeap and Gilmour v. Coats) on the public, so that the trust for ancestral worship can only be charitable if it benefits a section of the public, the ultimate question must be whether the character of the trust is private or public.

129. This leads to the further question whether, in determining whether the trust for ancestral worship is charitable or otherwise, this court should apply the rule in In re Compton [1945]Ch 123 which was approved in Oppenheim v. Tobacco Securities Trust Co. Ltd. [1951]AC 297 (H.L.), to the effect that even where a group of persons is numerous, if the nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes.

130. Compon and Oppenheim were concerned with trusts for the advancement of education, not religion. However the Compton rule was not stated by the majority in Oppenheim or understood in the subsequent cases of Davies v. Perpetual Trustee Company (Limited) [1959]AC 439 (P.C.) and Dingle v. Turner [1972]AC 601 (H.L.) (per Lord Cross at p.620H) to be confined to educational trusts. It seems to me that we are bound by Davies, a decision of the Privy Council, to apply the rule. In that case the Board (whose members included Lord Simonds and Lord Morton who had been parties to the majority decision in Oppenheim) was concerned with a reversionary devise of property in Sydney "to the Presbyterians the descendants of those settled in the Colony hailing from or born in the North of Ireland to be held in trust for the purpose of establishing a college for the education and tuition of their youth in the standards of the Westminster Divines as taught in the Holy Scriptures".

131. These trusts had been held to be charitable by the Full court of the Supreme Court of New South Wales on an originating summons issued in 1918. Forty years later, when the last life interest fell in, the Privy Council gave special leave to a representative of the next of kin of the testator to appeal against the Full Court's decision.

132. It appears from p.454 of the judgment of the Board delivered by Lord Morton that they regarded the trusts in question as being prima facie charitable as being concerned with both education and with the advancement of a particular religious faith. The Board only found it necessary to cite passages from the judgment of Lord Wrenbury in Verge v. Somerville [1924]AC 496 at p.499 and from the judgments of Lords Simonds and Normand in Oppenheim. As to the latter case Lord Morton said at pp.454-6:

"In Oppenheim Tobacco Securities Trust Co. Ltd. [1951]AC 297, 305; [1951]1 T.L.R. 118; [1951]1 All ER 31 Lord Simonds said: 'It is a clearly established principle of the law of charity that a trust is not charitable unless it is directed to the public benefit. This is sometimes stated in the proposition that it must benefit the community or a section of the community... With a single exception, to which I shall refer, this applies to all charities. We are apt now to classify them by reference to Lord Macnaghten's division in Income Tax Commissioners v. Pemsel [1891]A.C. 531, and as I have elsewhere pointed out, it was at one time suggested that the element of public benefit was not essential except for charities falling within the fourth class 'other purposes beneficial to the community.' This is certainly wrong except in the anomalous case of trusts for the relief of poverty with which I must specifically deal. In the case of trusts for educational purposes the condition of public benefit must be satisfied. The difficulty lies in determining what is sufficient to satisfy the test, and there is little to help your Lordships to solve it'. No question of the relief of poverty arises in the present case. Lord Simonds later observed [1951]AC 306: 'A group of persons may be numerous but, if the nexus between them is their personal relationship to a single propositus or to several prospositi, they are neither the community nor a section of the community for charitable purposes'; and later he added: (Ibid. 307) 'It must not, I think, be forgotten that charitable institutions enjoy rare and increasing privileges, and that the claim to come within that privileged class should be clearly established.' Lord Normand said (Ibid. 309) : 'No general rule has yet been formulated by which to distinguish trusts which have this essential element of public benefit and those which have not, and the valiant attempts of counsel to arrive at a rule have failed to convince me. I am, however, satisfied that the element of the public benefit must be found in the definition of the class of persons selected by the truster as the objects of his bounty. That seems to me to follow from the principle that the trust purpose must be directed to the benefit of the community or a section of the community. (Tudor on Charities, 5th ed., p.11, approved by Lord Greene M.K. in In re Compton [1945]Ch 123, 128, 61 T.L.R. 167;[1945] 1 ALLER 198) The truster may have selected a class of persons which forms an aggregate that is not a section of the community, and if he has done that the trust will fail for perpetuity. All depends on the attribute by which the selection of the class is determined.'"

133. The actual decision of the Board was expressed in the following terms at p.456:

"Their Lordships find it unnecessary to refer to any other authorities. The principles thus laid down must be applied to the facts of each particular case, and their Lordships have not found it easy to decide on ;which side of the line falls the trust which the testator desired to establish. They will assume that the college to be established was intended to provide a general education and not only to give education in the standards of the Westminster Divines. Even so, they are unable to hold the objects of the trust are either the community or a section of the community. They clearly are not 'the community', for the testator has been at pains to impose particular and somewhat capricious qualifications upon the persons who are to benefit from this education. Nor can these persons, in their Lordships' opinion, be 'a section of the community' in the sense in which these words have been interpreted in the authorities. The facts which must be proved by any boy who claims to come within the class of beneficiaries have already been stated, and it is clear that the nexus between the beneficiaries is simply 'their personal relationship to several propositi, namely, certain persons living at the death of the testator. And these persons are not themselves, in their Lordships' view, a section of the community. They are certain Presbyterians who can establish a particular  descent. Moreover, the qualifications which a boy must possess in order to benefit are in some respects wholly irrelevant to the educational object which the testator had in mind. It cannot be said that boys whose Presbyterian ancestors (living on January 21, 1897) trace their descent from emigrants from, Northern Ireland are in greater need of education in the standards of the Westminster Divines than other boys whose Presbyterian ancestors (living as aforesaid) are descended from emigrants from. e.g., England or Scotland. In their Lordships' opinion the qualifications laid down by the testator have the result of making beneficiaries under the trust nothing more than 'a fluctuating body of private individuals,' and the gift must fail because the element of public benefit is lacking."

134. Applying the same principles as were applied in Compton, Oppenheim and Davies it seems to me inescapable that a trust for the benefit of the male descendants of Ip Sze Shing, who are the persons who conduct the relevant ancestral worship of Ip Sze Shiny and their more immediate ancestors, falls squarely within the "single propositus" test which makes the requirement of common relationship to Sze Shing an attribute for selection of the class which renders the trusts private and non-charitable.

135. Mr. Chang relied on the important decision of the House of Lords in Dingle v. Turner where the impact of Compton and Oppenheim was considered on trusts of income for "paying pensions to poor employees of" a company jointly owned by the testator. The company carried on the business of a departmental store. At the time of the testator's death it employed over 600 persons and there were a substantial number of ex-employees. The House of Lords upheld the decision of Megarry J. that these were valid charitable trusts.

136. In the judgment of Lord Cross, with which all the other members of the House hearing the appeal (including Lord MacDermott who had dissented in Oppenheim) concurred (save as td Lord Cross's observations about the relevance of the fiscal privileges of legal charity with which only Lord Simon concurred), the House of Lords upheld the trust in question as a trust for the relief of poverty. Mr. Browne-Wilkinson (as he then was), appearing for the Attorney General, had mounted a powerful attack on the Compton test, contending inter alia that it was anomalous and should not be extended to classes of case other than educational trusts.

137. Lord Cross reviewed all the relevant cases but did not find it necessary to determine the ambit of the Compton rule. He would, he said at p.622 E-F:

"....assume that the appellant is right in saying that the Compton rule [1945] Ch. 123 ought in principle to apply to all charitable trusts and that the 'poor relations' cases, the 'poor members' cases and the 'poor employees' cases are all anomalous - in the sense that if such cases had come before the courts for the first time after the decision in In re Compton [1945] Ch.123 the trusts in question would have been held invalid as 'private' trusts."

138. Having concluded that the trusts in question were charitable for the reasons he gave Lord Cross commented at p.623C:

"So as it seems to me it must be accepted that wherever else it may hold sway the Compton rule has no application in the field of trusts for the relief of poverty and that there the dividing line between a charitable trust and a private trust lies where the Court of Appeal drew it in In re Scarisbrick's Will Trusts [1951] Ch. 622."

139. The remainder of Lord Cross's judgment contains dicta concerning the Compton rule which, although obiter and not therefore binding on this court, gives a warning at p.623 C-D that all the members of the House who heard the appeal in the Dingle case considered that it would be open to the House of Lords, without overruling Oppenheim, to curtail the scope of the application of the Compton rule. In the following passage of his judgment at p.623D-624D Lord Cross indicated their preference for the dissenting view of Lord MacDermott in Oppenheim (emphasis supplied) :

"If ever I should be called upon to pronounce on this question - which does not arise in this appeal - I would as at present advised be inclined to drag a distinction between the practical merits of the Compton rule and the reasoning by which Lord Greene M.R. sought to justify it. That reasoning - bases on the distinction between personal and impersonal relationships - has never seemed to me Very satisfactory and I nave always - if I may say so - felt the force of the criticism to which my noble and learned friend Lord MacDermott subjected it in his dissenting speech in Oppenheim. For my part I would prefer to approach the problem on far broader lines. The phrase a 'section of the public' is in truth a vague phrase which may mean different things to different people. In the law of charity judges have sought to elucidate its meaning by contrasting it with another phrase: 'a fluctuating body of private individuals.' But I get little help from the supposed contrast for as I see it one and the same aggregate of persons may well be describable both as a section of the public and as a fluctuating body of private individuals. The ratepayers of the Royal Borough of Kensington and Chelsea, for example, certainly constitute a section of the public; but would it be a misuse of language to describe them as a 'fluctuating body of private individuals'? After all, every part of the public is composed of individuals and being susceptible of increase or decrease is fluctuating. So at the end of the day one is left where one started with the bare contrast between public and 'private'. No doubt some classes are more naturally describable as sections of the public than as private classes while other classes are more naturally describable as private classes than as sections of the public. The blind, for example, can naturally be described as a section of the public; but. what they nave in common - their blindness - does not join them together in such a way that they could be called a private class. On the other hand, the descendants of Mr. Gladstone might more reasonably be described as a 'private class' than as a section of the public and in the field of common employment the same might well be said of the employees in some fairly small firm. But if one turns to large companies employing many thousands of men and women most of whom are quite unknown to one another and to the directors the answer is by no means so clear. One might say that in a such a case the distinction between a section of the public and a private class is not applicable at all or even that the employees in such concerns as I.C.I. or G.E.C. are just as much 'sections of the public' as the residents in some geographical area. In truth the question whether or not the potential beneficiaries of a trust. can fairly be said to constitute a section of the public is a question of degree and cannot be by itself decisive of the question whether the trust is a charity. Much must depend on the purpose of the trust. It may well be that, on the one hand, a trust to promote some purpose, prima facie charitable, will constitute a charity even though the class of potential beneficiaries might fairly be called a private class and that, on the other hand, a trust to promote another purpose, also prima facie charitable, will not constitute a charity even though the class of potential beneficiaries might seem to some people fairly describable as a section of the public."

140. For my part, I consider this court to be bound by Davies and Oppenheim to hold that the Compton test is applicable in the present case. Applying that test, as I have already indicated, I would hold that tile trust in question is private and not charitable. If and to the extent that it might hereafter be held by higher authority that this court should not apply the Compton test in the present situation but should regard the distinction between a public and a private trust as one ultimately of degree in all the circumstances, as indicated by Lord Cross in the Dingle case and by Lord MacDermott in Oppenheim at p.314, I would arrive at the same conclusion.

141. It seems to me that a trust to supplement an ancestral worshipping fund in the village of Gut Tai, albeit related to a 15th century founder of the village and his male descendants must be regarded as a private trust for an enlarged family or clan and the spiritual and temporal welfare of that enlarged family. The Ips of Gut Tai were not a clan which permitted outsiders to join for purposes of ancestor worship, nor was there any evidence that any other clan in China would permit such a thing. There was no evidence that their numbers were very substantial in 1875. Mr. Gladstone has been dead for a much shorter period than Ip Sze Shing and his line may not have been as prolific as that of Ip Sze Shing, but Lord Cross's reference to a trust for the descendants of Mr. Gladstone as being private seems to me to be in point. Furthermore, there is, I think, a clear distinction between an enlarged family or clan in a village in China and the many thousands of employees of a vast commercial conglomerate.

142. Mr. Chang relied on the words which I have emphasised above in the judgment of Lord Cross, but when considered in the light of the next ensuing words in that judgment it becomes clear, in my opinion, that Lord Cross was not meaning to say any more than was said by Lord Somervell in Baddeley in the passage at p.615 upon which Mr. Chang also relied and which I cited earlier.

143. In so far as any excess income not applied towards ancestor worship under this trust would be applied to provide welfare benefits for male descendants of Ip Sze Shing (as the expert witnesses indicated it might) and is not to be regarded, as Mr. Chang argued, as applied for purposes incidental to ancestor worship, the trust must also fail because it is a private trust. For the reasons given hereafter in relation to the common welfare trust, this welfare purpose itself must also fail as being too wide to be charitable under Lord Macnaghten's fourth head.

144. The judge would have held this trust to be charitable if he had considered that the settlor actually meant what the expert witnesses agreed was the English translation of what the settlor had said in the relevant part of the Rules. However he construed the relevant words "to assist in common welfare in the village" in their context as being intended to benefit the settlor's clan in the village and not the inhabitants of the village generally. The judge then applied the Compton rule and held the trust to be non-charitable.

145. For the Bank Mr. Chang has contended that the restricted meaning which the judge gave to "common welfare in the village" was not justified by the textual context in which those words occurred or by such facts as the judge identified at p.253B of his judgment as the factual context in which the Rules were made by the settlor. Notwithstanding the strenuous arguments to the contrary by Mr. McDonnell, I agree that there were no sufficient grounds for restricting the meaning of the plain words which appear in the translation of the Rules agreed by the experts as the correct translation of the Chinese characters used by the settlor.

146. As to the textual context of the relevant words it seems to me to be nightly material that the settlor has in different places in the Rules used the expression "the Clan" (e.g. the reference to the trust property as being "separate from the common property purchased by the Clan itself") and "the village" (when declaring what has been regarded in these proceedings as the relevant trusts). Furthermore he has, where he considers it appropriate, combined the two expressions, using the phrase "Clan in the village" when he gives his reasons for making the Rules which include his fear that "....the descendants of the clan in the village should multiply and be ignorant of the origins of the two Tongs...."

147. The judge regarded what he called the settlor's "exhortation to 'the descendants of the clan in the village'" as a factor to support the restrictive interpretation of "village" which he adopted. But these exhortations seem to me to be equally indicative merely of his wish to ensure that the clan, whose members the settlor had directed to be responsible for the management of the trust property, would "respect and observe" the Rules in the immediate and remote future.

148. The judge found it to be significant that the Rules provided that the managers were to be elected by and from members of the clan, but I agree with Mr. Chang that the fact that the management of the trust was confined to members of the clan does not by itself mean that the benefit of the trust was intended to be so restricted.

149. There is also force in Mr. Chang's reliance on the fact that (on both alternative versions of the Rules) the settlor has identified two purposes when declaring what are being accepted in these proceedings as the trusts affecting the trust property. One purpose is expressed to relate to the benefit of the ancestral worshipping fund of Sze Shing. This purpose can only be understood to be intended to benefit the clan and not a wider interest. On the other hand the second and different purpose is defined in more general terms by reference to "common welfare in the village" and is not declared by reference to the clan.

150. There being in my opinion nothing in the textual context of the Rules to justify the restrictive interpretation adopted by the judge, it is necessary to consider what factual circumstances the judge relied upon. He referred to the fact that in 1875 Gut Tai was a clan village which had been settled by the Ip clan, to the existence of the grand ancestral hall of the clan, to the existence of the Ip Cheong Kwong Tong and of the Tung Sheen Tong and Tung Yan Sheen Tong. He had earlier, when making his findings of fact, specified the lineage orientated purposes of the Ip Cheong Kong Tong.

151. There was no finding that the inhabitants of the village in 1875 were confined to the Ip Clan. It was common ground that by then there were also other clans living in the village and that at least the Tsangs and the Ku's were sufficiently numerous to have their own ancestral halls (the Tsang Ka Chi and the Ku Ka Chi shown on the sketch plan of the village and in the exhibited photographs). There was no finding regarding the membership (if any) or the purposes of the Tun Sheen Tong or the Tung Yan Sheen Tong themselves. Mr. Chang accepted that they were both lineage tongs but that is not in itself a decisive factor in the interpretation of the Rules.

152. Leading counsel on each side spent some time taking us through the expert evidence and various learned publications on Chinese custom in order to persuade us to resolve issues concerning the character of the Sheen tongs which the judge had left unresolved in his findings of fact and had not relied upon when interpreting the Rules. The Bank had produced Pak Hang's Collection and adduced a substantial volume of evidence from clansmen concerning the activities of the tongs from the early 1900's onwards, but the judge had not mentioned this evidence in his judgment and indicated, rightly, in his subsequent judgment on costs on the 17th October 1988, that he regarded it as  irrelevant. We were nevertheless taken through all this on appeal.

153. For my part I do not consider it is the proper function of an appellate court to take it upon itself to resolve issues which have arisen between expert witnesses on Chinese law and custom at the trial and have been left unresolved by the judge and left out of consideration when interpreting the Rules. Such issues are after all issues of fact.

154. For understandable reasons neither the plaintiff nor the Bank sought a re-trial for the determination of these issues. I would leave them well alone on appeal, particularly as the procedure adopted at the trial regarding expert witnesses was most unsatisfactory. There appears to have been no exchange of expert witnesses' proofs before trial, although the order made on the 19th April 1985 on the summons for directions had given leave to each party to call two expert witnesses. It appears from  the transcript of the proceedings (Day 12 p.39 F-G) that within two months of the trial Dr. Baker. one of the plaintiff's expert witnesses, had not even heard of the case. Furthermore it was not until the 22nd day of the trial (Day 22 p.19E) that a proof of the Bank's expert witness, Mr. Dicks, became available. By then the plaintiff's expert witnesses, Dr. Baker and Dr. Henry Hu, had already given evidence.

155. There was a real issue. very much in point on the question of interpretation of the Rules raised by Mr. Dicks' evidence as to whether the Tun Yan Sheen Tong, although lineage based, was constituted for purposes of. general welfare or benevolence or confined to such purposes for the benefit of the clan only. Mr. Dicks is an expert of considerable standing in the Hong Kong courts. He relied inter alia on the meaning of the Chinese cnaracters in the name of this tong to support his opinion in favour of the tong being a benevolent endowment not limited to clan purposes.

156. The opinion of Mr. Dicks on this point was in conflict with the earlier evidence of Dr. Baker to the effect that whilst clan endowments sometimes provided for needy outsiders, this was only where there were funds surplus to clan requirements, and the clan itself was always subject to the overriding priority of clan worshipping expenses. Learned articles, by Miss Handlin Smith on Benevolent Societies during the Late Ming and Early Ching dynasties and by Miss Hsien Chin Hu on the Common Descent Group in China and its Functions contained no reference to lineage based general benevolent organisations. There was also evidence, for what it was worth, that the 1921 edition of the County Annals of the Chung Shah County, where Gut Tai was situate, contained a register of benevolent endowments not limited to clans but did not include the Tun Yan Sheen Tong or the settlor's endowment under the Rules.

157. However Mr. Dicks nevertheless maintained his opinion. Under cross-examination (Day 27 pp.28-9) concerning the Po Wei Sheen Tong (a tong registered in the County Annals whose purposes had been extended from its original clan purposes to all people living in the village) he referred to a book by Dr. James Hayes, written long before Miss Handlin Smith's Article, concerning a Sheen Tong in Kowloon which was founded by a clan (which presented a hall) and then subscribed to by merchants in the vicinity of Kowloon Walled City. He added:

"So it seems that there are many different ways in which these endowments could be accumulated. But that is a case where the clan started by donating the hall, according to the tradition in the locality and the rest of the endowment was provided by others."

158. The judge never made a decision on this issue. He could not and did not therefore construe the Rules otherwise than in conjunction with the facts actually mentioned by him in his judgment. In my opinion those facts were insufficient to justify the restrictive interpretation which he put upon the plain words "to assist in common welfare in the village".

            (ii) The validity of the welfare trust

159. The appeal was initially presented on behalf of the Bank on the footing that the judge had misconstrued the Rules when interpreting "village" as "clan in the village" instead of giving "village" its ordinary meaning, and that even if the construction put upon the Rules by the judge had been correct, he was wrong to apply the Compton rule. It was left to the plaintiff (who had raised the point in his respondent's notice), to attack the dictum of the judge, delivered after his citation of Goodman v. Mayor of Saltash (1882)7 App. Cas. 633, that:

"If a gift for the benefit of a village is charitable (as it is) I am not prepared to hold that a gift for the welfare of a village is not."

160. In his reply to Mr. McDonnell's formidable argument that the trust to apply the rents of any of the trust properties "to assist in common welfare in the village" was not limited to charitable purposes and therefore void, Mr. Chang assembled written submissions dealing at length with the cases where locality trusts were held to be valid because there was no particular purpose actually defined in the trusts and a charitable purpose was implied. He then went on to contend that the welfare trust in the present case should be so interpreted as to fall into the category of locality trusts.

161. However, the correct judicial approach has always been to construe the trust instrument first and then apply the law to it when construed. I accept that, if possible, the courts will always tend to interpret an instrument so as to preserve its validity and that, as Lord Hailsham L.C. observed in I.R.C. v. McMullen [1981] A.C.1 (H.L.) at p.14F, a benignant construction will be adopted if possible where the intention was to set up a charitable trust and where it can be claimed that there is an ambiguity. However in Hadaway v. Hadaway [1955]1 W.L.R.16 (P.C.) at p.19 Lord Simonds observed:

"Their Lordships do not dissent from the general proposition, which has been stated in various terms, to the effect that, where possible, a benignant construction in favour of charity should be adopted. But this does not justify the insertion of words in order to restrict the plain meaning of an expression and thus give validity to an otherwise invalid bequest. If there is a real ambiguity, it may be resolved in favour of charity: where there is no ambiguity, no question arises: the plain meaning of the words must be accepted and so must the ensuing legal effect."

162. In the present case I see no ambiguity in the wording of the trust as translated into English the agreed translation. "Welfare" seems to me to connote well being in relation to persons, and "common welfare" to connote community or public well being. I respectfully adopt what was said by Loru Oliver in Attorney General of the Bahamas v. Royal Trust Co. [1986]1 W.L.R. 1001 (P.C.) regarding the meaning of "welfare" when used in connection with a class of children and young people. At p.1005 he said:

"But 'welfare' is a word of the widest import and when used in connection with a class of 'children and young people' generally is capable of embracing almost anything which would lead to the enhancement of the quality of life of any member of the class."

In my opinion there can be no doubt that assisting in the common welfare in the village of Gut Tai in 1875 involved anything which would lead to the enhancement of the quality of life of the village community.

163. Mr. Chang contended that the expressions "common welfare" and "common benefit" were interchangeable and that it could not be plausibly argued that "welfare" was a word of less generality than "benefit". I cannot agree. "Welfare" is a very wide word, but "benefit" is even wider and more unrestricted. There is a readily identifiable degree of particularity about "common welfare" because it connotes (albeit in wide terms) an aspect of benefit, namely the well being or quality of life of the community. If and so far as Mr. Chang was contending that "common benefit" and "common welfare" had the same meaning in their context in the Rules, it seems to me that "common benefit" must in that context have the same meaning not extending beyond the meaning of "common welfare". The argument is therefore self defeating.

164. The understandable objective of these arguments of Mr. Chang was to endeavour to persuade the court to construe the words creating the trust in question in such a way as to bring it within the valid locality trusts cases. He went so far as to contend in his written submissions that a trust for "common welfare in the village" could not "be differentiated from a trust for the village, or for the inhabitants of the village, or for the benefit of the village." For the reasons I have already given regarding the meaning of "common welfare" I cannot accept this submission. It seems to me that there is a sufficient degree of particularity and definition of purpose in a trust "to assist in common welfare of the village" to distinguish it from a trust expressed to be simply for the village or for the benefit of the inhabitants of the village or for the benefit of the village. It was after all the primary argument of Mr. Chang by the end of the hearing of the appeal that the Rules declared purpose trusts i.e. endowments made to the tongs for specified purposes.

165. There was no suggestion that the trusts in question were confined to the relief of poverty in the village. It was not contended that the inhabitants of Gut Tai were not a section of the public to satisfy the public benefit requirement of charity. The argument on behalf of the plaintiff was that the purposes of this trust were too wide to be exclusively charitable within the spirit and intendment of the preamble to the statute of Elizabeth. I agree. The ambit of common welfare is so wide that it would, for instance, permit the application of the rents of the relevant trust properties, without breach of trust, in defraying the costs of regular banquets for the inhabitants of the village, both rich and poor alike, or the establishment and management of social clubs for the benefit of all or sections of the village community. Such purposes would clearly be beneficial to a section of the community, but they would equally clearly not be charitable because they would not be exclusively within the spirit and intendment of the preamble to the statute of Elizabeth and therefore not beneficial in a way which the law regards as charitable.

166. This seems to me to be fundamental and not to require the support of extensive citation of authority. It is all really covered by the statements of principle by Lord Simonds in Williams Trustees v. I. R.C. [1947] A.C. 447 (H.L.) where a trust for promoting the interests of Welsh people in London by social intercourse and other means was held too wide to be charitable. At p.455 Lord Simonds said:

"My Lords. there are, I think, two propositions which must ever be borne in mind in any case in which the question is whether a trust is charitable. The first is that it is still the general law that a trust is not charitable and entitled to the privileges which charity confers, unless it is within the spirit and intendment of the preamble to the statute of Elizabeth (43 Eliz. c.4), which is expressly preserved by s.I3, sub-s.3 of the Mortmain and charitable Uses Act, 1888. The second is that the classification of charity in its legal sense into four principal divisions by Lord Macnaghten in Income Tax Commissioners v. Pemsel ([1891] A.C. 531, 583) must always be read subject to the qualification appearing in the judgment of Lindley L.J. in In Re Macduff ([1896] 2 Ch. 451, 466): 'Now Sir Samuel Romilly did not mean, and I am certain Lord Macnaghten did not mean, to say that every object of public general utility must necessarily be a charity. Some may be, and some may not be.' This observation has been expanded by Lord Cave L.C. in this House in these words: 'Lord Macnaghten did not mean that all trusts for purposes beneficial to the community are charitable, but that there were certain beneficial trusts which fell within that category; and accordingly to argue that because a trust is for a purpose beneficial to the community it is therefore a charitable trust is to turn round his sentence and to give it a different meaning. So here it is not enough to say that the trust in question is for public purposes beneficial to the community or for the public Welfare; you must also show it to be a charitable trust. See Attorney General v. National Provincial & Union Bank of England ([1924]AC 262, 265)'. But it is just because the purpose of the trust deed in this case is said to be beneficial to the community or a section of the community and for no other reason that its charitable character is asserted. It is not alleged that the trust is (a) for the benefit of the community and (b) beneficial in a way which the law regards as charitable. Therefore, as it seems to me, in its mere statement the claim is imperfect and must fail."

167. Lord Simonds went on to cite in support of these principles the decisions of the House of Lords and Privy Council in Houston v. Burns [1918]AC 337 (H.L.); Dunne v. Byrne [1912]AC 407 (P.C.); and Farley v. Westminster Bank [1939] AC 430 (H.L.) which have all been cited with other authorities to the same effect, by Mr. McDonnell. Lord Simonds had to consider the impact of the decision of the House of Lords in Williams on two lines of authorities which had been relied upon by the appellants in that case. At the conclusion of his judgment at p.459-60 Lord Simonds observed in relation to those cases:

"My Lords, it would not be right for me in a case which raises in such a general form the broad question of charitable trusts to ignore a line of authorities relied on by the appellants. More accurately, I think, there are two lines of authorities which are apt to converge and cross each other. There is, first the class of case of which In re Smith ([1932]1 Ch. 153) is typical. In that case the testator gave his residuary estate 'unto my country England to and for - own use and benefit absolutely' (sic). This was held to be a good charitable trust. Here no particular purpose or benefit was defined. Secondly, there is the class of case of which Goodman v. Saltash Corporation ((1882) 7 App. Cas.633) may be regarded as the prototype. There Lord Selborne L.C. used the words cited so often in the reports (Ibid. 642). 'A gift subject to a condition or trust for the benefit of the inhabitants of a parish or town, or of any particular class of such innabitants, is (as I understand the law) a charitable trust.' In the one class of case there is no particularity of benefit and the Widest range of beneficiary, in the other the beneficiaries are localized and the nature of the benefit defined. How are these cases to be reconciled with the decisions of this House to which I earlier referred? In Tudor on Charities, 5th ed., p.45, it is said: 'It is hard to avoid the conclusion that the foregoing cases, which establish that gifts for the benefit of particular districts are charitable, are anomalous. They cannot be related to the statute of Elizabeth, and they logically involve the proposition that purposes which are not charitable in the world at large are charitable if their operation is confined to a specified locality, for public or benevolent purposes, are not charitable; while there is nothing to prevent the trustees of a fund given for the benefit of a parish from spending it upon public or benevolent purposes. and yet the gift of such a fund is charitable. Nevertheless, a gift for public purposes in a particular parish is not charitable.' Your Lordships may think that this sounds like a cry of despair, and, in truth, there is some ground for it. But I would suggest that it is possible to justify as charitable a gift to by country England' upon the ground that, where no purpose is defined, a charitable purpose is implicit in the context; it is at least not excluded by the express prescription of 'public' purposes. Where the gift is localized but the nature of the benefit is defined, no reconciliation is possible except on the assumption that the particular purpose was in each case regarded as falling within the spirit and intendment of the preamble to the statute of Elizabeth, though I find it difficult to ascribe this quality to the benefit taken by the freemen of Saltash. If this affords no solution of the problem, I can only invite your Lordships to maintain the principles which have consistently been asserted in this House over the last fifty years in this difficult and intricate branch of the law. I would dismiss this appeal."

168. It seems to me that the trust we now have to consider is one where, in the words of Lord Simonds cited above, ".... the beneficiaries are localized and the nature of the benefit defined. The gift is therefore in the same class factually as Goodman v. Saltash Corporation where the rights of the appellants to extract oysters from a tidal river bed were presumed in terms referable to their actual immemorial usage. However, by virtue of the above cited reasoning of the House of Lords expressed by Lord Simonds in Williams, the ratio decidendi of the decision in the Saltash case (as distinct from the dictum of Lord Selborne cited by Lord Simonds above) must be taken to have been modified. The modification is to the extent of assuming that the particular purpose of the trust or condition of oyster fishery for the benefit of the appellants and others, to which the presumed grant to the corporation was held to be subject, was assumed (albeit somewhat strangely in the view of Lord Simonds) to fall within the spirit and intendment of the preamble to the statute of Elizabeth: see the comment to this effect by Lord Reid in Baddeley at pp.609-10.

169. In practical terms the law is now as stated in Tudor on Charities, 7th edition at pp. 112-3 in the following passages:

"It must now be accepted that where, as in cases of which Re Smith is typical, no particular purpose or benefit is defined, a charitable purpose which is beneficial to the local community and is within the spirit and intendment of the preamble to the Charitable Uses Act 1601 is implicit in the context. But in cases where the gift is localised but, as in Goodman v. Mayor of Saltash, the nature of the benefit is defined, no reconciliation seems to be possible except on the basis that the particular purpose was in each case regarded as falling within the spirit and intendment of the preamble. As Lord Simonds said, it is difficult to ascribe this quality to the benefit taken by the freemen of Saltash. It may be observed that neither Lord Selborne nor Lord Cairns referred to the preamble."

170. I would also adopt the following statement of the law in Shell, 28th edition at p.159:

"(1)     BENEFIT OF LOCALITY. Trusts for the general benefit of a particular locality, and even for 'my country England,' have been held charitable: where no purpose is specified in a gift for the benefit of a locality, the courts will imply a limitation to charitable purposes in that district. But no such implication is possible if the draftsman has expressed the specific purposes for which the gift is to be used, and these purposes are not confined to charity. It follows that a gift which may by its express terms be used for some non-charitable object is not made charitable by confining it to a particular locality."

171. I conclude that the trust with which we are now concerned is clearly not charitable because the purposes of common welfare in the village, by their express terms permit the application of the rents of the relevant trust property for purposes which are not within the spirit and intendment of the preamble to the statute of Elizabeth: c.f. In re Cole [1953]Ch 877 (C.A.) and the decisions (cited to this court in unreported form] of the Chief Justice and Court of Appeal in Attorney General of the Bahamas v. Royal Trust Co.

172. If Williams had been cited to Godfrey J. below I venture to doubt whether he would have expressed the view that the common welfare trusts would have been charitable if extending to all the inhabitants of the village of Gut Tai. Moreover, his reliance on Re Moss [1949]1 All ER 495 (where Romer J. held to be charitable a bequest "for the welfare of cats and kittens needing care and attention") by way of analogy in support of his view that the trust to assist in common welfare in the village was charitable, was misplaced. Romer J. made it clear at p.498c that his decision was not based on the view that the bequest was merely for the welfare of cats and kittens. It was held to be charitable because it was for animals needing care and attention.

173. Romer J. said at p.498D:

"It is plain that a gift to prevent cruelty in relation to cats and kittens would be good as having an elevating effect on mankind. For my part, I can see no difference between that and a gift the object of which is to alleviate distress among cats and kittens. It seems to me that, that being the object which the testatrix had in mind, the object which she intended to benefit, and it being, in substance, the object of the work which this lady has carried out and is now carrying out, the gift is perfectly good as being a valid charitable bequest and I so hold."

174. In modern times trusts for the protection of animals have been held to be prima facie charitable for the reasons given by Swinfen Eady L.J. in In re Wedgwood [1915]1 Ch. 113 at p.122, namely that they tend:

"to promote and encourage kindness towards animals, to discourage cruelty, and to ameliorate the condition of the brute creation, and thus to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.": see National Anti-Vivisection Society v. I.R.C. [1948] A.C. 31 (H.L.). per Lords Simonds at p.67 and Normand at p.76.

175. The animal protection cases seem to be anomalous, but they have been treated as falling within Lord Macnagthen's fourth class of trusts beneficial to the community, albeit indirectly: see the National Anti-Vivisection Society case per Lord Normand at p.76, Baddeley per Lord Simonds at p.590 and Tudor at p.131.

176. The reason why trusts for the protection of animals have been held to be within the preamble to the statute of Elizabeth therefore is not directly concerned with welfare to animals but indirectly concerned with the edification of mankind. There can be no true analogy in charity law with a trust to assist in common welfare in the village of Gut Tai. In seeking to draw the analogy he did the judge was losing sight of the reminder given by Lord Simonds in Gilmour v. Coats at pp.448-9 that the law of charity "has been built up not logically but empirically".

177. Having held that the judge was right to conclude that both the trusts declared in the Rules were not charitable no question of apportionment arises, nor does the existence of the alternative passages in the agreed translation of the Rules give rise to any difficulties.

            (3)     Valid gifts to unincorporated associations

178. Mr. Chang for the Bank advanced no argument in reply to Mr. McDonnell's persuasive arguments in support of the judgment of Goufrey J. on this issue. Furthermore it seemed to me that once Mr. Chang had adopted as his primary argument, in his written submissions in reply, the proposition (which was in accord with Mr. McDonnell's argument and with which I agree) that the Rules had declared "purpose (or income) trusts (i.e. endowments, made to the Tongs for the specified purposes)...." the Bank's case on appeal on this issue was hopeless and must have been impliedly abandoned.

179. The arguments initially advanced by Mr. Chang in support of grounds of appeal 4 and 11 and additional ground D, in respect of which he acknowledged that he faced difficulties, particularly if the Rules were construed as declaring purpose trusts, were that (1) the property belonged to the tongs under the Rules (which contained a declaration to that effect) (2) it had not been given to the tongs for a purpose but to the tongs themselves under the control of the administrators and (3) members of the tongs could put an end to the tong under Chinese law and custom and dispose of tong property. As to (3), Mr. Chang relied on evidence of Mr. Dicks to the effect that the prohibition of the alienation of tong land did not preclude its alienation in cases of pressing need.

180. The subsequent primary contention of Mr. Chang (which I have accepted) in his reply that the trusts were purpose trusts destroys all these arguments because being purpose trusts clearly intended by the settlor to be endowments of the tongs of indefinite duration and not being charitable they must fail as being perpetuitous: see Carne v. Long (1860)2 De G.F. & J.75; In re Macaulay's Estate reported as a footnote in [1943]1 Ch 435 (H.L.); Leahy v. Attorney General for New South Wales [1959] AC 457 (P.C.) at pp.482-4; and Neville Estates Ltd. v. Madden [1962] Ch. 832 at p.849.

181. I mean no disrespect to Mr. McDonnell's full and able arguments on this issue when I decline to consider it further in view of the primary submission on behalf of the Bank in Mr. Chang's reply. I would only add in relation to Mr. Chang's initial arguments, which seen to have been intended to bring the Bank within the principles applied by Brightman J. (as he then was) in In re Recher's Will Trusts [1972] Ch. 526 at pp. 538 to 540, that I do not wish to be understood to be accepting, any more than the judge did, that there was any evidence at the trial that the relevant tongs comprised members or "quasi-corporators" in whom the tong property was vested by contract. Indeed there was no finding by the judge that the two relevant tongs had any membership.

182. In ground of appeal 10 this issue was raised in relation to both Sheen tongs, but it was only argued at the hearing of the appeal in relation to the Tun Yan Sheen Tong. It was then argued on the basis of the "preferred" translation of the Rules under which the rents of Nos. 154 and 156 (referred to initially in the Rules as the property of the Tun Yan Sheen Tong) were declared to be applicable to assist in common welfare in the village.

183. Initially the argument was presented by Mr. Chang in reliance on the evidence of Mr. Dicks (with which Dr. Hu, the Bank's expert on this matter disagreed) to the effect that the Tun Yan Sheen Tong is or was a "foundation", whose purposes were public and not exclusively clan welfare, with a legal personality capable of owning land in China by virtue of Article 6 of the Law Governing the application of the General Principles of the Civil Code of the Republic of China. The Republic of China came into being in 1911 when the Ching dynasty ended. Article 6, which was evidently a transitional provision relating to Book I of the Code, came into force in 1929 and provided that:

"A foundation which came into existence before the coming into force of the General Principles of the Civil Code and whose object is for the promotion of public welfare and which possesses independent property, is regarded as a juristic person....."

184. The contention was that the judge (who had, it was argued, wrongly construed the welfare trust as confined to the welfare of the clan in the village) had wrongly held that the Tung Yan Sheen Tong was excluded from the application of Article 6 by Article 9 which provided:

"The provisions of Articles 6 to 8 are not applicable to ancestral halls, monasteries and temples and those independent properties used for the purpose of maintaining a family."

185. This argument was supported by citation of Lazard Brothers and Company v. Midland Bank Limited [1933] AC 289 (H.L.) per Lord Wright at p.297; Anton's Private International Law (1967) at p.254; Halsbury's Laws of England 4th edition, Vol. 9, paragraph 1231 and President et Syndics de la Commune de Laprairie v. Compagnie de Jesus [1920] AC 314 (P.C.) for the proposition that the Hong Kong court should accept without any formal act of state the juristic personality of the Tun Yan Sheen Tong which was established under Chinese law.

186. Again, this argument depended on the proposition that the welfare trust was not a purpose trust but a gift to the tong itself. As in the case of the previous issue, the entire edifice of the argument collapses, as the judge rightly indicated at p.253G-H of his judgment, once it is held that the trust was a perpetual trust of income for non-charitable purposes. No useful purpose can therefore be served by further consideration of this issue. However I do not wish to be understood to be accepting that the argument is otherwise necessarily sound. In particular I cannot see how it can possibly be said that in 1875, when the trust was constituted, the Tun Yan Sheen Tong was recognised under Chinese law as having a juristic personality. This did not happen, if it happened at all, until Article 6 was introduced in 1929. Mr. Dicks acknowledged at all stages of his evidence that under Chinese law in the Ching dynasty, which did not end until 1911, there was no general theory of corporate personality and, in chief he said that company law was not introduced until 1904.

Conclusion

187. Accordingly, for the reasons I have given which do not fully coincide with the judge's reasons, but sustain his decision, I would dismiss the Bank's appeal on the substantive issues.

THE FIRST AND SECOND DEFENDANTS' CASE ON APPEAL

188. The second defendant having made no submissions when invited to do so at the appropriate time (apart from the submissions I have already mentioned which were made in the course of the hearing of the appeal and were eventually adopted by the first defendant), must be regarded as not having effectively cross-appealed against or supported the judge's decision.

189. As I have already indicated, the first defendant was permitted to be heard as he was in person despite the fact that he had not filed a respondent's notice. His contention against the Bank that the trust properties were not held on charitable trusts has already been decided against the Bank. It only remains to deal with his argument that there was no concrete evidence to prove that the trust property belonged to Koo Chi and that he was the settlor. It was on this basis that he claimed that the trust property belonged to the Ip Cheong Kwong Tong which he represented. He also contender that there had been no proper trial of the issue whether Koo Chi was the real settlor and that there should be a re-trial on this issue.

190. A copy of the Rules which purport to have been in writing made under the hand of Koo Chi, thereby complying with sections 7 and 9 of the Statute of Frauds 1677 (29 Car.2 c.3), was admitted in evidence, together with a copy of Pak Hang's Collection in which the Rules were incorporated, under the judge's order dated the l8th April 1988. The Rules contain Koo Chi's statement that the trust properties were "purchased and donated by KOO CHI using his own money".

191. The judge used arguably equivocal language in the introductory part of his judgment when he said at page 249 A-B:

"It appears that, in 1875, the settlor purchased 152 and also 154 and 156, with his own money, causing all these properties to be assigned to Yip On and Yip Yuen.''

However, in the course of making his findings of fact he said, in the passage beginning at p.250J:

"On 31st December 1875 the settlor made some Rules ("the Rules") for the two Tongs last mentioned. The original of the Rules was not in evidence but the Rules are set out in an Appendix (written, as were the original Rules, in the Chinese language) to a letter dated 17th June 1920 from Ip Pak-hang to Ip Chi-sue, which I propose to treat as secondary evidence of the Rules and to accept both as proof of the making of the Rules under the hand or the settlor and of the contents of these Rules ."(Emphasis supplied)

192. There was other evidence relating to this issue which Mr. McDonnell helpfully assmebled for the court. Thus in Pak Hang's Collection the Minutes of the Clan Conference in the ancestral hall on the 19th November 1927 taken down by the plaintiff's father recorded that Tuen Noi:

"....said that the two Tongs have such a development up to the present mainly because Elder Koo Chi had personally financed and established this charitable project."

Again, the Collection contains a copy of a letter dated the 25th November 1927 from Chue Wang to Pak Hang saying that "the foundation capital of the two Tongs was donated by grand-uncle Koo Chi personally". In another letter in the Collection dated the 3rd August 1928 written to the plaintiff's grandfather by Pak Hang he says:

"My personal opinion is that when Elder Koo Chi contributed the large sum of money for the benefit of the whole clan, he did not mean it to be exclusively for his agnates."

193. There was, however, evidence tending to cast doubt on whether Koo Chi's money had necessarily been the sole source of the trust property. In a statement admitted under the judge's order dated the 18th April 1988 Mr. Ip Sau Yin, who was born in 1909, said:

"I was told by my father that 3 Hong Kong properties were bought by Yip On (i.e. Ip Tsuk Kai) on behalf of the 2 Tongs during the Tsing Dynasty. I do not know when they were purchased but I was told that Ip Koo Chi had paid a sum or money to Yip On to purchase the said properties. However, I am uncertain as to whether that sum also came from the public fund of the Ip Tribe."

194. A witness for the plaintiff, Mr. Tsang Hon Shing, said under cross-examination by the first defendant that the plaintiff's father and the plaintiff had told him in 1982-3 that the three properties were bought out of the money of ancestors Koo Chi and Fai Shek. The first defendant's witness Mr. Ip Tong Chiu said in chief:

"Koo Chi was at that time an official with the government and he was in Shanghai. He remitted 9,000 taels of silver to Yip On and Yip Yuen. He remitted the money to Chuk Kai and Chuk Kai was in fact Yip On. With the 9,000 taels of silver, Chuk Kai acted as the purchaser or manager of a company. He, together with Fai Shek, were responsible for the 9,000 taels of silver and they were to make a profit with that sum of money. At that time Fai Shek had gone seafaring. The two of them purchased goods and earned money in the course of doing so. The profit made in the course of doing business by the two gentlemen together with the contributions made be uncles and nephews of the Yip Clan, came to 4,000 taels of silver.... with the 9,000 taels of silver and the 4,000 taels of silver, Chuk Kai purchased the three properties."

195. On appeal the first defendant relied, as he had done in an affirmation made by him in these proceedings on the 1st May 1989, on the content of a tenancy agreement made on the 10th January 1940 by the trustees of the trust properties (including Pak Hang) granting a tenancy of the trustees' newly redeveloped shop building to the supervisor. and others of the Hong Kong Wah Nam Restaurant. In the agreement the landlord is described as Ip Cheung Kong Tong and it is declared that the trust properties (described now as "Cheong Kong Hong") are owned by that tong. An English version of the agreement is referred to in clause (16) as being registered in the Hong Kong Registration Office. What appears to be a registered memorial of the professionally drawn English version of this agreement describes Pak Hang and his three co-trustees as "Trustees for and on behalf of the Yip Cheong Kwong Tong Loan Association and the Tung Yun Sheen Tong Loan Association" (c.f. the 1875 Assignments to the original trustees on behalf of the associations).

196. The first defendant also relied on a subsequent tenancy agreement made on the 26th October 1942 (during the Japanese occupation) whereby Ip Sai-lau, described as "Trustee" granted a tenancy of Cheong Kong Hong to representatives of Chat Yin Tong. In that agreement it is declared that Ip Cheong Kong Tong owns the trust properties (described as "Cheong Kong Hong") and the landlord is expressed to be Ip Sai-lau as "Trustee of Ip Cheong Kong Tong". The first defendant relied on the 1940 and 1942 tenancy agreements and the memorial of the 1940 agreement as evidence supporting his contention that the Ip Cheung Kong was the owner of the trust properties and that the Tong was the main body with two connected loan associations.

197. In my opinion the judge was fully entitled to accept the secondary evidence of Koo Chi's statement in the Rules, that he had purchased the trust properties with his own money, as the best evidence of the source of the trust properties, particularly as there is no hint to the contrary in the other relevant documents in Pak Hang's Collection. Those documents reflect the understanding of members of the clan up to 1928, including Pan Hang who was a party to the 1940 tenancy agreement. The hearsay evidence given by other witnesses and the relevant content of the 1940 and 1942 tenancy agreements was, in my opinion, impliedly and rightly rejected by the judge when deciding this issue. I am certainly not prepared to accept that the judge was not entitled to come to the conclusion he did on the evidence before him.

198. Once it is accepted, as the judge found, that Koo Chi was in fact the settlor, then, as the judge held at p.254 B-C of his judgment, no permissible construction of the Rules allows the conclusion that any of the trust properties are held on trust for the Ip Cheung Kong Tong. Furthermore in the absence of any evidence of the existence of the loan associations (apart from the fact that loan associations are actually named in the 1875 Assignments), there must have been a resulting trust in favour of the settlor between the date of the Assignments and the date of the Rules which are the only documentary evidence of the declaration of trusts affecting the property which satisfies the Statute of Frauds.

199. My Lord Cons asked the first defendant what evidence he would propose to adduce on the question whether Koo Chi had acquired the trust properties with his own money if a re-trial were ordered. It was clear from his reply that he was really calling for a re-hearing on the same evidence and that he would not be in a position to adduce any new documentary evidence or call any other witnesses who could give any evidence which would effectively add to the evidence, which had already been given. Accordingly, even if the first defendant were to be treated as having cross-appealed against the judge's order I would dismiss that cross-appeal.

Sir Derek Cons, V.P.:

200. I am grateful to my Lord for his lucid analysis of the issues in this appeal. The reasons which have lest him to his conclusions so nearly accord with my own, save in one particular, that I need say no more than that I too would dismiss the appeal of the Bank and the notional cross appeal of the First Defendant.

201. The one particular does not affect the outcome. It relates to the construction of the words "to assist in common welfare in the village".

202. In the article by Miss Joanna Handlin Smith (Bundle J) she explains how the general charitable needs of the community were at that time being met by the more recently introduced "benevolent societies", invariably made up of a number of gentlemen, from different clans, joining together to facilitate good works. The Tung Yun Sheen Tong not being an institution of that kind, it seems to me more likely that Koo Chi intended his bequest only to benefit the descendants of Sze Shing, following the custom of the longer established lineage tongs. I observe that in her work Miss Hsien Chin Hu (notes Bundle P, at p.80) that on occasion lineage tongs do extend their benefit to those beyond the clan, but I get the impression that it was not usual and feel that if Koo Chi had so intended, he would have made it absolutely clear. I accept that the construction adopted by the judge below requires the literal addition of the words "of the clan", but given the context of the time and the circumstances in which the Rules were written, I find those words to be implicit. I am comforted in this conclusion by the fact that the Tun Yun Sheen Tong finds no mention in the County Annals.

Kempster, J.A.:

203. I agree with the judgment of Clough. J.A.