Tang Man Kit and Another v. Hip Hing Timber Co. Ltd.

HCA 8000/1990

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8000 OF 1990

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D E C I S I O N

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1. This is a motion issued by the Defendant to set aside the Writ on the ground that it has been issued without authority. The motion raises a number of interesting issues, but it is first necessary to set out briefly the background of the proceedings.

Proceedings

2. The action started in 1990. It appears not to have progressed much in the nearly 9 years before a strike-out application was issued by the Defendant in 1998, but no point on delay or lack of prosecution has been taken by either side.

Original Plaintiffs

3. The plaintiffs named in the writ were originally "Wah Yan Mo Fan Heung with Chan Kam Cheung and Tang Man Kit as Managers". It was pleaded in the Statement of Claim that "at all material times, Wah Yan Mo Fan Heung (華人模範鄉) ('the Heung') was and is an unincorporated body beneficially interested in lands in the New Territories ...". It was further pleaded that the Defendant was a former tenant occupying part of those lands, that a Notice to Quit was given by solicitors in April 1986, by reason of which the tenancy expired in December 1986, and that the Defendant was holding over. Recovery of the land and mesne profits were sought. (There was an amendment in 1997 to add certain allegations which are not relevant here).

4. In the Defence, the Defendant admitted that Wah Yan Mo Fan Heung "has been and is" the beneficial owner of land occupied by the Defendant. However, it was pleaded in the Defence that the solicitors lacked authority to issue the Notice to Quit and that certain agreements had been made with Wong Tat To, a manager of Wah Yan Mo Fan Heung, in 1966 and 1974. The Defence also contained defences of estoppel and laches and acquiescence. There was a Counterclaim for specific performance, damages for breach of contract and declaratory and consequential relief.

Application to strike out

5. In December 1998, the matter first came before me on the Defendant's application to strike out the claim on the ground that an unincorporated body has no legal capacity to sue.

Application to amend

6. At the hearing, Mr Patrick Fung SC then leading counsel for the Plaintiff, whilst not abandoning the pleading that "Wah Yan Mo Fan Heung" was an unincorporated body, sought to amend the name of the Plaintiff as "Tang Man Kit suing as sole manager of Wah Yan Mo Fan Heung" and to re-amend the Statement of Claim to add an alternative case that Wah Yan Mo Fan Heung "was and is a t'ong within the meaning of s.19 of the New Territories Ordinance (Laws of Hong Kong, 1960 edition) and s.15 of the New Territories Ordinance (Laws of Hong Kong, current edition)". I granted leave to amend on the ground that it was not sufficiently plain and obvious that Wah Yan Mo Fan Heung was not a t'ong or that there had been no approval of managers that leave to amend should not be given (reported at [1999] 1 HKC 373).

7. There was subsequently a re-amendment to add Foo Tak Ching as a plaintiff as he had purportedly been appointed manager by a resolution passed by "the members of the Heung" on 17 December 1999. There was no objection to this re-re-amendment.

Motion to set aside for lack of authority to sue

8. The amendment to plead that Wah Yan Mo Fan Heung was a t'ong within the meaning of s.15 NTO and that Tang Man Kit and Foo Tak Ching were suing as its managers led to the present motion for an order that the writ be set aside as having been issued without authority (Banco de Bilboa v Sancha [1938] 2 KB 176).

9. The grounds are that :-

(1) Wah Yan Mo Fan Heung is not a clan, family or t'ong within the meaning of s.15 and s.16 NTO or exempted from the requirement to be registered under the Companies Ordinance by virtue of s.16 NTO;

(2) Wah Yan Mo Fan Heung has no legal status and is not recognized in law as a legal entity capable of enforcing rights over land or authorising the commencement of an action on its behalf; and

(3) no application for approval has been made under s.15 of the NTO or approval granted pursuant to any such application or at all.

The reference to "approval" has been understood to mean approval of the appointments of Tang and Foo as managers assuming that Wah Yan Mo Fan Heung is a t'ong within the meaning of s15 NTO.

Section 15 New Territories Ordinance

10. Section 15 NTO in its current form provides:-

"Whenever any land is held from the Crown under lease or other grant, agreement or licence in the name of a clan, family or t'ong, such clan, family or t'ong shall appoint a manager to represent it. Every such appointment shall be reported at the appropriate New Territories District Office of the City and New Territories Administration, and the Secretary for Home Affairs on receiving such proof as he may require of such appointment shall, if he approves thereof, register the name of the said manager who shall, after giving such notices as may be prescribed, have full power to dispose of or in any way deal with the said land as if he were sole owner thereof, subject to the consent of the Secretary for Home Affairs, and shall be personally liable for the payment of all rents and charges and for the observance of all covenants and conditions in respect of the said land. Every instrument relating to land held by a clan, family or t'ong which is executed or signed by the registered manager thereof in the presence of the Secretary for Home Affairs and is attested by him, shall be as effectual for all purposes as if it had been executed or signed by all the members of the said clan, family or t'ong. The Secretary for Home Affairs may on good cause shown cancel the appointment of any manager and select and register a new manager in his place. If the members of any clan, family or t'ong holding land do not within 3 months after the acquisition of the land make and prove the appointment of a new manager, it shall be lawful for the Crown to re-enter upon the said land held by such clan, family or t'ong, which shall thereupon become forfeited. Such re-entry shall be effected by the registration of a memorial thereof in the appropriate New Territories Land Registry".

11. This section was first enacted as s.13 of the New Territories Land Ordinance 1905. Apart from stylistic differences, the only differences are that in the 1905 Ordinance, (i) the word "office" was in place of "New Territories District Office of the City and New Territories Administration"; (ii) "Land Officer" in place of "Secretary for Home Affairs"; (iii) changes of appointment were expressly referred to; and (iv) the word "thereupon" appeared in the sentence "every such appointment and change shall be reported at the appropriate office and the Land Officer on receiving such proof as he may require of such appointment shall, if he approves thereof, register the name of the said Manager or Managers; the said Manager or Managers thereupon shall after giving such notices as may be prescribed have full power to dispose of or in any way deal with the said land as if he or they were sole owner thereof, subject to the consent of the Land Officer, and shall be personally liable for the payment of all rents and charges and for the observance of all covenants and conditions in respect of the said land". The deletion of the word "thereupon" has been held by Litton JA (as he then was) in Light Ocean Investments Ltd v Enway Development Ltd [1994] 3 HKC 31, 40G-H not to have had any effect on the substantive law.

Section 16 New Territories Ordinance

12. Section 16 NTO in its current form provides:-

"Any clan, family or t'ong owning land on 28 October 1910, in respect of which a manager has been duly registered under this Ordinance, shall not, so long as such land is certified by the Secretary for Home Affairs as being used for agricultural, religious, educational or charitable purposes or such other uses of a similar nature as are recognized by established local custom, or for dwelling houses occupied by bona fide members of the clan, family or t'ong, be required to be registered under the Companies Ordinance (Cap.32), although such clan, family or t'ong may consist of more than 20 members".

13. This section was first enacted as s.14 of the New Territories Land Ordinance 1905. The only differences were that in the 1905 Ordinance, the section applied to "any clan, family or t'ong owning land in the New Territories at the date of the coming into operation of this Ordinance" instead of the date "28 October 1910", and again, "Land Officer" was in place of "Secretary for Home Affairs".

14. Twenty-eighth October 1910 is the date when the New Territories Regulation Ordinance 1910 came into operation. This Ordinance was to "consolidate and amend the laws relating to the administration and regulation of the New Territories". Section 13 NTO became s.27 NTRO and s.14 NTO became s.28 NTRO, but apart from extending the application of s.14 NTO from any clan, family or t'ong owning land on 7 July 1905 to any clan, family or t'ong owning land on 28 October 1910, there were no substantive differences. This extension does not make any difference in the present case because whatever Wah Yan Mo Fan Heung is or is not, the lands in question were only acquired in the 1920's.

Proceedings against Secretary for Justice in HCMP 2082/00

15. The Motion was first heard in June 2000, but as the Plaintiffs' expert witness was taken ill and could not travel to Hong Kong, the hearing had to be adjourned to dates in late August and September. In the meantime, there was a change in events which may be said to be dramatic.

16. It appeared from materials available at the hearing of the Motion in June that starting from the 1970's, at the latest, the position taken by the Land Officer was that Wah Yan Mo Fan Heung was not a t'ong within the meaning of s.15 NTO. This was shown in contemporaneous documents in the Land Office file and in correspondence passing between the Land Officer and the purported managers or solicitors acting for them.

17. In April 2000, after the re-re-amendment, the Plaintiffs issued separate proceedings in HCMP 2082 of 2000 against the Secretary for Justice on behalf of the Director of Home Affairs and the Director of Lands, claiming that (i) Chan Kam Cheung and Tang Man Kit were registered or entitled to be registered as managers of Wah Yan Mo Fan Heung under s.15 NTO since 1989 and that Tang Man Kit and Foo Tak Ching were registered or entitled to be registered as managers of Wah Yan Mo Fan Heung since 1999; (ii) the Director of Home Affairs was obliged to register them as managers of Wah Yan Mo Fan Heung since 1989 and 1999 respectively; and (iii) the Director of Lands was obliged to pay compensation to Tang Man Kit and Foo Tak Ching as such managers for the resumption in 1997 of certain lands registered in the name of Wah Yan Mo Fan Heung.

18. Between the first hearing of the present Motion in June and the adjourned hearing in late August, however, the Plaintiffs and the Secretary for Justice reached agreement in the form of a Tomlin Order in HCMP 2082/00, the terms of the schedule to which were that the Director of Home Affairs shall approve and register the appointments of Chan Kam Cheung, Tang Man Kit and Foo Tak Ching as managers under s.15 NTO which shall have retrospective effect.

19. The Defendant applied to join as a party to HCMP 2082/00. I refused leave for the reasons given in my written Decision of 30 August 2000. The Tomlin Order did not involve the making of any declarations by the Court and the terms in the Schedule are not binding on the Defendant in the present action. Nor do I consider it relevant to a judge being asked to make a Tomlin Order to ask the parties why they have chosen to do so, when the parties are legally represented.

20. On 31 August 2000, the District Officer (Yuen Long) signed a document which stated that "in accordance with the provisions of section 15 of the New Territories Ordinance, I hereby approve the appointment of Messrs TANG Man Kit and CHAN Kam Cheung of Wah Yan Mo Fan Heung to replace Messrs. LUI Lap Ka (雷立家), WONG Tat To (黃達道) and WONG Pui (黃培) (and including Messrs. WONG Fook Pui (黃福培) and WONG Kwan Fat (黃均發) in so far as they have been purportedly appointed additional managers of the Heung) as the managers of the above named Heung with effect from the 28th day of January 1989".

21. On the same day, the District Officer (Yuen Long) signed a document which stated that "in accordance with the provisions of section 15 of the New Territories Ordinance, I hereby approve the appointment of Mr FOO Tak Ching (傅德楨) of Wah Yan Mo Fan Heung to replace Mr CHAN Kam Cheung as a manager of the above named Heung with effect from the 17th day of December 1999".

22. Both documents were registered in the Yuen Long Land Registry on 1 September 2000.

Further amendment of Statement of Claim

23. By reason of the above turn of events, the Plaintiffs formulated their case as follows:-

"3E. Further or in the alternative, the appointments of the first named Plaintiff and the second named Plaintiff as managers of the Heung on the respective dates of 28th January 1989 and 17th December 1999 were both, pursuant to Section 15 New Territories Ordinance, Cap. 97, approved on 31st August 2000 and registered on 1st September 2000 with effect from their respective dates of appointment".

It is not clear from that whether it is the Plaintiffs' case that both approval and registration were effective from their respective dates of appointment.

Issues on Motion

24. The issues that arise on the Motion are:-

(1) What is the meaning of "t'ong" in the context of s.15 NTO?

(2) What is "Wah Yan Mo Fan Heung" and is it a t'ong within the meaning of s.15 NTO?

(3) Even if Wah Yan Mo Fan Heung is a t'ong within the meaning of s.15 NTO, have Tang Man Kit and Foo Tak Ching been appointed managers of the t'ong and have their appointments been approved and registered so that they are authorised to bring or continue this action?

25. The burden is of course on the Defendant to show that Tang Man Kit and Foo Tak Ching have no authority to sue.

26. It would be convenient to deal with each issue in a separate section.

(1) Meaning of "t'ong" in s.15 New Territories Ordinance

27. The issue is not what is meant by the word "t'ong" in Chinese customary law, but what is meant by that word in the context of s.15 NTO.

28. A t'ong in the sense of a family lineage "trust" is well-known. The question in the present case is whether the legislature intended to include within s.15 a business organization or association, which the Plaintiffs have referred to as a "business t'ong", for the Plaintiffs' case is that Wah Yan Mo Fan Heung is a "business t'ong".

"Business t'ong"

29. A "business t'ong" was referred to by Cheung J (as he then was) in Tang Yau Yi Tong and another v Tang Mou Shau Tso and others [1995] 2 HKC 245, 253. The learned judge made that reference in a summary of the customary law gleaned from various authorities and articles to which he had been referred. However, that case involved a pure family lineage t'ong, and so it was not necessary for the judge to find (and as I read the judgment, he did not find) that a "business t'ong" was included within the meaning of "t'ong" in s.15 NTO. In any event, even if his judgment were to be read to include such a finding, that finding would have been obiter.

30. In the present case, expert evidence of Chinese customary law was adduced from Professor Anthony Dicks SC by the Defendant and from Professor Chang We Jen by the Plaintiffs. There was no dispute, and I accepted, that both Professor Dicks SC and Professor Chang are experts in the field of Chinese customary law. From their evidence (Professor Dicks SC was not cross-examined on his report), I derive the following points.

31. In relation to the term "business t'ong", even Professor Chang confessed to some resistance to the use of that term, which he used in his report, possibly, he said, by reference to the request from the Plaintiffs' solicitors for his expert evidence. In cross-examination, Professor Chang said he would prefer to express a "business t'ong" as "an organization or association for business undertaking". Such associations were generally called he-hua (合伙) (or he-ben合本, he-gu合股, he-zi合資).

32. The term he-hua合伙 is also the translation of "partnership" and indeed, Professor Dicks SC in his report refers to organizations described as "companies" as being "extended and more elaborate versions of the traditional Chinese partnership". The term partnership appears to be apposite because according to Professor Dicks SC, the concept of a separate corporate personality was unknown to Chinese customary law. This was not disputed by Professor Chang. In effect, therefore, what the Plaintiffs refer to as a "business t'ong" was a group of individuals in partnership to do business.

33. According to Professor Chang, these groups might be further sub-categorized into the narrow, profit-making sense (where the members intend to make money for themselves) or the broad, non-profit-making sense (where the members raise funds, not for their own profit, but for worthy causes such as the building of schools).

34. The Plaintiffs' case is that Wah Yan Mo Fan Heung was an investment project where the members intended to reap a profit for themselves (affirmation of Chong Kai Man). Accordingly if it is a t'ong, it could only be a "business t'ong" in the narrow, profit-making sense. The issue in the present case is whether the legislature intended that such an organization or association for business undertaking, where the members or partners intended purely to make a profit for themselves, to be included in the word "t'ong" in s.15 NTO.

35. In Professor Chang's report, he said that customarily, for tax and social control purposes, a t'ong was required to register its name and the name(s) of its manager(s) with the Bureau of Civil affairs (hu-fang戶房) at the local yamen and, if the t'ong owned real property, that must be registered with the same Bureau in the name of the t'ong. In cross-examination, however, he said that the name of the owner appearing on the title deed depended on the number of members. If the members were small in number (what he called the "closed" type), then all the members' names would be included. If however the number was large, or even if small, was expected to increase, then the land would be held in the name of managers. (This is not unlike the holding of association property in English law by trustees for the members - see Underhill and Hayton, Law Relating to Trusts and Trustees, p.102). The managers were elected or dismissed by the members.

36. It is significant that if the members were small in number, the title deeds would be in the name of the individual members, as it shows that the land belonged to the individual members. This is consistent with the lack of a concept of a separate corporate entity in Chinese customary law. Accordingly, even if the land were registered in the name of the t'ong, being a he-hua (合伙) or partnership, the t'ong name would be no more than the trade name or style of the individuals in partnership, in the way that a business registered in the name of "XYZ", a firm, would just mean individuals "A", "B" and "C" trading as "XYZ".

37. It should further be noted that according to Professor Chang, people would normally insist that the agreement between the members of an organization or association for business undertaking in the narrow, profit-making sense be put into writing, to avoid disputes. If land was involved, then a written agreement was a "must". Management of the land would have to be in accordance with the agreement.

38. In the light of the evidence set out above regarding "business t'ongs", or more appropriately, organizations or associations for business undertakings, it is now necessary to consider s.15 in the context of land in the New Territories when that section was first enacted in 1905.

The Lockhart Report

39. Soon after the New Territories was leased to Britain, the Colonial Secretary Stewart Lockhart was asked to prepare a report on the New Territories ("the Lockhart Report"). His report was dated 7 February 1900 and contained, amongst other things, a memorandum on land. This was presented to the Legislative Council by the Governor.

40. In relation to land tenure, he found:-

"in most cases land is owned by clans or private families and individuals, and can be sold, mortgaged, or settled upon specific trusts. In addition to these there are also the following varieties of tenure:- Ancestral land or Sheung T'in (嘗田), Temple land or "Miu T'in" (廟田), Land held by associations or "Ui T'in" (會田)".

41. As to what was meant by land held by associations, he wrote:-

"China is a land of associations, which are as numerous and the objects of which are as varied as the needs of man. Their formation is simple and easy. Certain villages, whatever their object may be, meet in a temple, ancestral hall or private house to deliberate over some scheme. If it is approved, a fund is raised to which the members contribute equally, their contributions being devoted to the purchase of a piece of land, landed property in China being considered the safest investment. The rent derived from this land may be used for the burial of a member of the association when he dies, or may be let out on interest, or may be used to assist members to emigrate to California and Australia, or for any other enterprise or good object that may be desired".

42. It would first be noted that according to the Lockhart Report, land in the New Territories was held by individuals, families or clans and the three other types of tenure he described. No other type of landholding is indicated.

43. Organizations or associations for business undertakings in the narrow, profit-making sense (the Plaintiffs' concept of "business t'ong") did not fit within the description of "associations" referred to in the Lockhart Report. First, Lockhart refers to equal contributions towards a fund to buy land. There is no evidence that in Chinese custom or law, members of "business t'ong" were permitted to invest only in equal proportions. Secondly, Lockhart refers to the use of rent derived for good objects. There is no mention of business or commerce which one would expect if organizations or associations for business undertakings in the narrow, profit-making sense were intended to be included in the description of this type of tenure. Obviously, the administration would have been aware of these profit-making organizations or associations for business undertakings as they had been part of Chinese society for a long time (according to Professor Chang, since the Han Dynasty). Chinese partnerships were governed under the provisions of the Chinese Partnerships Ordinance enacted in 1911.

44. Accordingly, it is clear from the above that the Plaintiffs' concept of "business t'ong" did not fit within Lockhart's description of the type of associations holding land. Since these organizations or associations for business undertakings are not families or clans, in so far as they held land, Lockhart must have regarded them simply as individuals, an understanding that would accord with the findings set out above that these "t'ongs" are actually he-hua, partnerships of individuals bound by private contract to one another.

Clan, family or t'ong

45. Having set out my understanding of "business t'ongs" (more appropriately called organizations or associations for business undertakings in the narrow, profit-making sense) and the historical context of landholding in the New Territories in 1900, I proceed to consider the meaning of "t'ong" in s.15 NTO.

46. It has been held that a t'ong is not a legal entity but a customary land trust (Tang Yau Yi Tong v Tang Mou Shau Tso (Court of Appeal) [1996] 2 HKLR 212, 219).

47. There is no ground for it to be read ejusdem generis with "clan" and "family" such that its members have to be related by blood or lineage ties. The words "clan" and "family" have such loose and flexible meanings anyway that the legislature could have rested with them if they intended to refer to persons related by blood or lineage.

48. So what is the genus between "clan" or "family" and "t'ong" which caused the legislature to regulate their landholding in the same way in s.15 NTO? One looks first at the constitution of the members of these groups. From s.15, one can see that the membership must be of a group of individuals, such that it was necessary for the land administration to impose rights and duties on an identifiable individual, i.e. the manager, who was given wide powers. More importantly, one can see that the clan, family or t'ong's objectives were sufficiently uncontroversial to enable the land administration to take a role in the process of selection and re-selection of a manager for their members.

49. By way of amplification, it is clear from the title to the 1905 NTLO that it is to, amongst other things, facilitate the transfer of land in the New Territories and for settling disputes in respect thereof. Obviously it would not facilitate the transfer of land if it were held by a large group of persons, who would all need to execute the transfer documents. Accordingly, the manager was given wide powers "as if he were sole owner".

50. Given these wide powers, the identity of the manager was important. Section 15 gave the Land Officer the power to approve, cancel and re-select a manager. It is true that the Land Officer was empowered under s.6 of the 1905 NTLO to decide questions relating to land in a summary way, subject to appeals to the Supreme Court provided for in s.9. But s.15 goes beyond "judicial" intervention, and empowers the Land Officer to participate in the selection (by way of approval) and re-selection process of the manager.

51. It is unlikely that the legislature would have intended the Land Officer to be involved like this in a commercial undertaking such as a "business t'ong", where there may be conflicts of interests between individual members who may have their private interests to serve in the choice of manager. By way of contrast, that sort of conflict and controversy would not be contemplated (or at least not expected) in a clan or family or a social organization or association (whether say, a charitable or religious society or a guild) whose members would be devoted in common to the same worthy objectives (such as those described in the Lockhart Report) and not motivated by pure commercial, profit-making interests. I find that this is the type of organization or association that was meant by the word "t'ong" in s.15 NTO.

(2) What is Wah Yan Mo Fan Heung and is it a t'ong within s.15 NTO?

52. I then turn to an analysis of what is "Wah Yan Mo Fan Heung". This task is made difficult by the paucity of contemporaneous documentary evidence as to what it was intended or understood to be by persons involved when the lands registered in the name of Wah Yan Mo Fan Heung were first acquired. It is unfortunate that no statement was taken from Lui Lap Ka, who had been involved from the start of events and who died only in the 1960's.

53. There was an affirmation of Chong Kai Man, who asserts that he is a member of Wah Yan Mo Fan Heung. Mr Chong was not cross-examined on his affirmation, but it has to be noted that he did not obtain information from his grand-aunt Chiu Ho Yin (whose shares he is said to have ultimately succeeded to), but from his aunt Chong Kam Yung (to whom Chiu Ho Yin gave her shares) and from his grandmother Chiu Yau (who did not have any dealings with Wah Yan Mo Fan Heung). It is not stated that Chong Kam Yung or Chiu Yau obtained any information about Wah Yan Mo Fan Heung from Chiu Ho Yin, or that they had any personal knowledge about it.

Finding

54. However I find from the matters discussed chronologically below that Wah Yan Mo Fan Heung is merely the name or style in which the members of Chap Shing Company (集成公司), an unincorporated association whose members were motivated by purposes of gain, sought to hold lands, and that Wah Yan Mo Fan Heung is not a t'ong within the meaning of s.15 NTO.

Acquisition of lands starting 1924

55. Events started in 1924 with the acquisition of lands from Crown lessees by Lui Lap Ka and Wong Yuet Chiu (黃月樵) either in their own names, or as trustees for Chap Shing Company, or as trustees for themselves and Chap Shing Company. Lands were also bought in 1933 by Lui Lap Ka and Wong Yuet Chiu as trustees of Wah Yan Mo Fan Heung.

56. Whilst there was no business registration of "Chap Shing Company" or of "Wah Yan Mo Fan Heung", nor was either name registered in any t'ong/tso registry book (although it would be fair to say that the evidence of the keeping of such books did not show that such books were kept in all parts of the New Territories at all times).

57. No land was ever granted directly from the Crown to Chap Shing Company or in the name "Wah Yan Mo Fan Heung" (cf Tsing Wan Kun).

Share certificates issued 1928

58. The most direct contemporaneous documentary evidence are share certificates issued in 1928. These share certificates contained the earliest reference to Wah Yan Mo Fan Heung, although no land had at that stage been put in that name.

59. It is necessary first to discuss the meaning of the words Wah Yan Mo Fan Heung (華人模範鄉). The literal meaning is "Chinese People's Model Village". It could be a name given to a place and indeed it appears that it has been so used. According to Mr Chong's affirmation (subject to the qualifications set out above), it was the name given to an investment project managed by Chap Shing Company. It is also possible, according to Professor Chang, that it could be the name given to a business organization or association, as stylised names have been known to be given to business organizations or associations. Professor Chang also said that "Heung" or bao (堡) or zhuang (莊) have also been used as the names of organizations set up to help settle dislocated families, although in this respect it is noted that there was no evidence that there were such families needing assistance in the 1920's, and Chong Kai Man's evidence was contrary to Wah Yan Mo Fan Heung being a philanthropic organization. There is therefore little assistance that one can derive from the literal meaning of the words Wah Yan Mo Fan Heung.

60. It is clear upon a perusal of the share certificates that they were issued by Chap Shing Company and not by an organization or association called "Wah Yan Mo Fan Heung".

61. First, by way of description, the "letterhead" of the share certificate states "Chap Shing Company" above "Wah Yan Mo Fan Heung" which words are in larger type. Then printed on the background of the share certificate are the words "Chap Shing Company" and "Wah Yan Mo Fan Heung", this time in similar size of print. By themselves, the above facts may not be of much significance, although it would be unusual for a management company or agent (if that was what Chap Shing Company was, according to Mr Chong) to place its name before the principal.

62. However, importantly, the shares are expressed to be issued by Chap Shing Company, not by "Wah Yan Mo Fan Heung". There is nothing that indicates that in issuing these shares, Chap Shing Company was acting as a management company or agent for another organization or institution called Wah Yan Mo Fan Heung. Lui Lap Ka and Wong Yuet Chiu signed the share certificates as sze lei (司理) or trustees or managers, but there was no indication of what persons or body. It is noted that they had by then bought land as trustees of Chap Shing Company but not (until 5 years later) as trustees of Wah Yan Mo Fan Heung.

63. Whilst it is true that payment of the "share money" (股銀) is said to be in accordance with the章程 (rules or constitution) of the Heung, that may as much be a reference to the terms of that venture or project, as to the constitution of a separate body. No constitution has been found or been referred to in other documents. And the question remains why, if at least the name "Wah Yan Mo Fan Heung" had already come into existence by then, and if it were meant to be a body of whom the investors were members, were the lands not transferred to it and shares not issued by it?

64. The counterfoils of the share certificates were also chopped only by Chap Shing Company. Again, there was no reference in the counterfoils to Chap Shing Company being a management company or agent only.

65. In my view, the fact that the shares were issued by Chap Shing Company, when the name "Wah Yan Mo Fan Heung" had already appeared, is an important pointer that the investors' membership was of that Company and not of a body called Wah Yan Mo Fan Heung.

66. Further, each share certificate recorded the member's entitlement to the permanent control of a stated house-lot (the location of which was written on each certificate). This specific beneficial interest of a member to a specific part of the lands (none of which had then been registered in the name Wah Yan Mo Fan Heung) is a pointer against Wah Yan Mo Fan Heung being a collective group such as a clan or family or social organization or association within the meaning of s.15 NTO.

67. The counterfoils show that some individuals took up a larger number of shares than others. According to a lay-out plan, the author of which is unknown but which apparently was in existence by 1932, some 396 house-lots had been laid out on part of the lands (later registered in the name Wah Yan Mo Fan Heung in 1929). The counterfoils show that some individuals acquired more shares (and thus more house-lots) than others (unlike the equal contributions referred to in the Lockhart Report).

68. I pause here to record that although the same date (22 June 1928) appears on all the share certificates, it is clear from the counterfoils that not all shares were issued that day, because for instance, No.67 and No.264 refer to the same house-lot and the same member, with an endorsement on the counterfoil for No. 67 that the original share certificate had been lost. Further share certificates issued to transferees also bore the same date.

Transfer of land to name "Wah Yan Mo Fan Heung" in 1929

69. In late 1929, i.e. nearly one and a half years after the issue of shares, the lands acquired by Lui Lap Ka and Wong Yuet Chiu were transferred to the name "Wah Yan Mo Fan Heung".

70. The Land Office posted a notice in Chinese asking if there would be objections. It referred to the intention that the lands of the Company be transferred to Wah Yan Mo Fan Heung managers or trustees Lui Lap Ka and Wong Yuet Chiu (改歸華人模範鄉司理雷立家黃月樵).

71. The transfers were effected on 30 December 1929. There was apparently no instrument of transfer, such as a vesting deed or assignment or any document purporting to transfer property according to Chinese custom or law. According to the memorial, the consideration was "payment of Crown rent". Stamp duty of $2 was charged, much less than at the acquisition of the lands.

72. It has been submitted on behalf of the Plaintiffs that prima facie, by this process of transfer, the Land Officer must have accepted that Wah Yan Mo Fan Heung was a t'ong. However, if that were the case, one would have expected to find an appointment and approval of managers of the t'ong recorded and registered in order to comply with s.15 NTO (at that time, s.27 NTRO). There was none. Nor was there a list of members lodged at the Land Office, which was the practice of the Land Office (as stated in evidence by Tommy Tam and not disputed by C. J. Robinson, both of whom have had many years' experience in dealing with t'ong lands in the New Territories).

73. Accordingly I do not accept the Plaintiffs' submission that this transfer supported their argument that Wah Yan Mo Fan Heung is a t'ong. Given that the lands were already held in the name of Chap Shing Company or Lui Lap Ka and Wong Yuet Chiu its trustees , and in the absence of the usual matters accompanying the holding of land by a t'ong, the transfer is consistent with "Wah Yan Mo Fan Heung" being used as the land-holding name or style of the Company.

Division of some lands to some members in 1932

74. In 1932, some of the lands were divided and distributed to some members. It is not clear from the evidence why only some (and not all) members who had shares were given lots.

75. What is however interesting is that before the division took place, a notice was posted by the Land Office. This was a printed form in which the printed words "t'ong/tso" had been deleted in two places and the word "Heung" written in manuscript. Mr Tam emphasised these deletions in his affirmation but in cross-examination his evidence was somewhat confused. In my view, it would be fair to say that since these deletions would not have been done by the Land Officer himself but by his staff, not much mileage can be made of it. However, the deletion of the generic words "t'ong/tso" in the second place where they appear on the notice (as contrasted to part of the proper name, in the first place where they appear) might show that at least the staff of the Land Office had insufficient materials to identify Wah Yan Mo Fan Heung as a s.15 t'ong with any degree of certainty.

76. As for the submission of the Plaintiffs that the notice would not have been necessary if Wah Yan Mo Fan Heung were not a s.15 t'ong, there is no evidence that these notices were only posted for s.15 t'ongs.

Unrest and War

77. As a matter of completeness, at this stage of the chronology, it should be recorded that no houses were ever built on the house-lots and no construction took place. According to Mr Chong's affirmation, this could have been due to the outbreak of unrest on the Mainland in the mid- to late 1930's.

78. In any event, Mr Chong's evidence of his belief as to the members' intentions for the house-lots was unclear. In his affirmation, he referred to the members' intention to build dwelling-houses for themselves. However, that seems inconsistent with his evidence that as the members came from wealthy families, it would have been unlikely that they would have intended to reside in the houses which were small.

Account books

79. It would appear that at some stage after the Second World War, part of the lands were occupied by a confectionery company and a timber yard. These are referred to in accounts books kept when Lui Lap Ka was alive. They were entitled "Chap Shing Company Wah Yan Mo Fan Heung". If Wah Yan Mo Fan Heung were a s.15 t'ong to which Chap Shing Company had transferred the lands, it is difficult to see why the Company was still involved with the lands in the absence of any management agreement or fees. Chap Shing Company was not referred to in any of the title deeds as "managers" of Wah Yan Mo Fan Heung. Nor did there appear to be any account rendered by Chap Shing Company to the members of Wah Yan Mo Fan Heung.

Minutes of meeting during Lui Lap Ka's lifetime

80. The only minute of a meeting of "New Territories Wah Yan Mo Fan Heung Chap Shing Company" held when Lui Lap Ka was alive also suggests that the real property was that of the Company. It refers to the selection of signatories for management of the property of "this company" (本公司物業管業簽字人). Wong Tat To and Lui Lap Ka were elected to represent "this company" as signatories of title deeds and for control of the property (代表本公司為管業地契簽字人).

81. In my view, the fact that Lui Lap Ka made no application for s.15 approval or even a report of his appointment as manager of Wah Yan Mo Fan Heung before land was transferred to that name in 1929, coupled with his continued inactivity in this respect during his lifetime is evidence that he (who had direct knowledge of the intention behind "Wah Yan Mo Fan Heung") did not regard Wah Yan Mo Fan Heung as a s.15 t'ong.

Land Officer's position

82. Lui Lap Ka died in 1965. By a letter dated 12 June 1972 referring to "the Company's" property, Wong Tat To notified the Land Officer of Lui Lap Ka's death and informed him that due to the dispersal of the members, there had been no meeting to elect a replacement.

83. This gave rise to various discussions within the Land Office which culminated in the Land Officer adopting the position that Wah Yan Mo Fan Heung was not a t'ong within the meaning of s.15 NTO. That was the Land Officer's firm position from that point in time until shortly before the Tomlin Order referred to above. It remained the Land Officer's position even when compensation was payable in the 1980's for resumption of certain lands registered in the name "Wah Yan Mo Fan Heung", and legal advisers within Government had the invidious position of having to advise both the Land Officer (who did not accept that Wah Yan Mo Fan Heung was a s.15 t'ong) and the paying authority (which was anxious to effect payment).

84. I will deal in section (3) with the Plaintiffs' submission that since the appointment of managers were registered, approval could be inferred.

Events after 1972

85. As a matter of completeness, I would record that matters were in a state of flux after 1972. In 1984, a company called Mutual Progress (in which Chan Kam Cheung and Tang Man Kit were interested) was appointed by Wong Tat To to act as managers of the lands. Chan and Tang later purportedly became members and then managers of Wah Yan Mo Fan Heung.

86. There was also a number of proceedings concerning the lands, including an action started in 1988 by Mr Chong in which he asserted Wah Yan Mo Fan Heung was not a s.15 t'ong, a position shared by Tang Man Kit in an action in 1989, and proceedings commenced by a company called Tonkit seeking relief against Tang Man Kit. None of those actions has proceeded to the stage of a decision or judgment.

Section 16 NTO

87. I have set out above the reasons why I have come to the conclusion that t'ong in s.15 NTO does not include the Plaintiffs' concept of a "business t'ong" and why on the facts as found, Wah Yan Mo Fan Heung is not a t'ong within the meaning of s.15 NTO.

88. Briefly, I would now discuss s.16 NTO in deference to counsel's submissions. It was the Defendant's submission that even if Wah Yan Mo Fan Heung were a "business t'ong", it did not fall within the exemption of s.16, so that it was required to be registered under the Companies Ordinance. Because there was no such registration, Wah Yan Mo Fan Heung was an illegal organization and the common law does not recognize the existence of illegal organizations except for penal purposes.

89. I agree that if Wah Yan Mo Fan Heung were a t'ong, it did not fall within the exemption in s.16 NTO, if only because it did not own land in 1910 (whether by itself or Chap Shing Company or Lui Lap Ka and Wong Yuet Chiu as trustees). It is unnecessary to consider any other elements of s.16.

90. However, I do not think it follows that a t'ong (if Wah Yan Mo Fan Heung were such) which failed to register under the Companies Ordinance would simply cease to exist. Section 13 NTO provides that Chinese law and customs must be applied if it affects land (Tang Kai Chung v Tang Chik Shang [1970] HKLR 276) , so that if lands are owned by a t'ong, it cannot be said that the t'ong would suddenly cease to exist for non-compliance with the Companies Ordinance.

(3) Authority of Tang Man Kit and Foo Tak Ching

91. The Plaintiffs' main case is that they are s.15 managers. I have found that Wah Yan Mo Fan Heung is not a s.15 t'ong. However, if I am wrong and Wah Yan Mo Fan Heung is a s.15 t'ong, my views on the disputes concerning their approval and registration are as follows.

92. First there is their submission that approval and registration do not matter because the commencement and continuation of proceedings is not "dealing with land" that requires the Land Officer's consent under s.15. I do not agree. The commencement and continuation of proceedings is the means by which occupation of land by a tenant may be determined and land is recovered. Such a recovery of land is the corollary to the grant of a lease. It is well-established that the grant of a lease of land is a dealing with the land. There is no reason why the same rationale does not apply to the determination of a lease and recovery of land.

93. I shall now deal with the aspect of approval of appointments as managers. The Plaintiffs' submission is that even before the Tomlin Order, their appointments as managers have been registered in the Land Registry and thus it could be inferred that their appointments had been approved. I cannot accept that submission.

94. Approval requires consideration and decision, whether reasoned or evaluated. Both the Land Office's internal documents since 1972 and the correspondence between a succession of Land Officers and the various persons purporting to be managers and their solicitors since at least 1980 clearly show as a fact that the Land Officer never intended to approve such purported appointments. In the light of that, the Plaintiffs' submission that by reason of the delegation and division of tasks between the Land Office (Registrar General) and the District Office, somehow the Land Officer unintentionally approved the appointments when he registered them, when his intention not to approve was overt, is artificial. Such an argument might have been more attractive if made by a third party, but not by the purported managers themselves.

95. The registration of the appointment of managers was explained (albeit somewhat elliptically) by the Land Officer Kenneth Wong in his letter dated 26 April 1988 as that of the appointment of managers of the land (as opposed to managers of a t'ong). Although there was no similar express rationalization of registration by other persons who had held the office of Land Officer, the fact remains that since 1972, the refusal to accept Wah Yan Mo Fan Heung as a s.15 t'ong had been made very clear, and that might also explain the pre-1972 registrations of appointment of managers in the absence of other indicia of treatment as a t'ong, such as reports of appointment before the transfer of property to the Heung's "managers" or applications for approval, notes of approval in the Land Officer's file, and requests for a list of members.

96. The terms of the recent approval of managers by the District Officer also makes it clear that previously there had been no approval. Approval can however be backdated to the date of appointment (Light Ocean Investments Ltd v Enway Development Ltd, supra).

97. As for registration, it was held in Light Ocean that this is an important step in the s.15 procedure. It was also held in that case that it was essential in dealings with the public, such as in that case a purchaser of land held in the name of a t'ong. For that reason, I would differ with respect from the judgment of Keith J (as he then was) in Wing Tung Yick v AG [1997] 4 HKC 432 in which he held that registration in s.15 was effected by the making by the Land Officer of a note on a file not available to the public. First, historically the Land Officer is an officer of the Land Registry, which is a public office for the maintenance of records. Secondly, although it is true that the Land Registry is meant for the registration of documents evidencing certain acts or transactions, statutes may (if drafted clearly enough) expressly provide for substantive actions or results to be effected by the registration of a document. Re-entry by Government of leasehold property is an example in point.

98. It is because of this effect on the public that I do not accept that registration of the District Officer's approval of appointment as managers can have a retrospective effect here. The purpose of registration is to provide a physical chronological record of public documents. Accordingly, the approval of the appointments of Tang Man Kit and Foo Tak Ching (assuming everything else in their favour) were still registered only as at 1 September 2000.

99. Since s.15 NTO provides that it is only "thereupon", after approval and registration, that the managers have power to act (Light Ocean, supra), they would only have power to sue after such registration on 1 September 2000. However, since there is no issue of competing priorities, it would be adequate if authority is vested before the determination of proceedings by way of ratification, subject always to arguments as to costs.

100. Finally, as regards authority to sue, the Plaintiffs have submitted that the Defendant is estopped from denying its landlord's title. However the issues on this motion are not what title the landlord has, but whether Tang Man Kit and Foo Tak Ching have authority to issue proceedings at all. They have not purported to sue in their own personal right, and in so far as Wah Yan Mo Fan Heung is an unincorporated association, the evidence as to the composition of the association and the validity of votes is far from clear.

Order

101. In the light of my findings, I would decide the Motion in the Defendant's favour. I will hear the parties as to the form of the order and costs unless they are agreed. It only remains for me to thank all counsel who have taken part in these proceedings at various stages.