XCHRX WAH YAN MO FAN HEUNG 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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DECISION

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1. This is an action for possession of several pieces of land in the New Territories. The registered owner of the land is "Wah Yan Mo Fan Heung, Chan Kam Cheung (Manager) and Tang Man Kit (Manager)". The land is occupied by the Defendant, who had entered onto the land as a tenant.

2. This action started in 1990. I am told that the trial is scheduled to take place in the next few months.

Application

3. Although there were a total of 5 summonses before me, the substantive application was by the Defendant to strike out the Amended Statement of Claim and to dismiss the action on the grounds that it discloses no reasonable cause of action and is frivolous, vexatious and/or is otherwise an abuse of the process. Alternatively, the Defendant seeks a stay of the proceedings.

4. The application was based originally on the ground that the Plaintiff, as an unincorporated association, has no corporate or separate legal existence or capacity; and on lack of authority for the issue of the Notice to Quit.

5. The Plaintiff has applied for leave to amend the title of the Writ and to re-amend the Statement of Claim, to the effect that the title of the action would be changed to "Tang Man Kit (suing as sole manager of Wah Yan Mo Fan Heung 華人模範鄉) " and, whilst maintaining at paragraph 1 the pleading that the Wah Yan Mo Fan Heung ("the Heung") was and is an unincorporated body, adding paragraph 1A to plead that it was and is a t'ong within the meaning of s.19 of the New Territories Ordinance (cap. 97, Laws of Hong Kong 1960 edition) and s.15 of the New Territories Ordinance (cap. 97, Laws of Hong Kong current edition).

6. The parties have accordingly argued the strike-out application on the basis de bene esse of the draft Re-amended Statement of Claim.

Principles

7. It is well-established that it is only in plain and obvious cases that the Court should strike out an action before it goes to trial. In exercising its discretion, the Court should also take into account the stage which the proceedings have reached, and that the jurisdiction should not be exercised except with great circumspection and unless it is perfectly clear that the Plaintiff's case cannot succeed. On the other hand, it should also be borne in mind that authority to sue is an important matter of which the Court should be conscious, as it may affect, amongst other things, the ability of a successful defendant to recover its costs.

Issues

8. The issues for the purpose of these proceedings can be condensed into the following questions:

(1) does the Plaintiff have an arguable case that the Heung is a t'ong?

(2) if so, has the Defendant succeeded in showing that there has been no approval of managers under s.15 New Territories Ordinance so that:-

(a) the Notice to Quit had not been issued by anyone with authority to represent the Heung?

(b) Mr Tang Man Kit ("Mr Tang") has no authority to issue and carry on these proceedings as the Heung's manager?

Arguable case that the Heung was a t'ong

9. It is to my mind clear that the Defendant would have succeeded in striking out if the Plaintiff had not sought to amend the title of the writ and to re-amend the Statement of Claim to plead that the Heung was a t'ong. It is difficult to see what persons were comprised in the unincorporated body known as the Heung as originally pleaded, and how (absent representative proceedings) Chan Kam Cheung and Mr Tang could have sued as "managers" on their behalf.

10. Whilst not conceding that he was out of court if the Heung was not a t'ong, Mr Patrick Fung SC, counsel for the Plaintiff, did not put forward any substantive arguments on capacity to sue on the basis of an unincorporated association only.

11. The Plaintiff's case is that the Heung is and was a non-ancestral t'ong. Mr Fung was able to refer me to a number of materials which show that the Heung could be a non-ancestral, or association, t'ong.

12. As far as the law is concerned, he referred to passages in the Lockhart Report (1900) and the Strickland Report (1948) which describe how under Chinese law and custom, land was held by associations ("ui tin"). He also referred to cases in which the courts of Hong Kong have held or accepted that a t'ong does not need to have the word "t'ong" in its name (Chu Tak Hing v Chu Chan Cheung-kiu [1968] HKLR 542, and Tang Yau Yi Tong v Tang Mou Shau Tong [1995] 2 HKC 245), and that a t'ong need not be ancestral in character (Tang Yau Yi Tong, supra).

13. As for evidence, the land now registered in the name of the Heung (together with other land) were first acquired in 1924 in the name of Chap (Tsap) Shing Company, or in the personal names of Wong Yuet Chiu and Lui Lap Ka, the funds having been raised by individual contributors. In 1929, all these lands were transferred to the Heung, with the same Wong and Lui acting as "sze lei" (trustees or managers).

14. Such an acquisition of land in the New Territories in the name of an association with trustees or managers is consistent with (although not exclusively) the concept of an association t'ong.

15. There is also some evidence showing that the Heung (and perhaps also its predecessor Chap Shing Company) had been acknowledged (or at least treated) by the Land Office as a t'ong. When land in the name of Chap Shing Company was transferred to the Heung in 1929, and when some land of the Heung was divided in 1932, the notices given by the Land Office of the proposed transfer and division were identical to, or at least consistent with, notices given when land of a t'ong is disposed of.

16. Although there is reference in the present case to the issue of share certificates, this is not fatal to the Plaintiff's t'ong argument, as share certificates have been known to have been issued by customary land trusts not formed on a family basis (Selby, 1991 HKLJ 45).

17. Miss Audrey Eu SC, counsel for the Defendant, has indicated that for the purposes of these proceedings only, she is not seeking to argue that a t'ong must consist of family members and be formed for ancestral worship. Indeed, so long as the Plaintiff's points as recounted in the foregoing paragraphs are arguable, they can hardly be the subject of a strike-out.

18. The bone of contention lies in the Defendant's submission that the Heung's case as a t'ong is doomed to failure because there had been no approval of managers required under s.15 New Territories Ordinance, so that

(a) the Notice to Quit issued by solicitors purportedly acting for the Heung was invalid for lack of authority, and/or

(b) the present proceedings could not be issued or carried on by Mr Tang purportedly as manager of the Heung.

It is common ground that a t'ong can only act by its registered manager(s) under s.15 New Territories Ordinance (Ip Cheung Kwok v Ip Siu Bun [1988] HKC 437, [1990] 2 HKLR 499).

Section 15 New Territories Ordinance

19. This section has been amended from time to time, but substantively it has changed little. As at the date of the Notice to Quit (April 1986) and Mr Tang's appointment (January 1989), it was in the following terms:

"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 Land 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 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 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. 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 Land Officer 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 Land Officer 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 manager, or within 3 months after any change of manager prove the appointment of a new manager, it shall be lawful for the Crown to re-enter upon the 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 Office".

20. It will be seen from this section that a clan, family or t'ong holding land must appoint a manager to represent it, or risk forfeiting its land. When it appoints a manager, it has to report the appointment to the Land Officer. The Land Officer may require proof (or further proof) of the appointment. He then has to decide whether to approve the appointment, and it is only if he does approve the appointment that he proceeds to register the name of the manager.

21. It seems fairly clear from the above process that the manager's name is only registered by the Land Officer after the Land Officer has approved of the appointment. So the appearance of the manager's name on the register would appear to be at least prima facie evidence that he has been approved by the Land Officer (perhaps subject to evidence to the contrary from the Land Officer).

Defendant's burden in these proceedings

22. So in asking the Court to strike-out the Plaintiff's claim, the Defendant will have to satisfy the Court that clearly the managers' names have not appeared in the register for the purposes of s.15 New Territories Ordinance; or that if the names have appeared, that there is clear evidence from the Land Officer that the managers have not been approved.

The "register" for the purposes of s.15 NTO

23. The next question must be: what is the "register" for the purposes of s.15 New Territories Ordinance?

24. It is at least arguable (when one considers the purpose of s.15) that this must be a public record, not an internal record of the Land Officer for his eyes only. The public has an interest in knowing the identity of the registered manager because of the registered manager's powers over the t'ong's land.

25. The manager (once registered) has power to dispose of or in any way deal with the t'ong's land as if he were sole owner thereof, so long as he gives the prescribed notice and obtains the consent of the Land Officer. And the execution of instruments relating to the t'ong's land by the registered manager, made in the presence of the Land Officer and attested by him, is equivalent to the execution of the instrument by all the members of the t'ong.

26. So, it must be at least arguable that the register contemplated in s.15 New Territories Ordinance is a public register, or a record open to public inspection.

Wing Tung Yick

27. At this point, it may be relevant to consider the case of Wing Tung Yick Investment Co Ltd and others v The Attorney General HCMP2557/1995 (unrep). In that case it was held that registration of a successor of property under s.17 New Territories Ordinance was constituted by the Land Officer's record recording the details of the application and the written notice approving his succession.

28. In that case, there appeared to have been evidence (p.9) of what the Land Officer actually did when he received an application for succession, but unfortunately, it is not clear from the judgment whether the Land Officer's record (of approval of successors) was open for public inspection.

29. If it was open to public inspection, then one can readily understand the judge's finding that the record was a register for the purposes of s.17. If it was not, then it would be less easy to understand how an internal record could be regarded as a "register" with such important public consequences as the vesting of property in another person.

30. In any event, there is no evidence in the present case that (i) whenever a t'ong's manager was approved by the Land Officer Yuen Long under s.15, there would be some internal record kept by him and that (ii) the names of the Heung's managers have not been found in that record. (Indeed, the fact that there appears to be 2 possibly inconsistent views held by 2 Government officials whether there had been s.15 registration of Wong Tat To as manager in 1960 - as discussed later - may indicate that there were no such specific internal records).

Arguable case that Heung's managers were registered under s.15 NTO

31. The crux of the dispute here is whether the Heung did have registered (and thus, previously approved) managers under s.15 New Territories Ordinance. I note that in Mr Tang's Affirmation, he asserts that he was approved as manager, but does not go into specifics as to if or when he had received notification from the Land Officer of such approval. It would appear that for Mr Tang's appointment, as with the 1984 managers, the Plaintiff is relying on a number of public documents:

(1) a Memorial No.143161 "required to be registered in the New Territories Administration of Hong Kong according to the provisions of the Land Registration Ordinance (cap 111) and the New Territories Ordinance (cap 97)" and registered on 4 January 1960, where the nature and object of instrument was stated to be "Appointment of Manager" followed by a reference number. Against the box printed "Names and additions of parties" are recorded "Wong Tat To of [address] is hereby appointed as manager for Wah Yan Mo Fan Heung in place of Wong Yuet Chiu, deceased".

(2) a Memorial No.293048 also stated to be "required to be registered in the Yuen Long District Land Office of Hong Kong according to the provisions of the Land Registration Ordinance (cap 128) and the New Territories Ordinance (cap 97)" and registered on 20 September 1984, where the nature and object of instrument was stated to be "Notice of Appointment of New Manager (a copy whereof is hereto annexed)". Against the box printed "Names and additions of parties" are recorded "Wong Tat To of [address], the existing manager of Wah Yan Mo Fan Heung; Wong Pui of [address], the newly appointed manager of Wah Yan Mo Fan Heung in the place and stead of Lui Lap Ka, deceased".

(3) a Memorial No. 367910 entitled as above and registered on 3 June 1988 where the nature and object of instrument was again stated to be "Notice of Appointment of New Manager (a copy whereof is hereto annexed)". Against the box printed "Names and additions of parties" are recorded "Wong Tat To of [address], the existing manager of Wah Yan Mo Fan Heung; Wong Fook Pui of [address] and Wong Kwan Fat of [address], the newly appointed managers of Wah Yan Mo Fan Heung in the place and stead of Wong Pui deceased".

(4) a Memorial No. 388993 entitled as above and registered on 31 January 1989 where the nature and object of instrument was stated to be "Notice of Appointment of New Managers of Wah Yan Mo Fan Heung (a copy whereof is hereto annexed)". Against the box printed "Names and additions of parties" are recorded "Chan Kam Cheung of [address] and Mr. Tang of [address] the new managers of Wah Yan Mo Fan Heung in place of Wong Tat To and Wong Pui and including Wong Fook Pui and Wong Kwan Fat in so far as they have been purportedly appointed additional managers of the Heung".

32. The Defendant's submission is that these are registrations under the Land Registration Ordinance and s.11 of the New Territories Ordinance, and not under s.15 New Territories Ordinance. It submits that the registration was only registration of the documents, viz. the documents evidencing the appointment of those persons qua ordinary estate managers (like managers of say, Fairview Park), not qua s.15 managers.

33. The Defendant relied on the fact that the notice of appointment by Wong Tat To (albeit expressly subject to the consent of the Land Officer) of Wong Fook Pui and Wong Kwan Fat as additional managers in 1988 had been registered, even though it did not purport to be an appointment by the Heung as would have been necessary under s.15.

34. Now, it is not stated on the face of these memorials that they were registered under the Land Registration Ordinance and only under s.11 of the New Territories Ordinance. It does not appear plain and obvious to me that they should be read so restrictively, so as to exclude even the possibility that they may have been registrations of managers under s.15 New Territories Ordinance.

35. Further, an attractive argument against the Defendant's submission (that these were registrations only of documents appointing ordinary estate managers) is that the managers here were described in the registrations as managers "of the Heung", not managers of the various lots of land. And more importantly, the registrations have appeared under the "Owners Particulars" part of the Register, not the part registering dealings with the land where one would expect to find appointments of ordinary estate managers.

36. The fact that they appear under the "Owners Particulars" part of the Register would appear to be arguably more consistent with their being s.15 registrations, because, of course, registered managers under s.15 represent the t'ong which owns the land.

37. Accordingly, I do not agree with the Defendant that it is plain and obvious that the Plaintiff's case must fail on the ground that the Heung's managers had not been registered under s.15 New Territories Ordinance.

Letters from LACO & Yuen Long District Office

38. Even if there is evidence that the Heung's managers had been registered under s.15 New Territories Ordinance, this may perhaps be rebutted if there is clear evidence that the Land Officer in 1984 and 1989 had in fact not approved the managers.

39. However, for a strike-out application, such rebutting evidence would have to be very clear before the Court would exercise its discretion to deny the Plaintiff a right to trial without the chance to put forward its case and to cross-examine such witnesses as may be called for the Defendant. I do not find such clear evidence here.

40. The Defendant relied heavily on two letters for its submission that the managers in 1984 and 1989 had not been approved by the Land Officer. These were (i) a letter dated 12 January 1995 from Mr C.J. Robinson, Assistant Principal Solicitor from the Legal Advisory and Conveyancing Office, Lands Department ("the Robinson letter") and (ii) a letter dated 23 March 1998 from Mr Arthur MT Wong of the Yuen Long District Office ("the Wong letter").

41. Mr Robinson's letter does state that the Government's view "is" very clear that neither the Heung nor Tsap Shing Company "can" be considered to come within the ambit of s.15 of the New Territories Ordinance. So articulated, however, it does not state clearly (or clearly enough for a strike-out) that the Land Officer in 1984 and 1989 had considered that the Heung was not a t'ong, and had not approved the managers. What is important in the present proceedings between these parties is not the view of a legal adviser of the Lands Department now, but whether the Land Officer in Yuen Long at the time (in 1984 and 1989) had approved the managers.

42. This letter then continues to express Mr Robinson's own view that the lots "registered in the name of the Heung through the managers was erroneously done purportedly under s.15 of cap. 97. The registration of Memorial No.141363 relating to the appointment of manager [Wong Tat To's appointment as manager in 1960] was in my opinion not registered by the then District Officer pursuant to s.15 of cap.97". It is not clear whose error was being referred to, and the opinion that there was no s.15 registration appears to be an ex post facto rationalization by a legal adviser, rather than a narration of actual fact.

43. As for the appointment of Wong Pui, Wong Fuk Pui and Wong Kwan Fat, the letter says that "Wong Tat To was advised by Government that Government was not prepared to deal with him as the sole manager in view of the uncertainty around 1984 as to the legal status of the Heung. He was advised that an additional manager should be appointed by members of the Heung and Government would not recognise any such appointment unless" certain requirements as to calling of meetings were complied with. These requirements were met and "Wong Pui was duly elected in accordance with the agreement reached with Government and Wong Pui's appointment as manager was registered by M/N 293048".

44. No source of information is disclosed for these statements. It is not known which arm of Government was referred to by Mr Robinson.

45. The "agreement" with "Government" would presumably have been documented, but this has not been provided.

46. I find it difficult in a strike-out application to assume that this "agreement" was only for the purposes of facilitating payment of resumption compensation (as suggested by the Defendant) and not possibly also for approval of s.15 managers, when the Court has not been shown any primary documents or affidavit evidence from the "Government" side of the agreement (Wong Tat To and Wong Pui both having died). It is at least arguable that as a result of their complying with the conditions imposed by "Government", these persons were recognised qua "managers"as such, not just as say, "representatives" of an unknown body of individuals which was not a t'ong.

47. Wong Tat To and Wong Pui were the managers who had authorised the issue of the Notice to Quit. As for the appointment of Mr Tang, the rest of the Robinson letter does not add anything. If anything, it seems to validate Mr Tang's appointment as having been made in compliance with the conditions imposed by "Government".

48. Therefore I cannot agree with the Defendant that the Robinson letter provides sufficiently clear evidence that the Land Officer Yuen Long had not approved the appointments of the managers in 1984 and 1989.

49. I then turn to the Wong letter. This reiterated that the Heung "does not come within the meaning of s.15 of the New Territories Ordinance" and states that any appointment of manager/new manager "does not require the consent of the District Officer". Expressed that way, it does not assist when the question is what the Land Officer Yuen Long did (or did not do) in 1984 and 1989.

50. The letter then advises that "the registration of Memorial No.143161 on the appointment of Mr Wong Tat To as manager for the above `Heung' was not made pursuant to s.15 of the New Territories Ordinance. The then District Officer was involved in a variety of duties, one being the District Land Registry and the registration of that Memorial was made by him in that capacity".

51. Now, that appears to be a categorical statement of fact, written presumably after consulting such documents as were in the possession of the writer in his official capacity as a representative of the Land Officer Yuen Long. However it did not explain Mr Robinson's reference to Wong Tat To's registration under s.15 being in error (even though a copy of the Robinson letter was enclosed with the Wong letter).

52. More importantly, it did not go on to say that the 1984 and 1989 registrations (which are the relevant ones for present purposes) were also "not made pursuant to s.15 of the New Territories Ordinance". No similar assertion was made on these appointments.

53. In the circumstances, I am also unable to see from this letter a plain and obvious case that the managers in 1984 and 1989 were not approved by the then Land Officer Yuen Long notwithstanding the registrations.

Notice to Quit

54. As a matter of completeness, I would also add that the Defendant had challenged the authority of Wong, Hui & Co., solicitors, to issue the Notice to Quit on behalf of the Heung.

55. Mr Tang has however recently exhibited a Power of Attorney whereby the Heung's managers (registered in 1984 under Memorial No.293048) had appointed a company called Mutual Progress to be their attorney, empowering it to inter alia give notices to quit to tenants, and to employ and retain solicitors in relation to any matter to which the powers relate.

56. Thus, if the managers were registered managers under s.15 (and I have found there is at least an arguable case), then Wong, Hui & Co were authorised in the name of the Heung to issue the Notice to Quit here.

57. If however I am wrong, and only Mr Tang were authorised, but not the managers in 1984, then I would agree with the Defendant that Mr Tang cannot simply ratify the issue of the Notice to Quit now. A notice to quit is a document that affects interests in land (Divall v Harrison [1992] 2 EGLR 64, 66). If an agent had not been authorised to issue it, it is not the act of the principal and the tenant's interests in the land have not been affected.

Orders

58. At the hearing there was no objection to, and I made an order in terms of, paragraphs 1 and 2 of the Defendant's Summons dated 17 November 1998.

59. By reason of the matters set out above, the Defendant's Amended Summons to strike out the Writ and Amended Statement of Claim is dismissed. Consequently, its application to dismiss or stay the action is dismissed.

60. I make an order in terms of the Plaintiff's Summons to amend the title to the Writ and to re-amend the Statement of Claim as per the draft attached to its Summons dated 13 May 1998.

61. I will leave it to the parties to agree costs, or to restore the summonses for argument as to costs. I am not inclined to make an order nisi for costs to be paid by the Defendant to the Plaintiff (even though the Plaintiff has succeeded in the arguments before me) in light of my view that the Defendant would have originally succeeded in striking-out had the Plaintiff not applied to re-amend to plead a case based on the concept of a t'ong.

62. Finally I would like to thank counsel for their assistance.