TO KAN CHI AND OTHERS v. TO KIN WAH AND OTHERS

HCMP 509/2002

[2025] HKCFI 4054

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 509 OF 2002

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BETWEEN

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DECISION

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Introduction

1.  By summons filed on 29 April 2024, the Plaintiffs seek payment out of court in respect of the expenses in relation to the operation of T’ong Tsing Wan Kun (the “Tong”).

Material Background

2.  These proceedings have a chequered procedural history. For present purposes, it suffices to highlight the following matters.

3.  The Tong owns and operates a temple that serves the purposes of ancestral worshipping. It also owns various properties and lands in the New Territories.

4.  Pursuant to the originating summons herein, on 5 February 2002, Yam J ordered that the funds of the Tong held by HSBC Trustee (HK) Ltd may only be paid out with the approval of the court.

5.  The Plaintiffs, namely To Kan Chi and To Kam Chau, claimed to be the managers of the Tong.

6.  Since the said order dated 5 February 2002 was made, the Plaintiffs had made 5 applications for payment out. By the orders dated 29 January 2012, 16 July 2014, 20 July 2016, 10 October 2018 and 24 July 2020, To J allowed these applications for defraying the general and specific expenses in relation to the operation of the Tong.

7.  Meanwhile, the Defendants strenuously challenged the validity of the Plaintiffs’ appointment as managers. They commenced HCA 1603/2004.

8.  The trial of HCA 1603/2004 took place before Bebe Chu J in June 2023. The judgment was handed down on 18 December 2023. In short, the learned judge held, amongst other things, that:-

(l) The Plaintiffs were validly appointed at a meeting on 13 May 2001 and their appointment was duly registered and approved pursuant to section 15 of the New Territories Ordinance.

(2) The Plaintiffs, as managers, should be regarded as trustees of the Tong’s assets.

(3) The surplus funds of the Tong should be used for enhancing or maintaining its temple and supporting worshipping activities that had been traditionally carried out in the temple.

(4) The surplus funds of the tong should be used for any purposes beneficial to either present or future members of the Tso/Clan/Tong in circumstances of necessity and unexpected circumstances.

9.  The Defendants lodged an appeal against Bebe Chu J’s judgment under CACV 32/2024. However, the appeal has not yet been set down for substantive argument. There has been no stay of execution pending appeal.

The Broad Observations made by the Defendants

10.  It does not appear that the Defendants object to the Plaintiffs’ application outright. However, the Defendants ask me to bear in mind the following matters.

Appointment of New Managers is Long Overdue

11.  The Tong used to have 3 managers on records, namely To Kan Chi and To Kam Chau (ie the Plaintiffs) as well as To Fuk Tim.

12.  To Fuk Tim passed away in October 2009.

13.  After these proceedings were commenced, To Kan Chi passed away recently in January 2025.

14.  Thus, as of today, the only surviving manager is To Kam Chau.

15.  The Defendants say that the appointment of new managers is long overdue. They say that Bebe Chu J appeared to accept that each of the 3 principal fongs within the clan should separately and autonomously nominate or appoint a manager.

16.  In my view, it is for the Defendants and/or the members of the Tong to take appropriate steps to fill the vacancy. In light of the hostile litigation in HCA 1603/2004, I understand why the vacancy left behind by To Fuk Tim has not yet been filled. Adopting a common-sense approach, the vacancy is not a reason to thwart the operation of the Tong.

17.  I do not lose sight that To Kan Chi (who passed away in January 2025) is named as a co-plaintiff in these proceedings. However, this is not a reason for dismissing or not dealing with the present application.

18.  First of all, as pointed out by Mr Chan Chi Hung SC (for the Plaintiffs) who referred me to Re Man Un Uk Wai [2023] 3 HKLRD 869, there is no expert evidence showing that the 3 managers were jointly appointed such that they must act jointly. If the 3 managers must act jointly, all the acts that were purportedly done by To Kan Chi and To Kam Chau after 2009 would be void. If this were the case, To J would not have granted the 5 orders mentioned hereinabove. Obviously, on the previous occasions, the court did not proceed on the basis that the 3 managers must act jointly.

19.  Since there is no expert evidence showing there is a requirement that the 3 managers must act jointly, I see no reason why the remaining manager, namely To Kam Chau, may not prosecute the present application.

20.  More fundamentally, the foremost question for the court to decide is what ought to be done in the best interest of the trust estate: see Re Estate of Chiu Keung [2020] 3 HKLRD 779 at para 60 (per Chu JA).

21.  Adopting a practical and common-sense approach, the death of To Kan Chi must not put a halt to the Tong’s operation. Despite the death of To Kan Chi, the Tong will continue its operation and expenses will be incurred on a continuous basis.

22.  It would be plainly against the Tong’s interest to allow the Tong’s expenses to be left overdue. It would also be against the Tong’s interest if the court disallows the Tong to incur expenses to continue its operation.

23.  In the premises, I will proceed to deal with the application under the Plaintiffs’ summons filed on 29 April 2024

The income arising from the Columbarium

24.  Before I deal with the items under the Plaintiffs’ summons, I shall address the Defendants’ concern regarding the Columbarium.

25.  In gist, the Defendants complain that the Plaintiffs have concealed the financial position regarding the Columbarium, including the income arising therefrom.

26.  In this connection, it is the Plaintiffs’ evidence that:-

(l) The sale of the individual units or spaces in the Columbaria could have been a possible source of income for the Tong.

(2) However, as of today, the Tong has not yet obtained a license from the Government, which, the Plaintiffs say, is due to the objections raised by the Defendants’ camp.

(3) Thus, the sale proceeds have been kept by a company named Cirrus View, which was engaged to manage the Columbaria. If it transpires that no license could be obtained, the proceeds of sale would have to be refunded to the purchasers.

(4) Cirrus View is independent of the Tong. As evidenced by the public records, the Plaintiffs are neither shareholders nor directors of Cirrus View.

27.  For present purposes, I accept the Plaintiffs’ evidence. The Plaintiffs’ evidence makes commercial sense and is not contradicted.

28.  In any event, the matters relating to the Columbarium are not directly related to the expenses incurred or to be incurred by the Tong. Even if there is uncertainty regarding the Columbarium, it does not follow that the Tong does not need to incur expenses in sustaining its operation.

29.  I am not of the view that the affairs relating to the Columbarium constitute a reason not to entertain the Plaintiffs’ application.

The Individual Items in the Plaintiffs’ Summons

30.  I now deal with the individual items under the Plaintiffs’ summons.

Para 1 of the Summons: Secretary’s Salary

31.  Ms Wan Yim Ting has been working as the Tong’s secretary on a part-time basis since 1 August 2013.

32.  Under the previous orders, To J allowed the Tong to increase Ms Wong’s salary and each increase was between HK$1,000 to HK$1,500.

33.  Ms Wong is currently paid a monthly salary of HK$12,000 per month.

34.  The Plaintiffs say that the Tong wholly relies on Ms Wan to handle clerical and administrative matters. As such, she is indispensable.

35.  I have no reason to doubt the Plaintiffs’ assertions. Ms Wan, who has been working for the Tong for more than a decade, must be familiar with the Tong’s operation. It is necessary to ensure that she is reasonably paid, such that she will not seek employment elsewhere.

36.  Bearing in mind that Ms Wan has been increasingly experienced and that there has been inflation since the last order was made, I am of the view that it would be reasonable to pay Ms Wan HK$15,000.

37.  I order that the Plaintiffs do have leave to increase the salary of the secretary appointed to perform secretarial duties for and/or as requested by the Tong by an increment of HK$3,000 per month.

Para 2 of the Summons: General Operation Expenses from 1 September 2022 to 31 December 2026

38.  Under paragraph 2 of the summons, the Plaintiffs seek a sum of HK$3,702,153 for defraying the operation expenses of the Tong for the period from 1 September 2022 to 31 December 2026.

39.  The Defendants say that the amount is excessive and ask me to bear in mind that the funds of the Tong have been depleting.

40.  In this connection, I note that:-

(1) Under paragraph 2 of the order dated 20 July 2016, To J granted a sum of HK$793,500 for the period from 1 February 2017 to 31 December 2017.

(2) Under paragraph 2 of the order dated 10 October 2018, To J granted a sum of HK$758,000 for the period from 1 May 2018 to 31 December 2019.

(3) Under paragraph 2 of the order dated 24 July 2020, To J granted a sum of HK$1,324,320 for the period from 1 January 2020 to 31 December 2021.

41.  There is no question that the Tong’s operation will have to continue.

42.  Bearing in mind (i) the period covered; (ii) the services provided by the Tong at its temple; (iii) the manpower required to sustain the operation of the Tong’s temple; and (iv) inflation, I am of the view that it would be reasonable to grant a sum of HK$3,200,000.

43.  Taking into account the interim payment of HK$900,000 that has already been paid out pursuant to paragraph 1 of the order dated 24 May 2024 made by Wilson Chan J, I order that an additional sum of HK$2,300,000 be paid out forthwith from HSBC Trustees (Hong Kong) Ltd to the Plaintiffs on account for the general operation expenses of the Tong for the period from 1 September 2022 to 31 December 2026.

Para 3 of the Summons: HK$250,000 for repairing the Tong’s Property

44.  The Tong is the owner of 1^st Floor of Block H, No 6 Lee Fat Path, Tuen Mun.

45.  As evidenced by the quotation dated 6 October 2020 and the invoice dated 23 December 2020, the Tong engaged a Tao Kin Lun to carry out works at the said property, which were necessitated due to water seepage.

46.  The Tong is plainly liable to pay HK$250,000 to Mr Tao. Further, I accept that the works were necessary. After all, the property in question was built 60 years ago. As such, it was necessary to carry out reparation from time to time in order to ensure that it would not fall into a dilapidated state.

47.  It is necessary and in the interest of the Tong to pay the indebtedness as soon as possible.

48.  I make an order in terms of paragraph 3 of the summons.

Para 4 of the Summons: HK$ 105,500 for works relating to fire service equipment/facilities and installation

49.  As evidenced by various invoices and letters from February to October 2022, Min Hsing Fire Engineering Co was engaged to install, maintain and repair fire service equipment and/or facilities at the Tong’s temple, and the total charge was HK$105,500.

50.  Bearing in mind that the worshipping activities at the temple involve burning of incense sticks as well as other ceremonial materials, it is necessary for the Plaintiffs to ensure that the temple is safe and fully in compliance with the requirements imposed by the Fire Services Department.

51.  I accept that the works are necessary.

52.  I also accept that the Tong is liable to pay the contractual sum of HK$105,500 to Min Hsing Fire Engineering Co.

53.  It is necessary and in the interest of the Tong to pay the indebtedness as soon as possible.

54.  I make an order in terms of paragraph 4 of the summons.

Para 5 of the Summons: HK$346,200 for works relating to fire service equipment/facilities and installation

55.  As evidenced by various invoices and letters from March to May 2023, Well Fortress Ltd was engaged to (i) find out the locations of water seepage and inspect the fire services facilities; and (ii) install a fire service piping system. The total expenses involved were HK$346,200.

56.  It appears to me that it was necessary to install a new fire service piping system due to the water seepage emanating from the pre-existing water pipes.

57.  In this connection, the Defendants contended that Well Fortress Ltd is not a registered contractor that is qualified to carry out fire service installation works.

58.  However, on the evidence, Well Fortress Ltd was the main contractor that was responsible for coordinating the project, and it engaged a sub-contractor named Hugo Fire Engineering that was licensed to carry out the relevant fire service works.

59.  I am not of the view that the works were carried out illegally or not in compliance with the requirements imposed by the Fire Services Department. Had this been the case, the Fire Services Department would have taken issue or even prosecuted the Tong. There is no evidence showing that this happened.

60.  Whilst I am of the view that the works in question were necessary, there is no question that Well Fortress Ltd had performed services for the Tong and that the Tong is liable to Well Fortress Ltd for HK$346,200.

61.  It is necessary and in the interest of the Tong to pay the indebtedness as soon as possible.

62.  I will make an order in terms of paragraph 5 of the summons.

Para 6 of the Summons: HK$98,000 for installing CCTV system

63.  The Plaintiffs propose to install a CCTV system in the temple. To this end, the Plaintiffs obtained quotations from 3 contractors. They propose to engage KNS Matrix Technology (HK) Ltd, which will charge HK$98,000 for the service.

64.  The Tong’s temple is located in a rural area in Tuen Mun. It is understandable as to why security is a concern.

65.  In my view, the proposed charge of HK$98,000 is not excessive.

66.  The Plaintiffs’ proposal is reasonable and in the interest of the Tong.

67.  I will make an order in terms of paragraph 6 of the summons.

Para 7 of the Summons: HK$3.74 million for reinstating the Elevators

68.  The Tong’s temple has a passenger lift and 3 lifting platforms (the “Elevators”) for wheelchair-bound persons to use. However, for want of reparation or maintenance, the Elevators have been out of service. Thus, the Plaintiffs propose to engage a contractor to carry out works for reinstating or reviving the Elevators.

69.  I accept that the proposed works would bring advantages. For instance, the image of the Tong will improve. More importantly, with better accessibility, more people (including the public) can visit the Tong, and members can also benefit from the convenience.

70.  However, the expenses are substantial. The Plaintiffs have obtained 2 quotations. The cheaper one (which came from Sakura Elevator Engineering Ltd) is as much as HK$3,740,000. This is a substantial sum.

71.  Bearing in mind that the expenses are substantial and that the appeal under CACV 32/2024 will be heard in the foreseeable future, initially I was inclined to the view that the matter be dealt with after the appeal is disposed of.

72.  However, Mr Chan (for the Plaintiffs) drew my attention to the CFA’s judgment. There, it was held that the funds of the Tong should be used for maintaining the temple.

73.  Mr Chan also submitted that the outcome of the appeal has no bearing on the question whether the Elevators should be reinstated.

74.  I accept Mr Chan’s submissions.

75.  The Elevators are facilities that improve the operation of the Tong’s temple. It is not desirable to leave these facilities defunct. Sooner or later, the Elevators should be reinstated or repaired. I am satisfied that the expenses to be incurred are for the purposes of maintaining the Tong’s temple.

76.  In the premises, I will make an order in terms of paragraph 7 of the summons.

Para 8 of the Summons: HK$250,000 for contingency repair works of the temple and other properties owned by the Tong

77.  The Plaintiffs propose that there be a contingency reserve fund of HK$250,000 for repairing the Tong’s temple and other properties.

78.  I accept that there will be wear and tear to the temple and other properties.

79.  The Plaintiffs’ proposal is reasonable and in the interest of the Tong.

80.  I will make an order in terms of paragraph 8 of the summons.

Para 9 of the Summons: HK$1,236,570 for engaging Well Fortress to (i) carry out annual inspection, testing and attending emergency calls; and (ii) replace certain parts of the fire service system

81.  The Plaintiffs propose to engage Well Fortress to:-

(1) inspect and test the fire service system at the temple on an annual basis and to attend emergency calls; and

(2) replace certain parts of the fire service system, including the sprinkler head, the hose reel set, the visual fire alarm, the alarm bell, the fire extinguisher, the fixed fire pump, the fire jockey pump, the valve and the pump panel.

82.  As mentioned, the worshipping activities at the temple involve burning of incense sticks as well as other ceremonial materials.

83.  In the circumstances, fire safety is a foremost concern. There is every reason why the Plaintiffs would wish to ensure that the temple is free from fire hazard.

84.  I am satisfied that the Plaintiffs’ proposal is reasonable and in the interest of the Tong.

85.  I will make an order in terms of paragraph 9 of the summons.

Para 10 of the Summons: HK$225,000 for engaging T&L CPA for preparing the yearly accounts from 2022 to 2026

86.  The Plaintiffs propose to engage T&L CPA for preparing the yearly accounts from 2022 to 2026, and T&L CPA proposes to charge HK$225,000.

87.  There is no question that the preparation of accounts promotes transparency and accountability. The accounts will enable members to understand the affairs of the Tong.

88.  I am satisfied that the Plaintiffs’ proposal is reasonable and in the interest of the Tong.

89.  I will make an order in terms of paragraph 10 of the summons.

Costs

90.  In line with the previous orders made by To J, I order that the Plaintiffs’ costs be paid out of the Tong’s funds on a trustee basis.

91.  However, I will reserve the costs of the Defendants.

92.  In this connection: -

(1) Unlike the circumstances relating to the previous applications, by now, the Court of First Instance has already determined that the Plaintiffs were properly appointed as managers of the Tong, and the Defendants had their days in court.

(2) If the Defendants’ appeal in CACV 32/2024 fails, the Plaintiffs will have much to say about the reasonableness of the Defendants’ stance in the present matter.

(3) The position will only be clear after CACV 32/2024 is disposed of.

93.  I thank Mr Chan Chi Hung SC, Mr Kenneth Chan and Ms Margaret Chan for the Plaintiffs and Mr McDonnell KC and Mr Jeffrey Chau for their able and helpful assistance.