BRISILVER INVESTMENT LTD. v. WONG CHO MUI

HCMP 2038/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2038 OF 1997

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REASONS FOR DECISION

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Introduction

1. Since the time when the Plaintiff's claim was amended, what the Plaintiff asks for in these proceedings is an order for the sale of the suit property. The Plaintiff is the two-thirds co-owner of the suit property and the 1st Defendant is its one-third co-owner. These proceedings were brought pursuant to the provisions of the Partition Ordinance, Cap. 352.

2. On 28 June, 2000, the Defendants took out an application for the determination of the following issue:-

"Whether the Court has jurisdiction to make an order for sale of the subject properties which are partly owned by a Tso under the Partition Ordinance (Cap. 352), having regard to the provisions of the New Territories Ordinance (Cap. 97) and Article 40 of the Basic Law" ("the jurisdiction issue").

At the beginning of the hearing on 3 July, 2000, the Defendants asked for the following additional issue to be determined:-

"If the preceding question is answered in the affirmative, whether the Court can exercise its discretion to make such an order in the absence of consent of the registered manager of the Tso under section 15 of the New Territories Ordinance (Cap. 97), unanimous consent of all members of the Tso, and/or consent of the Secretary for Home Affairs, having regard to the provisions of the New Territories Ordinance" ("the consent requirement issue").

At the end of the hearing on 4 July, 2000, the Plaintiff agreed the Court could consider and determine the consent requirement issue as well.

3. On 4 July, 2000, I answered both issues in the Plaintiff's favour. The reasons for doing so are as follows.

4. Before proceeding further, it should be noted that:-

(a) both issues raised in this application concerned the Court's jurisdiction under the Partition Ordinance, and not with how the Court is to exercise its discretion thereunder;

(b) the question of Chinese law, Chinese custom and Chinese customary rights is a matter of fact which needs to be established by expert evidence.

5. Since the only relief asked for by the Plaintiff is a sale order, Mr Mok limited his arguments to the jurisdiction or power to grant such an order. For this reason, I shall also limit the discussions herein to that aspect.

The Jurisdiction Issue

6. The arguments advanced by Mr Mok for the Defendants regarding this issue can be summarized as follows. There were numerous Court decisions stating that Chinese customary law overrides the provisions of the Partition Ordinance:-

(a) Tang v. Tang [1970] H.K.L.R. 276, especially at pp. 278 and 321 to 322;

(b) Kan v. Kan [1987] H.K.L.R. 516, especially at p. 534.

S. 13(1) of the New Territories provides that in any proceedings in the Court of First Instance, the court shall have regard to Chinese custom or customary rights. The above decisions were so concluded because the Courts considered s. 13 is a mandatory provision to which effect must be given.

(a) The Need for Unanimous Consent

7. The Defendants also contended that there were also Court decisions which stated that if land is conveyed to and owned by a tso (or cho), the law would presume an intention to create a trust over the land in favour of its members from time to time, subject to such limitations or conditions as may be imposed on such land by Chinese custom or customary rights affecting it: Kan v. Kan. Further, as a matter of Chinese customary law, tso land was intended to be perpetual, inalienable and indivisible. Hence, a tso member cannot ask for tso land to be sold or partitioned, and tso land can only be disposed of by the unanimous consent of all tso members: Kan v. Kan, at pp. 516, 536, 537 and 539. These principles were affirmed in To v. Pui, H.C.M.P. No. 562 of 1992 and C.A.C.V. No. 32 of 1999.

8. By reason of the above matters, in the absence of unanimous consent, any sale of the tso land (even if ordered under the Partition Ordinance) would be contrary to Chinese law and custom: see To v. Pui, C.A.C.V. No. 32 of 1999 (per Godfrey, JA, at p. 7 of the transcript). To put it in another way, the Court should not make a sale order because to do so would be inconsistent with Chinese law and custom.

9. In reply, Mr Tang for the Plaintiff observed that all the Court decisions relied upon by the Defendants were concerned only with applications for the disposal of tso land by tso member(s). The evidence adduced in all these decisions was only that Chinese law and custom prohibits a disposal of tso land by tso member(s) in the absence of a unanimous consent of all tso members. There has not been any evidence (whether adduced in those cases or the present application) that this prohibition extends to the world at large. Mr Tang submitted that the Plaintiff is not a tso member or otherwise related to the tso (except as a co-owner). In these circumstances, he argued that the apparent conflict between the Plaintiff's claim for a sale order and those decisions (contended for by the Defendants) does not in fact exist.

10. Mr Mok did not dispute any of the above submissions of Mr Tang except the last sentence immediately above. Mr Mok contended the prohibition against the sale of tso land applies whether or not the application for sale is made by a tso member.

11. As stated earlier, Chinese law and custom is a matter of evidence. All the Court decisions referred to by the Defendants were decided based on the evidence adduced therein. I therefore agreed with Mr Tang's submissions and disagreed with those of Mr Mok. In the absence of evidence, I found that the Court cannot and should not somehow conclude that the need for unanimous consent for the sale of land should also apply to outsiders or strangers not related to the tso.

12. Leaving aside the lack of evidence or conclusions in those Court decisions to support the Defendants' arguments regarding this issue, I do not see any good reason to rule in the Defendants' favour over this issue. Reliance has also been placed on Article 40 of the Basic Law:-

"The lawful traditional rights and interests of the indigenous inhabitants of the 'New Territories' shall be protected by the Hong Kong Special Administrative Region".

However, it is not argued that Article 40 by itself created any additional rights over and above those recognised in the decisions relied on by the Defendants. I therefore do not find that Article 40 should affect my conclusion relating to this issue.

13. I therefore considered that this issue should be decided in the Plaintiff's favour by answering it in the affirmative.

(b) The Need for Consent of the Secretary for Home Affairs

14. Section 15 of the New Territories Ordinance provides:-

"Whenever any land is held from the Government ... in the name of a clan, family or t'ong, such clan, family or t'ong shall appoint a manager ... who shall, after giving such notices as may be prescribed, have full power to dispose of or ... deal with the land as if he were sole owner thereof, subject to the consent of the Secretary for Home Affairs ... ".

15. Mr Mok said that the Full Court decided in Lai Chi Kok Amusement Park Co. Ltd (No. 2) v. Tsang Tin-sun [1966] H.K.L.R. 124 at pp. 130 to 131 that s. 15 give a protection to tso land and tso members. That decision observed in effect that the Land Officer (now the Secretary for Home Affairs) is not only a government official but a paterfamilias. While s. 15 was intended to facilitate the disposal of tso land, his consent to the disposal of the tso land is required to protect the tso members against malpractice on the part of the tso managers. Mr Mok argued that it was exactly for that reason that in that decision the Court had refused to authorize a sale of tso land which dispenses with the protection given by s. 15.

16. Mr Tang's answer to this argument was a relatively short one. He said that the event which triggers the operation of s. 15 is a disposal of tso land by a manager because of the words "... a manager ... shall, after giving such notice as may be prescribed, have full power to dispose of ... [tso] land as if he were sole owner thereof, subject to the consent of the Secretary for Home Affairs ... ".

17. I agree with this argument and therefore conclude that since the Plaintiff is not a tso manager, and the present application for a sale order is not a disposal of tso land by a manager within the meaning of s. 15, this provision has no application.

The Consent Requirement Issue

18. The Defendants adopted their arguments set out under sub-heading "(b) The Need for Consent of the Secretary for Home Affairs" in support of this issue. I have already dealt with those arguments under that sub-heading and therefore will not repeat them here.

19. For those reasons, I agreed with Mr Tang and considered that the Court can still exercise its discretion (in appropriate circumstances) to order a sale of tso land in these proceedings despite the lack of consent of the Secretary for Home Affairs.

Other Matters

20. In support of his arguments, Mr Tang submitted that disposal of tso land by authority of a statute or a Court order should not be affected by the provisions of the New Territories Ordinance or Article 40 the Basic Law. For example, the Government should be able, in appropriate cases, to re-enter tso land pursuant to the Lands Resumption Ordinance, Cap. 124. A judgment creditor should be able to enforce a judgment by way of an order for the charging, or the sale, of tso land. These show that there is no valid reason for saying that the provisions of the New Territories Ordinance relied upon by the Defendants should have wide or general application.

21. Because I was already able to decide in the Plaintiff's favour without the need to refer to this part of Mr Tang's arguments, I would not say definitively whether it is correct. For the moment, I consider them to be forceful arguments in the Plaintiff's favour.

Costs

22. On 4 July, 2000 I also ordered that the costs of this application are to be paid by the Defendants to the Plaintiff in any event. The reasons for so ordering are as follows.

23. If this application is treated as an independent interlocutory application, I considered that there was no valid reason for departing from the usual rule that costs should follow the event. Since the Plaintiff was the successful party, it should have the costs of this application.

24. Even if this application is treated as a part of the trial of the Plaintiff's claim, I agreed with Mr Tang that in the context of these proceedings, this application is sufficiently discrete to be regarded as an independent application. The 2 issues were separated from the remainder of the trial and were unrelated to either points of law or factual dispute relating to the other aspects of this claim. 5 days were allocated exclusively for this purpose (although it turned out only 2 days were needed). The costs of this application were also sufficiently substantial: costs were incurred in engaging leading and junior counsel to attend a 2-day hearing. For these reasons, I considered that a separate costs order should be made in the Plaintiff's favour, instead of ordering them to be costs in the cause of the entire case (as Mr Mok proposed).