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

HCMP509/2002 & HCA1603/2004

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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AND

ACTION NO.1603 OF 2004

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BETWEEN

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(HEARD TOGETHER)

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J U D G M E N T

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1. There are altogether 8 summonses under the 2 sets of proceedings before me.  Before I list out these 8 summonses, I shall set out the brief and relevant history before and after the present litigation between basically the same parties. 

HISTORY

(1) CFI judgment

2. By the judgment of this court on 26 November 1998 (under HCMP562/1992 and 2084/1994), the Taoist temple Tsing Wan Kun (“the Kun”) was found to be a family temple owned by the To Clan, being a group of indigenous inhabitants in 5 nearby villages in the New Territories for centuries.  Members of the Kun are also members of the To Ka Yi T’so.  The Kun is a Chinese T’ong or T’so holding the land of the Kun and other pieces of land.  Some of the land were resumed by the Government and the compensation money upon resumption (called “the fund”) therefrom has accumulated up to nearly $300 million now.  

(2) CFA decision

3. There was an appeal through the Court of Appeal from my judgment to the Court of Final Appeal.  By the Court of Final Appeal decision on 22 December 2000, [2002] 3 HKLRD 756, it was declared that : 

(1)	The temple Tsing Wan Kun and all its assets, including the fund, are owned by the T’ong Tsing Wan Kun, the members of which T’ong are the members from time to time of the To Ka Yi T’so and the To Clan.
(2)	The temple Tsing Wan Kun’s assets are, as they have been for centuries, devoted to the purposes of due observance of the customary ceremonies of the temple Tsing Wan Kun and of maintenance of its temple buildings and temple properties.  They will remain so devoted unless and until the T’ong Tsing Wan Kun, proceeding in a manner which conforms with Chinese law and custom, withdraws them from devotion to those purposes.  The T’ong Tsing Wan Kun’s proprietary rights in the temple Tsing Wan Kun’s assets are vested rights.  Accordingly the T’ong Tsing Wan Kun is entitled to effect such withdrawal at any time provided that it does so in a manner which conforms with Chinese law and custom.

4. The proviso at the end of Declaration (2) was followed by the following explanation in the judgment at p.767 :

“This proviso arises for the reason that a t’ong, being an institution of Chinese law and custom, cannot act effectively if it does not act in conformity with that system.  It is not for us to deal here with the details of the relevant requirements of Chinese law and custom.  But we would just mention that unanimity in some form is generally required.”

5. The Court of Final Appeal also explained the nature of a T’ong at p.760 as follows : 

“The t’ong is an institution of Chinese law and custom.  At least as they are generally understood, t’ongs are essentially in the nature of unincorporated associations composed of individuals and with continuous succession through patrilineal descent from their founding members.  A t’ong’s type depends on its purpose and activities.  Generally if not invariably, the context in which the Hong Kong courts have dealt with t’ongs has been that of land in the New Territories.”

(3) Post-CFA’s decision

6. After the CFA’s decision it would be necessary to have new managers to be appointed for the Kun and registered with the District Land Office.  Previously the last manager of the Kun registered with the District Land Office was Tat On but this court has decided that his registration was irregular because after the death of the previous Abbot Chan Chun Ting, all the rights of possession and enjoyment of the land of the Kun should revert back to the To Clan in the name of the T’ong Tsing Wan Kun. 

7. It is convenient to start here with the meeting of Tsing Wan Kun on 10 April 2001.  At this meeting To Kam Chau stated that he wanted to resign as a manager of the To Ka Yi T’so and a new manager should be elected by the 2^nd Fong to take over since he was getting old. 

8. At the meeting on 27 April 2001, it was resolved unanimously that the managers of Tsing Wan Kun should comprise two representatives from each of the three Fongs.  The notice of the general meeting to be held on 15 May 2001 for the whole To Ka Yi T’so was dated 5 May 2001, and it was stated that the meeting was to convene in order to elect the managers for Tsing Wan Kun, comprising two representatives from each of the three Fongs. 

9. However, at the meeting on 13 May 2001 it was resolved upon one To Wing On’s proposal that :

(1)	the 3 managers of To Ka Yi T’so be appointed managers of Tsing Wan Kun and the same shall be registered with the Chinese Temples Committee;
(2)	To Fook Tim, To Kam Chau and To Kan Chi as the three existing managers of To Ka Yi T’so be registered as the managers of Tsing Wan Kun;
(3)	one Global Factor Ltd be engaged to register the Kun with the Chinese Temples Committee and at the same time to handle the application to the District Office for registration of managers therein.

10. Again, on 25 May 2001 at the meeting of Tsing Wan Kun, To Wing On proposed that the three managers of the T’so should handle all monetary matters of Tsing Wan Kun and it was resolved by the meeting accordingly.

11. At another meeting of Tsing Wan Kun on 12 August 2001, 43 members attended the meeting.  (There are about 449 members in the To Clan.)  This meeting was convened as a result of a notice given to all members of To Ka Yi T’so and Tsing Wan Kun.  This Notice was given by To Yau Shun as the Chief Elder of the To Clan.  This Notice of meeting was also advertised in one Chinese newspaper and one English newspaper on 26 July 2001.  At the meeting, it was resolved that house Lot Nos. 1, 2 and 3 (i.e. the site of the Kun) and Lot 416 in DD131 together with $50 million in the fund with interest since 1 December 2001 shall be used for traditional customs worship and repairing the building and property of the Kun.  The balance of the fund of about $250 million shall be distributed among the members of the Kun.

12. However thereafter, there were objections from eight members of the T’so (To Kin Wah was one of them) by their letters dated 22 November 2001 both as to the appointment of the three managers and the resolution to distribute the balance of the fund of about $250 million among the members.  (Strangely enough, another letter of objection was signed by a person in the name of To Wing On.)  Basically, their contentions were that the three managers of the T’so should not also be managers of the Kun as it would make them too powerful to control a large amount of assets.  In the past by the “Sung Tip” (送帖), the Chief Elder and the 3 Fong Elders appointed Chan Chun Ting as the Abbot of the Kun and Pui To Tsz.  They proposed that the Chief Elder should be represented as its predecessor was a party to the “Sung Tip” but To Yau Shun, the chief elder of the To Clan who had given the said notice dated 26 July 2001 is now too old and infirm.  He should now be represented by his son To Kwok Tai.  They proposed five representatives from each of the five villages together with To Kwok Tai as the managers of the Kun.  

13. Eventually, after the aforesaid objection was raised, the aforesaid 3 managers were appointed by the District Office on 2 January 2002 as the managers of the Kun and registered as such in the District Office on 19 January 2002.

THE PRESENT 2 SETS OF PROCEEDINGS

14. HCMP509/2002 was instituted originally by way of ex parte Originating Summons on 5 February 2002 by To Kan Chi, To Fook Tim and To Kam Chau as the newly appointed and registered managers of Tsing Wan Kun (“the 3 managers”) for an order that the fund presently standing to the credit of Tsing Wan Kun, under HCMP562/1992 and HCMP2084/1994 in the previous proceedings be released to them forthwith and/or subject to such further directions as this court may think fit.  

15. Thereupon this court directed that this ex parte Originating Summons should be served on all parties to the aforesaid two previous miscellaneous proceedings in order to ascertain whether there would be any objection to the application.  If there was any objection from anyone, he should file an affidavit within 14 days after the expiration of the period of filing the Acknowledgement of service, stating his ground of objection.

16. Hitherto, To Kin Wah filed an affirmation on 12 April 2002 objecting to the application of the 3 managers.  He contended that, inter alia, he had applied for leave for judicial review under HCAL105/2002 concerning the propriety in the appointment of the 3 managers.  (Actually on 10 April 2002, To Kin Wah had obtained leave to apply for judicial review to, inter alia, quash the approval of the District Officer of Tuen Mun in the appointment of the 3 managers under section 15 of the New Territories Ordinance, Cap.97.)  In any event, he objected to the release of the fund to the managers on various grounds stated therein.  Needless to say, the judicial review proceedings were also instituted against the Tuen Mun District Officer.

17. Consequently, To Kin Wah became a defendant in HCMP509/2002 herein together with To Yuk Leung his infant son suing by his guardian at litem, To Kin Wah himself.

18. HCA1603/2004 was instituted on 8 July 2004 by To Kin Wah against the 3 managers personally.  The issues raised by To Kin Wah in the original Statement of Claim, are as follows :

(1)	whether the three managers are fit and proper persons to be the managers of Tsing Wan Kun;
(2)	whether the meeting of 13 May 2001 at which they were purportedly appointed was validly convened or conducted;
(3)	whether the meeting of 27 June 2004 at which their appointment was purportedly rectified was validly convened or conducted.

19. On 27 August 2004 Tang JA sitting as an additional judge of the High Court dismissed the judicial review proceedings in HCAL105/2002 instituted by To Kin Wah against the Tuen Mun District Officer and the 3 managers.

20. I was told that at the hearing of the judicial review, Mr Warren Chan SC appearing for To Kin Wah informed the court that the judicial review is only concerned with the approval of the District Officer.  Those allegations against the 3 managers of the Kun would be made in HCA1603/2004.  This included the issue whether unanimity among all the members of the Kun is required in the appointment of managers. 

TO KIN WAH’S CASE

21. To Kin Wah contended that the purported decision or resolution of the meeting of the Kun did not have the unanimity of all members of the T’ong.  It was submitted that the proceeds of ancestral land can only be disposed of or paid out by way of distribution with the unanimous agreement of the Clan, T’so or T’ong.  The case of Kan Fat Tat v. Kan Yin Tat [1987] HKLR 516 was cited to support the submission that without unanimity of the members of a T’ong or T’so, the distribution of T’so’s assets would not be sanctioned by the court.  Deputy Judge Tang (as he then was) held in that case that as a matter of Chinese customary law, the disposition of T’so property by sale must be by the unanimous consent of members of the Tso, subject to any local custom to the contrary.

22. Under HCMP509/2002, in respect of distribution of the fund, To Kin Wah has obtained a Preliminary Expert Report from Professor Hugh Baker in respect of what should be done with the money surplus to the primary purpose of the Kun, i.e. the maintenance of the same in order to enable the descendants of the T’so in the worship and ceremonial activities therein.  Professor Baker also opined that there are secondary purpose of the Kun which would for the better welfare and enjoyment of the Clan including education and other activities. 

23. In To Kin Wah’s affidavit, he alleged that a comparatively small but aggressive group within the Clan has taken control of the T’ong Tsing Wan Kun and is spending the members’ funds without rendering proper accounts and in an atmosphere of secretiveness. 

24. Furthermore, they are using the T’ong’s funds to pay their own legal costs of resisting To Kin Wah’s attempts to force them to account properly to the T’ong for the expenditure of T’ong money and to explain and justify such matters as the demolition of the Kun. 

25. They have also used T’ong’s funds to pay for unsuccessful but expensive litigation allegedly for the benefit of the T’so against their former solicitors in the previous litigation. 

26. To Kin Wah on his own and at his own expense has secured the appointment by the court of the independent auditors despite vigorous opposition and then lengthy prevarication over their Engagement Letter.  To Kin Wah said he discovered that this Global Factor Limited proposed by To Wing On as a vehicle to register the Kun with the Chinese Temples Committee and the registration of the three managers as managers for the Kun, is connected with one of the three experts who were appointed earlier by the court to handle the renovation of the Kun. 

27. According to Professor Hugh Baker, the primary purpose of the fund is or was the maintenance of the ancient temple and the continuation of its rites for the benefit of the Clan.  Yet the temple has been demolished and it looks likely that excessive costs are being incurred with the fund which is supposed to be required by the Panel of Experts passing through a company associated with a leading member of the aggressive group within the Clan according to the allegations of To Kin Wah.  

28. The secondary purpose to which surplus funds should be applied according to Professor Baker’s Preliminary Expert Report appears to have been given no consideration on the three managers’ initiative at all. 

29. Accordingly, To Kin Wah questioned whether the reserve of $50 million would be enough for all the aforesaid primary and secondary purposes.  

30. Further, it is submitted on behalf of To Kin Wah that there is a lack of unanimity among the members of the T’ong and this would defeat the proposal of distributing nearly $250 million to all members of the T’ong.  To Kin Wah stated categorically that his opposition is not for his own benefits at all since he himself and each of his children would be entitled to $300,000 odd upon distribution.  Yet he considered that the distribution is not for the benefit of the Kun, the T’ong in general and in particular, future members of the T’ong which would have no say at the moment but would have to shoulder the consequence of lack of funds in the future if and when more money is required for the Kun. 

31. I shall now come to these 8 summonses before me in these 2 sets of proceedings.

EIGHT SUMMONSES

32. These 8 summonses are all taken out by To Kin Wah in the 2 sets of proceedings before me and they are set out neatly by counsel for the 3 managers as follows :

33. It is blatantly clear that summonses (3) and (4) were only taken out to ensure that I would hear the first 2 summonses.  Thus, I have granted leave to the applicant to withdraw them with no order as to costs.  There are only 6 summonses before me.

34. At the hearing of these 6 summonses together on 22 August 2005, I have indicated to the parties that apparently the hearing should be adjourned to a date to be fixed after December 2005 for the following reasons :

(1)	A firm of accountants have already been appointed by me to inspect the accounts of Tsing Wan Kun in the past and to provide a report to the court.  According to the accountants, their report might be ready by December this year.
(2)	The appeal in HCAL105/2002 will be heard by the Court of Appeal in December 2005.

35. In other words, the matter will be clearer after the accountants’ report and the Court of Appeal’s decision in the judicial review.  For example, in the amendments sought by To Kin Wah to his Statement of Claim, he raised 3 further issues, namely :

(4)	whether the very substantial assets of Tsing Wan Kun which are (or will be) surplus to the requirements of the primary purpose as defined by the Court of Final Appeal should be applied to any, and if so, what, secondary purpose;
(5)	whether proper accounts have been maintained by the three managers for Tsing Wan Kun and To Ka Yi T’so; and
(6)	whether the three managers have misapplied assets of the T’ong (Kun) and T’so.

36. Mr Alan Leong, SC appearing together with Mr Francis Yip for the managers entirely agreed to my suggestion. 

TO KIN WAH’S SUBMISSION

37. Mr John McDonnell, QC appearing together with Ms Jane Lo for To Kin Wah and his infant son also agreed to my suggestion except that they would like to bespeak their 7^th and 8^th summonses under the 2 sets of proceedings for To Kin Wah’s costs to be indemnified out of the assets of the fund as stated hereinabove.  I proceeded to hear counsel’s arguments on these 2 summonses No.(7) and (8). 

38. Mr McDonnell submitted that the court can and should order that To Kin Wah’s costs should be paid out of the fund of the T’ong by analogy with the reasoning of the English Court of Appeal in McDonnell v. Horn [1995] ICR 685.

39. In that McDonnell’s case the plaintiffs were beneficiaries in a pension fund to which they and their employers had contributed.  They alleged a number of breaches of trust against the trustee, which was a company controlled by their employers, and also raised issues of construction concerning one of the documents constituting the scheme.  The plaintiffs were impecunious, and the allegations were strenuously contested.  Nevertheless Vinelott J made a “pre-emptive” Order that they were to be indemnified out of the pension fund for their costs of the litigation for a limited period after which they could renew their Application for a further period.

40. The aforesaid decision was challenged in the Court of Appeal on two grounds, but however they were both unsuccessful. 

41. First of all it was said that there was no jurisdiction under the Rules of the Supreme Court to make such an Order.  The Court of Appeal agreed but said that jurisdiction was to be found in s.51(1) of the Supreme Court Act 1981.  The terms of s.51(1) are substantially the same as s.52A(1) of the High Court Ordinance.

42. Secondly it was said that the litigation was hostile and therefore was not in the second category in Re Buckton [1907] 2 Ch 406.  In that case the Court distinguished between cases where a trustee applies to the Court to determine a point of his own guidance or protection (Category 1), cases where a beneficiary applies to the Court to determine a point on which the trustee could or should have applied to the Court for guidance himself (Category 2), and cases where a beneficiary or alleged beneficiary applies to the Court to determine a point ostensibly for the benefit of the trust as a whole but in reality making an adverse claim against the trust as a whole or another beneficiary (Category 3).  The Court held that it was proper to give all parties their costs out of the fund in Category 1 and 2 cases, but Category 3 should be treated as hostile litigation.

43. Again the Court of Appeal in the case of McDonnell agreed, holding that the claim was to be treated as hostile litigation because of the allegations of breach of trust.  But they nevertheless upheld the Judge’s Order. 

44. They treated the case as analogous to Wallersteiner v. Moir (No.2) [1975] QB 373 where a “pre-emptive” costs Order was made in favour of a minority shareholder bringing a derivative action on behalf of the company against directors who were in control.  It was argued that the pension fund was not a separate entity so the practice in derivative actions was inapplicable; but the Court of Appeal held that in economic terms there was a close analogy.  Hoffmann LJ said :

“… if one looks at the economic relationships involved, there does seem to me a compelling analogy between a minority shareholder’s action for damages on behalf of the company and an action by a member of a pension fund to compel trustees or others to account to the fund.  In both cases a person with a limited interest in a fund, whether the company’s assets or pension fund, is alleging injury to the fund as a whole and seeking restitution on behalf of the fund.  And what distinguishes the shareholder and pension fund member on the one hand from the ordinary trust beneficiary on the other is that the former have both given consideration for their interests.  They are not just recipients of the settlor’s bounty which he, for better or worse, has entrusted to the control of trustees of his choice.  The relationship between the parties is a commercial one and the pension fund members are entitled to be satisfied that the fund is being properly administered.  Even in a non-contributory scheme, the employer’s payments are not bounty.  They are part of the consideration for the services of the employee.
Pension funds are such a special form of trust, and the analogy between them and companies with shareholders is so much stronger than in the case of ordinary trusts, that in my judgment it would do no violence to established authority if we were to apply to them the Wallersteiner v. Moir procedure.”

45. Accordingly, Mr McDonnell submitted that the analogy with a derivative action is even closer in the present case.  The members of the T’ong from time to time are the joint legal owners of the property in the name of the T’ong.  Although it is not a separate legal entity, it is an institution which will continue longer than the lives of its members from time to time.  Although the members have not purchased their interests, they are the recipients of a settlor’s bounty.  They are the owners for the time being of property which was originally derived from ancestors; but each living member is in the same position as all the others; and the costs in question are being incurred, rightly or wrongly, for the purpose of benefiting all equally.

46. As to the test to be applied, Hoffmann LJ said at p.700 :

“The need for caution in making such Orders does not however mean that the Judge or Master should undertake a close examination of the merits of the dispute.  The question is whether the Plaintiffs have shown a sufficient case for further investigation.  Once the Judge is satisfied that there are matters which need to be investigated, caution should take the form of choosing the most economical form of investigation.”

THE MANAGERS’ POSITION

47. Mr Alan Leong, SC who appeared with Mr Francis Yip for the three managers submitted that the only point raised so far in both set of proceedings before this Court is only in respect of the unanimity in the appointment of the managers.  This point has been expressly reserved as aforesaid by Mr Warren Chan for To Kin Wah when he appeared before Tang JA in HCAL105 when the applicant To Kin Wah sought to review the decision of the District Officer.  Thus, Mr Leong submitted that as no point was taken in respect of unanimity in the decision to distribute the fund, this point is just an afterthought when To Kin Wah brought in a leader from England.  This is not in the pleadings under HCA1603/2004 either. 

48. It was further submitted that To Kin Wah has no allegation made in respect of future generation.  Thus, the only question under HCMP509/2002 is whether the T’ong has followed the Order of the Court of Final Appeal or has complied with the Chinese law and customs in the decision to distribute the balance of the fund according to the direction of the Court of Final Appeal.

TO KIN WAH’S REPLY

49. In reply to that, Mr McDonnell relied on earlier affirmation of To Kin Wah in which the lack of unanimity in the appointment of managers was mentioned.  It was submitted that the point taken by To Kin Wah now could be implied from his application.  

THE COURT’S DECISION HEREIN

50. In respect of provision for future generation, the position is not entirely as contended by Mr Leong for the managers.  In the 6^th affirmation of To Kin Wah made on 16 November 2004, he contended as follows :

“	80.	I have been advised by Leading Counsel and verily believe that as matters currently stand, even if the current dispute over the manager-ship of the T’ong were resolved, the future of the funds currently held by HSBC International would not necessarily be resolved as :
		a.	The Plaintiffs herein are not and ever have been appointed the trustees of the Funds.  Even if they are were lawfully appointed and registered as managers of T’ong Tsing Wan Kun under s15 of the New Territories Ordinance, they were at best trustees for sale only in respect of those lands currently held by T’ong Tsing Wan Kun at the date of their registration on 2nd January 2002. …
	81.	Accordingly, I am advised and verily believe that :
		a.	The Funds are held upon the trusts derived from the purpose of their original donation to T’ong Tsing Wan Kun.  Further or alternatively, from purposes which are derived from the customary method of clan, family or T’ong in dealing with such surplus funds.  An expert report is now in the process of preparation by Professor Hugh Baker, which will set out details of the same;
		b.	That in view of the above, it would be to the benefit of the T’ong for the trusts of the said Funds to be administered by this Honourable Court;
		c.	That in view of the nature of such application, I can and should be made a representative for the other members of the To Clan, including infants and those yet to be born in applying for this Honourable Court to administer the Funds; …”  (emphasis added)

(1) Under HCMP509/2002

51. Thus, To Kin Wah has mentioned infants and those yet to be born.  I accept Mr McDonnell’s submission that under HCMP509/2002, To Kin Wah has “shown a sufficient case for further investigation” (as expressed by Hoffman LJ and citied in paragraph 46 hereinbefore.)  Consequently, in my view, To Kin Wah is the most appropriate person to represent those who are in opposition to the distribution of the balance of the fund.  

52. In any event, this point of unanimity in the decision of distributing the balance of the fund is a question of mixed law and fact.  There would be infants and children en ventre at any point of time and in future there will be other members of the T’ong.  In fact the number of members would vary from time to time and this is just a fact of life.  To Kin Wah does not have to adduce evidence therefor.  This legal issue whether unanimity among existing members are required and whether future generation should be taken care of by the court is something which the court will have to decide in this case.  As there is no pleadings in these miscellaneous proceedings, this point of law could not and actually should not be raised in an affidavit.  On the other hand, after all, point of law is not required to be pleaded in a High Court Action began by writ. 

(2) Under HCA1603/2004

53. Under the High Court action, even Mr McDonnell contended that :

“If the only problem in the present case were accounting, that reasoning could justify leaving To Kin-wah’s Application in abeyance until the Independent Accountants have finished their work. …”

54. Accordingly, I am of the view that the application for To Kin Wah’s costs under HCA1603/2004 to be paid out of the fund would have to be adjourned until after the independent accountants have submitted its reports which would also have some bearing on the amendment to the Statement of Claim.  By which time the Court of Appeal would have heard the appeal in HCAL105/2002 and it is expected that a judgment thereof will be handed down shortly thereafter. 

ORDER

55. By reason of the aforesaid matters, I adjourn the 5 summonses taken out by To Kin Wah (i.e. summonses no. (1) and (2), (5) to (7)) to a date to be fixed after the independent accountants’ report and the judgment of the Court of Appeal in HCAL105/2002.  However, under the applicant’s 8^th summons for his costs under HCMP509/2002 up to the stage of discovery, I order that his costs shall be paid out of the fund.  Accordingly, as requested, I would order that the sum of $350,000 to be paid out by HSBC Trustee Limited, the Trustee of the fund, forthwith to To Kin Wah’s lawyer on account for his costs.  To Kin Wah’s solicitors will have to submit a skeleton bill for his estimated costs until discovery, and if the matter could not be agreed between the two parties, it shall be decided by a Master of the High Court.  

COSTS

(1) The adjournment on 22 August 2005

56. I have made an order of costs against the three managers for the adjournment on Monday 22 August 2005.  This order arose out of the managers’ intended opposition to Mr McDonnell’s representation for To Kin Wah since Mr McDonnell has appeared for the managers and the five village representatives in the Court of Final Appeal before.  However, Mr McDonnell contended that all his knowledge in the case were public knowledge already by the time he represented these litigants in the Court of Final Appeal and there is no piece of information which he got directly from any of the managers which is unknown to others.  He had duly enquired from the chairman of the Bar and both of them could not see any objectionable point for Mr McDonnell to represent To Kin Wah now.  

57. It is quite apparent from To Kin Wah’s solicitor’s letter of 26 May 2005 that Mr McDonnell would be instructed to appear for To Kin Wah, and the hearing date was fixed according to his diary.  However, as Mr Leong pointed out that, rightly or wrongly, they thought the responsibility was on To Kin Wah and his counsel to seek approval from the managers when Mr McDonnell would be instructed to represent To Kin Wah, being the son of one of the five representatives of the Clan.  Since there was no approval sought from them, they then raised the possibility of raising the objection at the hearing on Monday 22 August 2005 by their letter sent on Friday before to To Kin Wah’s solicitors.  Even on Monday morning they could not make up their mind as to whether they were objecting or not.  I was told by counsel for the managers that they still have to obtain specific instructions from their client and that was the cause of the adjournment to Tuesday.  Eventually, the managers did not object to Mr McDonnell’s appearance.  I considered therefore the managers should pay the costs of the adjournment.

(2) The 8^th summons and the hearing on 23 August 2005

58. In respect of the costs of the hearing on Tuesday, it was totally concerned with the arguments on the summons of To Kin Wah for his costs to be paid out of the fund.  He is successful in the argument and accordingly there should, in my view, be an order nisi that costs of that summons and the hearing on 23 August 2005 be to To Kin Wah to be taxed on trustee basis if not agreed and paid forthwith out of the fund in the hands of the Trustee.