TANG FU SUN (or spelt as SUM) the manager of 'TAI HONG WAI COMMUNITY' v. TANG LIK YUEN ALSO KNOWN AS TANG WING YUEN

[English Translation – 英譯本]

HCA 2028/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2028 OF 2006

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HCA 2846/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2846 OF 2006

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JUDGMENT

Introduction

1.  These two cases concern disputes between tso or t’ong (祖堂) and its duty manager (值理). The plaintiff in High Court Action No. 2028 of 2006 (“HCA 2028/2006”), Tang Fu Sun, was the manager of Tai Hong Wai Community (“THWC”). The plaintiff in High Court Action No. 2846 of 2006 (“HCA 2846/2006”), Tang Kan Yip, was the manager of Tang Sung Kok Tso (“TSKT”). The defendant in both cases is Tang Lik Yuen. He was a duty manager of these two tsoort’ong from 2001 to January 2006.

2.  While THWC and TSKT are two different entities, they both originate from one of the paternal lines of the Tang clan, share common members, and have a common ancestor by the same of Tang Sung Kok. The evidence involved in these two cases is also the same. The term “plaintiffs” herein below refers to the plaintiffs in these two cases.

3.  The plaintiffs’ cases are that, mainly due to the reason that the defendant was not able to give an account of the relevant tso or t’ong’s accounts under his management, the tso or t’ong passed a resolution in the general assembly of descendants on 22 January 2006 to remove the defendant from his office as duty manager. That resolution was subsequently confirmed by another resolution passed in the general assembly of descendants on 6 August 2006. If these two resolutions were invalid, the defendant’s appointment would also have terminated automatically on 28 January 2006 upon expiry of the term of appointment. Moreover, the plaintiffs as managers of the two tso or t’ong had the authority to remove the defendant from his office as duty manager, and the appointment of the defendant as duty manager was terminated by the plaintiffs on the dates of issue of the writs of summons. Nevertheless, up to 2008 the defendant still rented out tso or t’ong properties to third parties and privately used tso or t’ong funds in his name as duty manager. The plaintiffs sought a determination by the court as to the date on which the defendant’s appointment as duty manager was formally terminated, for the purpose of ascertaining whether the transactions made by the defendant were legal and binding on the tso or t’ong.

4.  The defendant’s case is as follows. At the general assembly of descendants on the 10 January 2006, the defendant was appointed as duty manager for the year 2006. In accordance with tso or t’ong customs, the dismissal of a duty manager must be by a unanimous resolution of the general assembly of descendants in order to be effective. As the agenda of the general assembly of descendants on 22 January 2006 was incomplete and/or did not expressly include, as an item of discussion, the termination of the defendant’s appointment as duty manager, the resolution in question was invalid. In addition, since the resolution of the general assembly of descendants on 6 August 2006 to terminate the defendant’s appointment as duty manager was not unanimous, such appointment remained valid. He still had the authority to possess the documents and articles of the two tso or t’ong.

5.   In HCA 2028/2006, the plaintiff’s claims include:

(a)   Return by the defendant of the documents and articles (including bank passbooks, tenancy agreements, minutes of assemblies, rental receipts and correspondence) belonging to THWC;

(b)   A declaration that the defendant’s appointment as THWC’s duty manager has been terminated; and

(c)   An order prohibiting the defendant from claiming or purporting to be THWC’s duty manager and performing the relevant duties.

6.   In HCA 2846/2006, the plaintiff’s claims include:

(a)   Return by the defendant to TSKT of all the money and assets in his possession, custody and control which belong to TSKT (including financial accounts, bank passbooks, chops and documents belonging to that tso or t’ong);

(b)   A declaration that the defendant’s appointment as TSKT’s duty manager has been terminated; and

(c)   An order prohibiting the defendant from claiming or purporting to be TSKT’s duty manager and performing the relevant duties.

7.   In HCA 2028/2006, the defendant counterclaims as follows:

(a)   A declaration that the plaintiff stop paying the legal fees incurred in the proceedings on the issue of the legality or otherwise of the removal of the defendant from the office of duty manager; and

(b)   An order that the plaintiff pay the legal fees already paid by the tso or t’ong.

8.   In HCA 2846/2006, the defendant counterclaims as follows:

(a)   A declaration that the defendant was a lawful duty manager of TSKT; and

(b)   A declaration that the defendant had the authority to keep in his custody the chops, bank passbooks and copies of relevant documents of the tso or t’ong unless a new duty manager was unanimously elected by the general assembly of descendants.

9.   On the third day of the trial (i.e. 6 June 2014), the defendant claimed that he no longer performed the duties of a duty manager and confirmed withdrawal of part of the relief sought in HCA 2846/2006, namely a declaration that he was a lawful duty manager of TSKT (see para.8(a) above), but maintained the other item of counterclaim (see para. 8(b) above). Given that the defendant changed his stance and no longer insisted on performing the duties of a duty manager of the two tso or t’ong, it became unnecessary for the plaintiffs to pursue their applications for the injunctions (see paras.5(c) and 6(c) above).

10.   In addition, the defendant changed his stance during his opening submission and in his testimony in court. Initially, in his defence he challenged the legality of the proceedings of the two meetings in which he was dismissed; now he stated clearly that he would not perform the duties of a duty manager, but he claimed that he had surrendered the financial accounts of 2003 to 2005 and hence it was unreasonable, and misleading to the descendants of the tso or t’ong, for the meeting of 22 January 2006 to remove him on the basis that he had not surrendered those financial accounts. He alleged that the plaintiffs remove him in order to cover up the fact that he found out through investigation that Tang Kan Yip was suspected of embezzling the public money of the tso or t’ong before the defendant became a duty manager. In light of his new stance, it appeared that he was no longer disputing the legality of the proceedings of the 22 January 2006 meeting and the resolution to remove him, and that he accepted that his appointment as duty manager was terminated on that day. On the other hand, however, he insisted that in accordance with customs of the two tso or t’ong, the removal of a duty manager must be passed unanimously in a general assembly of descendants in order to be effective. This custom remained at the core of the entire defence. His position was ambiguous. I therefore do not regard him as having accepted that he was removed from office on 22 January 2006. As the amended Statements of Claim did not plead the defendant’s failure to give an account of the 2003 to 2004 financial accounts as a ground of his removal, I therefore do not have to deal with the dispute over the 2003 to 2004 financial accounts. The focus of this litigation is on whether the defendant had given an account of the 2005 financial accounts, and this issue still hinges on what happened from 6 to 22 January 2006. In my view, the defendant has not changed his stance.

11.   The issues of fact in the present case are set out below:

(1)   The rules applicable to the appointment and removal of a duty manager;

(2)   Whether the customs alleged by the defendant existed or not;

(3)   If the customs did not exist, whether the appointment of the defendant as duty manager was terminated or not;

(4)   If it was, when it was terminated;

(5)   What actually happened at general assembly of descendants on 10 January 2006; and

(6)   Whether the defendant is still in possession of, and liable to return, the chops, bank passbooks, original minutes of assemblies and original books of account, etc of the tso or t’ong.

Background

12.   The following description of the background to the present case is based on undisputed facts, except for paragraph 23 which sets out my findings of fact.

13.   On 16 December every year of the Chinese lunar calendar, the two tso or t’ong simultaneously hold the general assembly of descendants to “kick the figures” (transliteration of踢數 in Chinese), appoint duty managers for the following year and announce “starve distribution” (transliteration of派饑in Chinese). “Kicking the figures” means checking the accounts of the tso or t’ong for that year. The duty manager of that year gives an account of the annual income and expenditure and produces the books of account, receipts, bank passbooks, monthly statements etc for inspection and approval by younger descendants. If the accounts are correct, the duty manager and the descendants checking the accounts will sign on the account books as confirmation. “Starve distribution” means distributing the surplus income of the tso or t’ong to its descendants. Most of the events material to the present case happened during the “figure kicking”, i.e. at year end of the lunar calendar year or in January and February of the Western calendar.

14.   On 14 January 2001, the general assembly of descendants were held by the tso or t’ong to “kick the figures”. The duty manager of the time, Tang Hor Nin, gave an account of the annual income and expenditure. Tang Chi Tim participated in the inspection of the accounts and signed on the books confirming their correctness. On that day, the defendant was appointed duty manager of the two tso or t’ong, he having put himself forward for such appointment. He received the books of account and other documents by hand from Tang Ho Nin and signed to acknowledge receipt. After that, the defendant was re-appointed as duty manager until January 2006.

15.   At the general assembly of descendants of 6 January 2004, the defendant, on the pretext that Tang Hor Nin had not given an account of a deposit of $208,623.47 in the current account of HSBC in January 2001, refused to give an account of the income and expenditure of the tso or t’ong in 2003 and to produce the original books of account for inspection by the general assembly of descendants.

16.   The two managers then issued a notice on 10 January 2004 and convened a general assembly of descendants on 8 February 2004 for the purpose of requiring the defendant to give an account of the financial entries of 2003 and seeking a re-audit. However, the defendant did not attend that meeting. The descendants present then requested the two managers to seek help from the police.

17.   On 25 February 2004, the defendant issued a notice in the capacity of duty manager and convened an urgent general assembly of descendants on 27 February 2004 for the purpose of going through the financial entries for 2003. Only 12 people attended that meeting, including Tang Kan Yip, the defendant and his father, but Tang Fu Sun did not attend. Tang Kan Yip and the defendant’s father chaired the meeting. The meeting confirmed the accounting entries for 2003 and resolved that the defendant continue to be the duty manager and that Ricky Cheung & Co, Certified Public Accountants (“the Accountant”) be appointed to do the audit in future. The descendants present at the meeting also sent a letter to the Yuen Long Police Station to cancel their report.

18.   At a meeting on 10 December 2004, the defendant brought up again the issue of the deposit of $208,623.47 in the current account with HSBC. He was authorised to pursue the matter with Tang Hor Nin and report the matter to the general assembly of descendants on 16 January 2005.

19.   The parties have not produced the minutes of the general assembly of descendants on 16 January 2005. It seems from the book of meetings that no general assembly was convened on that day.

20.   On 1 February 2005, part of the minutes of the assembly indicated that: the defendant provided the income and expenditure account for 2004 prepared by the accounting firm. The assembly went through the income and expenditure account and then resolved that the account be received by the defendant, meaning that he continued to be a duty manager. It is, however, worth noting that none of the parties has produced the minutes in their entirety, and the notes to the income and expenditure table for 2004 prepared by the Accountant stated clearly that it was prepared on the basis of “the figures listed in an expenditure list handwritten” by the defendant and that “the income entries set out in this statement are for reference only and not to be used for the purpose of declaring ‘property tax’ by [TSKT]. Nor is this statement an audit report.” These notes show that the reliability of this income and expenditure account is open to suspicion. The defendant also failed to deliver on his promise made on 25 February 2004 to appoint an accounting firm to audit the accounts.

21.   Tang Kan Yip issued a notice on 18 February 2005, claiming that in accordance with a decision of the auditing meeting on 1 February 2005, a general assembly of descendants would be held on 27 February 2005 to inspect the original books of account.

22.   TSKT convened its general assembly of descendants on 27 February 2005. The defendant wrote to the office claiming he was ill and unable to attend the assembly. He also claimed that he had handed over the books of account to the police station and suggested that the assembly send someone to the police station to check them. The inspection of the accounts was then left on the shelf. However, according to the receipt issued by the police station, it was not until 21 March 2006 that the defendant handed over the books of account and other documents belonging to TSKT to the police station: see para.28 below. This indicates that the relevant allegation made by the defendant in his letter was false.

23.   It is my finding of fact that on 10 January 2006 the defendant forged evidence and falsely claimed that the general assembly of descendants was convened on that day, inspected the accounts for 2005 and unanimously resolved to appoint him as duty manager for the following year and make a “starve distribution” of $5,500 to every male descendant: see paras.56 to 62 below.

24.   The two managers issued a notice on 11 January 2006, claiming that re-inspection of the 2005 accounts was required as a lot of descendants considered the inspection of accounts on 10 January 2006 unfair, and stating that a general assembly of descendants would be convened on 22 January 2006 to inspect the accounts and decide on the date of “starve distribution”.

25.   The defendant wrote to Tang Kan Yip on 20 January 2006 claiming that as the tso or t’ong had on 10 January checked the financial accounts, completed the audit and decided to make “starve distribution” on 14 January 2006, the defendant would not attend the assembly on 22 January 2006.

26.   The defendant did not attend the general assembly of descendants on 22 January 2006. The assembly passed a resolution to terminate the defendant’s appointment as duty manager and appoint Tang Tok Wah as the new duty manager.

27.   On 28 January 2006, the defendant wrote an open letter in the capacity of the current duty manager of TSKT, claiming that, by consent of the general assembly of descendants on 10 January 2006, he had been re-elected the duty manager of TSKT, and unless the court ordered otherwise, he was the only lawful duty manager and as such could collect rent on ancestral properties.

28.   On 21 March 2006, inside Video-recording Room No. 1 at the Yuen Long Police Station, the defendant handed to a senior police constable the books of account and other documents belonging to TSKT.

29.   The two managers issued a notice on 23 July 2006 seeking to convene an assembly of descendents on 6 August 2006 for the purposes of passing resolutions to: remove the defendant as duty manager of the two tso or t’ong; confirm the validity of the resolution passed at the 22 January assembly of descendants appointing Tang Tok Wah as the new duty manager; confirm or ratify the authority of Tang Kan Yip to engage lawyers to represent the two tso or t’ong in handling this litigation and relevant legal issues; and to place an announcement in newspapers about the termination of the defendant’s appointment as duty manager of the two tso or t’ong.

30.   The four resolutions above were passed by majority at the assembly of descendents on 6 August 2006.

Assessment on the credibility of witnesses

31.   Both plaintiffs gave evidence and also called a total of two witnesses, namely, Tang Kam Wan and Tang Chi Tim. Tang Chi Tim is a serving police constable. Being a trained and experienced witness in giving evidence, his testimony is clear and his demeanour was satisfactory. I would not believe in him by reason of his occupation and demeanour, but I accept his testimony which is inherently credible. The two plaintiffs and Tang Kam Wan are elderly gentlemen, and Tang Kam Wan is approaching the age of 90. However, their demeanour while giving evidence was satisfactory. Their testimony tallies with the documents made at the relevant time and is inherently credible. I also accept their evidence.

32.   The plaintiffs also referred to the affirmation made in this case by Lai Fai, secretary of the tso or t’ong, who had passed away and could not give evidence at trial. Not being a descendant of the tso or t’ong and having no interests at all in this litigation, Lai Fai could be regarded as an independent witness. His testimony as set out in his affirmation is consistent with the documents made at the relevant time and with the testimony of the plaintiffs’ witnesses. Although it is hearsay evidence, it is still credible as it takes the form of a sworn statement.

33.   The defendant also elected to give evidence and also called one witness Tang Kei Wing. Part of Tang Kei Wing’s testimony is consistent with that of the defendant. For instance, the phrase “passed unanimously” in the tso or t’ong’s minutes of assembly did not necessarily mean that every descendant present at the assembly consented to the relevant resolution. It would be regarded as “passed unanimously” if a majority of the descendants consented thereto. However, in respect of evidence material to the defendant’s case, such as the assembly on 10 January 2006 and the notice issued for that assembly, Tang Kei Wing was ambivalent and inconsistent in his testimony. I accept his evidence as far as it tallies with that of the defendant and reject such part of his evidence that is inconsistent. Regarding the defendant’s evidence, I find it inherently not credible in light of an analysis of the evidence as a whole. His handling of the books of account of the tso or t’ong while serving as the duty manager, in particular his persistent refusal to produce the original books and receipts for inspection, was extremely suspicious. I do not accept his evidence. I shall address this in greater detail below when I come to analyse the evidence.

The appointment and removal of duty manager

34.   The parties hold different views regarding the rules and procedures governing the appointment and termination of the duty manager. Put simply, the plaintiffs allege that the power to appoint a duty manager was enjoyed exclusively by the manager, while both the manager and the general assembly of descendants were empowered to remove a duty manager. The defendant alleges that other than the manager, the general assembly of descendants also had the power to appoint a duty manager but, in accordance with tso or t’ong customs, removal of a duty manager must be approved unanimously by the general assembly of descendants.

35.   Before dealing with the relevant evidence, I must first decide on the burden of proof. The burden of proof depends on the allegations of the parties in their pleadings. In a nutshell, if a party has to rely on certain facts to win on a particular issue, then he or she must bear the burden of proof in respect of those facts. According to Phipson on Evidence[1], the party making an allegation must prove that it is true: see Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited[2], and Abrath v The North Eastern Railway Co[3]. Therefore, the plaintiffs must first discharge the evidential burden of proof in support of their case. After that, the defendant bears the legal burden of proof to prove, on a balance of probabilities, his allegations, particularly the custom as alleged by him. In Re Man Sham Chung Wui[4], Tang JA (as he then was) pointed out in his judgment that the party claiming that a custom exists or relying on it must prove the existence of the custom[5].

36.   On the issue of the appointment and removal of a duty manager, I must begin with the origin and functions of the posts of manager and duty manager. Section 15 of the New Territories Ordinance (Cap 97) provides that tso or t’ong shall appoint a manager to represent it in dealings involving tso or t’ong’s land, that such appointment shall require the approval of the Secretary for Home Affairs, and that the Secretary for Home Affairs shall register the name of the approved manager, who shall then be empowered by section 15 to dispose of the said land. The appointment of the manager is prescribed by law and entails statutory powers and obligations. In addition, on the undisputed evidence, the elders of the clan elect one of them who has great morals and high respect to be the manager, and that the appointment is for life. The two plaintiffs were elected in accordance with this custom and were registered as the managers of the two tso or t’ong respectively pursuant to section 15 of the New Territories Ordinance. On the other hand, the appointment of duty manager is not statutory. The New Territories Ordinance does not have any provision governing the appointment, removal, powers and obligations of a duty manager. In my view, the appointment, removal and functions of a duty manager are matters of internal administration of tso or t’ong, and every tso or t’ong has its own set of regulations.

37.   The parties do not have major disputes over the background to setting up the post of duty manager and its functions. Tang Fu Sun’s evidence shows that he grew up in Tai Hong Wai and became the manager of THWC in 1955. At that time the post of duty manager did not exist and all matters relating to the tso or t’ong were dealt with by the manager. Only in late 1960’s or early 1970’s was the post of duty manager created in the two tso or t’ong to assist the manager in dealing with tso or t’ong affairs and hence provide training to younger descendants in managing tso or t’ong affairs and prepare for them to become managers in future. The post gradually became permanent over time. The duty manager is the manager’s subordinate and his main function is to assist the manager in dealing with the tso or t’ong’s routine affairs. Unless authorised by the manager, the duty manager does not have the power to manage the business and affairs of the tso or t’ong. The specific functions of the duty manager include receiving rent accrued on the tso or t’ong’s properties and dealing with the financial accounts. The duty manager is chosen by the manager from people of the clan who are younger, more honest and more learned, or is nominated by the elders and then appointed by the manager. The duty manager holds office for one year, from the first day of January to the last day of December of the Chinese lunar calendar. The candidate for the next duty manager and his appointment will be discussed in the general assembly of descendants at the end of the lunar year after the assembly “kicked the figures”. The appointment of a duty manager will terminate automatically upon expiry of his term of office unless he is re-appointed.

38.   Regarding the appointment and removal of a duty manager, the evidence of Tang Fu Sun is: the appointment of a duty manager is a matter of internal administration of the manager’s office and within the authority of the manager. Although the manager will usually consider the views of the descendants present on the choice of candidates, the power to make a final decision rests with the manager. Being empowered to appoint a duty manager, the manager must also have the power to remove the duty manager who is derelict in his duty or in breach of his fiduciary duty, and such power is exercisable without a resolution of the general assembly of descendants. However, prior to 22 January 2006 no manager had ever exercised the power to remove a duty manager before expiry of his term of office by reason of dereliction of duty or breach of fiduciary duty. Tang Kan Yip was appointed the manager of TSKT in 1989. Tang Kam Wan is an elder of the tso or t’ong and served as duty manager for four years in the 1980’s. The evidence of Tang Kan Yip and Tang Kam Wan regarding the creation of the post of duty manager and the appointment, term of office and removal of a duty manager is by and large the same as the evidence of Tang Fu Sun.

39.   The gist of the defendant’s evidence is: the appointment of a duty manager does not require the consent or permission of the manager and only requires the consent of the descendants present at the general assembly of descendants; nevertheless, in accordance with the customs of the two tso or t’ong, the removal of a duty manager must be by unanimous resolution of the descendants present at a general assembly of descendants in order to be effective.

40.   The notwithstanding, the defendant also pointed out in court that before Tang Kan Yip became the manager, there was no record of the appointment of a duty manager in the minutes of assembly of the tso or t’ong; that such records only appeared after Tang Kan Yip became the manager; that in the assembly there was no election of a duty manager by voting and a duty manager would be appointed as long as no one raised an objection. It follows from this that tso or t’ong does not have a procedure for the selection and appointment of its duty manager. This fact lends support to the evidence given by Tang Fu Sun and Tang Kan Yip that the appointment of a duty manager is a matter of internal administration of the manager’s office and does not require the approval of the general assembly of descendants by way of resolution.

41.   The circumstances leading to the appointment and re-appointment of the defendant are not in dispute. These facts also serve to support the evidence of Tang Fu Sun, Tang Kan Yip and Tang Kam Wan. In the assembly of 14 January 2001, Tang Fu Sun asked the descendants present whether any of them wanted to become a duty manager and the defendant volunteered himself. In the absence of any objection from the other descendants, Tang Fu Sun and Tang Kan Yip appointed the defendant as duty manager for the following year. The circumstances of re-appointment of the defendant were similar: he was appointed by Tang Fu Sun and Tang Kan Yip in the absence of objections from other descendants. These undisputed facts are consistent with the evidence of the plaintiffs on the appointment of a duty manager but inconsistent with the evidence of the defendant.

42.   The minutes of assembly at the time also lend support to the evidence of the plaintiffs. When the defendant was appointed duty manager in 2001, the agenda set out in the minutes of assembly made no mention of election and appointment of a duty manager. Nor was there any record showing that the descendants unanimously approved of or consented to the appointment of the defendant as duty manager. There was only a simple record in the minutes which reads: “Tang Lik Yuen took over as duty manager. Tang Lik Yuen received the accounts.” Similarly, the agenda set out in the minutes of the 1 February 2005 assembly made no mention of election and appointment of a duty manager. Nor was there any record that the defendant was appointed as duty manager by unanimous resolution or consent of the descendants. The minutes also only briefly recorded: “Tang Lik Yuen received the accounts.” The minutes of assembly are also consistent with the plaintiffs’ evidence but inconsistent with the defendant’s.

43.   In my view, the evidence of Tang Fu Sun, Tang Kan Yip and Tang Kam Wan is clear and inherently credible. They gave a detailed account of the background to the creation of the post of duty manager and the procedure of appointing a duty manager. They are the elders of the two tso or t’ong— in particular, the almost 90 years old Tang Kam Wan has been living in Tai Hong Wai except for a few years in the 1950s when he lived in the urban area away from Tai Hong Wai, and he knows the affairs of the two tso or t’ong very well. More importantly, the three witnesses have personal knowledge of the creation and function of the post of duty manager. The post was first created by Tang Fu Sun. On the contrary, the defendant is only 54 years of age. Being someone from the younger generation, he began to attend the general assembly of descendants from 1994 onwards. He is not as conversant as the plaintiffs are with the affairs of the two tso or t’ong. Nor does he have personal knowledge of the creation and function of the post of duty manager. His father had been a duty manager before and might have knowledge of the appointment and removal of a duty manager, but he was not called by the defendant to give evidence. The defendant merely emphasized that the removal of a duty manager required unanimous approval of the descendants present at the general assembly of descendants, but he did not explain clearly whether the appointment of a duty manager also required unanimous approval. The defendant’s evidence lacks substance. Compared to the plaintiffs’ evidence, the defendant’s evidence is inherently not credible.

44.   I accept the plaintiffs’ evidence. The post of duty manager was created by the manager to assist the manager in dealing with the affairs of the tso or t’ong. The duty manager was appointed by the manager and the appointment did not require unanimous resolution or consent of the general assembly of descendants. The manager also had the power to dismiss a duty manager without a resolution of the general assembly of descendants. In my judgment, the plaintiffs have discharged their evidential burden of proof in relation to the appointment and removal of the duty manager. If the defendant fails to rebut such evidence, the plaintiffs will then also have discharged their legal burden of proof and met the requisite standard of proof.

45.   As I said earlier, the defendant bears the burden of proving the existence of the custom he alleged, i.e. the removal of a duty manager required unanimous approval of the descendants present at a general assembly of descendants in order to be effective. In Re Man Sham Chung Wui[6], Tang JA (as he then was) pointed out that a party who relies on an alleged custom must prove its existence by showing that such custom is certain in terms of its nature, the locality where it allegedly exists and people allegedly affected by it.

46.   On the undisputed evidence, the post of duty manager was created in late 1960’s to early 1970’s. Nonetheless, during the 50 years since then, there had never been an instance of removal of a duty manager except the removal of the defendant. There was no usual practice or custom to begin with, let alone the alleged custom that the removal of a duty manager requires the unanimous approval of the descendants present at a general assembly of descendants. The fact that no previous duty manager had ever been removed during his term of office is not sufficient to prove that the usual practice or custom alleged by the defendant exists.

47.   The alleged custom that the manager does not have power to remove a duty manager is also extremely unreasonable from a jurisprudential point of view. Section 15 of the New Territories Ordinance provides that the manager has full power to dispose of the land of tso or t’ong as if he were sole owner thereof and shall be personally liable for the payment of all rents and charges and the observance of all covenants and conditions in respect of the said land. The manager is under a statutory duty to represent the interests of the tso or t’ong. He owes fiduciary duties towards the tso or t’ong and its descendants, and the rules of equity governing the powers and duties of a trustee apply also to the manager[7]. The job of the duty manager is to assist the two managers in managing the daily affairs of the tso or t’ong. The manager delegates his powers to the duty manager but still bears legal liabilities arising from the execution of duties by the duty manager: see Lewin on Trusts[8]. For this reason, if the duty manager breaches his fiduciary duty in the execution of duties, and the manager has no power to terminate the appointment of the duty manager, this is then tantamount to compelling the manager to bear all legal liabilities arising from the execution of duties by the duty manager. For example, in the present case, following his removal from office on 22 January 2006, the defendant continued to hold himself out as the duty manager of the tso or t’ong and, as such, collected rent from tenants and even entered into tenancy agreements. If the manager had no power to terminate the appointment of the duty manager, then the manager would be legally liable to the tso or t’ong and third parties in respect of contracts signed by the defendant. That would be extremely unreasonable.

48.   From a practical point of view, the alleged custom that a duty manager may only be removed by unanimous approval of the general assembly of descendants is also extremely unreasonable. Being under the duty to assist the manager in managing affairs of the tso or t’ong, a duty manager also owes fiduciary duties towards the tso or t’ong and its descendants. These duties are based on the trust of the descendants (beneficiaries of the trust) towards the duty manager. If the manager were unable to remove a duty manager whom the majority of the descendants did not trust, the interests of a majority of the descendants and the overall interests of the tso or t’ong would be jeopardized. Taking one step further, if the duty manager to be removed was not willing to step down, he himself could simply vote against the removal and would then be able to keep the post. Nothing could be more unreasonable. Although the existence or otherwise of a custom hinges on whether it is certain and not whether it is reasonable, it would defy belief that an extremely unreasonable practice could become a certain usual practice.

49.   As I said, the burden of proving the existence of such a custom rests on the defendant. The only evidence he has is his own allegation. The evidence of his own witness, Tang Kei Wing, does not support his allegation. He did not call the elders of the two tso or t’ong, including his father, to give evidence in support of his allegation. As I said earlier, the defendant is a member of the younger generation. He only started to attend the general assembly of descendants from 1994 onwards and was not as conversant as the plaintiffs were with the affairs of the two tso or t’ong. His evidence lacks substance and, compared to the plaintiffs’ evidence, inherently not credible. More importantly, there had never been any precedent for the removal of a duty manager in the tso or t’ong, let alone the custom alleged by the defendant. In my judgment, the defendant failed to prove the existence of such a custom.

50.   However, the evidence of Tang Fu Sun does not rule out the possibility of a duty manager being removed by unanimous resolution of the general assembly of descendants. It should be noted that the wording used by Tang Fu Sun is that the manager has the power to remove a duty manager without “the need for approval of the general assembly of descendants by way of resolution”, not that “the general assembly of descendants does not have the power to remove a duty manager by way of resolution”. The powers of the manager are derived from the tso or t’ong, and the centre of authority of the tso or t’ong is the general assembly of descendants. It follows that the powers of the manager must be subject to the unanimous resolution of the general assembly of descendants. In my judgment, therefore, the general assembly of descendants also has the power to resolve unanimously to remove a duty manager by reason of dereliction of duty or breach of fiduciary duty.

51.   In conclusion, I accept the plaintiffs’ evidence but not the defendant’s evidence. The post of duty managerwas created by the manager to assist the manager in discharging his duties. A duty manager is appointed by the manager and the term of office of a duty manageris from the first day of January to the last day of December of the lunar calendar year. The appointment of a duty manageris a matter of internal management of the manager’s office. The manager no doubt has the power to appoint and remove a duty manager without the need for approval of the general assembly of descendants by way of resolution. However, being the centre of authority of a tso or t’ong, the general assembly of descendants also has the power to resolve unanimously to remove a duty manager by reason of dereliction of duty or breach of fiduciary duty.

52.   On 22 January 2006, however, the general assembly of descendants amended the rules relating to the appointment and term of office of a duty manager (see para.67 below).

Allegation that tso or t’ong lost money in HSBC current account

53.   Before I deal with the defendant’s removal, I would like to address two disputed allegations made by the defendant: (1) the loss of the tso or t’ong’s money in the current account with HSBC; and (2) the general assembly of descendants on 10 January 2006 as falsely claimed by the defendant.

54.   The tso or t’ong held a general assembly of descendants on 14 January 2001. Three young descendants and Tang Chi Tim “kicked the figures” and found them to be correct. Then the defendant received from Tang Hor Nin the tso or t’ong’s books of account, passbooks, monthly statements and other documents. The defendant and Tang Chi Tim, who was in charge of the handover process, signed on the books of account as confirmation. As at that date, according to the books of account, the tso or t’ong had a deposit of $208,623.47 in its current account with HSBC. Subsequently, on the basis of a 3-year-old monthly bank statement dated 19 January 1998 which recorded a balance of $3,222.41, the defendant claimed that Tang Hor Nin had not given a proper account of the difference of $205,401.06 between of the said deposit and the balance shown on the monthly statement dated 19 January 1998. Furthermore, on the pretext that Tang Hor Nin had not given an account of this sum of lost money, the defendant refused to produce the original books of account for inspection at the annual general assembly of descendants. He also accused the plaintiffs of removing him for the purpose of covering up the fact that he had discovered Tang Kan Yip’s suspected embezzlement of the tso or t’ong’s public money before he became duty manager.

55.   The defendant’s allegation of loss of money and his accusation of embezzlement of public money by Tang Hor Nin and/or Tang Kan Yip can be regarded as groundless. The defendant received from Tang Hor Nin the tso or t’ong’s books of account, passbooks, monthly statements and other documents. Before the handover, the descendants responsible for “kicking the figures” had checked the books of account against the above supporting documents. Tang Chi Tim’s evidence is that on that day he took charge of the handover process. “Kicking the figures” was a very serious and rigorous process, with all figures accurate up to the cent. Upon receipt of the books and other documents and before signing on them to acknowledge receipt, the defendant should also have checked to make sure that the balance as shown on the monthly statement of that current account was indeed $208,623.47. It was after a lapse of three years that the defendant alleged at the general assembly of descendants on 6 January 2004 that Tang Hor Nin had not given an account of the lost money of $205,401.06. The sole basis of his allegation was the balance shown on a monthly statement that was three years old. He did not provide the monthly statements from January 1998 to January 2001 in support of his accusation. He was kicking up a row about nothing and forcing his argument without reason. His explanation was that after 16 years, the bank no longer kept such old records. I am unable to accept his evidence. On 14 January 2001, before he received the books and documents, he should have checked the monthly statement for January 2001 to make sure that the balance shown and the record in the books tallied. Even if there was indeed no monthly statement for January 2001 among the documents at that time, he should have received the monthly statements from February 2001 onwards after he took up the post of duty manager. He should also have produced these monthly statements in support of this serious accusation. Even if the tso or t’ong had never received these monthly statements, upon discovery of the so-called “embezzlement” the defendant as a duty manager should have made enquiries with the bank and asked for copies of the monthly statements. Now the defendant also accuses Tang Kan Yip of suspected embezzlement of the tso or t’ong’s public money before the defendant became duty manager. In my judgment, the defendant’s allegations are simply groundless and are nothing more than a pretext for not giving an account of the original books. It is he who has to give an account of the lost money. I harbour grave doubts about his integrity.

The general assembly of descendants on 10 January 2006 as falsely claimed by the defendant

56.   The defendant’s case regarding the general assembly of descendants on 10 January 2006 is: on 6 January 2006 he issued a notice in the capacity of duty manager, stating that a general assembly of descendants would be held on 10 January 2006. During the assembly, the descendants verified the financial accounts of 2005, approved the appointment of the defendant as duty manager for 2006, and decided to make “starve distribution” of $5,500 to each descendant. The defendant claimed that the contents of the minutes of assembly were entirely true.

57.   However, according to the affirmation of Lai Fai, secretary of the tso or t’ong, on 10 January 2006 the defendant and eight other descendants went to the office of the tso or t’ong and ordered him to draft a notice of assembly and put in the date of 6 January 2006 in the notice. The defendant also ordered Lai Fai to draft the minutes of assembly recording the following resolutions: finished checking, accounts were clear; “starve distribution” of $5,500 to every descendant; the defendant continued to be the duty manager; and “thereafter checking the accounts, do not return sign for presence (the manager said)”. I am unable to interpret the last resolution. And neither of the two managers attended the assembly on that day. The defendant then telephoned Tang Kan Yip requesting him to attend the assembly. Tang Kan Yip hurried back to the office. The defendant asked him to sign on the draft minutes of assembly as confirmation. Tang Kan Yip did not agree to the draft minutes of assembly, refused to sign, and, unwilling to be “hijacked”, left the office angrily after staying there for about three minutes. Lai Fai stated in his affirmation that no checking of accounts was carried out. Nor had Tang Fu Sun and Tang Kam Wan seen the notice dated 6 January 2006, and so they did not attend the assembly on 10 January 2006. The following day, Tang Kan Yip and Tang Fu Sun issued a notice that an assembly of descendants would be held on 22 January 2006 to verify the financial accounts of 2005 and discuss matters relating to “starve distribution”.

58.   Lai Fai was secretary of the tso or t’ong but was not a descendant of the tso or t’ong. He did not have any interest in the present litigation and can be considered an independent witness. As he had passed away, he was unable to give evidence in the court. I accept his evidence in his affirmation, which is consistent with the documents at the time. The evidence of Tang Kan Yip and Tang Fu Sun is consistent with the actions they took in response on the following day and the report they gave to the descendants present at the general assembly of descendants on 22 January 2006 about what had happened on 10 January 2006. Their evidence is not recent inventions and is highly credible. The evidence of these four persons is inherently credible.

59.   In contrast, the demeanour of the defendant and his witness Tang Kei Wing when giving evidence gives cause for suspicion. If a general assembly was indeed held on that day to inspect the financial accounts, appoint the duty manager and discuss “starve distribution” and other matters and Tang Kan Yip also agreed to the resolutions, he should have signed on the minutes of assembly as confirmation, but he did not. This shows that the evidence of Tang Kan Yip and Lai Fai is more credible.

60.   In the early stage of cross-examination, the defendant’s witness Tang Kei Wing admitted that the defendant on 10 January 2006 ordered Lai Fai to draft the notice dated 6 January 2006 and then posted that notice on the notice board. However, Tang Kei Wing subsequently changed his evidence, saying that the notice was posted by him three or four days before the general assembly of descendants in question. The evidence of Tang Kei Wing is vague, unclear and contradictory. I am of the view that his initial evidence was his spontaneous response and did not arise from his misunderstanding the questions asked. That initial evidence is consistent with the evidence of Lai Fai, Tang Kan Yip, Tang Fu Sun and Tang Kam Wan and is more credible. I therefore reject the defendant’s evidence and adopt the plaintiffs’ evidence.

61.   In addition, the defendant as duty manager had no power to convene a general assembly of descendants except with prior authorisation of the manager. Nor had he given the requisite seven days’ prior notice of the general assembly. The manager is the only person who has the power to dispose of the tso or t’ong’s property, including making “starve distributions”. In the absence of the manager, passing a resolution to make “starve distributions” would create doubts about the authenticity of the general assembly and the resolution as well as the defendant’s motive. Apparently, the defendant was ill-intentioned, trying to prevent those descendants who opposed his appointment as duty manager from attending the assembly in question and inspecting the financial accounts.

62.   Summing up this part of the evidence, I make the following findings: the tso or t’ong did not inspect the financial accounts of 2005 or resolve to re-appoint the defendant as duty manager for 2006 at the general assembly of descendants on 10 January 2006 as alleged by the defendant. None of the resolutions alleged by the defendant is valid or binding on the two tso or t’ong, the managers and the descendants. The defendant’s conduct on that day was in serious breach of his fiduciary duties.

Removal of the defendant

63.   The plaintiffs’ case is that the appointment of the defendant was either terminated on 22 January 2006 at the general assembly of descendants by reason of dereliction of duty and/or breach of fiduciary duty, or terminated automatically on 28 January 2006 upon expiry of his term of office, or terminated by the plaintiffs in their capacity of managers on the dates on which the writs of summons of the present case were issued.

64.   Paragraph 9 of the amended Statement of Claim contains the following pleas in respect of dereliction of duty and/or breach of fiduciary duty on the part of the defendant:

(a)   the defendant failed or refused to issue a notice of the annual general assembly of descendants to inspect the financial accounts of 2005 which were to be submitted  before the expiry of the defendant’s term of office as duty manager on 28 January 2006;

(b)   on 6 January 2006 (the evidence shows it should be 10 January 2006) and without notice, the defendant issued a notice dated 6 January 2006 to convene and hold a general assembly of descendants, and together with eight descendants, the defendant falsely claimed that resolutions were passed verifying the financial accounts of 2005 and re-electing the defendant as duty manager for the following year;

(c)   the defendant was absent at the general assembly of descendants on 22 January 2006 which was convened by the managers on 11 January 2006. The defendant did not produce or give an account of the financial accounts of 2005, nor did he supply supporting documents for verification by the assembly. He also issued a letter expressly stating that he refused to carry out the duty of a duty manager to give an account of the financial accounts of 2005.

65.   On the undisputable evidence, there is ample evidence in the present case to support the plaintiffs’ allegations (see paras.12 to 30 above), in particular those in respect of the defendant’s conduct on 10 January 2006 (see paras.56 to 62 above). I shall not go into detail here again about them. The plaintiffs had ample reasons to remove the defendant on the ground of dereliction of duty and/or breach of fiduciary duty.

66.   In response to the defendant’s conduct on 10 January 2006 and his false claims that resolutions had been passed appointing him as duty manager for the following year and making “starve distributions”, the two managers issued a notice to convene a general assembly of descendants on 22 January 2006, the agenda of which included inspection of the financial accounts of 2005 and determination of the date of making “starve distributions”. Thirty-seven descendants attended the general assembly. The defendant did not attend and wrote to the general assembly claiming that he would not attend as the checking of accounts was completed (referring to the falsely alleged assembly on 10 January 2006). Nor did he produce the books of account and documents for audit purposes. During deliberation, the general assembly of descendants passed a number of resolutions, of which the 6^th, 7^th, 9^th and 10^th resolutions are in the following terms:

“(6) Tang Lik Yuen had not been able to produce in 2003, 2004 and 2005 the books of this tso or t’ong for open inspection, and he failed to follow the audit procedure of this tso or t’ong and perform the duty of a duty manager. For these reasons, the descendants have doubts about the financial accounts of this tso or t’ong. After discussion, the descendants at the general assembly have resolved that the appointment of Tang Lik Yuen as duty manager of [TSKT] and [THWC] and all his functions as such be terminated with immediate effect, and that he is to return all books of account, passbooks, chops, various documents and all matters to the managers. This resolution is unanimous.”

“(7) After discussion, the general assembly has resolved to visit Messrs. John Chan & Co, solicitors in Yuen Long, at 2.00 pm tomorrow and request the solicitor to issue a letter terminating the appointment and office of Tang Lik Yuen as duty manager and requiring him to return the books of account, passbooks, chops and all documents. This resolution is unanimous. … ”

“(9) Tang Kwong Yip proposed that the term of office of the duty manager be set at one year; that where two or more persons apply to become the duty manager, a ballot will be conducted among all the attendees of the assembly and the candidate with the greatest number of votes will become the duty manager; that every duty manager will serve a maximum term of two consecutive years; and that auditing is to be conducted on the Sunday immediately following the second day of December in the Chinese lunar calendar. The above proposals were seconded by Tang Wai Kwong and then approved by unanimous resolution.”

“(10) Tang Kap Wan proposed that Tang Tok Wah be the duty manager of [TSKT] and [THWC] for the year 2006. The proposal was seconded by Tang Kam Wan and Tang Wai Kwong and then approved by unanimous resolution.”

67.   Resolutions (6) and (7) show that, instead of exercising their power as managers to remove the defendant, the plaintiffs merely followed other descendants present at the assembly in removing the defendant by way of unanimous resolution. Subsequently, they engaged Messrs. Paul W. Tse, Solicitors to notify the defendant that the general assembly of descendants had resolved on 22 January 2006 to discharge the defendant from his post of duty manager and all his functions as such. The plaintiffs’ case, as pleaded in their amended Statements of Claim, is also that the defendant was removed on the basis of resolution of the general assembly of descendants. It is worth mentioning in passing that, according to resolutions (6) and (7), from 22 January 2006 onwards, the plaintiffs as managers relinquished their power to appoint duty managers, and the appointment of duty manager has been institutionalised, requiring a process of nomination, seconding and approval by descendants attending the general assembly, and if necessary, election.

68.   The defendant’s ground of defence is that the agenda of the tso or t’ong assembly on 22 January 2006 was incomplete and/or did not clearly include discussion of his appointment as duty manager, and hence the resolutions were invalid; furthermore, by virtue of the resolutions passed on 10 January 2006, he was re-appointed as duty manager for the year of 2006.

69.   Prior to the general assembly of descendants on 22 January 2006, the powers to appoint and remove a duty manager were enjoyed exclusively by the manager. They were matters of internal management within the manager’s office. The removal of a duty manager was not required to be listed in the agenda in the notice of general assembly. However, on that day the plaintiffs relied on the resolution of the general assembly of descendants as the basis of removing the defendant, and therefore such a resolution became an item for discussion at the general assembly. Whether this item had to be included in the agenda depended on the rules of the tso or t’ong. There were no rules in the tso or t’ong expressly requiring the removal of a duty manager to be approved by way of resolution of the general assembly of descendants. According to the general rules governing meetings, the answer to this question depends on whether the subject of the relevant item involves the rights of the members of the meeting and is sufficient to cause those members to decide whether to attend the meeting to express their views or allow the members present at the meeting to make their own resolutions.

70.   Even if the removal of a duty manager is a matter of the tso or t’ong, a duty manager is only the assistant of the manager. The removal of a duty manager is akin to the dismissal of any staff member within the manager’s office. It goes to the general affairs of the manager’s office and does not involve the interests of any member of the tso or t’ong as such. Items for discussion of this sort of general affairs need not be listed in the agenda. It is not in dispute that the tso or t’ong did not have any usual practice of listing in the agenda the appointment of a duty manager as an item for discussion. Nor was such an item listed in the notice dated 6 January 2006 which was issued pursuant to the defendant’s instruction. By the same token, the removal of a duty manager did not have to be listed in the notice of assembly. The defect in the agenda, therefore, was not sufficient to render the resolution in question invalid.

71.   Furthermore, the plaintiffs gave notice on 23 July 2006 to convene a general assembly of descendants on 6 August 2006. The notice listed four items for discussion, including: Item (1) being the removal of the defendant as duty manager; and Item (2) being ratification of the resolutions passed on 22 January 2006. During the general assembly, Item (1) was carried, with 46 votes for it and 9 votes against it. Item (2) was also carried, with 49 votes for it and 6 votes against it. These two resolutions have already rectified the so-called defects in the agenda.

72.   Regarding this general assembly of descendants, the defendant does not take issue with the legality of the notice of assembly, agenda or the assembly itself. He merely challenges the resolution, arguing it was invalid as it was not “passed unanimously” in accordance with the custom or usual practice of the tso or t’ong. However, on the plaintiffs’ evidence, a general assembly would pass a resolution which would be recorded in the minutes as having been “passed unanimously” as long as no descendants at the assembly opposed the resolution or the majority of the descendants agreed to the relevant item. The defendant’s witness Tang Kei Wing also admitted that this was the usual practice of assemblies of the tso or t’ong. He said that a resolution would be passed if the majority of the descendants present at a general assembly agreed to it. In my judgment, therefore, it was not the usual practice of assemblies of the tso or t’ong that a resolution could not be passed unless all the descendants present at a general assembly agreed to it. In substance, the usual practice of assemblies of the tso or t’ong proceeds on the basis that a resolution is passed by “a majority of votes” but recorded in the minutes as having been “passed unanimously”. Moreover, I have held earlier that the defendant failed to prove the existence of such a custom or usual practice. Therefore, even if the resolution on 22 January 2006 removing the defendant as duty manager was invalid for whatever reason, it was ratified on 6 August 2006 by way of resolution. I hold that the defendant’s appointment as duty manager came to an end on 22 January 2006.

The defendant is obliged to return the tso or t’ong’s articles

73.   During his term of office as duty manager, the defendant came to possess articles belonging to the tso or t’ong. He does not accept that his appointment was terminated on 22 January 2006 and refuses to return those articles.

74.   He admits that he is still in possession of certain articles of TSKT including passbooks with DBS Bank (Hong Kong) and the Overseas Trust Bank, the chop for making withdrawals from banks, a copy of the book of minutes of meetings or assemblies, a copy of the books of account, and originals of some relevant documents and receipts. However, he denies having possession of the originals of the book of minutes and books of account. The plaintiffs’ main contention is that the defendant still possesses and refuses to return the original book of minutes and the original books of account.

75.   The defendant had claimed in court that the original books of account were lost upon inspection of financial accounts at the general assembly of descendants on 10 January 2006. Lai Fai stated in his affirmation that no inspection of accounts was carried out on that day. I accept Lai Fai’s evidence, which means that the defendant’s allegation is untrue. Further, it is all the more beyond dispute that on 21 March 2006 at Yuen Long Police Station, the defendant in person handed over the original books of account, the original book of minutes, paper with letterhead, envelopes and rental receipts to the police for keeping in relation to a case report, and a senior police detective who received those items signed and issued a receipt to the defendant. This receipt refutes the defendant’s allegation about the loss of the original books before 10 January 2006.

76.   The defendant also alleges that when the report prepared by the Accountant was verified on 10 January 2006, it was pasted in the books of account which were then returned to the manager’s office of the tso or t’ong. This is again at odds with the facts because the copy of books of account provided by the defendant does not show the Accountant’s report being pasted therein as alleged by the defendant.

77.   The defendant admits that the police subsequently returned the original books of account and the original book of minutes to him, but he also alleges that he had returned them to the tso or t’ong’s office. However, his lie collapses of itself again. The copy of the books of account provided by the defendant shows that the books were certified on 7 March 2008 by his solicitor to be a true copy of the original, the solicitor having inspected the original. For this reason, I believe that the defendant has kept the original books ever since 7 March 2008. On this issue, he has repeatedly concealed the truth. In other areas of evidence, he was neither frank nor honest and instead uttered a pack of lies, completely destroying his credibility. I can also infer from his conduct that he is also still in possession of the original book of minutes. As the defendant is no longer a duty manager, he is not entitled to possess the tso or t’ong’s articles and documents and is obliged to return them to the tso or t’ong.

The defendant’s counterclaims

78.   By counterclaim in HCA 2028/2006, the defendant claims that the manager Tang Fu Sun does not have the authority to represent the tso or t’ong in bringing the action against him, and seeks a declaration requiring the plaintiffs to stop paying legal fees arising from the issue regarding the legality of removing the defendant as duty manager, and an order requiring the plaintiffs to reimburse THWC for legal fees already paid by the tso or t’ong. In accordance with Resolution (3) passed by the general assembly of descendants on 6 August 2006, the general assembly ratified Tang Kan Yip’s authority to engage lawyers on behalf of TSKT and THWC to handle matters concerning the termination of the defendant’s appointment as duty manager and to take all legal actions against the defendant. That resolution was passed by vast majority of the descendants present at the assembly, with 48 votes for the resolution and 8 votes against it. As stated above, the tso or t’ong’s resolutions are based on the principle that the majority rules. Tang Kan Yip has been formally authorised to engage lawyers for to commence legal proceedings against the defendant. The defendant’s counterclaims in HCA 2028/2006 are completely groundless and must be dismissed altogether.

79.   Turning to HCA 2846/2006, the defendant counterclaims for a declaration that he is entitled to keep the chop, bank passbooks and copies of relevant documents of TSKT until the unanimous election of a duty manager by the general assembly of descendants. This counterclaim must also be dismissed on the ground that the defendant’s appointment as duty manager was already terminated on 22 January 2006 and that his post has already been taken up by Tang Tok Wah.

Conclusion

80.   For the above reasons, it is my judgment that at the general assembly of descendants on 22 January 2006 the plaintiffs in these two actions removed the defendant from the post of duty manager and the functions and duties as such. Taking into account the defendant’s actions and the interests of third parties who transact with the two tso or t’ong, I must declare as follows: that the defendant’s appointment as duty manager of the two tso or t’ong and his functions and duties as such were already terminated on 22 January 2006, and that the defendant must return to the two tso or t’ong within seven days from this order the documents and property of the tso or t’ong in his possession including the original book of minutes, the original books of account, bank passbooks, tenancy agreements and rental receipts in respect of the real property of the tso or t’ong, correspondence, chops and other documents, etc. The plaintiffs are at liberty to make further applications regarding the execution of the above order. I forewarn the defendant that the original book of minutes and the original books of account are precious and irreplaceable tso or t’ong antiquities, and that I shall take a serious view of any failure on the part of the defendant to return them in time and deal with the matter accordingly.

81.   Also for the above reasons, I dismiss the defendant’s counterclaims in these two actions.

82.   I also order the defendant to pay costs of the two plaintiffs in these two actions on a party and party basis, to be taxed if not agreed.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor.