TANG MAN KIT AND ANOTHER v. HIP HING TIMBER CO. LTD.

CACV 137/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 137 OF 2002

(ON APPEAL FROM HCA NO. 8000 OF 1990)

____________________

____________________

____________________

J U D G M E N T

____________________

Hon Rogers VP:

1. This action was commenced by a writ dated 22 November 1990. The named plaintiff in the action was "Wah Yan Mo Fan Heung (華人模範鄉) with Chan Kam Cheung and Tang Man Kit as Managers."

2. The claim was relatively simple, if, perhaps, defectively pleaded at the time. The relief sought was the recovery of various lots of land in Demarcation District 107 (the "land") which are said to be agricultural land which had been let to the defendant on a yearly tenancy. The Wah Yan Mo Fan Heung (the "Heung") was pleaded as being an unincorporated association. Paragraph 2 of the statement of claim referred to the appointment of one Lui Lap Ka (sometimes referred to as Lui Lap Kar or Lui Lap Gar and, for convenience, hereinafter referred to as Lui Lap Ka) and Wong Tat To in January 1960 as the Managers of the Heung. Paragraph 3 referred to the replacement of Lui Lap Ka by Mr Wong Pui in 1984. All these persons were said to be the legal owners of the land and trustees of it for the Heung. It was said that the Heung was beneficially interested in the land. It was pleaded that solicitors had served a notice to quit on 10 April 1986 and in doing so had acted on behalf of the registered managers of the Heung. It might be mentioned that at that stage there was no indication as to how Mr Chan Kam Cheung and Mr Tang Man Kit had become Managers.

3. The defence and counterclaim, which was filed on 10 January 1991, is of some interest. There is first of all an admission that the Heung is and had at all material times been the beneficial owner of the land in question. It was also admitted that Mr Wong Tat To had been a Manager of the Heung. It was said that the defendant had been carrying on business of a timber yard on the land. The crucial part of the defence was that there had been an oral agreement between Mr Wong, in his capacity as manager and trustee of the Heung, with a Mr Chong in 1966. Mr Chong was carrying on business under the name Hip Hing Timber Company. The agreement was in essence that, provided Mr Chong preserved and improved the land on which the timber yard was and paid nominal fees to the Heung, he would be allowed to use the land until the government resumed it and would be entitled to 60% of any compensation paid by the government. After the business of the defendant had been incorporated in 1974, the oral agreement was, in effect, renewed with Mr Chong this time acting on behalf of the company. It was said that, in reliance upon the promise made by Mr Wong, the defendant had altered its position in a large number of material respects by improving and paying costs related to the timber yard. Whilst it was admitted that a notice to quit had been served, it was said that Mr Wong Tat To had informed the defendant, through Mr Chong, that the notice to quit did not represent his or the Heung's intentions and he had dissociated himself from it. On the basis of that, the defendant counterclaimed for specific performance of the 1966 and 1974 agreements with Mr Wong and, in the alternative, for a declaration and also for damages.

4. It can thus be seen that the defendant's case was that not only had there been a yearly tenancy but that an agreement had been made with Mr Wong, the manager of the Heung, acting as manager and trustee which entitled the defendant to remain on the land and to an interest of sorts therein. Its defence and counterclaim was thus predicated upon the position of Mr Wong Tat To having been manager and trustee of the Heung.

5. Very little happened in relation to the action until December 1997. It was then that the plaintiff amended the statement of claim largely in relation to the position of the trustees and managers. It was said that Mr Wong Pui had died in May 1987 and Mr Wong Tat To had died on 17 January 1989. Mr Chan Kam Cheung and Mr Tang Man Kit were then said to have become the new sole managers and hence the legal owners and trustees for the Heung by virtue of a notice of appointment dated 28 January 1989 which had been registered in the District Land Office. The amendments to the statement of claim occasioned almost no amendment to the defence and counterclaim.

6. In March 1998 the defendant applied by summons to have the amended statement of claim struck out and the action dismissed or stayed on the ground that the plaintiff was an unincorporated association and had no corporate or separate legal existence or capacity. Unfortunately, that application was the first of what has now become a protracted series of peripheral disputes, the net effect of which has precluded the real issue in the case being given consideration or being decided.

7. On the hearing of the defendant's summons to strike out, the plaintiff applied for leave to amend the title of the writ and to re-amend the statement of claim. The title of the action was to be changed to "Tang Man Kit (suing as sole manager of Wah Yan Mo Fan Heung (華人模範鄉)". The body of the statement of claim was to include a plea that the Wah Yan Mo Fan Heung was a T'ong within the meaning of section 19 of the New Territories Ordinance (Cap. 97, Laws of Hong Kong 1960 Edition) and section 17 of the New Territories Ordinance (Cap. 97, Laws of Hong Kong Current Edition [presumably as at the date of the writ]). It appears that at the hearing the argument turned upon the draft re-amended statement of claim. In the outcome, the judge below, who also heard that application, came to the conclusion that it was arguable that the Heung was a T'ong and also that it was not clear that the managers in 1984 and 1989 were not approved by the then Land Officer, Yuen Long. She therefore refused to strike out the action and permitted the re-amendment of the statement of claim.

8. Shortly after that decision, a further summons was taken out by the defendant in December 1998 for trial of a preliminary issue namely whether Mr Tang Man Kit, who was at that stage the sole named plaintiff, was the validly approved and registered manager of the Heung under section 15 of the New Territories Ordinance, secondly whether the Wah Yan Mo Fan Heung was a T'ong within the meaning of the New Territories Ordinance and thirdly, consequently, whether the plaintiff had locus to bring this action. A fourth preliminary issue was also sought, namely, whether Wong Tat To and Wong Pui were validly approved and registered managers of the Heung under section 15 of the New Territories Ordinance at the time when the notice to quit was issued on 10 April 1986.

9. That summons was heard together with other matters in March 1999. At that hearing it appears that the defendant relied upon the case of Banco de Bilbao v Rey [1938] 2 All ER 253. Relying upon that authority, the judge below said that she did not think that the procedure of a preliminary issue was the correct procedure since a question of lack of authority to sue could not be raised as a defence in the action. She thus gave the parties liberty to apply, expressing the view that if the defendant were to take the point as to authority to sue, it should be taken immediately. It thus came about that on 26 March 1999 a notice of motion was issued seeking an order that the writ be set aside as having been issued without authority.

10. As a matter of form no exception can be taken to that notice of motion. However, it is to be noted that the form of procedure referred to in the judgment of Clauson LJ in the Banco de Bilbao case was based upon the decisions in Russian Commercial and Industrial Bank v Comptoir d'Escompte de Mulhouse [1925] AC 112 and in particular what was said at page 130 by Viscount Cave. At that juncture Viscount Cave had referred to a decision of Wellington J in the case of Richmond v Branson & Son [1914] 1 Ch 968, where incidentally Clauson had appeared as leading counsel. What is clear from these decisions and indeed the decision in Daimler Company Limited v Continental Tyre and Rubber Company (Great Britain) Limited [1916] 2 AC 307, another decision of the House of Lords, is that the procedure is one to determine whether the particular action has been brought on the proper authority of the party in whose name it has been brought. The procedure assumes the existence of a particular party and if the court decides there was not proper authority, in effect, it refuses to consider the case because it has been brought without the proper authority of that party. Indeed, the decision of the House of Lords in the Daimler case is instructive in this respect. The majority of the House of Lords reached the conclusion that the action had been brought without authority. Underlying the case was the question as to whether the Daimler Company, which was an English company, should have been treated as an enemy company by reason of the ownership and control thereof. That matter had been considered at length in the lower courts. As a result, the speeches in the House of Lords dealt with the matter, but it was made clear that although the action should have been struck out for want of the authority, the question as to the legal status of the plaintiff was a matter which should have been gone into at trial. See, for example, Lord Atkinson at page 328 of the report.

11. Whilst on the face of the notice of motion the application was confined to the question of whether there was authority, it took a further turn by the decision of the judge below recorded in her Reasons for Decision of 25 May 2000. On that occasion the judge heard an application on the part of the defendant to add to the notice of motion in the following terms.

"TAKE FURTHER NOTICE that it will be contended at the hearing of the this Amended Notice of Motion that this action has been issued without authority since:-

(1) the Heung is not a clan, family or t'ong within the meaning of section 15 and 16 of the New Territories Ordinance (cap. 97)('NTO') or exempted from the requirement to be registered under the Companies Ordinance by virtue of section 16 of the NTO);

(2) the Heung has no legal status and is not recognised in law as a legal entity capable of enforcing rights over the land or authorising the commencement of an action on its behalf; and

(3) no application for approval has been made under section 15 of the NTO or approval granted pursuant to any such application or at all."

12. It will be noticed, at once, that, although presented under the guise that there was lack of authority, the issues sought to be tried concerned the legal status and existence of the Heung. Two points may be noted in this respect. In the first place the Heung was not the plaintiff. In the second place, the existence and legal capacity of the Heung was not merely admitted on the pleadings but was a fundamental part of both the defence and the counterclaim. The judge below, however, allowed the amendment of the notice of motion on the basis that "Clearly all the issues that arise between the parties on this aspect should be before the court for determination once and for all." The procedure on the notice of motion had thus been changed from one which was to strike out the action for want of the authority to one which involved the trial of issues which should be determined at trial, moreover, in circumstances where they had yet to be pleaded. The difficulty posed by the stance taken by the defendant is perhaps highlighted by the fact that Mr Fung SC, on behalf of the defendant, asserted and averred in this court, in answer to a question from the court, that the defendant's case was that it had a valid tenancy which had been granted to it by Mr Wong Tat To on behalf of the Heung. Yet, the motion sought to challenge the Heung's status and existence as well as the authority of the plaintiff to act on its behalf.

13. There were 7 hearing days of the notice of motion ending on 5 September 2000. There was an adjournment after the first two days. The decision was handed down on 3 September 2001. In the decision the judge defined the issues that arose as follows:

"(1) What is the meaning of 't'ong' in the context to s.15 NTO?

(2) What is 'Wah Yan Mo Fan Heung' and is it a t'ong within the meaning of s.15 NTO?

(3) Even if Wah Yan Mo Fan Heung is a t'ong within the meaning of s.15 NTO, have Tang Man Kit and Foo Tak Ching been appointed managers of the t'ong and have their appointments been approved and registered so that they are authorised to bring or continue this action?"

14. In brief, the judge came to the conclusion that the Heung was not a section 15 T'ong and in paragraph 100 she summarised her conclusions that "They (the named plaintiffs) have not purported to sue in their personal right, and insofar as Wah Yan Mo Fan Heung is an unincorporated association, the evidence as to the composition of the association and the validity of the votes is far from clear." The judge did, however, indicate at paragraph 99 that despite the fact that section 15 of the New Territories Ordinance did not backdate the effect of the approval and registration of managers, since there were no competing interests in this case, "... it would be adequate if authority is vested before the determination of proceedings by way of ratification, subject always to arguments as to the costs."

15. The appellants sought to argue on three broad grounds of appeal:

(1) That the managers had the right of management and the actual possession of the land in question. They had put the defendant into physical possession and had granted the tenancy to the defendant. Irrespective of whether the Heung was a T'ong under section 15 of the New Territories Ordinance, the managers in the exercise of their possessory title had the legal right to seek to recover the land.

(2) That the managers were in fact approved and registered by the District Officer under section 15 of the New Territories Ordinance as managers of the Heung, having the right of disposal or otherwise dealing with the land subject only to the consent of the District Officer as if they were the sole owners. The plaintiffs remained vested with these rights unless they were taken away by court order. The declaration made by the judge below that the Heung was not a T'ong within the meaning of section 15 did not accomplish this. The conferment of these rights is a matter of discretion for the District Officer.

(3) That even if the judge below had been justified in making her own findings despite the registration of the managers, she was wrong in finding that the Heung was not a T'ong within the meaning of section 15 in that the finding was not based on the evidence or any reasonable construction of the New Territories Ordinance.

The history of the land

16. In 1924, there was in existence an organisation, which was probably an unincorporated association, by the name of Chap Shing Company. It is not known at this stage who formed that company. It is known that as early as that year one Lui Lap Ka and Wong Yuet Chiu took conveyances of various parcels of land being named first as trustees for Chap Shing Company and later as trustees for Lui Lap Ka and Wong Yuet Chiu and Chap Shing Company.

17. It would appear that on 25 October 1929 the District Officer caused a notice to be exhibited at Chap Shing Company, Wah Yan Mo Fan Heung Village recording the fact that Wong Yuet Chiu and Lui Lap Ka, the managers of Chap Shing Company, had come to the District Office wishing to assign the various properties to Wah Yan Mo Fan Heung managers, Wong Yuet Chiu, Lui Lap Ka and to sell them. The notice invited anybody who considered that to be inappropriate to go to the District Office and make a report, in which event the matter would be determined. There is a memorial dated 30 December 1929, which is registered in the District Office at Tai Po and certified as correct by the District Officer, recording the transfer for the consideration of merely the payment of Crown rent for those parcels of land to Wah Yan Mo Fan Heung trustees Lui Lap Ka and Wong Yuet Chiu.

18. There were in evidence documents, referred to as share certificates by the judge below, which emanated from about this time which were headed Chap Shing Company with the words underneath British New Territories Wah Yan Mo Fan Heung. This bore the inscription that they were to certify that a particular person "has in accordance with the constitution of our Heung paid the share money. So it has issued the form of share certificate appended with a numbered house lot to be possessed by him permanently." On the reverse of the certificate was a diagram showing the layout of houses in Demarcation District 107 Pok Wai.

19. On 2 December 1932 another memorial was registered, again, certified as correct by the District Officer. On this occasion it was recorded that the property of the Wah Yan Mo Fan Heung with Wong Yuet Chiu and Lui Lap Ka as trustees was divided amongst the parties whose names were on the list attached. This division of the property appears to have been approved by the District Officer following an advertisement the translation of which reads as follows:

"New Territories Tai Po District Office Wai for the purpose of announcement of matters according to Hong Kong Village Wah Yan Mo Fan Heung T'so/T'ong Manager Wong Yuet Chiu Lui Lap Gar now wish to distribute sell pledge the following properties of the said Heung T'so/T'ong to people village. Should any person consider this to be inappropriate and wish to object, should within one month from the date of showing this notice come to Tai Po/Ping Shan Land Office and report to this Office for determination. For such purpose hereby notifies."

It would appear that this notice had been posted up on 14 June 1932 and that it was recorded that no objection had been raised by 21 October of that year.

20. It is not known whether anything of significance was recorded as having taken place in respect of the Heung property in the period leading up to, during and immediately following World War II. On 4 January 1960, a memorial was registered, certified as correct by the Assistant Land Officer, recording the appointment of Wong Tat To as manager of the "Wah Yan Mo Fan Heung" in place of Wong Yuet Chiu, deceased.

21. There was, apparently, a meeting of members of the "New Territories Wah Yan Mo Fan Heung Chap Shing Company" held on 17 April 1959 when it was resolved that Mr Wong Tat To and Lui Lap Ka should jointly represent the company as managers and signatories to the land deeds. This was followed by the registration of the memorial.

22. There was evidence from Mr Robinson, the Assistant Director of the Legal, Advisory and Conveyancing Office of the Lands Department who had been posted to the New Territories in 1981 and had been Senior Solicitor Tuen Mun, Yuen Long, Tsuen Wan and Assistant Principal Solicitor in New Territories North, that he had seen a memorial in the T'so/T'ong Registry of the appointment of Wong Tat To which went back to 1960: see page 166 of the transcript.

23. Lui Lap Ka died in 1965. It should be mentioned at this stage that the judge below made specific reference at paragraph 81 of the judgment to the fact that no trace had been found of any record of Lui Lap Ka's application to be registered as a manager of a T'ong from 1929 until his death in 1965. Whilst it is correct that there is no specific record of an application by Lui Lap Ka, the various memorials which were signed certifying their correctness by the District Officer and the 1932 notices, which were referred to above, are all consistent with Lui Lap Ka having been a manager. Moreover, the property list attached to the memorial relating to Wong Tat To's appointment bears Lui Lap Ka's name as being an owner of the property and, of course, upon the occasion when Wong Tat To was elected as a manager, Lui Lap Ka acted as Chairman of the meeting. Lui Lap Ka's death was registered under memorial number 223351 in September 1979.

24. As noted above, it is the defendant's claim that some time in or about 1966, Wong Tat To, in his capacity as manager and trustee of the Heung, granted a tenancy to Chong Shui Kit who operated a business of Hip Hing Timber Company on the site. It is also the defendant's case that Mr Chong and Mr Wong Tat To agreed in 1974, when the defendant's company was incorporated, that it would be substituted for the Hip Hing Timber Company and the previous 1966 Agreement and other arrangements were applied to the defendant.

25. There were two attempts, one in 1972 and one in 1980, to register managers of the Wah Yan Mo Fan Heung. The earlier date was about the time that has been described by Dr James Hayes as being the commencement of considerable change in the New Territories. Dr Hayes retired as Regional Secretary of New Territories in 1987 and had been a District Officer for many years. He refers to the District Officers' responsibilities having been greatly extended, mostly connected with the physical development of the New Territories as a result of a giant housing programme which began in 1971: see "Chinese Customary Law in New Territories of Hong Kong: The Background to the Operation of the New Territories Ordinance 1899-1987" Asian Profile Volume 19 No. 2 page 97 esp. 97 and 122. It is not altogether surprising therefore that someone who was identified as a comparatively junior officer should have written in 1972 response to a request to register a new manager that:

"This is the similar case as that ..., causing a lot of troubles on appointment of managerships dispute. In fact, in my opinion, this is a private company and not Tso/Tong, and this office should not put an hand into it and the D.O.'s consent is not necessary. They should put the whole matter into the hand of their solicitor."

26. There was some evidence in the court below directed to the question as to whether proper consideration had ever been given to the question of whether the Wah Yan Mo Fan Heung was a T'ong. There was some doubt about the matter because in 1980 the solicitor acting on behalf of the Registrar General in the New Territories Section, Tsuen Wan, wrote a very short memo in which he said that "If land is held in the name of an unincorporated body which is not a clan, family or T'ong the appointment of an additional manager need not be reported to the District Land Office and the Land Officer would not be in a position to approve such appointment." Some 20 years later, the same officer, who by then was Deputy Director/Legal for Director of Land, indicated in a memo to the District Officer, Yuen Long, after reviewing the file that

"It appears that the District Officer of the time has made the decision that the Wah Yan Mo Fan Heung was not a t'ong for reasons which I cannot now identify."

Suffice it to say that, as recorded in paragraphs 18-21 of the judgment below, there has been a settlement of proceedings which were brought against the Secretary for Justice. That settlement has resulted in the recognition as managers of the Heung under section 15 of the New Territories Ordinance. The current managers who are now registered are the present named plaintiffs.

27. In December 1981, the Government paid compensation for resumption of part of the land. The payment order was made to "Wah Yan Mo Fan Heung with Wong Pui and Wong Tat To as managers." It would appear that for the payment of what was clearly a substantial amount of compensation the Government was prepared to treat Mr Wong Pui as a manager of the Heung. There was a resolution at a meeting of the Heung in September 1984 whereby Mr Wong Pui was appointed to act as manager with Wong Tat To in place of Lui Lap Ka. That appointment was recorded by a memorial in the Land Registry which was again certified by the Land Officer shortly thereafter.

28. On 1 May 1987 Mr Wong Pui died. In January 1988, the District Lands Office issued a notice to Wah Yan Mo Fan Heung and Wong Pui and Wong Tat To as managers indicating that more land would be resumed. This no doubt prompted some action to appoint a manager to fill the vacancy left by Wong Pui's death. It appears, however, that Mr Wong Tat To purported to do this on his own by appointing Mr Wong Fook-pui and Mr Wong Kwan-fat. He notified the District Lands Office, Yuen Long of this and a memorial was entered on the register recording the fact that the two new managers had been appointed to replace Mr Wong Pui.

29. January 1989 saw further action. A meeting of the Heung was called by Mr Tang Man Kit acting as secretary. The notice of the meeting was published in local newspapers on 6 January 1989. The meeting took place on 28 January 1989 but in the intervening time Mr Wong Tat To died. As a result of the meeting, Mr Tang Man Kit and Mr Chan Kam Cheung were appointed as managers and their appointment was recorded under Memorial No. 388993 on 31 January 1989. Thereafter, on 22 March 1989, compensation was again paid, the order at this time being made in favour of Wah Yan Mo Fan Heung. There were a series of demands in the period of 1990 through to 1998 whereby the Inland Revenue Department issued demands for tax and rates to Mr Chan and Mr Tang as managers of the Wah Yan Mo Fan Heung. Indeed, in 1991, proceedings were issued on behalf of the Director of Accounting Services, the defendants were named as "Chan Kam Cheung & Tang Man Kit (Managers of the Wah Yan Mo Fan Heung)." The District Lands Officer North also communicated by letter with the Wah Yan Mo Fan Heung and Mr Tang and Mr Chan as managers. They were also named in the Demand Note in respect of fees for a short term waiver as the managers of the Wah Yan Mo Fan Heung. That Demand Note was issued on 11 June 1997. It is right to point out that during the period from 1972 to 1998 the Lands Office and later the Lands Department as well as the District Officer Yuen Long took the view in correspondence that the Heung was not a T'ong. That view appears to have begun to be modified somewhat in a letter of 29 July 1999 from the Lands Department.

30. In November 1999, a meeting was called to appoint Mr Foo Tak Ching as manager of the Heung in place of Mr Chan who had died in 1997. Following an advertisement of that by public notice issued by the District Office in July 2000, eventually, as noted above, the District Officer acknowledged that the Heung was a T'ong within the meaning of section 15 of the New Territories Ordinance and approved the appointment of Mr Tam Man Kit and Mr Foo Tat Ching as managers.

These proceedings

31. The statement of claim refers to the Notice to Quit dated 10 April 1986. This was, of course, whilst Mr Wong Tat To was still alive. The writ was issued on 22 November 1990 in the name of Wah Yan Mo Fan Heung with Chan Kam Cheung and Tang Man Kit as managers. That would, of course, correspond to the appointment which was made in 1989. The latest amendment names Mr Tang Man Kit and Mr Foo Tak Ching suing as managers of Wah Yan Mo Fan Heung.

The judge's findings

32. The judge came to the conclusion that the Wah Yan Mo Fan Heung was merely the name or style in which the members of Chap Shing Company (集成公司), an unincorporated association whose members were motivated for the purposes of gain, sought to hold lands and that the Wah Yan Mo Fan Heung is not a T'ong within the meaning of section 15 of the New Territories Ordinance. The judge considered that business T'ongs were in the nature of he-huo (合伙). In essence that they were "narrow" profit making organisations: see paragraphs 45 and 54. She considered that in respect of a he-huo or partnership the T'ong name would be no more than the trade name or style of the individuals in partnership: see paragraph 36 of the judgment.

33. The process of reasoning by which the judge arrived at the conclusion that the plaintiffs were non-suited may be summarised on the basis that she considered that the Wah Yan Mo Fan Heung was not a T'ong within the meaning of section 15 of the New Territories Ordinance and that in any event, even if it had been a T'ong, the present plaintiffs were not the registered managers of the T'ong at the time when action was commenced and therefore could not continue these proceedings.

34. In respect of the first matter the judge posed the question as to whether, when the legislature passed the New Territories Land Ordinance in 1905, it had intended that a business T'ong should be within section 13. Section 15 of the New Territories Ordinance has replaced this section. That section, in the form it was in 1905 read as follows:

"13. Whenever any land is held from the Crown under Lease or other grant, agreement or licence in the name of a clan, family or t'ong, such clan, family or t'ong shall appoint a Manager or Managers to represent it, and may from time to time appoint a new Manager. Every such appointment and change shall be reported at the appropriate office, and the Land Officer on receiving such proof as he may require of such appointment, shall, if he approves thereof, register the name of the said Manager or Managers; the said Manager or Managers thereupon shall after giving such notices as may be prescribed have full power to dispose of or in anyway deal with the said land as if he or they were sole owner thereof, subject to the consent of the Land Officer, and shall be personally liable for the payment of all rents and charges and for the observance of all covenants and conditions in respect of the said land. Every instrument relating to land held by a clan, family or t'ong which is executed or signed by the registered Manager or Managers thereof in the presence of the Land Officer and is attested by him, shall be as effectual for all purposes as if it had been executed or signed by all the members of the said clan, family or t'ong. The Land Officer may on good cause shewn cancel the appointment of any Manager and select and register a new Manager in his place. If the members of any clan, family or t'ong holding land shall not within three months after the coming into operation of this Ordinance, or after the acquisition of the land if acquired after the coming into operation of this Ordinance, make and prove the appointment of such Manager or Managers as aforesaid, or within three months after any change of Manager prove the same as aforesaid, it shall be lawful for the Crown to re-enter upon the land held by such clan, family or t'ong which shall thereupon become forfeited to the Crown. Such re-entry shall be effected by the registration of a memorandum thereof in the appropriate office."

35. Section 15 as it reads today is not materially different. In answering the question as to whether a business T'ong might be a T'ong within the meaning of the section of the Ordinance, the judge considered the nature of a business T'ong. She came to the conclusion that it was a form of business association or he-huo, a business partnership. Whilst not entirely discounting the existence of business T'ongs, it is clear from the manner in which the judge dealt with that, that she was sceptical as to whether a T'ong could engage in business. The judge then considered a number of matters. In particular reference has made to the report made by the then Colonial Secretary, Stewart Lockhart dated 7 February 1900. That was a report in respect of the conditions prevailing in the New Territories at the time when the New Territories came under the jurisdiction of Hong Kong. The report was forwarded to the Secretary of State. The report was wide-ranging and covered all aspects relevant to the administration of the New Territories. Appendix III of that report was a memorandum on land. The judge's conclusion was that a business T'ong did not come within what was referred to in the memorandum in Appendix III. The judge considered that for a T'ong to be registrable within section 15 it should have sufficiently uncontroversial objects so that those responsible for the administration of land could take a role as envisaged the New Territories Ordinance. The judge considered that the legislature would not have intended that the Land Officer should become involved in decisions such as the selection of managers for a business venture.

36. Whilst referring to the paucity of contemporaneous documents, the judge noted that no constitution had been found in respect of the Wah Yan Mo Fan Heung and that no list of members had been found in respect of it although they should be identifiable persons, and that there was no reference in the T'ong or T'so registry book to the Wah Yan Mo Fan Heung. As has already been pointed out, the judge referred to the fact that there was no evidence of the appointment of managers and that there was in particular no evidence that Lui Lap Ka had ever been registered as a manager.

37. The share certificates, which were issued in respect of the Wah Yan Mo Fan Heung, also attracted adverse comment. The judge considered that they were issued by the Chap Shing Company and that therefore this militated against the Wah Yan Mo Fan Heung being a T'ong. The fact that they carried an individual right to a particular house lot meant that it was not a clan or organisation but an individual investment in unequal shares.

38. Before considering the section of the Ordinance, it should be observed that in considering the decision of Cheung J in Tang Yau Yi Tong and another v Tang Mou Shau Tso and others [1995] 2 HKC 245, sight might have been lost of the fact that Cheung J had before him a memorandum of Dr Hayes. That memorandum was apparently written in about 1962. However, it was circulated again in 1984 within relevant Government circles. As already indicated, Dr Hayes retired from government service in a senior position in 1987. He had commenced his service in Hong Kong Government in 1957. During the course of his work in the New Territories he had been District Officer for a considerable time. He had therefore acquired considerable knowledge as to the customs and law in the New Territories over a very long period. Not only has he been awarded a doctorate at the University of London but also an honorary doctorate from Hong Kong University in recognition of his services to culture in Hong Kong. The memorandum to which Cheung J referred makes quite clear that in Dr Hayes' experience, business T'ongs existed.

39. Reference might also be made to the article entitled "Chinese Customary Law - an Examination of Tsos and Family Tongs" by Belinda Wong Sheung-yu in (1990) 20 HKLJ 13 at 14 where reference is made to business T'ongs. Furthermore, Professor Anthony Dicks SC provided written evidence in the present case. Although his evidence was that he had never heard of a T'ong which had a name Heung, his evidence did not go so far as to say that the Wah Yan Mo Fan Heung could not have been a T'ong. Indeed in referring to judicial references to T'ongs, he made a specific reference to the case of Reuter, Brockelmann & Co. v Tung Lok Tong, otherwise Leung Lai Nam and others [1909] 4 HKLR 37 at 50-51. In that passage, Piggott CJ referred to the use of T'ong names. It is quite clear from that passage that T'ong names were used by persons carrying on business. In that case the partners of a business had subscribed to the partnership in their T'ong names. Far from indicating therefore that a T'ong could not carry on business, this fortifies the statement made by Dr Hayes in the memorandum that

"The tong ... is a business association as often as not, and can, in fact, be a registered company."

A little later on in the paper it is stated:

"However, old New Territories' organisations, both tso and tong, which have prospered and become enlarged since 1910 to the extent that they have over twenty members since that date and so put themselves outside the scope of the exemption, rarely registered themselves under the Companies' Ordinance, Cap. 32 and Government seems never to have enquired too closely into the matter. New organisations of the traditional type, large or small, do not seem to register either under the Companies' Ordinance, unless it suits their convenience."

The paper then went on to consider the welfare and family aspects of T'ongs and at the foot of the second page it is stated:

"But whatever its welfare or family functions, whatever its ends and policies, the tong is mainly a business venture concerned with profit and loss on which the continuance of its activities depend. Some of these tong are very large and are extensive landowners, e.g. the WONG Wai Tsak Tong of Cheung Chau at the present day and the LI Kau Yuen Tong of Sha Wan, Kwong Chau, before the lease, which was the taxlord for the whole of Lantau."

40. It is clear, therefore, that not only did very early judgments proceed upon the basis that business activities in relation to a T'ong were to be expected, but those involved in the New Territories administration clearly saw this happening in practice and the academic writers also appreciated this. This approach seems to me to be entirely in keeping with what is stated in the Lockhart Report. There was one subsection of Appendix III which dealt with the varieties of tenure of land. Again, one of the other subsections of that was headed "Land held by Associations" that read:

"China is a land of associations which are as numerous and the objects of which are as varied as the needs of man. Their formation is simple and easy. Certain villages, whatever their object may be, meet in a temple, ancestral hall or private house to deliberate over some scheme. If it is approved, a fund is raised to which the members contribute equally, their contributions being devoted to the purchase of a piece of land, landed property in China being considered the safest investment. The rent derived from this land may be used for the burial of a member of the association when he dies, or may be let out on interest, or may be used to assist members to emigrate to California and Australia, or for any other enterprise or good object that may be desired."

41. For some reason the judge below considered that the Lockhart Report referred only to "good objects" and made no mention of "business or commerce": see paragraph 43 of the judgment. That is not my reading of what the Lockhart Report was saying. In the first place, when referring to associations it was clearly indicating that there was a wide variety of associations. It referred to these associations deliberating over "some scheme". In this respect there is no reason to confine that to "good objects" which I understand to be something akin to, perhaps, charitable objects. Furthermore, the report refers to investments and more particularly the making of money which can be "used to assist members to emigrate to California and Australia or for any other enterprise or good object." I can see no reason why it should be considered that generating profits which could be used to pay for emigration abroad should be treated any differently from any other commercial enterprise. In my view also, the judge took too restrictive a view of the reference to members contributing equally. In the context of the Lockhart Report as a whole, to interpret this phrase as confining recognised associations only to those where each member contributes equally is, in my view, to take too restrictive a view of what the Lockhart Report was saying. In any event, I see no reason why "equal contributions" would not be satisfied where the contributions were equal but individuals were empowered to make more than one equal contribution. Hence, even if the 1905 legislation should be interpreted as if the term "T'ong" only included those organisations which fell within that section of the Lockhart Report, I see no reason why that is not satisfied.

42. Importantly, however, there are a number of matters in relation to the treatment of the Heung which are, in my view, indicative of the fact that the Heung was treated initially and, indeed, probably up until about 1972 as a T'ong. Indeed, it appears that recognition of this was partially the cause of the eventual recognition in 2000 of the Heung as a T'ong. As recognised in the judgment below, it was necessary that there should be identifiable members of the T'ong. There were two indications that the members of the Heung were identifiable. In the first place, as referred to in paragraph 19 above, there was a list attached to the memorial, recording the names of the persons to whom the property was transferred in 1932. In the second place, Mr Robinson said that as far back as 1984 he had seen lists of members and that they were held in the T'so/T'ong Registry.

43. Although it is true that no written constitution has been found relating to the Heung, there is no indication that there was any written constitution of Chap Shing Company either. Not only does the defendant accept in its pleadings that the Heung is a body on whose behalf land can be held and rented, but ever since 1929, trustees of the Heung had been recognised and registered as the owners of the property. The judge stated at paragraph 56 of her judgment:

"Whilst there was no business registration of 'Chap Shing Company' or of 'Wah Yan Mo Fan Heung', nor was either name registered in any t'ong/tso registry book (although it would be fair to say that the evidence of the keeping of such books did not show that such books were kept in all parts of the New Territories at all times)."

The judge does not appear to have considered Mr Robinson's evidence at page 166F of the transcript where he said:

"I do recall seeing the Memorial in the tso - I think it was the Tso/T'ong Registry - there was a memorial of the appointment of Wong Tat To, which went back to 1960."

44. In paragraphs 75 and 76, the judge considered the effect of the advertisement which is set out in paragraph 19 above. The judge said:

"However, the deletion of the generic words 't'ong/tso' in the second place where they appear on the notice (as contrasted to part of the proper name, in the first place where they appear) might show that at least the staff of the Land Office had insufficient materials to identify Wah Yan Mo Fan Heung as a s.15 t'ong with any degree of certainty."

That, in my view, is reading too much into the deletion of those characters. The form which was used was a form which could clearly either be used for a T'so or T'ong. What, perhaps, should be considered is rather that the staff of the Land Office considered it appropriate to use a form which would only be used in respect of a T'so or a T'ong in respect of a Heung. That, perhaps, is indicative that the Heung was considered to be at the least of the same generic type.

45. Equally importantly, the reference in paragraph 76 of the judgment that there was no evidence that notices of that type were only posted for a section 15 T'ong is somewhat curious. The question which would arise immediately is not that there was an absence of evidence that the form was never used for other organisations other than a T'so or a T'ong but rather on what basis it could be used for any other organisation than a T'so or T'ong.

46. In those circumstances, the indicia of a T'ong are, namely, the list of members, the registration at least in 1960 of particulars relating to the appointment of Mr Wong Tat To recorded in the T'so/T'ong Registry, the clear existence from at least 1929 of trustees holding the land and the existence of advertisements by the Land Office in relation to transfers of the land of the type used for T'sos and T'ongs.

47. One factor which was referred to as causing a potential difficulty was that there was no indication that Lui Lap Ka had ever been registered as a manager of the T'ong. Save to say that the land registrations clearly referred to him being a trustee and those events had clearly happened in very early times, it is unlikely that in later years he would have even considered it necessary to take the trouble to make a registration if, which is by no means certain, he had not been registered as a manager in the earlier years.

48. In conclusion therefore I consider that the Heung was always a T'ong within the meaning of the New Territories Ordinance and still remains a T'ong to this day.

49. That, however, is not conclusive of the matter because the judge considered that under section 15 of the New Territories Ordinance, which is the replacement of section 13, the commencement of and continuation of these proceedings is a dealing with land which requires the Land Officer's consent. On a simple construction of the section I find it difficult to envisage that the taking of proceedings based upon the non-payment of rent should be regarded as a dealing with land. The recovery of possession from a recalcitrant lessee who has failed to pay rent is a matter of management and not a dealing with land. Even if it were considered a matter of dealing with land it would be the equivalent of acquisition of land and not disposition of it. Section 15 does not require the Land Officer's consent to the acquisition of land. Section 15 only applies where land is held by a T'so or T'ong.

50. In any event, the conclusion that the bringing of proceedings in respect of the non-payment of rent was a dealing in land is based upon the proposition that the renting of land was a matter which required the consent of the Land Officer. That is, again, a proposition with which I do not agree. In my view, section 13 of the New Territories Ordinance, which is now section 15 was there to ensure that T'so land and family T'ong land were inalienable, indivisible and perpetual: see the judgment of Deputy High Court Judge Robert Tang QC in Kan Fat-Tat also known as Kan Fat v Kan Yin-Tat also known as Kan Tat [1987] HKLR 516 at 533 and the evidence of Dr Hugh Baker referred to at that passage.

51. The importance of non-alienation of land can be seen in the Lockhart Report. At the end of the paragraph under the heading Ancestral Land it is stated:

"Clan land cannot be alienated without the consent of the representatives and elders of the whole clan."

Under the heading Land Sales there is a statement:

"If any owner wishes to sell his land, he is supposed to offer such land in the first instance to his nearest relatives, and is not at liberty to sell to any one outside of his clan, unless the nearest relatives are unwilling to purchase."

52. This statement was taken up by Dr Chi-Cheung Choi of the Royal Asiatic Society and lecturer at the Division of Humanities, Hong Kong University of Science and Technology, in the paper entitled "Family and Land Transfer Practice in Guangdong" which he gave to the Panel on Customary Law at the International Symposium on Asian Studies in 1988. He said (at page 489) that:

"Buying and selling property in traditional China was not a free transaction. It is always mentioned in the Chinese property deeds that relatives of the owner had to be asked before the transferred to others. In many of these deeds, some relatives of the property owner are specified as not having any right to intervene in the transaction."

53. The paper then went on to analyse a large number of collected land documents dating from 1812 to 1938. Part of the purpose of the paper was to analyse which parties would not have the right to be consulted. However, what is significant is that in most of the 71 deeds that related to transfer of properties, the reasons for selling the property and the persons with whom the transaction was discussed e.g. father and son and the persons asked e.g. extremely close relatives and the relatives or group who would have the right to intervene are mentioned. Indeed Appendix VIc of the Lockhart Report sets out a sample deed relating to the sale of a stone quarry. One of the matters mentioned in the deed was the fact that relatives had been asked first whether they wished to buy the quarry, before a middleman was instructed to find a buyer.

54. Dr Hayes gave a paper at the same symposium where he referred to the powers of managers under Section 15 of the New Territories Ordinance. He said at page 458:

"This was, on the face of it, very different from their limited powers under the customary law, which emphasized consultation and agreement before any sale or mortgage of trust properties. However the section also required the giving of notices and the consent of the land officer, so that, in practice, they continued to be as restricted in their actions as before, for their members usually insisted on consultation, and the district officers scrutinized every application for alienation" (emphasis added)

55. As referred to by Stephen Selby in his article entitled "Everything You Wanted to Know About Chinese Customary Law (But Were Afraid to Ask)" (1991) 21 HKLJ 45, in particular at pages 46 and 56, the New Territories Land Ordinance 1905 provided a legal framework whereby land held under ownership of the types which had been previously customary could be accommodated by Hong Kong Laws and the English Common Law. The object of the New Territories Land Ordinance was to facilitate the conveyancing of land: see page 56. In contrast, it seems to me that the renting of land is part of management. By definition, all T'ong and T'so land which was not occupied by, for example, an ancestral hall would almost certainly have to be rented, whether it be to members of the T'so or T'ong or outsiders. Given the amount of land which is held by T'sos and T'ongs and, indeed, to this day still so held, if the renting of T'so or T'ong land were considered to require the consent of the District Officer it would seem that such a provision has been honoured by its universal breach. In this respect, I would add that I have had the advantage of seeing the relevant part of the draft judgment of Le Pichon JA in the case of Man Ping Nam, the manager of the Man Sham Chung Wui v Man Mei Kwai (by original action) Man Mei Kwai v Man Ping Nam as manager of Man Sham Chung Wui and others, CACV 193/2002 and I respectfully agree with what has been said there on this topic.

56. If, indeed, it were necessary to obtain the Land Officer's consent to the commencement of these proceedings on the basis that consent was required for any letting of the land, then the curious situation would arise whereby a manager who had let land without consent could not take steps to rectify his error without obtaining the consent of the Land Officer. Put in another way, if the point be right, the original letting was without consent and is therefore liable to be set aside.

57. Finally the point was made that even if the present plaintiffs should be regarded as now being the managers of a T'ong they cannot adopt these proceedings because they were not managers at the time of the commencement of the proceedings. The short answer to the point appears to me to be that a court will endeavour to permit the joinder of parties if that is necessary to constitute what would otherwise be a valid action. In these circumstances even if the action were commenced without authority, if persons who are now managers of the T'ong are joined, I see no reason why the action should not be continued in their name. The action was commenced and carried on by persons who were the managers of the T'ong albeit called a Heung. If necessary, further authority to pursue the action could be obtained although that is only a technicality.

58. In relation to Mr Neoh SC's first point that the managers of the T'ong had granted a tenancy and it was therefore open to them to terminate that tenancy, it seems to me that that point now becomes academic in view of my conclusion in respect of the T'ong. Nevertheless, I see no reason why if a tenancy were granted by a person who was registered as a trustee, and who purported to be manager of an entity which a defendant concedes exists, he cannot terminate that tenancy and proceedings cannot be brought by those who succeed to his place as trustee and manager.

59. In my view, this appeal should be allowed and the matter remitted to the Court of First Instance for trial. There should be an order nisi of costs in favour of the plaintiff.

Hon Le Pichon JA:

60. I agree.