WONG TAT SHUN v. TANG SHIU MAN

DCMP 790/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 790 OF 2012

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JUDGMENT

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1.  This is an application made by the applicant by way of originating summons asking the court to declare a good title in regard to a piece of land in the New Territories.

Background

2.  The applicant Wong Tat Shun (“the applicant”) is claiming a declaration of good title to the land known as Mong Tseng Wai Lot No 136 in DD 129 (“the Land”) despite the lack of title deed or document showing how the title of government lessee, one Tang Yu Lung (“Tang Yu Lung”) was conveyed to anyone before the relevant parties could enter into the division of property Memorial No YL20240 for vesting the Land unto Tang Loi Fuk (“Tang Loi Fuk”) and from whom the respondent, Tang Shiu Man (“the respondent”) succeeded the Land.

3.  The applicant is satisfied that the respondent has duly succeeded the Land from Tang Loi Fuk by virtue of succession to property dated 16 January 1962 registered in the Land Registry by Memorial No YL146521.

4.  From the division of property dated 24 April 1912 registered in the Land Registry by Memorial No YL20240, the Land (then described as “Mong Tseng Wai House 136”) was vested unto Tang Loi Fuk (“the Division of Property”).

5.  The applicant does not take issue on the description or identity of the Land so described in the said Division of Property.  He is also satisfied that the two descriptions “Mong Tseng Wai Lot No 136 in DD129” and “Mong Tseng Wai House 136” are two different descriptions of the same land.

6.  According to a letter dated 10 January 2012 from the applicant’s solicitors Messrs Raymond Chan, Kenneth Yuen & Co (“RCKY”) to the respondent’s solicitors Messrs CO Chan & Co (“COC”), the applicant raised the requisition about how the Land was conveyed from Tang Yu Lung ie the government lessee to a group of people surnamed Tang (including Tang Loi Fuk) who then divided their properties among themselves and vested the Land unto Tang Loi Fuk as the sole owner to the exclusion of others.  Further, the applicant’s solicitors enquired whether they could just take the said Division of Property as an “assignment” from which the title of the Land commences under section 13 and 13A of Conveyancing & Property Ordinance (“CPO”).

7.  By a fax letter dated 13 January 2012, COC replied to RCKY and stated that they had written to the District Lands Office, Yuen Long (“DLO”) on 29 November 2011 to enquire whether the interest of the government lessee Tang Yu Lung had been granted to Tang Loi Fuk by succession.  DLO replied by letter dated 13 December 2011 that there was no record in respect of COC’s enquired “succession”.

8.  RCKY by its letter dated 16 January 2012 in reply stated that the DLO has no record of how the title of Tang Yu Lung in the Land was conveyed to anyone before the relevant parties had entered into the Division of Property on 24 April 1912 for vesting the land unto Tang Loi Fuk.  However, in view of the fact that for over 99 years the title of Tang Loi Fuk and his successors in title had not been challenged, they wondered if the respondent was willing to apply to the court for seeking a declaration of good title under section 12 of CPO at his own costs. They stated that this would allow the applicant to complete the purchase of the Land.

9.  However, the respondent took a very passive role in the matter and did not make any application to the court under section 12 of CPO.  As the applicant is at all times a willing buyer, he makes the present application to seek declaration of a good title to the Land.  The originating summons, together with an affirmation of Wong Tat Shun and the notice of hearing of the originating summons were duly served on the respondent. The respondent however decided not to attend the hearing but would like to leave the matter for the court to decide. 

Discussion

10.  Section 3 of the Land Registration Ordinance, Cap 128 (“LRO”) provides that:-

“(1) Subject to this Ordinance, all such deeds, conveyances, and other [instruments in writing] [emphasis] … made, executed, …… and registered in pursuance hereof, shall have priority one over the other according to the priority of their respective dates of registration …..

(2)   All such deeds, conveyances, and other instruments in writing …… which are not registered shall, as against any subsequent bona fide purchaser …… for valuable consideration of the same parcels of ground …… be absolutely null and void to all intents and purposes ……” 

11.  Section 4 of LRO provides that:-

“No notice whatsoever, either actual or constructive, of any prior unregistered deed, conveyance or other instrument in writing …… shall affect the priority of any such instrument as aforesaid as is duly registered.”

12.  Thus, the applicant submits that whether or not the said Division of Property could be regarded as “conveyance” or “assignment” as defined in section 2 of CPO, it can still be treated as an “instrument in writing” registered at the Land Registry under the LRO.

13.  Section 2 of CPO defines “assignment” as:-

“(a) the transfer of the whole of the interest in land held under a Government lease …… and

(f) every other assurance or conveyance of land by any instrument”.

14.  The applicant further submits that the Division of Property so registered should fall within the definition of “assignment” in section 2 of CPO if the parties thereto were at the material times (immediately prior to 24 April 1912) the co-owners of various lands including the Land (which they acquired the title by way of conveyances or succession from their ancestors). 

15.  Mr Jerry Jim, the solicitor who represents the applicant in this case, submits that the division or distribution of the properties among themselves is similar to the situation of Fenjia (分家) (Division of Family) or devolution of title to lands by “inter vivos transaction” or “unanimous agreement in writing of all successors” as described in Tang Tak Sum & Tang Tak Chuen v Tang Kai Fong in HCA 2089/2009. 

16.  In that case, Deputy High Court Judge Linda Chan SC was asked to consider a Division of Family registered by a memorial dated 7 January 1976 pursuant to LRO and section 17 (now repealed) of New Territories Ordinance, Cap 97 (“NTO”).  She accepted the defendant’s submissions that the Division of Family could not be effective as a testamentary script of the deceased. In her view, it only contained a list of “intended inter vivos disposition”. In the learned deputy judge’s view, such intention would not have the effect of vesting the land to an ancestral worship trust.  The learned judge accepted the principles of Chinese customary law decided in Re Lau Wai Chau (2000) 3 HKCFAR 98 is binding (see §§ 53 & 54 of the Judgment).

17.  The learned deputy judge in §54 of her Judgment cited certain passages of the judgment of the Court of Final Appeal in Re Lau Wai Chau, supracase:-

“Only one of those submissions is renewed before us. In so renewing it, the appellants begin by accepting that under Chinese law and custom no ancestral worship trust can be created by will for the simple reason that Chinese law and custom does not recognise testamentary dispositions.” (at 103D-E) (underlining added)

“What it takes to create an ancestral worship trust

The Judge’s conclusion that Chinese law and custom required positive steps for the creation of an ancestral worship trust was a conclusion reached with the benefit of expert evidence which he accepted. Such evidence came from all three of the fourth fong’s experts on Chinese law and custom, namely Professor Anthony Dicks SC, Professor Hugh baker and Mr Michael Palmer, all of whom gave evidence against the existence of the alleged ancestral worship trust.

Since that conclusion of the Judge’s as to the state of Chinese law and custom was affirmed by the Court of Appeal and since the appellants no longer dispute that conclusion, it is unnecessary to deal with the expert evidence at length. But the evidence of Professor Dicks, who needs no introduction in our courts, is particularly illuminating in regard to the “intention/subject matter/beneficiaries” submission. The Judge dealt with Professor Dicks’s evidence by saying that Professor Dicks:

‘… said that the wording of the Codicil clearly indicated that the intention of the Ancestor was to create from his remaining properties an endowment in perpetuity for the maintenance of ancestral worship. Under customary law, this appeared to be a valid, as well as extremely common, type of provision in a Chinese will of the traditional sort. He said that executors or administrators or trustees who succeeded them, in reliance on it, could properly have had the properties in question registered in the appropriate district office either in the name of the deceased t’ong or in the name of its linear descendants (i.e. in one of its own names with the suffix “Tso”), appointing managers in the usual way. In traditional China, the proper method of carrying the deceased’s intention into effect would have been to draw up an agreement between all eight Fongs to establish the endowment and to make an official report to the Office of the County Magistrate in accordance with a decree to that effect of the 18^th Year of Qianlong, but in the New Territories these formalities were replaced in effect by registration. But as no such steps had taken place, no ancestral worship trust was created in this case.’

Professor Dicks also said ¾ and the Judge also accepted ¾ that the function of a will in traditional China was largely to transmit moral instructions and precepts for the conduct of family affairs.” (at 104G-105E) (underlining added)

         ……

“As to how such endowments are to be made under Chinese law and custom, the conclusion to be reached (with the benefit of the expert evidence accepted by the Judge whose acceptance thereof was affirmed by the Court of Appeal and is not challenged before us) is as follows. Such endowments are to be made either by steps taken by someone in his lifetime to carry out his own wishes or by steps taken by heirs in their lifetime to carry out the wishes of a deceased ancestor. In either case the person or persons taking such steps is the settlor or are the settlors. Thus by the very nature of ancestral worship trusts, the only kind of disposition that can create an ancestral worship trust is an inter vivos disposition.” (at 105I-106A) (underlining added)

18.  She further accepted the principle of the Privy Council in Wu Koon Tai v Wu Yau Loi [1997] AC 179 at 187E-188B submitted by the defendant’s counsel in that case:-

“62. …… In their Lordship’s view, the devolution of title to land in the New Territories, whether by inter vivos transaction or on death, is regulated by the registration system and the general law of Hong Kong …… The title to the land was vested by virtue of section 17 (of New Territories Ordinance, now repealed) directly in the grandson when, in 1951, he was registered as successor to the father. The tile to the land is now vested in the defendant ……” (underlying added)

63.         Section 17 of NTO (now repealed) provides that:-

“the Land Officer, on ascertaining the name of the person who is so entitled to such land in succession to the deceased person (hereinafter called the successor), and on being satisfied that any estate duty which may be due has been paid, shall register the name of the successor, and upon such registration being effected the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Office against the entry of the name of the successor ……” (underlying added)

19.  The learned Deputy Judge further accepted the principles propounded in Wu Koon Tai v Wu Yau Loi, supra and Yau Kwai v Yau Kar Siu [2004] 4 HKC 141 (see §64 & 65 of the Judgment).

20.  In §64 of the Judgment, the learned deputy judge referred to the Yau Kwai case, in which the court rejected the plaintiffs’ case that under Chinese customary law, the lot was family property, and that neither the 1^st nor the 2^nd defendant prior to the division of the family had any share in the lot, and therefore they had nothing to sell; alternatively, any such share could not be disposed of without the consent of all the  co-owners.  Tang J (as he then was) held that the devolution of title in the New Territories is not governed by Chinese customary law.  Upon registration of the land in the names of the sons and grandsons of the deceased, they became the beneficial owners of the land and hold their share as tenants in common (at §16-36 of the judgment).

21.  In Tang Tak Sum case, the learned deputy judge in §66 of the Judgment held that the intention of the deceased in creating an ancestral worship trust over the land was defeated by the act of the heads of 4 fongs in registering themselves as tenants in common of the land in 1976, and upon such registration, the title to and all the estate and interest which the deceased had in the land was vested in the heads of the 4 fongs.

22.  In §71 of the Judgment, the learned deputy judge regarded such registration in 1976 as an “unanimous agreement in writing” of all successors of the deceased, being the heads of 4 fongs that the wish or provision of the Division of Family in relation to the land was not to be followed.  In §73 she quoted the principle of Court of Appeal in Tang Kap Wing Tso v Tang Leuk Tso [2011] 4 HKLRD 132 at §30:-

“30.1 And with respect to Mr Wong, I do not agree with his argument that there could be no valid transfer of the shares without evidence of the unanimous consent of all members of KWT and the need for alienation.  It is clear that the requirement of unanimous consent quoted in Kan Fat Tat v Kan Yin Tat from the judgment of the Supreme Court in Nanjing was only a general rule which was subject to local custom being different.  So what is the custom applicable to Hong Kong?  In Re Lau Wai Chau (2000) 3 HKCFAR 98, the Court of Final Appeal held that “under Chinese law and custom, property endowed in perpetuity for the purpose of ancestral worship may be divided amongst the settlor’s male descendants if they, as the heads of all his fongs, unanimously agree to such a division (emphasis added)

30.2 This was followed and applied by this Court (Tang V-P, Cheung JA and Johnson Lam J) in Tang Che Tai v Tang On Kwai CACV 137/2007 [2008] HKEC 143.  In para 29 the Court held that “Lau Wai Chau is consistent with the view that consent of members could be inferred and would usually be expressed through the respective heads of their fong” although the court did not have to decide whether the head of a fong could “disregard actual dissent” by members of his fong.”

23.  The concept of Fenjia (分家) (Division of Family) was also considered by Hon Tang VP (as he then was) in CACV 130/2007 Lai Hay On v Commissioner of Rating & Valuation & Director of Lands.  In §53 of the judgment, he quoted Mr Godfrey Lam SC’s (who acted as amicus curiae) reference to Yau Kwai casein which the expert evidence described Fenjia as a process of dividing the estate among the sons during the parent’s lifetime or after the death of the father, possibly under the supervision of the widow or family elders (at §30).  In §56 of the judgment, he quoted section 87 of the Qing Code:-

“ Section 87

Division of Family

Lü

During the lifetime of grandparents or parents, the sons or grandsons are not allowed to set up separate establishments and register them as such, nor to divide the family property, under a penalty of one hundred blows, but the parents or grandparents must be the complainants. Also during the legal period of mourning for father or mother no division may take place, under a penalty of eighty blows; but in this case the nearest senior relations must be the complainants; and if the division has taken place in accordance with the last will of the father or mother, no action will lie.

Li

1. The full penalty of the above law is incurred if the sons separate and divide the property, though they do not register themselves.  If, however, the parents permit the division, there is no objection to its being don.”

24.  Tang V-P cited in §57 of his judgment the commentaries of Jamieson (at pp 24-27) quoted by Mr Lam SC:-

“Next as to the mode in which the family property is divided.  This consists not only of all ancestral inherited property and the accumulations made by the head of the family, but also of all property acquired by the sons.  Prior to division, the family is an undivided whole, holding all things in common.  The father is nominal owner, but each of the sons has an expectant interest in his share, of which he cannot be deprived.  The earnings of every member are brought into a common fund, and no one has a right to compel a partition or to withdraw from the society until it is dissolved by mutual consent or by natural demise of the head.  The division of the property is therefore an important event.  It corresponds to the Emancipatio of the Roman law.  The sons become sui juris, and thereupon a new set of rights comes into existence.  Prior to division a deceased son’s estate reverts to the common fund, after division it devolves on his sons or adopted successor according to the general law.  No distinction is made between land and any other kind of property.  To come within the scope of this general rules, however, it must be understood that the sons have, as a matter of fact, held together up to the time of a division.  A partial dissolution often occurs when one son leaves the family for an official position or for purposes of trade in a different part of the country.  He is held to be “separately established” and his earnings would not fall into the common fund for distribution.  Whether he would share or not would depend upon the arrangement at the time of his separation.”

25.  The learned Vice President in §58 of his judgment had doubt whether Fenjia “分家” was indeed a mode of succession according to Chinese law or custom, and he did not accept there was room for Chinese customary succession otherwise than under section 17 of NTO.

26.  Tang V-P (in §60 of his Judgment) referred to Kan Fat Ta v Kan Yin Tat [1987] HKLR 516, in which he ventured to suggest that the concept of family property was not part of the law of the New Territories in 1898, and it was inconsistent with the concept of individual ownership and the right of testamentary disposition.  He excluded from consideration the land held by tsos or tongs which as Re Lau Wai Chau case shows must take the form of an endowment in perpetuity of property for the purpose of ancestral worship.  He then referred to §25 of Bokhary PJ’s judgment in Re Lau Wai Chau case:-

“25. …… Such endowments are to be made either by steps taken by someone in his lifetime to carry out his own wishes or by steps taken by heirs in their lifetime to carry out the wishes of a deceased ancestor ……”

27.  Tang V-P therefore concluded in §83 of his judgment that he believed that “law successors” in Article 122 of Basic Law refer to a succession on the death of the relevant ancestor and do not include an “inter vivos transfer”, which Cheung JA agreed (§92) that “succession” clearly connotes passing of interest on death, so that only succession on death (but not during a father’s lifetime) were addressed in Article 122 of the Basic Law.

28.  Based the above authorities, the applicant therefore submits that the Division of Property registered on 24 April 1912 was governed by the then section 17 of NTO and sections 3 & 4 of LRO, which takes priority over other persons of the family entitled to succeed or acquire or share any interest owned by or derived from the government lessee, ie Tang Yu Lung whose interests are not registered at the Land Registry or by the Land Officer under NTO or LRO.  Such Division of Property should be regarded as “inter vivos” transfer done and registered with the “unanimous consent or agreement” of all the heads of the fongs, which the Land Officer had duty to check and verify before accepting registration.  However, once it was so registered, the other members of the family, being male descendents of the ancestor (assuming Tang Yu Lung, the Government Lessee) whose interests are not registered should become null and void as against those (including Tang Loi Fuk and his successor the respondent) in the light of sections 3 and 4 of LRO.

29.  I agree with the applicant’s submissions above and the reasoning propounded in the authorities cited by the applicant.  In my judgment, the Division of Property takes priority over other persons of the family entitled to succeed or acquire or share any interest owned by or derived to succeed or acquire or share any interest owned by or derived from the government lessee, whose interests are not registered at the Land Registry or by the Land Officer under NTO or LRO.      

30.  Further, the applicant submits that under section 7 of Limitation Ordinance, Cap 347, (“LO”) no action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.

31.  Under section 17 of LO, “subject to the provision of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land ……., the title of that person to the land shall be extinguished.”

32.  I also accept the applicant’s submission on this that whoever considers they might have a claim on the title of the Land, they would be badly out of time as, for over 100 years, the title of the government lessee and his successors in title had not been challenged.  In my view, it is unlikely that anyone would able to succeed now. 

Contents of Registration dated 24 April 1912

33.  The contents of the Division of Property registered on 24 April 1912 reveals the following:-

“Division of Property as follows:-

(1) Tang Kam To of Mong Tseng
DD 129	Lots Nos 560, 609, 699, 848, 928, 9312
"	Mong Tseng Wai House No 9
(2) Tang Loi Fuk of Mong Tseng
DD 129	Lot No 66
"	Lot No 734A .11 Acre
	Second class land	Area .6 R	22cents
"	Lot No 845
"	Lot No 852A	Area .16 Acr
	Second class land	Area 6 R	32 cents
"	Lot No 991A	Area .05 Acre
	Second class land	Area 6 R	10 cents
"	Lots Nos 1117, 1571, 1574, 1575, 1578
"	Mong Tseng Wai House 136
(3) Tang Chun Ip of Mong Tseng
DD 129	Lots Nos 734B	Area .09 Acre
	Second class land	Area 6 R	18 cents
"	Lot No 852B	Area .15 Acre
	Second class land	Area 6 R	30 cents
"	Lot 946, 975, 977
"	Lot No 991B	Area .04 Acre
"	Second class land	Area 6 R	08 cents
"	Mong Tseng Wai house No 61
(4) Tang Chan Shi of Mong Tseng Wife of son of Lessee, Deceased
DD 129	Lots Nos 1191, 1192, 1482
"	Mong Tseng Wai House No 11”

34.  Judging from the above, the lands were divided among 4 fongs (四房) of family members, ie Tang Loi Fuk, Tang Kam To, Tang Chun Ip and one more brother (deceased, leaving a wife surnamed Chan).  It appears that they were the 4 sons of the government lessee ie Tang Yu Lung, and the deceased son’s wife was described as “wife of son of Lessee, Deceased”.  In 1912, the only person described as “Lessee” was Tang Yu Lung, the Lessee under the Block Government Lease of DD 129 issued by the government at that time.  It was unclear whether the Division of Property being inter vivos disposition during the lifetime of the Lessee (Tang Yu Lung) or after his death.  However, after the 4 fongs (or widow as head of her deceased husband’s fong) registered the Division of Property in 1912, it is clear that their “unanimous consent or agreement” has similar effect as to that referred to in §71 of the Judgment of the learned deputy judge Linda Chan SC in Tang Tak Sum, supra., and the decendents of the 4 fongs will be “estopped” from disputing the title of Tsang Loi Fuk (and his successor in title ie the respondent) in respect of the Land. Further, any possible beneficial owner (it is doubtful if any existed at all) are also not entitled to take any legal action to claim any interest in the Land after lapse of over a century since accrual of their right of action (24 April 1912 being the date of registration of such Division of Property) due to the time limit stipulated under section 7 of LO.  Their title, if any, to the Land would have been extinguished under section 17 of LO.

Conclusion

35.  In the aforestated premises, I am satisfied that it has been established by the applicant that there is no real risk of any possible successful assertion or claims to be made by any others against the Land.  Hence, in my judgment, a good title of the Land has been shown and established.

36.  I therefore would make an order in terms as the originating summons as amended below:-

(1) A declaration that the respondent has shown a good title to all that piece or parcel of ground registered in the Land Registry as Mong Tseng Wai Lot No 136 in Demarcation District No 129 (“the Land”) despite the lack of title deed or document in showing how the title of Government lessee (Tang Yu Lung) was conveyed to anyone before the relevant parties could enter into the Division of Property Memorial No YL 20240 for vesting the Land unto Tang Loi Fuk from whom the respondent succeeded the Land by virtue of Succession to Property dated 16 January 1962 registered in the Land Registry by Memorial No YL 146521; and

(2) There be no order as to costs to the application.

37.  Lastly, I wish to thank Mr Jim for his very helpful research and written submissions.