Consent of the heads of fongs signifies the consent of all of the members

In Tang Kap Wing Tso v Tang Leuk Tso ([2011] 4 HKLRD 132, CA) Tang Jr (one of two managers of TKW Tso) purported to transfer to Tang Sr TKW Tso’s shares in TL Tso. The other manager of TKW Tso was Tang Jr’s mother. The other members of TKW Tso were Tang Jr’s sons. There was only one fong in the TKW Tso and Tang Jr was the head of it. It was argued that the transfer of the shares to Tang Sr was invalid because not all members of the Tso had consented. It was held that customary law in Hong Kong required only the consent of the heads of the fongs. Unless, perhaps, there were active dissent by any other member that would amount to the consent of all of the members. Here Tang Jr, the head of the only fong, had given his consent. Hence the transaction was valid. In any event, Tang Jr’s mother had authorised him to act on her behalf as manager. Given that both managers were parties to the transfer of the shares, the managers of TL Tso were under no obligation to inquire about the internal affairs of the TKW Tso.

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