Archive for the ‘Chinese customary law’ Category

Evidence concerning membership and customs of a Tso

January 18, 2012

In the context of an indigenous clan in the New Territories, an orally transmitted history or a history recorded in a genealogy is good evidence concerning the membership and customs of a Tso.

Kan Yam Yau v Kan Yook Tim ([2008] HKEC 1019, CA) concerned a dispute between as to whether two of the fongs of a Tso as originally constituted had left the Tso (at the time when they moved to a village away from the ancestral hall) so that they were no longer members of the Tso. In deciding that they had ceased to be members and to be entitled to participate in management, the Court of Appeal looked at evidence from the relatively recent past (around the late 1970s). The most decisive evidence as to the facts and the customs of the Tso, however, was to be found in two genealogies of the clan. There is an important statement as to the court’s approach to findings of fact in paragraph 22 of the judgment. This statement concludes:

‘In the context of an indigenous clan in the New Territories, the Court also expects its history to be passed down from generation to generation by way of oral transmission or recorded in documents such as a genealogy. ‘ (per Hon Cheung JA).

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

November 18, 2011

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.

Member of Wui objecting to sale

July 26, 2011

The mere fact that a member of a Wui signs a form consenting to a sale of Wui property does not estop him from lodging objections to the sale with the District Officer (or otherwise bind him to promote the carrying out of a contract entered into by the managers of the Wui for the sale of Wui property). The managers of a Wui are in a trustee relationship with members (they are not the agents of the members). Rectification of a formal agreement to make it conform to the terms of a provisional agreement will only be ordered where there is convincing proof that the provisional agreement reflects the parties’ true intentions while the formal agreement does not.

In Million Way Ltd v To Shing Wo ([2011] HKEC 560, CA) the managers of a Wui negotiated the sale of Wui property to MW. The members of the Wui approved the sale. A provisional agreement for sale was entered into, this was conditional on obtaining the District Officer’s consent to the sale. The provisional agreement gave MW the right to terminate the agreement if the consent was not obtained within a specified time. The formal agreement, by contrast, provided that the agreement would terminate automatically if the consent had not been obtained by the end of the relevant period.  An application to sell the property was signed by the  members of the Wui, including D4.  D4, nevertheless, wrote to the District Officer objecting to the sale and, as a result, the District Officer refused to consent to the sale. When the period specified in the formal agreement came to an end without the consent having been obtained, the Wui’s solicitors claimed that the agreement was terminated. MW sought a declaration that D4 was estopped from acting so as to prevent the necessary consent from being obtained.

On appeal, MW argued that the managers acted on behalf of the members and that each member was bound by the contract (and therefore precluded from acting so as to prevent the consent from being obtained). This was rejected, managers are trustees for, not agents of, the Wui members. The managers personally enter into the contract. MW also sought rectification of the formal agreement so that it reflected the terms of the Provisional Agreement (which gave MW an option as to whether to terminate the contract or not). This also failed. MW had failed to provide convincing proof that the terms of the Provisional Agreement (rather than the Formal Agreement) reflected the parties’ intentions.

The rule against perpetuities does not apply to compensation paid on the resumption of Tso land

February 23, 2011

The rule against perpetuities does not apply to compensation paid on the resumption of Tso land to which section 13 of the New Territories Ordinance applies. The law of partition does not apply to Tso land. A sale needs the consent of all of the members. There is no Chinese custom concerning the distribution of Tso land (since in principle it was not to be divided). The members themselves would have to agree on how it (or sale proceeds) should be distributed.

In Kan Fat-Tat v Kan Yin-Tat ([1987] HKLR 516) land belonging to a Tso was resumed by the government. Compensation took the form of cash and Letters B. As a result the Tso property comprised this compensation and other land belonging to the Tso. The plaintiff sought a partition of the land and per stirpes distribution of the compensation. The defendant, his brother, claimed that if the Tso failed then its property should belong to him on a resulting trust as he had provided the Tso property in the first place. It was held that section 13 of the New Territories Ordinance and Chinese customary law in the New Territories meant that the compensation remained Tso property and the rule against perpetuities did not apply. Had it applied, the Tso would fail with regard to that property and it would be held on resulting trust for the defendant. The law on partition did not apply to Tso land. Any sale or distribution needed the consent of all of the members. There was no Chinese custom as to how a distribution should be effected and the members would have to agree on this for themselves.

Perfecting transfer of land to a tong

February 22, 2011

Conveying land into the name of a tong, including the name of a sze lei (trustee or manager) in the conveyance, registering the conveyance and a list of members of the tong are effective steps to transfer land to a tong. The effect is to subject the property to a trust the beneficiaries of which are living male descendants of the relevant ancestor from time to time.

In Chu Tak-Hing v Chu Chan Cheung-Ki ([1968] HKLR 542) Chu Tak-Hing had various parcels of  land transferred to various aliases of his. In each case he specified the name of somebody as a sze lei (trustee or manager). These conveyances were registered. Chu Tak-Hing also registered lists of members of the relevant Tongs. It was held that the effect was to perfect the transfer of land to the Tongs. The land was no longer the private property of Chu Tak-Hing and did not form part of his estate. Conveying land into the name of a tong, including the name of a sze lei (trustee or manager) in the conveyance, registering the conveyance and a list of members of the tong are effective steps to transfer land to a tong. The effect is to subject the property to a trust the beneficiaries of which are living male descendants of the relevant ancestor from time to time. This judgment is interesting for its explicit attention to the relationship between Chinese customary law and section 15 of the New Territories Ordinance. It also considers the way of perfecting a transfer of land to a Tong and the effect of doing so.

Tso and Tong are not legal entities

February 21, 2011

A Tso and a Tong are not legal entities and proceedings cannot be brought in their names.

In Tang Yau Yi Tong v Tang Mou Shau Tso ([1996] 2 HKLR 212, CA) three individuals had made a gift of land in Tai Po to a Tong. It was accepted that one of the individuals had not been the beneficial owner of the property but had held it as representative of a Tso. The question was whether the relevant beneficial interest belonged to the the Tso or to the personal representatives of the transferor. The members of the Tso objected to a sale of the land by the Tong and could only do so if they had a beneficial interest. It was held that the beneficial interest belonged to the Tso. The Court of Appeal pointed out that Tsos and Tongs are not legal entities and proceedings cannot be brought in their name.

Partition of Tso lands

February 20, 2011

The provision in the New Territories Ordinance giving the court power to recognise Chinese custom and customary law affecting land in the New Territories is mandatory. Accordingly, the law of partition and the rule against perpetuities do not apply to such land.

Tang Kai-Chung v Tang Chik-Shang ([1970] HKLR 276) was an action for partition of Tso lands. The six sons of a focal ancestor formed a Tso after their father’s death. The descendants of each son formed a Tong. The Tso land was divided into nine portions. Six of these were managed on behalf of the Tongs. Management of each portion rotated amongst the six Tongs. The income from the land was divided among the Tong members. The managers of the smaller Tongs brought an action for the partition of the Tso land so as to create six equally sized portions. Each Tong would then have its own portion. This application was resisted by the managers of the larger Tongs. They argued that the English law of partition (which was the law then being relied on as the Partition Ordinance came into effect after proceedings had been commenced) was inapplicable since it was inconsistent with Chinese customary law. Section 13 of the New Territories Ordinance (Cap 97) gave the court power to recognise and enforce any Chinese custom or customary right affecting land in the New Territories. Mills-Owen J held that section 13 was mandatory. It meant that the English law of partition and the rule against perpetuities did not apply to Tso land in the New Territories. The application for partition failed.

Receipt of purchase price and delivery of possession are the clearest possible acts of part performance

January 15, 2011

Delivery up of possession and receipt of the purchase price are the clearest possible acts of part performance. The equitable interest created by a contract is not defeated by a successor in title of the seller who inherits the seller’s estate. Chinese customary law does not trump the system of registration contained in the Land Registration Ordinance.

In Wu Koon Tai v Wu Yau Loi ([1996] 2 HKLR 477, PC) a lease of land in the New Territories was granted to Wu Cheong U. He died and, in 1934, his son sold the land. In accordance with Chinese customary law the sale was effected through a document signed by neither party but by a middleman. The purchaser paid the price and went into possession. He and his successors remained in possession. The successor-in-title of the grandson of the seller claimed to be entitled to the land. Among other grounds relied on were the fact that there was no contract for sale satisfying CPO s.3(1) (the document had not been signed by the parties or their authorised repesentative). Lord Browne-Wilkinson held (at 483) that payment of the purchase pice and giving possession were the clearest acts of part performance. Thus there was a specifically enforceable contract. The equitable interest so created was binding on the successor-in-title of the seller’s grandson since he was a volunteer. The successor-in-title’s claim to possession failed. The 1934 sale was effective. In the course of argument the argument had been raised that failure to register the sale in 1934 did not matter since s.13 of the version of the New Territories Ordinance then in force allowed the court to recognise Chinese customary law and this did not require registration. This argument failed. Chinese customary law did not ‘trump’ the system of Land Registration in Hong Kong.

Public policy that land is to be freely alienable

December 15, 2010

Public policy demands that land should be freely alienable. This does not apply to New Territories land meant by Chinese custom to be held in perpetuity for ancestral worship. In respect of other New Territories land, clear evidence is needed of a custom requiring unanimous consent to the sale.

Re Man Sam Chung Wui ([2010] HKEC 1921, CA) concerned land in the New Territories held by a Wui. A majority (92%) of the members of the Wui voted in favour of the sale of this very large and valuable tract of land. The question was whether unanimity was required.  It was not land held for ancestral worship. The Court of Appeal (Tang ACJHC giving the leading judgment) held that where New Territories land was not held for ancestral worship then clear evidence would be needed of a custom requiring unanimous consent to a sale (at para. 41). There was no such evidence here. The court gave directions for sale under O.85 of the Rules of the High Court (Cap. 4A).