LAM YUI MING as a manager of Lam Lok Yee Tso registered under section 15 of the New Territories Ordinance (Cap 97) v. LAM YUI PUN as a manager of Lam Lok Yee Tso registered under section 15 of the New Territories Ordinance (Cap 97) AND OTHERS

LAM YUI MING as a manager of Lam Lok Yee Tso registered under section 15 of the New Territories Ordinance (Cap 97) v. LAM YUI PUN as a manager of Lam Lok Yee Tso registered under section 15 of the New Territories Ordinance (Cap 97) AND OTHERS

The court found as a fact that a consensus was reached at the 23 July 2016 meeting to distribute HK$60,000,000 according to the Formula; the Formula is a valid custom of the Tso for distribution of rental surplus and had been consistently applied since the 1980s; consequently managers must implement the 23 July 2016 resolution and pay HK$7,500,000 each to the 建邦 and 安邦 sub-stirpes. It was unnecessary to decide Chinese customary law issues on sale proceeds and the court gave obiter views that the Formula is incompatible with Chinese customary law for sale proceeds but that does not prevent execution of a valid unanimous resolution.

Citation
[2020] HKCFI 2011
Parties
Applicant as a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (cap 97): Lam Yui Ming; 1st Respondent as a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (cap 97): Lam Yui Pun; 2nd Respondent as a Manager of Lam Hung Sui (or Sou) Tso Registered Under Section 15 of the New Territories Ordinance (cap 97): Lam Wing Kwong; 2nd Respondent as a Manager of Lam Hung Sui (or Sou) Tso Registered Under Section 15 of the New Territories Ordinance (cap 97): Lam Siu Hung; 3rd Respondent as a Member of and Representative of the Male Descendants of 建邦 Sub Stirpe of 翹萬 Stirpe of Lam Lok Yee Tso Including Those Yet to Be Born: Lam Yui Cheung
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 August 2020
Case Number
HCMP250/2017
Procedural Posture
Order 85 Rule 2 Proceedings (administration Action Concerning Distribution of Tso Proceeds) / Judgment (court of First Instance)
Outcome
Declarations made and orders for payment and costs directions issued
Legal Topics
Distribution of Tso Sale Proceeds, Custom of a Tso, Managers' Fiduciary Duties, Per Stirpes Vs Per Capita Distribution, Rental Surplus Distribution, Unanimity Requirement for Sale
Source Language
EN
Trusts Property Chinese Customary Law Equity Civil Procedure New Territories Law Distribution of Tso Sale Proceeds Custom of a Tso +4 more

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Parties

Lam Yui Ming

Applicant as a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (cap 97)

Lam Yui Pun

1st Respondent as a Manager of Lam Lok Yee Tso Registered Under Section 15 of the New Territories Ordinance (cap 97)

Lam Wing Kwong

2nd Respondent as a Manager of Lam Hung Sui (or Sou) Tso Registered Under Section 15 of the New Territories Ordinance (cap 97)

Lam Siu Hung

2nd Respondent as a Manager of Lam Hung Sui (or Sou) Tso Registered Under Section 15 of the New Territories Ordinance (cap 97)

Lam Yui Cheung

3rd Respondent as a Member of and Representative of the Male Descendants of 建邦 Sub Stirpe of 翹萬 Stirpe of Lam Lok Yee Tso Including Those Yet to Be Born

Procedural Posture

Order 85 Rule 2 Proceedings (administration Action Concerning Distribution of Tso Proceeds) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether specified persons are members of the Tso and entitled to distributions
  2. 2 Whether the past practice (Formula) amounts to a custom of the Tso
  3. 3 Whether the Formula is compatible with Chinese customary law for sale proceeds and rental surplus

Ratio Decidendi

The court found as a fact that a consensus was reached at the 23 July 2016 meeting to distribute HK$60,000,000 according to the Formula; the Formula is a valid custom of the Tso for distribution of rental surplus and had been consistently applied since the 1980s; consequently managers must implement the 23 July 2016 resolution and pay HK$7,500,000 each to the 建邦 and 安邦 sub-stirpes. It was unnecessary to decide Chinese customary law issues on sale proceeds and the court gave obiter views that the Formula is incompatible with Chinese customary law for sale proceeds but that does not prevent execution of a valid unanimous resolution.

Court Disposition

Declarations made and orders for payment and costs directions issued

Orders

  • Declared that the listed ten persons were and are members of Lam Lok Yee Tso and descendants of 林建邦
  • Declared that the past practice for distribution of Lam Lok Yee Tso rental surplus (half per capita and half per stirpes among members; per stirpes equally among surviving stirpes 建邦, 安邦, 緒敬 and 渭安) is a custom of the Tso