CHAU CHUN KUN AND OTHERS v. YEUNG HO KEUNG RENE

bjbj hT/c e WQglQ@b) Jiim7_) e WQglQ@b) as provided by the Beneficiary, and that Yeung Senior, his executors and administrators shall hold the Property, and the rents and profits and the proceeds of sale thereof, upon trust for the Beneficiary absolutely. Yeung Senior died in April 2013, and his son Yeung Ho Keung Rene Jiim7_ e WQglQ@b) that Yeung holds the Property subject to the Trust Deed, on trust for Fuk Hing Li San Wai Village Office, and to restrain Yeung from disposing of or dealing with the Property. The Defence is that there was no unincorporated association known as Fuk Hing Li San Wai Village Office ( e WQglQ@b) e WQglQ@b was void for uncertainty, or was invalid for any other reason. Counsel s closing made it clear that the Plaintiffs were simply put to proof of their claims in these proceedings. The existence of the Alleged Association as the Beneficiary named in the Trust Deed, and the proper construction of the Trust Deed are the issues for determination at trial. History of the Village Witnesses called by both the Plaintiffs and Yeung as Defendant gave evidence on the history of the village in San Tin, Yuen Long in the Their clansmen from Taishan followed, and together with other members of the Chan, Lee, Tong, Yan, Wong and Chu families, they farmed and built houses on the land which they acquired in the area of San Tin, and which expanded to form what became known as Fuk Hing Li village in San Wai e W Qg, ch building structure is referred to below for convenience as the Center . It served as the gathering place for the villagers of San Wai. In around 1978, another structure was erected on the Property, referred to as the Youth Center . Both were used by villagers for communal and social activities. In 1988, part of the land in San Wai was resumed by the Government for the purpose of building a public highway. This included the land on which the Village Center and the Youth Center stood. The structures were demolished as a result, and Government undertook the expenses of rebuilding new structures to replace them, on land to be provided in the village for such purpose. It is material to relate next the contemporaneous and indisputable documentation concerning the history of dealings in the Property. As evidenced by an assignment made on 11 March 1988 ( Assignment ) between Yeung Chor Sing as vendor ( Vendor ), and Yeung Senior as named purchaser, the Property was sold by the Vendor to Yeung Senior for $73,943. The Assignment was registered at the Land Office. At the same time, the Trust Deed was made by Yeung Senior, and registered at the Land Office, by which Yeung Senior declared that he held the Property on trust for the named Beneficiary. Shortly after the execution of the Assignment and Trust Deed, Yeung Senior in his capacity as village representative of San Wai village e WQgw e WQglQ@b r on the Property, and stated that he had in the name of the Village Hall and as its representative completed the relevant transactions, and asked the Government to complete the Center and the Youth Center as soon as possible. Construction of the new Center and new Youth Center was duly completed by Government in around 1990, and these structures were handed over to the villagers for their use. According to the records kept by the Planning, Environment & Lands Branch of the Government, San Wai (Fuk Hing Li y va ving their status as indigenous villagers, notwithstanding that their village was not on the list or register of recognized indigenous villages. The evidence adduced by the parties in this case acknowledge that as time evolved, people from areas other than Taishan came to dwell in the area of San Wai, and inhabitants of the village in the location now include not only descendents of the initial families who had set up the village, who may be called indigenous villagers as such, but also non-indigenous inhabi e WQg, oses of electing village representatives under the Rural Representative Election Ordinance Cap 576 ( Ordinance ), the area of San Wai was divided into San Wai (I) and San Wai (II). Under the Ordinance, San Wai (in San Tin) was listed as an existing village . A person who has been a resident of San Wai (I) or (II) for 3 years and is a Hong Kong permanent resident may be registered as an elector, to elect a resident representative for the village, and the function of the resident representative is to reflect the views on the affairs of the village on behalf of the residents , but the representative shall not deal with any affair relating to the lawful traditional rights and interests of indigenous inhabitants. The Beneficiary In deciding the disputed issue in this case, on the identity of the Beneficiary named under the Trust Deed, it has to be borne in mind that the issue is not who are indigenous villagers who may claim particular property rights and benefits, or whether there was an indigenous village, e Wa e0u N e Wa e W e W e WQglQ@b e WQglQ@b icitors, and executed by Yeung Senior before a solicitor. There is an interpretation clause, signed by a clerk to the solicitor, that the Trust Deed had been interpreted and no doubt explained to Yeung. If what Yeung Senior had intended and meant, at th e WQglQ@b st Deed, which would have been clearly noticeable as totally different to the name of the Company. Yeung Senior passed away in 2013, and there is no evidence as to his education level, but from the way the Chinese characters were written in his signature to the Trust Deed, it would appear that Yeung Senior was literate, and would have been able to recognize the different Chinese characters for the names of the stated Beneficiary and of the Company. It is inherently improbable, and incredible, that the Comp e WQg e WQglQ@b sel for the Plaintiffs pointed out, and witnesses for Yeung have also emphasized, the Company had been in existence by at least 1971, as a traditional Chinese tso/tong for the 21 different clans or tsos of the Taishan forefathers, with its own members and managers, and the Company had been holding properties in or near San Wai for investment and farming purposes. The Company was in existence at the time when the Trust Deed was signed, and could have been named as the Beneficiary if it had indeed been intend itself clear evidence that the Company was not in fact the intended Beneficiary. Yeung Senior expressly declared in the Trust Deed that the Property was purchased by him under the Assignment of the same date for and on behalf of the Alleged Association as the stated Beneficiary, and further, that the purchase money of $73,943 ( Purchase Money ) was in fact provided by the Alleged Association. Yeung Senior, and his estate and administrator, as parties to the Trust Deed, are clearly estopped from asserting or contending otherwise. Even if it was the case (and I make no finding in this respect) that the Purchase Money was in fact provided by parties other than the Alleged Association (as Yeung sought to claim), Yeung is precluded by contractual estoppel and/or by deed to contend that the state of affairs agreed and accepted at the time the Trust Deed was concluded was not true. In the recent case of Ng Yuk Pui Kelly v Ng Lai Ling as the executor of Estate of Dung Wai Man, Deceased & ors [2021] HKCFA 40, the Court of Final Appeal referred to the leading authorities of Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] 1 CLC 582 and Springwell Navigation Corp v JP Morgan Chase Bank [2010] 2 CLC 705, confirming that parties to a contract can agree that a certain state of affairs should form the basis for their transaction, whether it be the actual case or not, as parties are entitled to agree what they desire. Parties can agree to assume that a certain state of affairs is the case at the time the contract is concluded or has been so in the past, even if that is not the case, so that the contract is made upon the basis that the present or past facts are as stated and agreed by the parties, even when they know that state of affairs to be untrue. Neither party can subsequently deny the existence of the facts and matters upon which they had agreed. Estoppel was not argued at trial, but on the evidence, I fail to see how Yeung can now, as the administrator of the estate of Yeung Senior, deny that the Purchase Money was not provided by the Beneficiary, or that the Property was not purchased for and on behalf of the stated Beneficiary, to be held on trust for the stated Beneficiary. The Alleged Association Under the Trust Deed, the Beneficiary for whom the Property was declared to have been purchased and to be held was the Alleged Association. Yeung seeks to contend that there was and is no such association in existence, but as he has not raised any specific plea by way of defence, eg of invalidity of the trust under the Trust Deed, he only put the Plaintiffs to proof of the existence of the Alleged Association as they allege. As Counsel for Yeung pointed out, Yeung has not put forward any counterclaim, that the Property is held on trust for the Company, or any other third party. He has obviously also abandoned the claim made in the affirmation made and filed, in applying for administration of Yeung Senior s estate, that the Property belonged beneficially to Yeung Senior. As Counsel for the Plaintiffs submitted, all that is required for an unincorporated association is for there to be two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings, each having mutual duties and obligations, in an organization which has rules which identify in whom control of it and its funds rests and upon what terms and which can be joined or left at will (relying on and citing Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 1 WLR 522 (CA) at 525). In this case, it has to be borne in mind that the Alleged Association involved villagers cohabiting in a traditional rural village, bound by traditional customs. As the evidence of the parties reveal, the early activities of the villagers were essentially farming and their rural lives would have been simple. It is reasonable to assume that not all the villagers would be sophisticated, or even educated, or literate. It would not be reasonable to expect the existence of full, written documentation and records of the setting up, running and management of such an Alleged Association throughout the period of its existence. It is also pertinent that whilst a declaration of trust must make it sufficiently clear who the beneficiaries are, or what the object of the trust is to which trust property is to be applied, the time for ascertaining the certainty of objects is at the creation of the trust. As the learned authors of Lewin on Trusts (17th edition) pointed out at para 4-34, it is enough if the beneficiaries can be ascertained with the requisite certainty at the time of creation of the trust, and any difficulty in doing so which may arise later will not invalidate the trust (Re Hain s Settlement [1961] 1 WLR 440, CA). The relevant time for ascertaining whether there was in existence the Alleged Association which was named as the Beneficiary, should be the time of the creation of the trust under the Trust Deed, in 1988. If there were persons bound together at that relevant time, albeit loosely and without formality, for the Beneficiary to be ascertained and identified with the requisite certainty, that should be sufficient. As Counsel for the Plaintiff rightly submitted, the membership of an unincorporated association can be fluid, and may also evolve through time when the rules governing its membership may be changed. The witnesses who were called to give evidence at trial were boys at the time of the events related by them in the 1960s and 1970s. They could only repeat what they recall having heard from their fathers and relatives, when they were young. Their testimony of what they can truthfully recall, of parts of the conversation they had overheard, or fragments of information which their elders had relayed to them of events or meetings, is highly unreliable. The oldest of the witnesses who made a witness statement could not be called at trial due to his advanced age and poor health. Nevertheless, there were photographs and some older documents included in the agreed bundles which served as evidence, and the Court has to decide whether, and what, inferences can properly be drawn from such documentary evidence. Where there is conflict between the evidence of the Plaintiffs and that of Yeung, I prefer the evidence of the Plaintiffs, as I find Yeung s evidence to be unreliable. At the forefront, the statement made in his affirmation, filed to apply for administration of the estate of his father, that the Property was beneficially and solely owned by Yeung Senior, was untrue, and known by him to be untrue, as he was able in these proceedings to depose to the facts of Yeung Senior s acquisition of the Property, the terms and conditions allegedly imposed by the Vendor as to the Property being held on trust by Yeung Senior, and the execution of the Trust Deed. Yeung s affirmation clearly reflects his refusal to accept that the Property was held on trust for the Plaintiffs, as is apparent from the Defence, and that such refusal was to the extent that he would be prepared to make a false declaration on oath. The fact that Yeung s evidence in this case is totally leaned against the Property being held on trust for the Plaintiffs can also be seen from the fact that Yeung initially claimed in his witness statement that the land on which the Center and the Youth Center had originally stood was owned by the Company. This obviously lent more credence to his assertion that the Property was held on trust for the Company. However, in his supplemental witness statement, Yeung had to accept that upon further research, the land on which the structures had stood was not in fact owned by the Company, as he had originally maintained. According to the evidence of the Plaintiffs, the Alleged Association was an association of the villagers of San Wai. Chan and Chau do not dispute the history of the village, that families of Taishan origin had moved from the Mainland to the area of San Tin in Yuen Long, and that San Wai village was established by these families. Nor do they dispute that some of the indigenous villagers of San Wai had formed and set up a tso known as the Company, which separately held land in the area, was separately managed by representatives of the 21 family representatives, and that the proceeds and profits of the Company were distributed amongst the tso members. Their evidence is that separate to and distinct from the Company, villagers of San Wai had gathered and formed a village association or union, principally to provide a gathering place for the villagers of San Wai, to meet socially and for mutual welfare. According to Chan, it was in about 1967 that the villagers of San Wai decided to raise funds and pool their resources to construct a village hall which became the original Center. As Chan explained, the villagers at the time did not have legal knowledge and the intention then was simply to form an informal association of all the dwelling owners, to provide a communal centre and social amenities for the inhabitants of the village. On Chan s evidence, the original Center was built with funds contributed by all the members of this association, who were not confined to members of the Company. There is some support for Chan s evidence, as to contributions made for the construction of the original Center, in the form of a receipt dated 7 January 1967, received from one Mr Ng, as payment of a donation of $20 for the construction of the Center. I agree with Counsel for the Plaintiffs, that there is nothing unusual in a welfare association of this sort, formed for the pursuit of common interests. In the case of the rural village in this case in the 1960s, the common interests binding the members together would be the management of affairs affecting the livelihood and common interests of the villagers, the provision of recreation and welfare for the villagers and the pursuit of benefits and privileges from the Government. Consistent with the evidence of Chan, that the villagers had formed the Alleged Association in about 1967 in order to build the village hall which became the Center, there is a pho e WQglQ@bd e WQglQ@b, e WQglQ@b, lQ@bc incorporated. On the Plaintiffs case, there was no formal documentation for the establishment of the Alleged Association, as the households of the village simply gathered together, met and discussed matters as and when required. According to the Plaintiffs evidence, there were no written rules or constitution, the villagers simply followed traditional customs, and elected a representative from amongst themselves as the village head. Initially, only those with registered or recognized households within the village would be entitled to elect their representatives, but as time evolved, the people who resided in the village included not only the descendents of the original 21 families from Taishan, but other families from Taishan, and in time, residents of the village included not only indigenous villagers but also non-indigenous villagers. In time, therefore, all resident villagers were permitted to participate in meetings of the Alleged Association and to express their views on matters affecting the village. The Plaintiffs claimed that at all material times, the Center could be used and was used by all villagers of San Wai, with no distinction made between indigenous and non-indigenous villagers. There is no dispute that in around 1988, the original building structure which was the Center was demolished, together with the Youth Center, to make way for modern development. Part of the land was resumed by Government, which agreed to construct a new building to replace the original and demolished Center and the Youth Center. Such construction commenced in 1989 and was completed by the end of 1990 on land provided by the villagers. It was as a result of the resumption, the demolishing of the original building and the intended reconstruction of the new building that the relevant Assignment between the Vendor and Yeung Senior, and the Trust Deed, were executed in March 1988. There is no dispute that Yeung Senior took the assignment of the Property on trust, so that the new Center could be built on the Property. According to the Plaintiffs, it was the same Alleged Association which had formerly raised funds and received contributions and donations for the construction of the original Center, which arranged for the reconstruction of the new Center in 1989/1990, and later managed the new Center after its completion. In 1988, Yeung Senior was the village head or representative, and the Property was sold by the Vendor and assigned to Yeung Senior, for use by the Alleged Association in the reconstruction of the Center for the benefit of the villagers. Counsel for the Plaintiffs highlighted the fact that the Assignment and Trust Deed were all formally prepared by solicitors, and duly and properly reflected the intentions of the members of the Alleged Association, the Vendor and Yeung Senior, that the Property was to be held on trust for the Alleged Association. As I have explained in the earlier parts of this Judgment, the Beneficiary is clearly stated to be the Alleged Association, and I have no basis to find otherwise. The letter from Yeung Senior immediately after his execution of the Assignment and the Trust Deed supports the Plaintiffs case on the existence of the Alleged Association. 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