IP CHEUNG KWOK v. IP SIU BUN AND OTHERS

1984, No. 7440

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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Godfrey, J.

1. On 18th May 1988, I gave judgment in these proceedings but postponed consideration of the terms of the Order to be made in consequence of that judgment. The case was in due course restored to the list and, on 14th September 1988, I heard further argument as to the terms of the Order to be made. On 17th October 1988, I delivered a further judgment dealing with the points raised in argument on 14t h September 1988; and I made an Order to give effect to that judgment. This Order has been the subject of a dispute between the parties which I now have to resolve. Before turning to that dispute I should say at once that in order to understand this judgment reference must be made to the judgments I delivered on 18th May 1988 and 17th October 1988, which I do not intend to recapitulate here, save insofar as necessary to explain my conclusions upon the present dispute.

2. The argument before me on 14th September 1988 concerned a number of matters included in a draft minute of the Order which the Plaintiff had proposed. One of these matters was the proposal of the Plaintiff to include in the order an order for an account and inquiry in the following terms:

"IT IS FURTHER ORDERED that the following account and inquiry be taken and made, that is to say

(1) an account of the rents and profits of the trust estate come to the hands of the Defendants Ip Siu Bun, Ip Cheung Kit Yee and Sin Hua Bank Trustee Limited or any of them; and

(2) an inquiry what has become of any such rents and profits."

The making of this Order for an account and inquiry was not the subject of any argument on 14th September 1988, although much else was. I did however myself suggest (see p.73 of the transcript) that the party to whom the named Defendants ought to account might be, not the Plaintiff, but the duly constituted personal representative of IP Koo Chi (the settlor whose estate I had held entitled, in my judgment of 18th May 1988, to the property the subject of the action). Mr. John McDonnell Q.C., for the Plaintiff, appointed to represent the estate of Ip Koo Chi for the purposes of the action, replied (in my view correctly) that the Defendants were being ordered to account to the Court, not to the Plaintiff. He maintained his position, that the Order should include the Order for an account and inquiry for which be had asked.

3. However, in my judgment of 17th October 1988 1 declined to accept Mr. McDonnell's submission that the Plaintiff (who had not obtained any grant of representation to the estate of Ip Koo Chi) was entitled to institute proceedings against the trustees for the execution of the trusts affecting the trust property. I pointed out that the Plaintiff was strictly speaking, a stranger to the trust; by which of course I meant that even if he was a person, beneficially interested in or entitled to the estate of Ip Koo Chi, he had to be regarded, unless and until he obtained a grant of representation to that estate, a stranger to the trusts affecting the trust property. For this reason, I refused the Plaintiff the Order for sale for which he had asked, a matter which had been argued before me; but I included in the Order which I made the Order for an account and inquiry, a matter which had not been so argued.

4. It now appears to me that it is, at least, arguable that the request made by the Plaintiff for an account and inquiry was a request which, at that stage, I should have refused, just as I had refused the Plaintiff's request for an Order for sale. But I did not do so. The Order I made on 17th October 1988 accordingly included the Order for an account and inquiry to which I have referred; and unless it is reversed on appeal it must be given effect. The Order has been perfected and I have no jurisdiction to recall it even if I were mended to do so. The account and inquiry must proceed and the Plaintiff is entitled to proceed with it.

5. The Plaintiff has, however, encountered a difficulty in doing so, which is why the case has come before me again. The difficulty arises in this way. The Plaintiff was advised, in my view correctly, that following the Order of 17th October 1988 he was entitled to issue a summons to proceed with the account and inquiry thereby ordered. He issued a summons to proceed accordingly, seeking common from directions, and returnable before a master, Master O'Donnell, on 19th December 1988.

6. But one of the Defendants, Sin Hua Bank Trustee Limited ("the bank") was anxious to resist the prosecution of the account and inquiry which had been ordered; so anxious, indeed, that without the courtesy of any prior notification of its intention to the Plaintiff, it attended with leading counsel, Mr. Denis Chang Q.C., before the Master and submitted that the summons to proceed should be dismissed.

7. This ploy succeeded. Aware, presumably, that the effect of a decision in favour of the bank would be completely to frustrate the working out of the Order dated 17th October 1988, the Master, instead of adjourning the summons to the Judge (which he had power to do and which he should have done) elected to deal with it himself. His note (so far as relevant) reads as follows:

"Following decisions of Mr. Justice Godfrey in this action on 18th May 1988 and 17th October 1988 the present Plaintiff does not have the locus standi to seek the directions set out in this summons as he is a stranger to the trust unless and until he is appointed the personal representative of the estate."

8. I am sorry to have to say that this approach was completely misconceived. The Master's duty, on the hearing of the summons to proceed, was to give directions for the working out of the Order for the account and inquiry made on 17th October 1988. The Plaintiff had the carriage of that Order and, having obtained the Order, had the right to prosecute it.

9. I must however add that I have a great deal of sympathy for the Master, faced, as he was, with an argument from leading counsel designed to persuade him to go behind the Order of 17th October 1988 and look at the judgments which led to it, particularly since, as I have said, it is at least arguable that, on the basis of those judgments, the Order for an account and inquiry ought not to have been made at all. But it was made; and the Master was not entitled to frustrate it by dismissing the Plaintiff's summons to proceed. Unless upset on appeal, the Order for an account and inquiry stands; and effect must be given to it, as I have said,

10. The Plaintiff has appealed from the decision of the Master, and it is that appeal with which I am now concerned. I allow the appeal, and I will give the directions which the Master was asked to give (with certain minor variations, which I think it right to make, and with one major variation to which will refer later). There directions are set out in the schedule to this Order.

11. I must go further. It is important, I think, that in future all the interlocutory applications in these proceedings, so far as practicable, should be made to me, and I so direct. I am anxious to avoid the case being further bedevilled with false procedural steps: it already has a most unfortunate history. And, in fairness to all parties, I have decided that there should now be a breathing space of reach party to take stock of his position. The Plaintiff may want to take steps, if he cannot get a full grant of administration in the near future, to try to obtain, or persuade someone else to obtain, a grant pendente lite or colligenda bona. The Defendants may want to include, as a subject of their appeal against the Order of 17th October 1988 (which I understand is pending), the Order for an account and inquiry to which they now take objection. As I have pointed out, only the Court of Appeal can now deal with this. So I will make one major variation to the directions which the Master was asked to give, by extending the time for compliance with the first direction (for filing of accounts) from 14 days after service of the Order to 90 days after such service and of course the Defendants, if, but only if, they have good cause to do so will be able to apply for a further extension of time if so advised. I do not intend to encourage delay; merely to avoid conflict with the progress of the Defendants' appeal to the Court of Appeal.

12. The costs of the Plaintiff of the abortive hearing before the Master, and of this appeal, must be borne and paid by the bank out of its own moneys. I will not at this stage direct an immediate taxation and payment as the Plaintiff has asked me to do; that, as it seems to me, would be unfair to the bank, which challenges, as it always has, the Plaintiff's locus standi and which has an appeal pending from the Order of 17th October 1988. I will however give liberty to the Plaintiff to apply at a later date for a separate taxation and payment of those costs, such application not to be made (without the leave to the Court) before the determination of the bank's appeal.

THE SCHEDULE

1.    Let each of the Defendants Ip Siu Bun, Ip Cheung Kit Yee and Sin Hua Bnak Trustee Limited within 90 days after service of this Order upon them respectively file in the Chambers of the Judge their respective accounts showing

(a)    the amounts of any payments come to their hands either alone or jointly with one or more of the other trustees in respect of the rents and profits of the trust estate (including interest received);

(b)    the person or persons form whom any such payments or interest were received;

(c)    the amounts of any payments made by them either alone or jointly with one or more of the other trustees out of the moneys come t their hands;

(d)    the person or persons to whom any such payments were made; and

(e)    the respective dates of all such receipts or payments

together with an affirmation verifying the same and stating the amount of any balance remaining in their hands or under their control and where and in what form the same is held.

2.    Let each of the said Defendants serve copies of the said accounts and affirmations on the Plaintiff as soon as they have been filed.

3.    Let each of the said Defendants vouch their respective accounts by lodging at the Chambers of the Judge within 14 days after the filing of their respective accounts

(a)    all receipts, invoices, rent demands, paying in slips, cheques or other vouchers evidencing the individual receipts and payments listed in the respective accounts and

(b)    all ledgers, books of account, bank statements, bank books and other documents recording any such receipts or payments or showing the balance remaining in their hands or under their control respectively.

4.    Let the Plaintiff be at liberty to inspect the vouchers, documents and books so lodged and to file in the Chambers of the Judge his objections (if any) to the said accounts within 28 days after all the respective vouchers, documents and books have been inspected as aforesaid.

5. Let the account and inquiry be restored for further consideration before the Judge after the time for filing objections has expired.

6.    And let the parties be at liberty to apply.

Representation:

Mr. J. McDonnell, Q.C. and Mr. Brian Van Buuren instructed by Messrs. King & Co. for the Plaintiff.

1st and 2nd Defendants appeared in person.

Mr. K. B. Ng instructed by Messrs. Woo & Woo for the 4th Defendant.

1984, No. A7440

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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IN THE HIGH COURT OF HONG KONG

ACTION NO. A7440 OF 1984

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JUDGMENT

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1. In these proceedings the court is concerned with three properties in Queens Road Central, Hong Kong. The first is no. 152; the second and third are nos. 154 and 156.

2. The question is : What are the trusts upon which these properties are held?

3. The plaintiff in the action is Ip Cheung Kwok. He claims to be beneficially interested in these properties as the only living person interested or alternatively, as one of the living persons interested, in the estate of Ip Koo Chi ("the settlor"). It appears that, in 1875, the settlor purchased 152, and also 154 and 156, with his own money, causing all these properties to be assigned to Yip On and Yip Yuen. As to 152, Yip On and Yip Yuen were expressed in the assignment (dated 8th September 1875) to take as "Trustees of the Ip Cheong Kwong Tong Loan Association for and on behalf of the said Association". As to 154 and 156, Yip On and Yip Yuen were expressed in the assignment (dated 28th September 1875) to take as "Trustees of the Tung Yan Sheen Tong Loan Association for and of behalf of the said Association". The plaintiff says that these "Associations" never existed and that the properties are accordingly held upon a resulting trust for the estate of the settlor. In the course of the trial, on 21st September 1987. I appointed him to represent the estate of the settlor for the purposes of these proceedings.

4. The legal title to the properties is now vested in new trustees, namely, Ip Siu Bun, the first defendant, and Sin Hua Bank Trustee Limited, the fourth defendant. They hold 152 by virtue of a deed of appointment of new trustees made on 2nd April 1979; and they hold 154 and 156 under an Order of the Court dated 31st March 1979.

5. Ip Cheung Kit Yee the second defendant (and the wife of the first defendant), is a former trustee. So is Ip Siu Kwong, the third defendant. During the course of the trial I gave leave to the plaintiff to discontinue the action against the third defendant, whose position I need not further consider. The plaintiff has indicated that he makes no claim against the second defendant as a former trustee (or in her personal capacity). But, again in the course of the trial, on 6th October 1987, I appointed the second defendant to represent, for the purposes of these proceedings, all persons claiming to be members for the time being of "The Yip Cheong Kwong Tong Loan Assoication" and "The Tung Yan Sheen Tong Loan Assoication"; because, on one view of the matter, the members for the time being of the first-named Loan Assoication (if any) might be beneficially interested in 152 and the members for the time being of the second-named Loan Association (if any) might be beneficially interested in 154 and 156.

6. The first defendant, as well as being a trustee, claims that he is or may be beneficially interested in the properties. He does not claim to be a direct descendant of the settlor, but he does claim to be a descendant of one Ip Sze Shing (of whom I shall have more to say later), a common ancestor of the plaintiff and of the first defendant. In 1875 there was already in existence an ancestral fund founded for the veneration of ancestors of the Ip Clan beginning with Ip Sze Shing and known as the Ip Cheong Kwong Tong. The first defendant, on the footing that the Ip Cheong Kwong Tong has or may have an interest in the properties or one or some of them, claims to be one of the persons interested in the Ip Cheong Kwong Tong, and accordingly, in the course of the trial, on 13th April 1988, I appointed the first defendant to represent, for the purposes of these proceedings, all persons for the time being claiming to be members for the time being of the Ip Cheong Kwong Tong. The first defendant also says that if the trusts on which the properties or one or some of them are held are found to be charitable trusts (see below) or valid private trusts then he is one of the persons entitled directly or indirectly to benefit under those trusts.

7. The fourth defendant has no interest in these proceedings save as a trustee. It says that, whatever the trusts are upon which the properties are held by the first defendant and the fourth defendant, the plaintiff has no interest under them; for even if the properties are held upon a resulting trust for the estate of the settlor, the plaintiff is not a person interested in that estate. Since I have appointed the plaintiff to represent the estate of the settlor for the purposes of these proceedings, this is not a point I need at this stage consider further. But the fourth defendant, although it has no interest in the proceedings save as a trustee has advanced a case of its own. First, it has argued that the trusts on which the properties, or one or some of them, are held are charitable trusts, and accordingly (and rightly) it has brought the Attorney-General into these proceedings as a defendant by counterclaim. However, the Attorney-General has declined to argue that the trusts on which the properties, or any of them, are held are charitable trusts. Secondly, it has argued that it holds the properties, or one or some of them, on valid private trusts, for the benefit, in the case of 152, of a legal entity (corporate or quasi-corporate) known as the Tun Shin Tong and, in the case of 154 and 156, of a legal entity (corporate or quasi-corporate) known as the Tung Yan Sheen Tong; alternatively, for the benefit of the members for the time being of these two Tongs (being descendants of Ip Sze Shing).

8. The plaintiff was represented throughout the trial by leading and junior counsel. So was the fourth defendant. The other defendants to the action appeared in person. I dispensed with the attendance of the third defendant when the Plaintiff elected to claim no relief against him. I dispensed also with the attendance of counsel for the Attorney-General when he indicated that he was not prepared to argue that any of the properties were held upon charitable trusts. The fourth defendant should not, in my judgment, have attempted in these circumstances to shoulder the burden of an argument in favour of the Court's declaring that the trusts upon which the properties, or one or some of them, are held were charitable trusts. The Attorney-General is the only person who can represent the general body of beneficiaries under a charitable trust (see Tudor, Charities, 7th edition, 1984, at p.337; Ware v. Cumberledge [1855] 20 Beav. 503, per Romilly MR at 511; In re King [1917] 2 Ch. 420; and most recently Hauxwell v. Barton-upon-Humber UDC[1974] Ch. 432, in which Brightman J said (at p.450) that he was able to discern nothing in the cases cited to him to indicate that anyone save the Attorney-General was entitled to maintain an action to establish the existence of a charitable trust). I would therefore hold that it is not open to me in these proceedings to find that any of these properties are held upon charitable trusts, in the teeth of the refusal of the attorney-General, the proper party to represent the interest of charity, so to argue. But in case I should be wrong about this I will, later in this judgment, consider the fourth defendant's arguments in favour of charity and express my conclusions upon them.

9. My findings of fact are as follows :

10. On a date in the second half of the 15th century, Ip Sze Shing settled in the village of Gut Tai in what is now Zhuhai, Chungsan County, Kwantung province, China.

11. His descendants flourished there and by 1836 there had been constructed in the village a "great ancestral worshipping hall of the Ip clan". By 1875 there had also been constituted an ancestral worshipping fund of Ip Sze Shing known as "The Ip Cheong Kwong Tong", A "Tong" of this character is one the primary object of which is the veneration of ancestors, any surplus income being used to provide welfare benefits for male descendants.

12. There had also been constituted by, or in, 1875, two further tongs, the Tun Shin Tong and the Tung Yan Sheen Tong.

13. On 31st December 1875 the settlor made some Rules ("the Rules") for the two tongs last mentioned. The original of the Rules was not in evidence; but the Rules are set out in an Appendix (written, as were the original Rules, in the Chinese language) to a letter dated 17th June 1920 from Ip Pak Hang to Ip Chi Suen, which I propose to treat as secondary evidence of the Rules and to accept both as proof of the making of the Rules under the hand of the settlor and of the contents of these Rules.

14. The Rules state (I paraphrase slightly) that the two last mentioned tongs own the properties with which this case is concerned. 152 is said to be the property of the Tun Shin Tong, and 154 and 156 are said to be the property of the Tung Yan Sheen Tong. The Rules state that the properties were purchased and donated by the settlor, using his own money, and were separate from the common property purchased by the clan itself; but the rents were "to be used in the case of the one tong to supplement any shortfall in the ancestral worshipping fund of the first ancestor Sze Shing and in the case of the other tong to assist in the common welfare in the village" The words I have quoted are important. I have taken them from a translation of the Rules which, I was told from the Bar, represented the view of a difficult passage preferred as the better translation by both Dr. H.D.R. Baker (who gave expert evidence before me on behalf of the plaintiff) and by Mr. A.R. Dicks (who gave expert evidence before me on behalf of the fourth defendant). This (the "preferred translation") is more favourable to the argument of the fourth defendant than the alternative and perhaps more literal translation ("the alternative translation") which would have it that the rents "were to be used on the one hand to supplement any shortfall in the ancestral worshipping fund of the first ancestor Sze Shing and on the other hand to assist in common welfare in the village". The Rules went on to provide for the election of managers by and from amongst members of the clan and concluded with the following expression on the part of the settlor of the triumph of hope over experience: "For fear that in days to come the descendants of the clan in the village should multiply and be ignorant of the origins of the two tongs ...... or that there should arise disagreement and disputes, I now specially set up these Rules as clear evidence for the future. I must hope that each descendant of the clan will always respect and observe these rules and not violate them, and that is truly my expectation."

15. In fact, by 1920 or earlier, differences had arisen within the clan over the management of the properties and the distribution of income. Many accusations and counter-accusations of incompetence and worse were bandied about. These differences still continue. Only the personalities have changed.

16. In 1937 one trustee obtained an order against the other for an account of rents and profits; with which the latter did not comply.

17. In 1939 the properties were redeveloped and, in 1940, let. But the years of friction continued, although it was not until 1977 that the properties again came to the notice of the Court.

18. On 24th April 1965, the first defendant was appointed a trustee of 152 (and probably of 154 and 156 also, but the instrument of appointment is unclear).

19. On 14th February 1977, two strangers to the trusts, Tsao Youn Zain and Chen Cheng Yuen, instituted proceedings concerning the properties against Yip Chi Keung (a trustee) and Ip Siu Bun (the first defendant in the present proceedings). The two plaintiffs were managers of the Sin Hua Trust Savings and Commercial Bank Limited; they had been appointed attorneys of seven Ips from the village of Gut Tai ("the 7 village Ips"). The 7 village Ips claimed to represent the Ip Cheong Kwong Tong and the Tung Yan Sheen Tong. After a number of steps in the action, including changes of parties, the 1977 proceedings were stayed by consent and the first defendant and the fourth defendant were constituted trustees of 154 and 156 by the order of 31st March 1979 to which I have already referred. They were similarly constituted trustees of 152 by the appointment of 2nd April 1979.

20. Needless to say, this did not put an end to the differences within the clan.

21. On 15th April 1980, the 7 village Ips purported to sell the properties to Gainer Limited, a Hong Kong company, for HK$28,750,000. Nothing came of this but more trouble. The vendors did not complete, On 31st July 1981 Gainer Limited instituted proceedings against the tongs, the 7 village Ips, and the trustees of the properties, for specific performance. One of the trustees, the first defendant in the present proceedings, put in a home-made Defence; and the 1981 action then went to sleep.

22. In 1982 the plaintiff in the present action came on the scene, advancing the usual wide selection of accusations. Getting no satisfaction, he instituted these proceedings on 1st November 1984.

23. Those are the facts. The trusts I have to consider are trusts for the application of the rents and profits of immoveable property in Hong Kong for the purposes specified by the settlor in the 1875 Rules. They are trusts of indefinite duration.

24. The Court cannot uphold a trust of indefinite duration for the application for ancestral worship of the income of immoveable property in Hong Kong. In Lau Leung Shi v. Lau Po Tsun (1911) 6 HKLR 149, Mr. Justice Gompertz considered (at p.171) a gift made by a testator of funds to be invested by his executors for his "ancestral sacrificial fund". He said this: "In my own view he meant his executors to invest this fund at, or near, his native place, with his other ancestral property and this is what no doubt the would naturally do. If they should attempt to settle property in perpetuity in Hong Kong, the Court will know what to do, when the matter comes before it". This last sentence may be oracular but it is hardly cryptic. Whatever the law on the point may be in Heung Chau or Homantin, in Hong Kong it is the same as it is in Honiton.

25. So far as 152 is concerned, that is the end of the case. The 1875 Rules provide for the application of the rents "to supplement any shortfall in the ancestral worshipping fund" of Ip Sze Shing (on the preferred translation, the whole of the rents; on the alternative translation, at least part of the rents). The trust fails and there is a resulting trust for the settler.

26. So far as 154 and 156 are concerned, the difference between the preferred translation and the alternative translation assumes some importance.

27. On the alternative translation the provision for the application of the rents made by the 1875 Rules is the same for 154 and 156 as for 152 and the result must be the same, too.

28. But on the preferred translation, the 1875 Rules provide for the application of the rents of 154 and 156 "to assist in common welfare in the village." If this is a public, or charitable, trust (and not, like a trust for ancestor worship, a private trust) the fact that it is a trust of indefinite duration does not affect its validity. And gifts in general terms for the benefit of a local community have sometimes been held to be charitable. The leading case is Goodman v. Saltash Corporation (1882) 7 App. Cas. 633. I am emboldened, not disheartened, by the fact that the decision in this case was described in Harris v. Earl of Chesterfield [1911] AC 623, as "a splendid effort of equitable imagination" (see per Lord Ashbourne at p.633). If a gift for the benefit of a village is charitable (as it is) I am not prepared to hold that a gift for the welfare of a village is not. It was decided in In re Moss [1949] 1 All ER 495 that a gift for "work for the welfare of cats and kittens needing attention" was a valid charitable gift. Even given the deep-rooted English preference for pets over people I cannot believe that the law of England would hold to be charitable a gift for the welfare of animals but not one for the welfare of a village. But, be that as it may, the Court must construe the words "to assist in the common welfare of the village" with reference to the context in which they appear.

29. At this point, the "local charity" argument starts to run into difficulties.

30. In 1875 the village of Gut Tai was a clan village. It had been settled by the Ip clan. There was already in existence in the village the grand ancestral hall of the Ip clan; and (to the extent that the two do not overlap anyway) the Ip Cheong Kwong Tong. At some time before 31st December 1875 the Tun Shin Tong and the Tung Yan Sheen Tong (referred to in the introductory words of the 1875 Rules ) had been set up by the clan. The Rules provide that the managers are to be elected by and from amongst members of the clan. The settlor addresses his exhortation to "the descendants of the clan in the village", I conclude that the settlor's intention was to benefit his clan in the village, and not the inhabitants of the village as such whoever they might be. If that conclusion is correct, the trust assumes the character of one for the welfare of relations rather than of one for welfare of a particular locality. And a trust for the welfare of relations (unless limited to the relief of poverty, which this is not) is not charitable, because there is not sufficient of an element of Public benefit about it: see In re Compton [1945] Ch.123.

31. Can the trusts affecting the properties be upheld, even if not charitable?

32. An engaging attempt was made to persuade me that the trustees held 152 upon trust for a corporate entity, alternatively, a quasi-corporate entity, known as the Tun Shin Tong, and 154 and 156 upon trust for a corporate entity, alternatively a quasi-corporate entity, known as the Tung Yan Sheen Tong.

33. The suggestion that the tongs are corporate entities is unsustainable. There was no evidence whatever to prove that they had at any time been clothed with that separate legal personality which is the essential characteristic of incorporation. I do not overlook the provisions of Article 6 of the Law governing the application of the General Principles of the Civil Code (of the Chinese Republic) under which a foundation which came into existence before the coming into force of the General Principles of the Civil Code and whose object was for the promotion of public welfare and which possesses independent property, is regarded as a juristic person. But the object of the tongs is not the promotion of public welfare and the operation of Article 6 is in my judgment excluded anyway in the present case by the provisions of Article 9, which declares that its provisions are not applicable to ancestral halls, monasteries and temples and those independent properties used for the purpose of maintaining a family. Even if I had found it possible to hold that the tongs were corporate entities, it would have been of no assistance. A gift to a corporation, not for its general purposes but, as here, for particular purposes is governed by exactly the same rules as a gift to individuals for such purposes. If the gift is a gift of income for a period of indefinite duration the gift (unless exclusively charitable) will fail even if the donee is a corporation.

34. The suggestion that the tongs are quasi-corporate entities is more plausible but of no greatar assistance. If the tongs are unincorporated associations, they are not of that type of unincorporated association the beneficial interest in the property of which is by contract vested in the "quasi-corporators" for the time being. On the contrary, they are of that type of unincorporated association the property of which is intended to be held on trust for or applied for the purposes of the association as a quasi-corporate entity.

35. The dispositions made by the settlor were either a disposition to the present and future "quasi-corporators" indefinitely, or dispositions for the purposes of the tongs. If the former, the result was the creation of private trusts which fail for perpetuity. If the latter, the result might have been the creation of public trusts, but only if the purposes were exclusively charitable (which in fact they were not). These conclusions are clearly dictated by the decisions in Neville Estates v. Madden [1962] Ch. 832 (see esp. at p, 849) and In re Recher's Will Trusts [1972] Ch. 526 (see esp. at pp. 538, 539).

36. The argument that the properties are held for the benefit of the two loan associations mentioned in the 1875 assignments is mortally affected for the want of any evidence that any such loan associations ever existed at all, let alone what their purposes were or who belonged to them. And there is no ground on which I could find that the properties are held for the benefit of the Ip Cheong Kwong Tong.

37. Either the trusts on which the properties are held are those declared by the Rules (as the plaintiff and the fourth defendant, but no other party accept), or they are not. If the trusts are so declared on no permissible construction of the Rules could the Court hold that the properties were declared to be held for the benefit of the Ip Cheong Kwong Tong, as the first defendant argued. Even if the Court were so to hold, the trusts would fail for the same reasons as are given in this judgment in relation to the trusts which, on the correct construction of the Rules, are in fact thereby created. And if the trusts on which the properties are held are not those declared by the Rules, then they fail anyway; for then, on the evidence, the trusts (whatever they might be) cannot be said to have been declared in writing by the settlor, as required by the Statute of Frauds. (There is no evidence, apart from the Rules, of any such writing at all. )

38. So the properties are held on a resulting trust for the estate of the settlor. What is to be done?

39. I can grant no relief to the plaintiff in his personal capacity. In that capacity he has no interest in the properties. In his capacity as the person appointed to represent the estate of the settlor for the purposes of these proceedings I am of the view that he is entitled to a declaration that the trustees hold the properties upon a resulting trust for that estate. But he represents that estate only for the purposes of these proceedings. He is not a person to whom letters of administration to that estate have been granted. It seems to me desirable that such a grant of representation should be made as soon as possible. Other grants of representation to the estates of deceased intestate male next-of-kin might in due course also be required. In this connection, I should note that I received much evidence about the male descendants of the settlor. Although I cannot make any findings of fact binding on anybody not a party this action it may helpful if I state my provisional views upon that evidence. These are as follows.

40. The settlor had two sons who survived him, namely Ip Wah Cho and Ip Wah Kui. Ip Wah Cho had (at least) one son, Ip Chi Suen. Ip Chi Suen had (at least) one son, Ip Hin Bun. Ip Hin Bun had two sons, ID Chi Keung and Ip Chi Ying. The only living direct male descendants of the settlor are the last-named two sons of Ip Hin Bun, Further than this I do not think it desirable for me to go. In particular, I do not think it would be right for me to express a view as to who is or may be entitled to a grant of administration to the settlor's estate, which may for all I know become a matter for contest before the court in the exercise of its probate jurisdiction; nor for me to express a view as to who is or may be (directly or indirectly) beneficially interested in the settlor's estate.

41. On this latter point, it seems to me that the personal representative of the settlor, when properly constituted, should institute an administration action and apply in that action for the making of inquires as to next-of-kin. (He might find it useful in this, connection to consider the guidance given in Heward's Chancery Practice 1983, pp.82 to 92, and the specimen form of Order set out in Heward's Chancery Orders, 1986 at p.177. )

42. The settlor's personal representative should also call on the first defendant and the fourth defendant to transfer the properties to him, and to account to him for all moneys came to their hands as trustees of the properties.

43. As trustees I would expect the first defendant and the fourth defendant to comply with this request since I will have declared in this action that they hold the properties upon trust for, the estate of the settlor. If they do not comply with this request then (as Mr. Justice Gompertz put it in another context see above) "the Court will know what to do".

44. The settlor's personal representative should also apply to be joined as a party to the 1977 action (mentioned above) and to have it dismissed. He should take the same course in relation to the 1981 action (also mentioned above).

45. The parties will want time to consider the implications of this judgment and may want to invite me to hear further argument. Accordingly, I will adjourn further consideration of these proceedings to a date and time to be fixed, when I will consider with counsel any further matters they may wish to raise (including the possibility of an order for sale of the properties, which appear to be derelict), the form of the order to be made, and any question that may arise as to the costs of these proceedings down to the date of the order.

Representation:

Mr. John McDonnell, Q.C., Mr. K. John Cheung (14th - 30th September 1987 & 1st - 7th October 1987), & Mr. B, Van Buuren (11th - 29th April, 1988) instructed by Messrs, King & Co. for the Plaintiff.

Mr. Charles China, Q.C ., Mr. Denis Chang, Q.C, & Mr. K.B. Ng instructed by Messrs, Woo & Woo for the fourth Defendant.

1st, 2nd & 3rd Defendants in person.

Headnote

An action the hearing of which started on 14th September 1987 had to be adjourned part-heard when counsel's estimate of the length of the hearing proved to be a gross under-estimate. The case was adjourned to a date to be agreed between counsel. Counsel agreed on 1st June 1988, which would have resulted in an adjournment of 7½ months. The Court declined to accept this and the case was restored to the list for the parties to show cause why the hearing should not be resumed on 5th January 1988. No official shorthand note of the proceedings had been taken, the judge having dispensed with it, under Order 68, on an undertaking from counsel to provide the Court with an agreed note of the evidence:

HELD :-

(Observations on the circumstances in which the Court would be prepared to dispense with the official shorthand note provided for by Order 68.)

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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JUDGMENT

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1. This is an action the hearing of which started on 14th September 1987. The Plaintiff was represented by leading and junior counsel. The fourth Defendant was represented by two leading and one junior counsel. The other Defendants appeared in person. The case had been estimated by counsel as one which was likely to last for three weeks; but one additional week had been reserved for contingencies. It became obvious that the estimate given for the length of the hearing was a gross under-estimate, and that the case would have to be adjourned to a future date for further hearing; this was because another case was listed before me to resume on 12th October 1987. (That was itself a part-heard case, the further hearing of which was itself likely to take four weeks; the hearing of that case in fact concluded last Friday, 13th November 1987.) In those circumstances, when adjourning the hearing of the instant case, I was invited to adjourn it to a date to be fixed "in agreement with Counsel's diaries". I acceded (as I now think, unwisely) to that application.

2. I was concerned to discover, at the end of October, that the date so agreed was the 1st June 1988. In those circumstances, I caused a letter in the following terms to be written to the parties (I quote it in full) :-

"I am directed by The Hon. Mr. Justice Godfrey to write to you about, the resumption of the trial of this case.

The trial began on 14th September 1987. Based on the estimate given to the Court for the length of the trial, 4 weeks were provided for the hearing. This was insufficient and the case had to be adjourned.

The estimate now given to the Court for the length of the adjourned hearing is for a further 4 weeks. The Judge will be able to resume the hearing on 5th January 1988. He intends as at present advised to restore the case to the list for hearing on that date and accordingly to rescind his earlier direction that a date be fixed by agreement between counsel. His reason is that the date so agreed, 1st June 1988, would result in an adjournment of 35 weeks. The Judge's view is that this is much too long a period for which to adjourn a part heard case to which it is the duty of counsel to give priority. A delay of this length, when a date some 5 months' earlier can be made available by the Court, appears to the Judge to be contrary to the interests of justice.

Nevertheless, the Judge is prepared to give the parties an opportunity to show cause why the case should not be listed for hearing on 5th January 1988. He will, if asked before close of business on 13th November 1987 to do so, restore the case to his list on 20th November 1987, for the purpose of hearing such representations as any party may then wish to make to him as to why the case should not be listed for hearing on 5th January 1988. If any representations are to be made, the Judge will require them to be supported by affidavit evidence, showing, in particular, that the lay client on whose behalf such representations are to be made has been informed that the Court is in a position to resume the hearing of the case on 5th January 1988 but has nevertheless given his consent to an adjournment to a later date. The Judge will also require confirmation that an agreed note of the evidence taken so far will, in accordance with the undertakings given to him at the commencement of the hearing, be provided for his use not less than 4 weeks before the date fixed for the resumption of the hearing.

Subject as indicated above, the case will be restored to the list for hearing on 5th January 1988. It is the Judge's desire that the content of this letter be brought forthwith to the attention of all counsel engaged in and committed to the case."

3. On or before 13th November 1987, the Plaintiff's solicitors and the 4th Defendant's solicitors indicated that they did wish the case to be restored to the list on 20th November 1987 (that is today) for the purposes I have mentioned (that it is to say, to show cause why the case should not be re-listed for hearing on 5th January 1988). It was apparently thought right to take out summonses returnable today for this purpose, although all that was required was for the parties to intimate, as I had suggested, that they wished the case to be restored to the list for hearing. That of course would have meant restoration of the hearing in open Court; but, as it is, the case has been listed for hearing before me in Chambers on the summonses taken out by the Plaintiff and the fourth Defendant respectively. I have cured this procedural irregularity by directing that the proceedings presently before me be treated as the restoration of the hearing and be heard before me in open Court.

4. I turn now to the substance of the present application. Both the Plaintiff and the fourth Defendant are content that the date fixed by their agreement, that is to say, 1st June 1988, should stand. The other parties have no objection. However, I have not the least doubt that it is quite contrary to the proper administration of justice to allow an adjournment of a part-heard case of a length much longer than that which is necessarily required to do justice between the parties. There is a role which the Court must play in taking control of its own proceedings. Nothing I have heard has satisfied me that an adjournment to a date so long away as 1st June 1988 is necessary in the interests of justice.

5. However, I am satisfied, on the evidence, that the date I have offered to the parties, 5th January 1988, is too early.

6. By an affirmation of the Plaintiff, made on 13th November 1987, the Plaintiff affirmed that he had made arrangements for business purposes to visit Canada, the United States and China, staring in mid-December 1987, and that be did not expect to be back in Hong Kong until late January 1988. He deposed that it was too late for him to change his itinerary and that, if the action was to resume in January 1988, he would not be able to attend the hearing. He asserted that it would be necessary for him to attend the resumed hearing to hear the oral evidence of the Defendants' witnesses, so as to give instructions to his counsel for cross-examination of these witnesses. He contended that his presence at the trial would be of vital importance. I think the Plaintiff in this evidence somewhat overstates the position, but the interests of justice would certainly not be served by depriving him of the opportunity to attend the hearing if he wishes; it is, I think true that the proper advancement of the Plaintiff's case requires that he should have the opportunity to be present at the resumed hearing. For this reason (and having regard to the fact that the Plaintiff must have been misled by the information, at the time correctly given to him, that the new hearing was fixed for 1st June 1988), I would not now propose to insist that this hearing be resumed as early as 5th January 1988. The Plaintiff in his affirmation also deposed that his leading counsel would not be available as early as 5th January 1988, and that there were also be difficulties with his junior counsel. Since counsel's commitment to a part-heard case must take priority over all other business, this does not impress me.

7. The Plaintiff's solicitor (who appeared before me at my invitation since the case had originally been listed to be heard in Chambers) told me that he would prefer the case to resume on 1st June 1983 but he did not advance any good reason why it should not resume earlier than that, so long as there was time for the note of the evidence, plainly required after an adjournment of this length, to be prepared. The fourth Defendant was represented before me today, as at the original hearing, by Mr. Charles Ching, Queen's Counsel. He accepted that when a case is adjourned part heard to a date to be agreed between counsel it would be an abuse of the procedure of the Court for counsel to agree on a date for resumption unreasonably far ahead, and helpfully indicated that in this case an earlier date that that originally agreed was in fact possible. Mr. Ching submitted with force that there would be difficulties about obtaining notes of the evidence by 5th January 1988. He accepted that the longer the adjournment, the further away from everybody's mind the evidence becomes. Mr. Ching also remarked that (as was the case) some of the witnesses in the present case would have to come from mainland China, and that some two months' notice to those witnesses would have to be given to ensure their attendance at the hearing. I accept this point, too, which again would make a resumption of the hearing on 5th January 1988 impracticable. Mr. Ching was good enough to indicate that the state of his own diary would permit him to attend the hearing if it were to be resumed on or after 6th April 1988. In all these circumstances, I think the hearing should be fixed for resumption on the 11th April 1988. I so direct. There is no good reason why the case should stand out of the list for several weeks longer than this and it is not in the interests of justice that it should do so.

8. I wish to say in conclusion two further things about this case. Frist, it is the duty of counsel to give an accurate estimate of the length of time that the case in which they are engaged is likely to take. I am well aware that this is not an easy duty to discharge, and that the longer the case is likely to take, the more difficult it is to give an accurate estimate. But the Court should, at all times, be kept informed of any reason counsel may have to revise the estimate; if that had been done in this case alternative dates could have been given which would have enabled the case to be heard without the necessity of an adjournment.

9. Secondly, I have referred to the fact that a note of evidence is to be prepared for the use of the parties and of the Judge in this case. Order 68 of the Rules of the Supreme Court provides for an official shorthand note to be taken of the evidence. These are proceedings in the High Court of Justice and the High Court is (or is supposed to be) "a Superior Court of Record" : see section 12 (1) of the Supreme Court Ordinance, Chapter 4. It is a blot on the administration of civil justice in Hong Kong that although Order 68 provides for an official shorthand note no official shorthand writer is in practice provided (except in very rare instances). While this ludicrous state of affairs continues (as apparently it has done for years without any correction) I propose to insist, in all witness actions, on an undertaking from counsel, in accordance with what in any case is counsel's duty, to take a proper note of the evidence, and I propose to invite counsel to agree to provide, if asked to do so, an agreed note of the evidence for the use of the Judge or the Court of Appeal. Only if this invitation is accepted will I be prepared to dispense with the official shorthand note for which, rightly, Order 63 provides. The necessary undertaking was given in this case and supported by the use of tape recorders, from which a note can be provided. On what I was told from the bar, it should be possible to produce the note by the middle of March, so that copies can be supplied to all counsel engaged in the case and for the use of the Judge before the date of the resumed hearing. In those circumstances, the damage to the proper administration of justice, done by resuming the hearing of a case so many months after the original hearing had to be adjourned, will be minimised. For the reasons I have endeavoured to state, I now direct that the hearing of this case be resumed on 11th April 1988.

Representation:

Mr. F. Ho of Messrs. Knight & Co. for the Plaintiff.

The 1st Defendant - in person.

The 2nd Defendant - in person.

Mr. Charles Ching, Q.C., leading Mr. K. B. Ng instructed by Messrs. Woo & Woo for the 4th Defendant.