Ipsofactoj.com: International Cases [2001] Part 1 Case 7 [CFA]


COURT OF FINAL APPEAL, HKSAR

Coram

Secretary for Justice

- vs -

K.C. To[a]

MR JUSTICE BOKHARY PJ

MR JUSTICE CHAN PJ

MR JUSTICE RIBEIRO PJ

MR JUSTICE SILKE NPJ

LORD MILLETT NPJ

22 DECEMBER 2000


Judgment

Mr Justice Bokhary PJ and Mr Justice Chan PJ

INTRODUCTION

  1. This is our joint judgment.

  2. As is well-known, there is a Buddhist monastery in the area of the New Territories called Castle Peak in English and Tsing Shan in Chinese. The complex which houses that Buddhist monastery includes a Taoist temple. There was expert evidence at the trial that traditional Chinese notions of religious tolerance accommodate Buddhist and Taoist worship within the same religious complex. The monastery is the Tsing Shan Monastery, and the temple is the temple Tsing Wan Kun. Two further facts add to the complication.

    • First, Tsing Shan Monastery itself is sometimes referred to as a temple.

    • Secondly, the religious complex in question used to house yet a third institution. This was a Buddhist temple known as Pui To Tsz. It no longer exists.

  3. In public records dating from the end of the 19th century and the beginning of the 20th century Tsing Shan Monastery, Pui To Tsz and the temple Tsing Wan Kun itself each appears as the grantee of Crown land in its own name.

  4. This appeal arises in litigation over the ownership of the temple Tsing Wan Kun and the assets standing in its name. Such assets consist of land in the New Territories and funds in court. We will refer to these funds as “the Funds”. Including interest to date, the Funds are now in the region of $300 million. They represent the proceeds of the sale of letters of land exchange entitlement issued by the Government to the temple Tsing Wan Kun upon the resumption of land in the New Territories held in its name. So the assets standing in the temple Tsing Wan Kun’s name consist of New Territories land and money derived from New Territories land.

  5. The protagonists before the Court are a tso and a clan on one side and the Government on the other side. The tso is the To Ka Yi Tso (“the Tso”), being the tso of a man named To Ka Yi (“the Focal Ancestor”) who died in 1454 during the Ming Dynasty. As to the nature of a tso, it suffices for present purposes to quote what Mills-Owens J said in Tang Kai-chung v Tang Chik-shang [1970] HKLR 276. Referring to a focal ancestor as a common ancestor, he said this at pp 279-280:

    Speaking generally, a Tso may be shortly described as an ancient Chinese institution of ancestral land-holding whereby land derived from a common ancestor is enjoyed by his male descendants for the time being living for their lifetimes and so from generation to generation indefinitely. Thus every male descendant of the common ancestor automatically becomes entitled at birth to an interest in the land for his life-time; on his death his interest merges so as automatically to enlarge the interests of the surviving male descendants; thus his interest at any given moment during his lifetime depends on the number of male descendants then living and on his death it forms no part of his estate.

  6. Turning to the Clan, it is the To Clan (“the Clan”). Its membership from time to time is made up of all the male members of five villages in Tuen Mun (namely Nai Wai, Tsing Tsuen Wai, Tuen Tsz Wai, Lam Tei Tsuen and Sun Tsuen) descended from the Focal Ancestor.

  7. Shortly stated the Tso and the Clan’s case is that they are the members of a t’ong, being the t’ong Tsing Wan Kun, and that this t’ong owns the temple Tsing Wan Kun and its assets.

  8. The t’ong is an institution of Chinese law and custom. At least as they are generally understood, t’ongs are essentially in the nature of unincorporated associations composed of individuals and with continuous succession through patrilineal descent from their founding members. A t’ong’s type depends on its purpose and activities. Generally if not invariably, the context in which the Hong Kong courts have dealt with t’ongs has been that of land in the New Territories.

  9. One of the matters in respect of which Chinese law and custom has application in Hong Kong is New Territories land unless exempted from the provisions of Pt II of the New Territories Ordinance, Cap. 97. (The land here in question is non-exempt land.) T’ongs have received legislative recognition. Section 15 of the New Territories Ordinance requires the registration of a manager of any clan, family or t’ong in whose name land is held from the Government. And as Mills-Owens J noted in Tang Kai-chung v Tang Chik-shang at p.288: “It appears that tso lands have always been treated as ‘clan, family or t’ong’ lands”.

  10. Pursuant to their case that they are the members of a t’ong, being the t’ong Tsing Wan Kun, and that this t’ong owns the temple Tsing Wan Kun and its assets, the Tso and the Clan claim the temple Tsing Wan Kun and its assets for their members.

  11. In pursuit of their claim, the Tso and the Clan commenced proceedings against a number of persons including the Secretary for Justice. Disputing the Tso and the Clan’s claim, the Secretary for Justice, representing the Government as parens patriae, counterclaims the temple Tsing Wan Kun and its assets for charity.

    On 26 November 1998 Yam J gave judgment in favour of the Tso and the Clan. The orders which he made include an order that the Funds be paid out to the Tso and the Clan.

    On 3 February 2000 the Court of Appeal (Leong and Woo JJA and Pang J) dismissed the Secretary for Justice’s appeal against Yam J’s decision.

    And on 24 March 2000 the Court of Appeal granted the Secretary for Justice leave to appeal to this Court.

  12. So we now have before us the Secretary for Justice as the appellant, the managers of the Tso as the 1st respondent and the representatives of the Clan as the 2nd respondent. There had been another claimant, namely the Abbot of Tsing Shan Monastery. But he dropped out of this litigation after failing in the courts below.

    THE SECRETARY FOR JUSTICE'S STANCE

  13. The Secretary for Justice’s stance consists of a primary submission and an alternative one.

  14. Her primary submission is that the t’ong Tsing Wan Kun does not own the temple Tsing Wan Kun and that it is a religious t’ong, either without members or with all Buddhists and Taoists as its members. She relies on this submission as a springboard for her claim to the temple Tsing Wan Kun and its assets for charity. Under this claim, she advocates a scheme of trust, to be approved by the court, for managing the temple Tsing Wan Kun and holding its assets.

  15. Her alternative submission is that, even if her primary submission fails, the temple Tsing Wan Kun is nevertheless a Chinese temple under the Chinese Temples Ordinance, Cap. 153, so that the Funds are covered by its provisions, particularly sections 7 and 8. Initially she asked under her alternative submission that the order for payment out of the Funds be set aside. But in the course of the argument that was modified. It was modified to asking only that the order for payment out of the Funds be stayed so as to give the Chinese Temples Committee an opportunity to take advice and consider its position once the Court’s decision on her primary submission is known, and to then take such steps as it may see fit.

  16. Mr Robert Tang SC for the Secretary for Justice has emphasised on her behalf that her concern is to preserve and protect an important temple to which the public has access and which is housed within a monastery complex which is a landmark in Hong Kong.

    THE VARIOUS TYPES OF TEMPLE OWNERSHIP

  17. Crucial to the Secretary for Justice’s primary submission is the question: under what type of temple ownership is the temple Tsing Wan Kun held? This question is one of Chinese law and custom.

  18. As to temple ownership in traditional China, three types were identified by Prof. Anthony Dicks SC who was called by the Tso and the Clan as their expert on Chinese law and custom. Prof. Hugh Baker, the Secretary for Justice’s expert on Chinese law and custom, preferred to divide one of Prof. Dicks’s types into two. That resulted in four types, being:

    1. ownership by all the people of the relevant faith in the case of a temple amounting to a large monastery containing a large number of monks;

    2. ownership by the body of clergy residing in a hereditary private temple and forming a pseudo-family there;

    3. ownership by an individual, clan, family or t’ong (remembering that a t’ong may include a tso) of a private temple; and

    4. ownership by the inhabitants of a geographical area of a temple without resident clergy established for the benefit of the inhabitants of that area.

  19. There is evidence that the temple Tsing Wan Kun was founded by the Focal Ancestor’s male descendants: but as a private temple of their own (albeit one to which the public has access) or as a public temple? Nobody suggests that the temple Tsing Wan Kun is of the first, second or fourth type of temple ownership listed above. And it is accepted by Mr Tang for the Secretary for Justice that if that really left only the third type to consider, then the evidence would justify the lower courts’ concurrent findings of fact that the temple Tsing Wan Kun is held under the third type of temple ownership, it being owned by a t’ong whose members are the Tso and the Clan. But Mr Tang then argues:

    1. that there is in truth a fifth type;

    2. that once this fifth type is recognized, it becomes apparent that the temple Tsing Wan Kun cannot sensibly be viewed as being of any type other than this fifth one; and

    3. that the temple Tsing Wan Kun being of this fifth type means that the position is as the Secretary for Justice asks the Court to declare and order.

  20. Before dealing with that argument, we would emphasise that the question is not whether the traditional types of temple ownership are confined to the four types mentioned above. We are not called upon to decide that. Rather the question is whether there is a fifth type of temple ownership of the nature contended for by the Secretary for Justice.

    IS THERE A FIFTH TYPE OF TEMPLE OWNERSHIP OF THE NATURE CONTENDED FOR BY THE SECRETART OF JUSTICE?

  21. As we have seen, the Secretary for Justice’s primary submission depends on there being such a thing as a temple constituting a religious t’ong either without members or with all Buddhists and Taoists as its members. She contends that, if there are such temples, then the temple Tsing Wan Kun is obviously such a temple. The notion of a temple which does not amount to a large monastery containing a large number of monks but which is nevertheless owned by all the people of a relevant faith or relevant faiths was not pressed by Mr Tang in argument. He argued instead for the concept of a religious t’ong without members. And the fifth type of temple ownership for which he contends is ownership by the temple of itself: so that the temple is in the nature of a juristic entity and something akin to the civil law concept of a foundation.

  22. In arguing for this fifth type of temple ownership, Mr Tang relies first and foremost on a passage in the report dated 7 February 1900 on the New Territories prepared by the then Colonial Secretary, Mr Stewart Lockhart (“the Lockhart Report”). The Lockhart Report is to be found in a supplement to the Hong Kong Government Gazette No. 26 of 28 April 1900.

  23. As can be seen, the Lockhart Report was prepared very soon after the New Territories had been leased by China to Britain for 99 years from 1 July 1898 under the Peking Convention of 1898. To read the report in its proper setting, therefore, it is necessary to bear in mind two things in particular. The first is the ways in which, and the purposes for which, land was held in traditional China. The second is how New Territories land was dealt with once the 99-year lease commenced.

  24. In traditional China persons who occupied waste land and cultivated it could maintain some sort of right to such land while keeping it under cultivation. Normally, however, land was held under a heritable and assignable title granted by the Emperor in consideration of the payment of land tax or the performance of services.

  25. Land was registrable at the appropriate magistracy. A registered title deed would bear an official red seal. Such deeds were known as “red deeds”. Upon a sale and purchase, the vendor would provide the purchaser with a title deed without an official red seal. Such deeds were known as “white deeds”. A purchaser holding a white deed would be able to obtain a red deed by registering the sale and purchase. Unless and until that was done, the vendor, as the registered owner of the land, would remain liable for the land tax thereon. But the vendor would normally then collect such tax from the purchaser.

  26. A landowner could be an individual, a family, a clan or an association.

  27. In addition to the temporal uses to which land might be put, there was spiritual land use such as for devotion to ancestral worship or to the establishment and maintenance of temples.

  28. As to how New Territories land was dealt with once the 99-year lease commenced, it suffices to note the following passage in the advice of the Privy Council delivered by Lord Diplock in Winfat Enterprise (HK) Ltd v Attorney General [1985] AC 733 at p.745 A-B:

    When the New Territories were ceded, the land became on 1 July 1898 the property of the British Crown for the 99-year period of the cession. It was declared to be so by the Land Court (New Territories ) Ordinance 1900 (No.8 of 1900). For the common or customary Chinese tenure under which the inhabitants had previously occupied their land there was substituted by that Ordinance a leasehold interest of 99 years less three days which .... took the form of an initial term of 75 years from 1 July 1898 which was automatically renewable for a further term of 24 years less three days. The leasehold interest in particular parcels of land in the New Territories was granted by incorporating them in the schedules of individual Block Crown Leases which identified their location and area and described the use to which they were put in July 1898.

  29. We turn now to the passage in the Lockhart Report on which Mr Tang places particular reliance. The passage appears in Appendix No. III to the report, which appendix is headed “Memorandum on Land”, and comes under the sub-heading “Temple Land”. In the Gazette it is at p.xviii, and it reads:

    Temple land is land devoted to the support and upkeep of a temple dedicated to the service of some specially selected idol in the name of which the land is held. Some of those who originally subscribed towards the creation of the temple or their descendants act as trustees and keep the rent roll and an account of current expenses.

  30. In the context of that passage, we take the term “idol” to mean a god or goddess represented by an idol. Is the writer referring to land held in the name of a god or goddess to the service of which a temple is dedicated? Or is he referring to land held in the name of a temple dedicated to the service of a god or goddess? We are inclined to think that the reference is to land held in the name of a temple. Reliable examples of that exist. As we have already pointed out, Tsing Shan Monastery, Pui To Tsz and the temple Tsing Wan Kun itself each appears in public records dating from the end of the 19th century and the beginning of the 20th century as the grantee of Crown land in its own name. And no one has suggested that those grants were made unwittingly.

  31. By contrast, there is what the then Attorney General said in the Legislative Council on 29 March 1928. Moving the first reading of the Secretary for Chinese Affairs Incorporation Bill of that year, he said:

    I said that all property specified in the schedule stands in the name of the Secretary for Chinese Affairs or the Registrar-General or in the name of some holder of this office. There is one exception to that. It is the case of Shaukiwan Inland Lot 142. This is the site of a temple at Shaukiwan. The Crown Lease in that case, which is for 999 years, is in the name of Lam Ah Neung, and as I have explained in the ‘Objects and Reasons’ of this Bill an attempt was made to find Lam Ah Neung. The attempt was unsuccessful and it is not surprising for it turned out to be the name of a goddess, or at least the name was put forward by the villagers as standing for the goddess of the temple. That is the only case in which the Bill proposes to invest in the new Corporation any property which does not at present stand in the name of some holder of the office of Secretary for Chinese Affairs or in the name of the office itself.

  32. Every indication is that the grant of Crown land to Lam Ah Neung had been made in the belief on the part of the British authorities that Lam Ah Neung was the name of a human being. Plainly it was to the Crown’s consternation that it eventually discovered that the name was actually that of a goddess.

  33. Now the mere fact that land is found in the name of a temple does not mean that such temple is something in the nature of a juristic entity or akin to the civil law concept of a foundation. (By juristic entity or person we mean an independent juristic entity or person separate from its members.) Prof. Dicks’s view is that if Mr Lockhart is to be taken as having suggested something of that kind, then one would have to wonder if he had confused the situation here with the one in India. We can understand that view. In Bumper Development Corporation v Commissioner of Police of the Metropolis and Others [1991] 1 WLR 1362, a decision of the Court of Appeal in England, a temple in the Indian state of Tamil Nadu was permitted to sue in England for the recovery of an idol taken from the site on which its ruins stood. And this was because there was expert evidence that temples are recognized under the law of Tamil Nadu as a juristic entity capable of suing and being sued in that jurisdiction.

  34. So if Mr Lockhart is to be taken to have been suggesting that a Chinese temple is something in nature of a juristic entity or akin to the civil concept of a foundation, then one would indeed have to wonder if he was confusing the situation here with the one in India, and to discount such suggestion accordingly. As it happens, however, we do not take Mr Lockhart to have been suggesting anything of that sort. We think that Mr Lockhart was merely alerting administrators and surveyors to one of the things which they would come across, namely land held in the name of a temple.

  35. The key to Mr Lockhart’s meaning is to be found in the next paragraph of his report. There he described traditional China, accurately in our view, as “a land of associations which are as numerous and the objects of which are as varied as the needs of man”.

  36. Going by the experience of the Hong Kong courts over the years, the associations of traditional China were typically if not inevitably unincorporated associations with continuous succession and composed either of individuals or of other associations themselves with such succession and so composed.

  37. One of the publications to which Prof. Baker drew attention and upon which Mr Tang relies is “F.T. Cheng: The Chinese Supreme Court Decisions” (1923). Dr F.T. Cheng appears to have extracted a series of propositions from the decisions of the Republican Supreme Court (“the Da Li Yuan”) as he understood those decisions, and then arranged those digested propositions in such a way as to form a code.

  38. There are references in this publication to juristic persons and to foundations. We do not propose to cite all of these references. It suffices to quote the following.

    This appears at pp 9-10:

    A juristic person composed of a group of natural persons in pursuit of a certain object is called an Association; a juristic person composed of properties devoted to the furtherance of a particular object is called a Foundation.

  39. The notion of an association of natural persons constituting a juristic person is not in harmony with the Hong Kong courts’ experience of institutions of Chinese law and custom. Nor does it seem to us that Dr Cheng himself regarded such an association as an institution of Chinese law and custom. For at p.10, he says that “[t]he directors of an Association must be elected by its members ....” No one has suggested that directorships form any part of Chinese law and custom.

    As to foundations, Dr Cheng acknowledges in terms (at p.11) that they are “to be governed by principles of law in the absence of customs”.

  40. We have perhaps said enough on this publication, but it is probably best to leave the last word thereon to Prof. Dicks. In a further report made in March 1997 he said that “the general concept of corporate personality or juridical personality was entirely unknown to traditional Chinese law, notwithstanding the existence of various quasi-corporate collectivities (such as clans or merchant gilds) which exhibited some of the features of corporate personality”. Further on in the same report, following a typically learned and thorough analysis of the jurisprudential approach adopted by the Da Li Yuan, he said this:

    It follows that in those of the Da Li Yuan judgments digested under the sub-category of foundations which were explicitly concerned with traditional religious institutions such as temples and monasteries, the court, far from applying customary law, was fitting, indeed forcing, the traditional institutions into what were then the most up-to-date concepts of codified European civil law. The true though presumably unintended effect of Professor Baker's suggestion that the decisions relating to foundations .... were based on the customary law is to argue that the Courts of Hong Kong should apply the twentieth century German law on foundations as part of the Chinese customary law of the New Territories.

  41. Plainly Prof. Dicks had in mind the well-known fact that the law of Republican China had borrowed heavily from the Japanese Civil Code which had itself borrowed heavily from the German Civil Code.

  42. In Re Lau Wai Chau (2000) 3 HKCFAR 98 this Court declined to combine the English law of trusts as applicable in Hong Kong with Chinese law and custom so as to bring about an instance of an ancestral worship trust where none was brought about by Chinese law and custom itself. It is of course even more obviously impermissible to combine the German or Japanese law of foundations as adopted or adapted by Republican China, none of which has any application in Hong Kong, with Chinese law and custom so as to bring about a further type of customary temple ownership. Such ownership, like the ancestral worship trust, is an institution of Chinese law and custom. And for such institutions the Hong Kong courts look purely to what the position had been in traditional China.

  43. While relying principally on the Lockhart Report for his fifth type of temple ownership, Mr Tang also places some reliance on three other publications: an article, a book and something which appears to be a discussion paper. The article is “Stephen Selby: Everything You Wanted to Know About Chinese Customary Law (But Were Afraid to Ask)” HKLJ (1991) 45. The book is “Holmes Welch: The Practice of Chinese Buddhism 1900-1950” (1967). And the discussion paper is “Modern Buddhism No. 4:27” (December 1950). Mr Tang’s reliance on these three other publications is very much subsidiary to his reliance on the Lockhart Report. We find nothing in them which advances Mr Tang’s position, and that is all we propose to say about them.

  44. In our judgment, there is no such type of temple ownership as the one contended for by the Secretary for Justice.

    OWNERSHIP OF THE TEMPLE TSING WAN KUN

  45. There being no such fifth type of temple ownership, we affirm the lower courts’ concurrent findings of fact that the temple Tsing Wan Kun is held under the third type of temple ownership by a t’ong of the same name whose members are the Tso and the Clan. This means that the temple Tsing Wan Kun and all its assets, which now include the Funds, are owned by the t’ong Tsing Wan Kun whose members are ultimately the members from time to time of the Tso and the Clan.

  46. The temple Tsing Wan Kun’s assets are, as they have been for centuries, devoted to the purposes of due observance of the customary ceremonies of the temple Tsing Wan Kun and of maintenance of its temple buildings and temple properties. They will remain so devoted unless and until the t’ong Tsing Wan Kun, proceeding in a manner which conforms with Chinese law and custom, withdraws them from devotion to those purposes. The t’ong Tsing Wan Kun’s proprietary rights in the temple Tsing Wan Kun’s assets are vested rights. Accordingly the t’ong Tsing Wan Kun is entitled to effect such withdrawal at any time provided that it does so in a manner which conforms with the requirements of Chinese law and custom. This proviso arises for the reason that a t’ong, being an institution of Chinese law and custom, cannot act effectively if it does not act in conformity with that system. It is not for us to deal here with the details of the relevant requirements of Chinese law and custom. But we would just mention that unanimity in some form is generally required.

    THE CHINESE TEMPLES ORDINANCE, CAP. 153

  47. Turning to the Chinese Temples Ordinance, we begin by noting that it is, as its long title states, an Ordinance “To suppress and prevent abuses in the management of Chinese temples and in the administration of the funds of Chinese temples”.

  48. As one sees from the interpretation section (s.2) of the Ordinance, the term “Chinese temple” includes all kun.

  49. The judge held that the Ordinance had no application to a private temple owned by an individual, clan, family or t’ong and therefore did not apply to the temple Tsing Wan Kun. The Court of Appeal, on the other hand, held that the judge was wrong as to that. And it held that the Ordinance’s application extended to such a temple and therefore applied to the temple Tsing Wan Kun. That is plainly right, as the Tso and the Clan now accept. In other words, they now accept that the temple Tsing Wan Kun is a Chinese temple within the scope of the Ordinance.

  50. Section 5 of the Ordinance provides that:

    (1)

    No Chinese temple shall be established or maintained unless it is registered in accordance with the provisions of this Ordinance.

    (2)

    Registration shall be effected at the office of the Secretary for Home Affairs and the following particulars shall be supplied in order to effect registration -

    (a)

    the name of the temple or intended temple;

    (b)

    the address of the temple or intended temple, including the street or road and lot number;

    (c)

    the gods worshipped or intended to be worshipped;

    (d)

    the nature or intended nature of the control of the temple, that is to say, whether by a committee or by a family or by an individual, and the title of the committee or the name of the family or individual;

    (e)

    the name and address of the sz chuk (facv_8_00.gif (903 bytes), temple keeper), if any;

    (f)

    particulars of the funds, investments and properties held at the time of registration and where, how and by whom those funds, investments or properties are held;

    (g)

    the application or intended application of the revenue of the temple, including the revenue from funds, investments or property held or to be held.

  51. Section 15 provides that “Any person who contravenes any of the provisions of this Ordinance shall be liable on summary conviction to a fine of $1,000”. It therefore follows that it is an offence to maintain the temple Tsing Wan Kun without registration under the Ordinance. As it happens, the temple Tsing Wan Kun has never been registered. But as a result of legal advice, an application for its registration was lodged during the course of the present appeal. The application form is dated 30 November 2000 and the acknowledgment of its receipt is dated 1 December 2000. Of course the fact that a Chinese temple is not registered does not affect the application of the Ordinance to it.

  52. By virtue of s. 13(1) the Chinese temples specified in the Schedule to the Ordinance are exempted from the provisions of sections 3, 4, 7, 8, 10 and 11. Section 13(4) empowers the Chief Executive in Council to add to the Schedule. The temple Tsing Wan Kun is not in the Schedule.

  53. The sections of the Ordinance of particular importance to this appeal are sections 7, 8 and 9. So far as material s.7 provides as follows:

    (1)

    Notwithstanding anything in the Secretary for Home Affairs Incorporation Ordinance (Cap. 1044), the revenues, funds, investments and properties of all Chinese temples shall, subject to the provisions of section 8, be under the absolute control of a committee which shall be known as the Chinese Temples Committee

    ....

    (6)

    In order to make such control effective it shall be lawful for the Chinese Temples Committee, without prejudice to any powers that the committee may possess, to require any person other than the Secretary for Home Affairs Incorporated, who may be in possession or control of, or in whom may be vested, any property held on behalf of or for the purposes of any Chinese temple, to transfer or assign any such property to the Secretary for Home Affairs Incorporated.

    Section 8 provides as follows:

    (1)

    The revenues of all Chinese temples shall be applied in the first instance to the due observance of the customary ceremonies and the maintenance of the temple buildings and temple properties, and any surplus may be transferred to the General Chinese Charities Fund referred to in section 9.

    (2)

    It shall be in the discretion of the Chinese Temples Committee to decide what are the customary ceremonies of any particular Chinese temple and what amount may be spent on any particular authorized object and what surplus may be transferred to the General Chinese Charities Fund.

  54. In construing these provisions as they affect the temple Tsing Wan Kun, the ownership of the temple must be kept constantly in mind. (It is perhaps worth mentioning that none of what we are about to say on the Ordinance is directed to what the position might be in the case of a Chinese temple without any identifiable owner or as to whether such a temple may revert to the Government as bona vacantia or otherwise.)

  55. Confiscatory statutes are hardly what one ever expects to find in Hong Kong. And where New Territories land is concerned, there is the added factor that the Peking Convention of 1898 states in terms that “there will be no expropriation” and that if land is required for official purposes “it shall be bought at a fair price”. We are satisfied that the Chinese Temples Ordinance is not confiscatory. If it were, then its constitutionality would be open to question under Article 105 of the Basic Law which entrenches the right to compensation for lawful deprivation of property, such compensation to correspond to the real value of the property concerned at the time of such deprivation. But that does not arise. We turn now to the task of demonstrating why the Ordinance is not confiscatory and explaining the regulatory manner in which it operates.

  56. It is a leading principle of statutory construction that, unless compelled to do so by clear words, the courts do not construe a statute as confiscatory.

  57. As we have seen from its long title, the Ordinance’s purpose is the suppression and prevention of abuses in the management of Chinese temples and in the administration of their funds. It is thus concerned with management and administration, not with ownership. It does not expressly deal with ownership or purport to deprive any owner of his property. Nor does it provide for compensation to be paid for the loss of any property rights.

  58. Section 7 is concerned solely with control. Subsection (1) thereof confers on the Chinese Temples Committee control of “the revenues, funds, investments and properties of all Chinese temples”. Of course nothing in the Ordinance obliges the Committee to intervene willy-nilly. If it can see that a temple and its funds are being properly managed, then the Committee can consistently with its public duty leave the day to day management of that temple and its funds in the hands of its owners or managers. But the Committee has the ultimate power of control. In order to make such control effective, subsection (6) authorises the Committee to require any person in whom temple property is vested to transfer the property to the Secretary for Home Affairs Incorporated.

  59. Section 8 is concerned with the application of the revenues i.e. the income of Chinese temples. Such income must be applied, in the first instance, to the due observance of the temple’s customary ceremonies and the maintenance of its temple buildings and temple properties. Any surplus income may, at the discretion of the Committee, be transferred to the General Chinese Charities Fund established under s.9 of the Ordinance and then (by virtue of s.9(2)) applied for the purpose of any Chinese charity in Hong Kong.

  60. Land and other property of the t'ong Tsing Wan Kun which is for the time being devoted to the due observance of the temple Tsing Wan Kun’s customary ceremonies and the maintenance of its temple buildings and temple properties is undoubtedly property of the temple Tsing Wan Kun within the scope of these sections. It follows that the Committee has ultimate control and powers of management over such property, and may in its discretion require the same to be transferred to the Secretary for Home Affairs Incorporated. The income for the time being from such property must be applied, whether by the Committee or the t’ong Tsing Wan Kun, in accordance with s.8.

  61. If the Ordinance operated to take away the t’ong Tsing Wan Kun’s Chinese law and custom right at any time to alter the purpose to which all or any part of the property of the temple Tsing Wan Kun is devoted, it would not be regulatory but confiscatory. In the case of property owned by an institution like a t’ong, therefore, we construe the references in the Ordinance to properties or revenues of Chinese temples as references to such properties and revenues for the time being devoted to the due observance of the temple’s customary ceremonies and the maintenance of its temple buildings and temple properties.

  62. So construed, the Ordinance does not affect the beneficial interest of the t’ong Tsing Wan Kun, which retains its Chinese law and custom right at any time to withdraw all or any part its property from the purposes to which it was previously devoted. Once withdrawn in conformity with Chinese law and custom, such property and its revenue would cease to be property or revenue of the temple Tsing Wan Kun within the meaning of the Ordinance.

  63. We pause to mention that if judicial proceedings were ever to ensue over whether any such withdrawal had been achieved, the Chinese Temples Committee would be a necessary party to such proceedings. As for the respondents, it was made clear to the Court by Mr McDonnell on their behalf that they bring their claim in a fiduciary capacity for the benefit of the t’ong Tsing Wan Kun. So far the t’ong Tsing Wan Kun has not attempted to make any such withdrawal. But it seems likely that some such withdrawal will be made or attempted in the foreseeable future. It is stated in the application form dated 30 November 2000 lodged for the purpose of registering the temple Tsing Wan Kun that:

    The property of the Temple consists of Tsing Shan House Lots 1, 2 and 3 and D.D.131 Lot 416, Tuen Mun, which are held by the clan, family or t’ong Tsing Wan Kun, and a fund of $50 million which is to be provided by the clan , family or t’ong out of the monies recovered by them in High Court Miscellaneous Proceedings Nos.562 of 1992 and 2084 of 1994 and held by Trustees appointed by them.

    And it is further stated in this application form that:

    The revenue of the Temple, including the revenue from the said fund of $50 million, will be applied in the repair and maintenance of the Temple.

  64. Those two statements tend to suggest that a withdrawal of the Funds less $50 million is being contemplated. The person who signed the acknowledgment of receipt of the application form seeking registration is described in the acknowledgment as “STI of Chinese Temples Committee”. So it is likely that the Committee is well aware that some such withdrawal is being contemplated. But as Mr Tang has said, the Committee may be waiting for the Court’s decision on the Secretary for Justice’s primary submission so that it may consider its position in the light of such decision.

  65. Even in the hands of the 1st and 2nd respondents as the managers and representatives of the Tso and the Clan whose members are the members of the t’ong Tsing Wan Kun, the Funds would, in the absence of effective withdrawal, still be under the control of the Chinese Temples Committee under s.7(1). And the Committee would be empowered by s.7(6) to require the transfer of the Funds to the Secretary for Home Affairs Incorporated.

  66. In our judgment, the legitimate interests of all concerned calls for a stay - but only a very limited one - of the order for the payment out of court of the Funds. We will revert in due course to this matter of a limited stay. Before that we will deal with the variations which we would make to the declarations made by the courts below in regard to the nature and ownership of the temple Tsing Wan Kun.

    VARIATION OF THE DECLARATIONS MADE BY THE COURT BELOW

  67. We would vary those declarations by declaring instead as follows:

    1. The temple Tsing Wan Kun and all its assets, including the Funds, are owned by the t’ong Tsing Wan Kun, the members of which t’ong are the members from time to time of the Tso and the Clan.

    2. The temple Tsing Wan Kun’s assets are, as they have been for centuries, devoted to the purposes of due observance of the customary ceremonies of the temple Tsing Wan Kun and of maintenance of its temple buildings and temple properties. They will remain so devoted unless and until the t’ong Tsing Wan Kun, proceeding in a manner which conforms with Chinese law and custom, withdraws them from devotion to those purposes. The t’ong Tsing Wan Kun’s proprietary rights in the temple Tsing Wan Kun’s assets are vested rights. Accordingly the t’ong Tsing Wan Kun is entitled to effect such withdrawal at any time provided that it does so in a manner which conforms with Chinese law and custom.

    3. The temple Tsing Wan Kun is a Chinese temple within the scope of the Chinese Temples Ordinance, and the Ordinance applies to it.

    LIMITED STAY OF THE ORDER FOR PAYMENT OUT

  68. We revert now to the matter of a limited stay of the order for payment out of court of the Funds. Save to the extent of an immediate payment out of $40 million in respect of costs on the basis explained later on in this judgment, we would stay the order for payment out of court of the Funds until 30 days after service of a copy of the Court’s judgment in the present appeal by the Tso and the Clan’s solicitors on the Chinese Temples Committee or further order in the meantime made on application to the Court of First Instance of the High Court.

    COSTS HERE AND BELOW

  69. The Court has been addressed on costs on two hypotheses. The first hypothesis is that of the primary issue of the ownership of the temple Tsing Wan Kun being resolved in the Secretary for Justice’s favour (which has not eventuated). The second hypothesis is that of such issue being resolved in the Tso and the Clan’s favour (which has eventuated).

  70. The only parties before the Court of Appeal and this Court were the Tso and the Clan on one side and the Secretary for Justice on the other. But there were further parties before the judge. What we do about costs of course does not affect the orders for costs in regard to those other parties.

  71. As between the Tso and the Clan on one side and the Secretary for Justice on the other, the judge awarded them their costs of their claim against her and their costs of her counterclaim against them. Having so ordered, the judge then directed that all the costs which the Secretary for Justice had to pay the Tso and the Clan and all of her own costs be paid on a common fund basis out of the funds lodged in court in the name of Tsing Shan Monastery.

  72. That direction by the judge is plainly wrong. A trial concerning a scheme of arrangement in respect of Tsing Shan Monastery is pending, and the beneficial ownership to the funds lodged in court in the monastery’s name has not yet been decided. It cannot be right to make such a direction against that - or indeed any other - fund without first identifying and then hearing all relevant parties. So that direction by the judge cannot be supported. Very properly, the Secretary for Justice has indicated to the Court, through Mr Ambrose Ho SC who dealt with the issue of costs on her behalf, that she does not seek in any circumstances to support it.

  73. Mr Ho’s submission on what the proper orders as to costs would be in the event of the primary issue of the ownership of the temple Tsing Wan Kun being resolved in the Tso and the Clan’s favour is as follows. There should be no order as to costs against the Secretary for Justice in favour of the Tso and the Clan (apart from orders made before trial). And there should be a direction that all of the Secretary for Justice’s own costs be paid on an indemnity or common funds basis out of the Funds (i.e. the funds lodged in court in the name of the temple Tsing Wan Kun).

  74. In so submitting, Mr Ho harked back to the position of the Secretary for Justice’s predecessor, the Attorney General, first at common law and then under the Crown Proceedings Ordinance, Cap. 300. The common law rule was that the Attorney General never had to pay costs whatever the outcome of litigation in which he was involved in the performance of his public duty. The Crown Proceedings Ordinance, while introducing the courts’ power to award costs against the Attorney General, left the courts with a discretion to spare him from having to pay costs even if he lost in litigation in which he was involved in the performance of his public duty. This discretion enures for the protection of the Secretary for Justice’s position in appropriate circumstances.

  75. In the present litigation, Mr Ho’s submission continues, the Secretary for Justice was representing the Government in its capacity as parens patriae by testing the Tso and the Clan’s claim through the t’ong Tsing Wan Kun to the temple Tsing Wan Kun and its assets. This was done in the public interest. And since the primary issue was the ownership of the temple, her own costs ought to come out of its funds i.e. the Funds.

  76. Mr John McDonnell QC for the Tso and the Clan asks that his clients be given their costs against the Secretary for Justice. And he resists any direction which would enable her to tap the Funds which after all belong to the temple to the ownership of which his clients have made good their claim over her opposition.

  77. The pivotal factor, as we see it, is that this was essentially adversarial litigation in which private property owners have made good their claim to private property. In our judgment, the orders as to costs now to be made must be dictated by that factor subject only to some allowance for the fact that, even in the absence of any opposition by the Secretary for Justice, it would still have been necessary for the Tso and the Clan to come to court and satisfy a judge of the correctness of their claim. Even that would have involved a long and expensive trial. But it would of course not have been nearly so long or expensive as this one, which lasted almost 100 days when one includes the aborted trial before the late Mr Justice Jerome Chan. And of course there would have been no appeal by the Secretary for Justice to the Court of Appeal let alone to this Court.

  78. We consider it right that the Secretary for Justice, having lost on the Tso and the Clan’s claim and on her counterclaim, should pay them most of the costs of that claim and that counterclaim. We think that 80% would be the appropriate percentage.

  79. As far as the appeal to the Court of Appeal and the one to this Court are concerned, we think that the Secretary for Justice should pay the Tso and the Clan their costs. The fact that the Court of Appeal rightly reversed the judge on the issue of the Chinese Temples Ordinance’s applicability ought not, in our view, to affect costs.

  80. Costs against the Secretary for Justice in favour of the Tso and the Clan ought in our view to be taxed on a party and party basis if not agreed.

  81. We see no justification for directing that any costs which the Secretary for Justice has incurred or is ordered to pay should come out of the Funds.

  82. We would accede to Mr McDonnell’s submission that $40 million be paid out of the Funds forthwith to the Tso and the Clan’s solicitors on account of and for the purpose of meeting the Tso and the Clan’s own costs pending recovery from the Secretary for Justice. However the position may eventually develop as between them and the Chinese Temples Committee, such an immediate payment out is only fair, they having been put to much expense in establishing their proprietary rights. When costs are recovered from the Secretary for Justice the Funds are to be reimbursed the $40 million paid out on account of and for the purpose of meeting costs.

  83. The Court of Appeal, we should mention, has not made any order as to the costs of the appeal to it. It meant, we understand, to leave those costs to be dealt with by this Court.

  84. For the reasons which we have given, we would order and direct as follows in regard to costs here and below:

    1. Save for orders made before trial, the orders and direction made by the judge on costs as between the Tso and the Clan on one side and the Secretary for Justice on the other are set aside. They are replaced, both in regard to the trial before Yam J and the aborted trial before Jerome Chan J, by an order that the Secretary for Justice do pay the Tso and the Clan 80% of their costs of their claim against her and 80% of their costs of her counterclaim against them, all such costs to be taxed on a party and party basis if not agreed.

    2. The Secretary for Justice do pay the Tso and the Clan their costs of the appeal to the Court of Appeal and of the appeal to this Court, such costs to be taxed on a party and party basis if not agreed.

    3. There be common fund taxation of all of the Tso and the Clan’s own costs, the costs so taxed to be paid out of the $40 million mentioned in item iv below.

    4. Subject to item v below, $40 million be paid out of the Funds forthwith to the Tso and the Clan’s solicitors on account of and for the purpose of meeting the Tso and the Clan’s own costs, taxed on a common fund basis, pending recovery from the Secretary for Justice (the stay of the order for payment out of the Funds being subject to such $40 million payment out and the stay therefore being only on the Funds less $40 million).

    5. When costs are recovered from the Secretary for Justice the Funds be reimbursed by the Tso and the Clan the $40 million paid out on account of and for the purpose of meeting costs; and if any reimbursement is made within the duration of the stay the money so reimbursed also be subject to the stay for its duration.

    CONCLUSION

  85. We would vary the declarations, grant a limited stay and deal with costs as indicated above, but would otherwise dismiss the appeal.

    Mr Justice Ribeiro PJ

  86. I agree with the joint judgment of Mr Justice Bokhary PJ and Mr Justice Chan PJ.

    Mr Justice Silke NPJ

  87. I have some reservation over construing the Chinese Temples Ordinance at this stage but otherwise agree with the reasoning in the joint judgment of Mr Justice Bokhary PJ and Mr Justice Chan PJ. I agree with the result reached in their joint judgment.

    Lord Millett NPJ

  88. I agree with the joint judgment of Mr Justice Bokhary PJ and Mr Justice Chan PJ.

    Mr Justice Bokhary PJ

  89. The Court unanimously varies the declarations, grants a limited stay and deals with costs as indicated above, but otherwise dismisses the appeal.


Cases

Tang Kai-chung v Tang Chik-shang [1970] HKLR 276; Winfat Enterprise (HK) Ltd v Attorney General [1985] AC 733; Bumper Development Corporation v Commissioner of Police of the Metropolis and Others [1991] 1 WLR 1362; Re Lau Wai Chau (2000) 3 HKCFAR 98

Legislations

Chinese Temples Ordinance, Cap 153: s.2, s.5, s.7, s.8, s.13, s.15

Peking Convention of 1898

Authors and other references

F.T. Cheng: " The Chinese Supreme Court Decisions” (1923)

The Lockhart Report, Hong Kong Government Gazette No. 26 of 28 April 1900

Stephen Selby: "Everything You Wanted to Know About Chinese Customary Law (But Were Afraid to Ask)” HKLJ (1991) 45

Holmes Welch: The Practice of Chinese Buddhism 1900-1950 (1967)

Modern Buddhism No. 4:27 (December 1950)

RepresentationS

Mr Robert Tang SC, Mr Patrick Fung SC and Mr Ambrose Ho SC (instructed by the Department of Justice) for the appellant, the Secretary for Justice.

Mr John McDonnell QC, Mr Edward Chan SC and Ms Isabella Chu (instructed by Messrs Miller Peart) for the respondents, the To Ka Yi Tso and the To Clan

Notes:-

[a] To Kan Chi & two others as Managers of the To Ka Yi Tso AND To Cheong Lam & four others as Representatives of the TO CLAN


all rights reserved