The Trustees of the Union Church in Hong Kong v. The Senior Missionary in Hong Kong of the London Missionary Society

HCMP 1579/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1579 OF 2016

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J U D G M E N T

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1.The plaintiff as the Trustees of the Union Church in Hong Kong seeks the court’s determination on the proper construction of section 17 of the Union Church Incorporation Ordinance (Cap 1052) (“the Ordinance”).

Background

2.The Union Church in Hong Kong (“the Church”) was established in Hong Kong in 1844 by Rev James Legge.  ‌He was a member of the London Missionary Society (“LMS”) which was established in the United Kingdom (“UK”) in 1795 and incorporated in the UK on 24 October 1899.

3.LMS was an inter‑denominational missionary society formed as the Missionary Society in the UK in 1795.  It was subsequently merged with other missionary societies to form the Council for World Mission (“CWM”), a worldwide partnership of Christian churches.  In 1842 the directors of LMS decided to remove its Anglo‑Chinese college from Malacca to Hong Kong.  It was decided in 1843 that Rev James Legge should move to Hong Kong to superintend the work of the Anglo‑Chinese College and its Theological Summary.  Union Chapel was founded by Rev Legge in 1844 and it was later re‑named the Church.

4.In October 1911, the trustees of the Church decided to apply for incorporation.

5.In December 1911 the Trustees of the Union Church in Hong Kong were incorporated under The Union Church Incorporation Ordinance, 1911 (No 57 of 1911).  ‌This Ordinance was re‑published in 1923 and again in 1937 with minor amendments.  In 1950, it was re‑named the Union Church Incorporation Ordinance (Cap 318) (No 37 of 1950).  This was replaced in 1962 by the Union Church Incorporation Ordinance (Cap 1052) (No 6 of 1962), which was amended in 1974 (No 74 of 1974).

6.In 1997, the Union Church Incorporation Ordinance (Cap 1052) (amended in 1999) replaced the previous versions of the Ordinance and presently governs the Church.

7.The plaintiff as the Trustees of the Church is a body corporate with perpetual succession (section 3 of the Ordinance).

8.By section 6 of the Ordinance the plaintiff holds the property vested in it and all property subsequently acquired and any other premises which may be substituted therefor and all the other property of the Church for the charitable purposes set out therein.

9.The present premises of the Church is at 22A Kennedy Road, Hong Kong (“the Site”).  The Church’s buildings comprise of facilities for a sanctuary, fellowship hall, fellowship garden, classrooms, residence of the Church’s Minister, church office and certain ancillary facilities.  ‌The Church’s present buildings are used for the charitable purposes set out in section 6 of the Ordinance.

10.On the evidence, the Church originally occupied a church building built on Hollywood Road in 1845.  The Church was removed in about 1863/1864 to Staunton Street and in about 1889/1890 it was moved again to the Site.  In 1886 the then premises were assigned by Rev Legge to trustees “as a place for public worship and the preaching of the Gospel”.

11.The Church’s 1890 church building was totally destroyed during the Second World War.  The Church’s current building was built in stages after 1948 and is situated on the Site.

12.On the evidence, the Church’s building is between about 50 to 68 years old since its reconstruction after the Second World War and is in need ofsignificant renovation or rebuilding due to aging, wear and tear.  ‌Additionally, the Church also requires additional seating capacity which a new building would bring.

13.The Church has formulated a plan over many years to redevelopthe Site to a 22‑storey mixed‑use development comprising new church facilities and approximately 45 residential apartments and 60 car parking spaces (“the Proposed Redevelopment”).

14.In order to proceed further with the Proposed Redevelopment the Church decided that the best option was to seek co‑operation with a financially strong property developer in the redevelopment, in which the developer would take the construction and financing risks.

15.In furtherance of the Proposed Redevelopment:

(a)  In 1997 conditional planning permission was granted by the Town Planning Board.

(b)  From 2009 to 2015, a number of submissions of General Building Plans and amendments were made to the Buildings Department.  The most recent submission was approved on 17 December 2015                                   .  

(c)  In April and May 2012 and again in September 2013, the Churchreached out to various property developers in Hong Kong for the rebuilding works.  Eventually, the Church accepted a proposal from Henderson Land Development Co Ltd (“Henderson Land”) to work with the Church on the Proposed Redevelopment.

16.On 16 January 2014 the Church issued a letter to Henderson Development, which was counter‑signed by Henderson Development on 20 January 2014, attaching a non–legally binding term sheet (“the Term Sheet”) setting out the terms of the Proposed Redevelopment agreed among the parties.  

17.The main terms of the Proposed Redevelopment contained in the Term Sheet are:

(a)  Henderson Land will undertake the redevelopment of the Site and the Church’s building into a new building of approximately 7,782 square metres comprising:

(i) a basement with 40 car parking spaces for residential and church use;

(ii) a ground floor with 23 car / bus parking spaces and 5 motor cycle parking spaces for church use;

(iii) 22 floors above ground, with G/F to 5/F to be used as the new church facilities, and 6/F to 22/F will be built into 45 residential apartments.

(b)  Henderson Land will undertake all risk and bear all costs for the Proposed Redevelopment, and in return, Henderson Land will be entitled to the proceeds from the sale of 26 apartment units and 26 car parking spaces.

(c)  The Church will retain a total of 19 apartments of which 7 apartments will be reserved for church or governmental, institutional or community use.

18.By a further unsigned term sheet dated 6 May 2016, a condition was imposed by Henderson Land that the implementation of the Proposed Redevelopment was conditional upon the obtaining of the court’s declaration that the reverter in section 17 of the Ordinance will not be triggered by the implementation of the Proposed Redevelopment.  The Church has accepted this condition.

19.The Proposed Redevelopment is expected to take approximately5 years from the time the Church vacates the existing church buildings on the Site until the completion of the Proposed Redevelopment at which time the Church can return to the Site.  ‌During this period, the Church will continue to meet and worship in alternative premises to be provided by Henderson Land                              .  

20.On the evidence, Henderson Land and the Church are looking to secure a tenancy for the alternative premises at 18^th Floor, Sunlight Tower, 248 Queen’s Road East, Wanchai, Hong Kong or some other suitable premises(“the alternative premises”).  Henderson Land has also agreed to provide the Minister with temporary residential accommodation during the construction period.

21.At the annual general meeting of the Church held on 16 March 2014, a motion was passed by the members of the Church to authorize the Proposed Redevelopment with Henderson Land.  The motion was passed by a margin in excess of the two‑thirds majority required.

22.In order to avoid requisitions of title from future purchasers of the residential units in the Proposed Redevelopment and to satisfy the condition imposed by Henderson Land, the plaintiff applies for the declaration sought in the amended Originating Summons.

23.The defendant is the Senior Missionary in Hong Kong of the LMS which is a body corporate incorporated under the London Missionary Society Incorporation Ordinance (Cap 1033).

24.Rev Lee Ching Chee is currently the Senior Missionary.

25.In 1966 the LMS in the UK ceased to exist as a society in its own name and merged with the Commonwealth Missionary Society to form the Congregational Council for World Mission, which subsequently became the CWM in 1977 after a series of mergers with other missionary societies.

26.Despite the restructuring, the Senior Missionary remains a body corporate in Hong Kong under the London Missionary Society Incorporation Ordinance (Cap 1033).

The applicable principles

27.The applicable principles are well settled and not in dispute.

28.In interpreting a statute, the court’s task is to ascertain the intention of the legislature as expressed in the language of the statute.  ‌This isan objective exercise.  ‌The court is not engaged in an exercise of ascertaining the legislative intent on its own (HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at para 11, Li CJ).

29.The modern approach is to adopt a purposive interpretation.  The statutory language is construed, having regard to its context and purpose.  Words are given their natural and ordinary meaning unless the context or purpose points to a different meaning.  Context and purpose are considered when interpreting the words used and not only when an ambiguity may be thought to arise (Cheung Kwun Yin at para 12, Li CJ).

30.The purpose of a statutory provision may be ascertained from the Explanatory Memorandum to the bill, or from statements made by the responsible official of the Government in relation to the bill in the Legislative Council (Cheung Kwun Yin at para 14, Li CJ).

31.The proper starting point in statutory interpretation is to look at the relevant words or provisions having regard to their context and purpose (Leung Chun Ying v Ho Chun Yan Albert (2013) 16 HKCFAR 735 at para 12, Ma CJ).

32.The effect of statutory reverter clauses was considered by the House of Lords in Fraser and another v Canterbury Diocesan Board of Finance and another (No 2) [2006] 1 AC 377.

33.At paras 45 and 46, Lord Walker of Gestingthorpe summarised the following principles:

(a)  Charity law has for centuries required that a general charitable purpose (or intention) should be recognized and given effect to, even though some particular directions given by the charity’s founder are (or become) impracticable;

(b)  It is a well‑established principle of trust law that any provision determining or divesting an estate must be such that the court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the estate was to determine.  Reverter is an event, not a process (and if it occurs, it is automatic and irrevocable); and

(c)  The court should take a broad and practical approach in determining the question whether a charity has ceased to be used for the statutory purpose.

Section 17

34.Section 17 of the Ordinance provides:

“17. Property to be held in trust for London Missionary Society in certain events

In the event of the Corporation failing to use, occupy and enjoy the present buildings of the Church, or any other premises which may be substituted therefor, for the purposes mentioned in section 6, for a period of more than two years at any one time, then the Corporation shall hold the said premises with the erections and buildings thereon, and all moneys, goods and chattels then belonging to the Corporation, in trust for the London Missionary Society Incorporated under the London Missionary Society Incorporation Ordinance (Cap 1033), absolutely.”

35.The beneficiary of the reverter clause in section 17 is the London Missionary Society Incorporated under the London Missionary Society Incorporation Ordinance (Cap 1033).

36.The question to consider is whether the reverter clause in section 17 will be triggered by the Proposed Redevelopment so that the premises of the Church with the erections and buildings thereon, and all moneys, goods and chattels belonging to the Church are to be held in trust for the London Missionary Society Incorporated.

37.It was submitted by Mr Fung SC, for the plaintiff, and Mr Maurellet SC, with Mr Yu, for the defendant, that the reverter clause in section 17 will not be triggered by the Proposed Redevelopment.

38.The Ordinance was enacted in 1962 at which time the Church’s present buildings had been built. The words “present buildings of the Church” in section 17 must mean the Church’s existing buildings.

39.The event which triggers the operation of the trust in favour of the London Missionary Society Incorporated under section 17 is the event of the Church failing to use, occupy and enjoy the present buildings “or any other premises which may be substituted therefor” for the purposes mentioned in section 6, for a period of more than 2 years at any one time.

40.The purposes mentioned in section 6 are the charitable purposes mentioned therein, namely:

(i) for the purpose of a church for the public worship of God and for preaching the Gospel of the Lord Jesus Christ according to the principles and usages of Protestant Christians;

(ii) for the sole object of spreading the knowledge of Christ;

(iii) for the instruction of children and adults;

(iv) for religious and philanthropic purposes; and

(v) for the providing of a residence for the Minister of the Church.  

41.During the estimated 5 years’ period of the redevelopment of the Site under the Proposed Redevelopment, on the evidence, the members of the Church will continue to meet and worship at the alternative premises.

42.It is clear, in my view, that the alternative premises would be regarded as “any other premises which may be substituted therefor” under section 17.

43.I was also referred to what the responsible official of the Government said when moving the first reading of the Bill for the 1911 Ordinance.  The Hon Mr Pollock KC explained the purpose of clause 18 of the Bill (which was substantially the same as the present section 17 of the Ordinance).  He said that the clause:

“... has been inserted in the Bill providing that in the event of the discontinuance of public worship for two years, the buildings, all monies, goods and chattels pertaining to the Church shall be held in trust for the London Missionary Society.”

44.After the Proposed Redevelopment is completed, the Church will regain possession of the Site. The Church’s premises will only comprisethe portion of the Site designated for the Church’s use but will exclude the residential block which comprises the residential units and their parking spaces from which 26 units of apartments and their parking spaces are to be sold to Henderson Land.

45.After the Church moves back to the Site on completion of the Proposed Redevelopment only the Church’s premises, but not the whole of the new building, will be used for the purposes of the Church.

46.It is clear, on the evidence, that at no time will there be any discontinuance of public worship.

47.The substituted premises are mentioned as “any other premises which may be substituted therefor” in section 17.  It seems to me that the Church’s premises after the Church regains possession of the Site at the completion of the Proposed Redevelopment will be the “any other premises which may be substituted therefor” mentioned in section 17.

48.On a proper construction of section 17, it seems to me that the reverter clause creating a trust in favour of the London Missionary Society Incorporated will only be triggered if the Church fails to use, occupy and enjoy any part of its premises for the charitable purposes under section 6.  There is no requirement for the Church to use all or the whole of its premises for such purposes.

49.The solicitors for Henderson Development have raised two matters of concern:

(a) that the Church would be vacating the Site for more than 2 years during the Proposed Redevelopment; and

(b) that not all of the new building after the completion of the Proposed Redevelopment will be occupied by the Church.

50.In my view, there is nothing in the points raised by the solicitors for Henderson Development.

51.As to the first point, the fact that the Church would be vacating the Site does not mean that public worship will discontinue.  It is clear on the evidence that this will continue at the alternative premises.  ‌The alternative premises will be the “any other premises which may be substituted therefor” mentioned in section 17.

52.As I have said, the Church was first built on Hollywood Road in 1845.  It moved to Staunton Street in 1863/1864 and again in 1889/1890 to the Site.  Since the Church’s premises had already moved twice before the enactment of the 1911 Ordinance, it is highly unlikely that the legislature intended to create a trust in favour of the London Missionary Society Incorporated in the event of the Church vacating the Site.  As the Hon Mr Pollock KC said, clause 18 of the Bill was inserted to provide that in the event of discontinuance of public worship for 2 years, the trust would be created in favour of the London Missionary Society Incorporated.

53.As to the second point, it is clear that not all of the new building after the Proposed Redevelopment will be occupied by the Church.  But there is no requirement for the Church to occupy the whole or all of the new building.  The clear wording in section 17 is “any other premises which may be substituted therefor” and not the whole or all of the other premises which may be substituted therefor.  After the Proposed Redevelopment, the Church’s premises in the new building will then be the “any other premises which may be substituted therefor”.

54.As I have said, there will be no discontinuance of public worship at any time.

55.I am satisfied that the plaintiff is entitled to the declaration sought.

56.I grant the plaintiff a declaration that the implementation and completion of the Proposed Redevelopment, and the entering into of any agreement to grant or the granting of leases and/or licences in respect of the residential units and parking spaces of the Proposed Redevelopment (whether pursuant to the redevelopment arrangements with Henderson Land or otherwise), as outlined in the affidavits filed on behalf of the plaintiff herein would not trigger the operation of section 17 of the Union Church Incorporation Ordinance (Cap 1052).

57.Both Mr Fung and Mr Maurellet submitted that there should no order as to costs.  It seems to me that is the proper course to adopt.  I make no order as to costs.

58.It remains for me to thank counsel for their able assistance in this matter.

Mr Eugene Fung SC, instructed by Peter Yuen & Associates, for the plaintiff

Mr Jose Maurellet SC, leading Mr Jason Yu, instructed by Sidley Austin, for the defendant