Lock Tao Christian Association v. Hung Wai Chung

CACV000052/1974

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO.52 OF 1974

(On appeal from O.J. 2302/74)

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Coram: Huggins, McMullin & Pickering, JJ.

Date of Judgment: 16th December 1974.

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JUDGMENT

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Huggins, J.:

1. The Plaintiffs in this action are a Christian association who run a school and a clinic. It is with the school that we are concerned. The Defendant is a benefactor of this association and a member of the association, which, at one time, got into financial difficulties, and there was an agreement between the association and the Defendant whereby the Defendant was to become the supervisor of the school and was to put up large sums of money and to be responsible for collecting money for the development and running of the school. There was a somewhat strange provision of the agreement that she was to appoint the management committee whereas under the Education Ordinance the correct procedure is for the management committee to appoint any supervisor after the first. That agreement expired. The association was no longer satisfied that the five persons who had been the managers should continue and they passed a resolution which appointed four new managers along with the Defendant. Those four managers have not been registered with the Education Department and therefore their appointment has not taken effect. Nevertheless, the association, having had a disagreement with the Defendant, has sought, or now seeks, to remove her from having anything to do with the school. They took out a summons for an interlocutory injunction and after a brief hearing before the learned Chief Justice an order was made granting three injunctions. They restrained the Defendant from taking any part in the management of the two institutions to which I have referred the school and the clinic - restrained the Defendant from collecting fees from the students or from parents or guardians of the students or from visitors to the institutions and from removing any records, books, papers or equipment of any kind whatsoever and restrained the Defendant from holding herself out as a manager or person in charge of the institutions.

2. The case was fought before the learned Chief Justice on the basis that the Defendant was entitled to some kind of constructive or resulting trust and that as the beneficiary of that trust she was entitled to remain in possession of the premises, to be in the premises and to collect fees and so forth.

3. The Defendant has appealed to this Court against the interlocutory injunctions. Before us it has transpired that the association really had no ground for applying for these injunctions because the failure to register the new managers means that the supervisor and the previous managers are still in office under the terms of the Education Ordinance. As supervisor the Defendant is entitled to remain on the premises and to collect fees from the students. The position, as we see it, is that as supervisor and a manager the Defendant has the right to do the very things which the three injunctions restrain her from doing. Whether or not she has any right by virtue of her having contributed to the expenses of the association is an entirely different matter and one which, in the circumstances, we find it unnecessary to decide, although, speaking entirely for myself, I find it difficult to see that even if there is a resulting trust that gives the Defendant any right to be on the premises or to collect the moneys from the students, which, as I see it, is a matter which is within the powers of the management committee and the supervisor under the terms of the Education Ordinance. However, it is sufficient, in my view, for the decision of this case that, as I have said, the very terms of the injunctions are inconsistent with the appointment of this lady as a manager and supervisor.

4. We were asked to say that the fact that these proceedings have been brought presupposed the authority of a resolution asking solicitors to institute the proceedings, and thus far I go along with Mr. Bernacchi's argument, but he further says that we must assume a resolution which would in effect remove the Defendant from her position as manager and supervisor - in other words that no proceedings can be authorised by an association which could possibly fail. That is an entirely novel proposition and is not one with which I could agree.

5. In my view the circumstances are that this lady is entitled to do the very things which she has been restrained from doing and that the appeal must succeed and these injunctions be set aside and I would, for my part, order that the costs in the court below be awarded to the Defendant and that the costs of this appeal be costsin the cause.

6. What I have said so far related only to the school. The Defendant has indicated that she has no interest in continuing her association with the clinic and in so far as the injunctions relate to the clinic they should stand.

16th December 1974

Representation: