Lai Chik Kun Michael and Others v. The Baptist Convention of Hong Kong and Another

HCA 2741/2018

[2025] HKCFI 647

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2741 OF 2018

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D E C I S I O N

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BACKGROUND

1.This is the hearing of the Plaintiffs’ Summons filed on 19 December 2024 for an order that the 2^nd Defendant (“SJ”) do attend and participate in the trial of the action scheduled to be held from 5 October 2026 with 9 days reserved. This is opposed by SJ. The 1^st Defendant (“BCHK”) is neutral.

2.The Plaintiffs are all alumni of Pui Ching Primary School (“School”) and the Pui Ching Middle School (“Middle School”) (collectively, “Pui Ching Schools”).

3.BCHK is a company limited by guarantee and a charitable institution. It serves as the sponsoring body of and exercises overarching management over the School. It is also the operator of a tertiary education institute formerly known as Pui Ching Academy, but subsequently renamed Academy of the Baptist Convention of Hong Kong.

4.SJ was joined as a party in his capacity as parens patriae pursuant to the order of Wilson Chan J dated 11 March 2022.

5.The Plaintiffs’ claims are for recovery of donations made by them and various sums, costs and expenses incurred by the School which should properly be borne by BCHK. The Plaintiffs allege that BCHK holds the funds in the School’s accounts on charitable trust; that BCHK had breached its duties as trustee by misapplying the School’s funds; and that BCHK is liable to pay equitable compensation for breach of trust.

6.The issues disclosed on the pleadings, relevant to the present Summons, are:

(1)  Whether there existed any charitable trust; and

(2)  Whether BCHK breached their duties as trustee.

7.The Re-Re-Re-Amended Statement of Claim does not claim any relief against SJ. SJ’s Defence filed on 21 June 2022 largely does not admit the facts pleaded by the Plaintiffs as SJ does not have personal knowledge of those facts.

8.SJ all along has taken a neutral stance. He sought to be excused from the trial by 2 letters dated 15 November 2024 and 4 December 2024 respectively (“the 2 Letters”).

9.The Plaintiffs find SJ’s position “somewhat surprising”, hence they took out this Summons.

LEGAL PRINCIPLES ON SJ’s ROLE IN CHARITY PROCEEDINGS

10.SJ acts as the protector of all charities. Where the trustees of a charity might bona fide but wrongly exercise the powers given to them, SJ would be entitled to intervene if he thought fit; but it would be purely a matter in his discretion alone to determine whether he would take any proceeding or any step in a proceeding or not: In re Carnarvon Harbour Acts, 1793 to 1903, Thomas v Attorney-General [1937] Ch 72 at pp.77-78, Farwell J.

11.It may be sufficient if SJ agrees to be joined as a neutral defendant rather than in substitution for the party making the argument for the charitable trust: Tudor on Charities, 11^th ed, 2023, §16-053.

12.Examples in which SJ’s participation at the trial is suitable are where maladministration has allegedly occurred, the trustees are in dispute, a question as to the charitable status of a gift or trust has been raised, or a scheme is proposed: 釋照月 v SJ and others [2022] HKCFI 2293, §22, B Chu J.

13.Although his power (and on appropriate occasions the duty) to intervene is beyond question, there may often be occasions when (on grounds of expense to public funds, or uncertainty as to the outcome or otherwise), SJ may perfectly properly decide not to intervene: Scott and others v National Trust for Places of Historic Interest or Natural Beauty and another [1998] 2 All ER 705, p.714g-j, Robert Walker J.

14.There must be an element of proportionality, as between the perceived problem and the cost of SJ attempting to resolve it: Tudor on Charities, 11^th ed, 2023, §13-017.

15.There seems to be no hard and fast rule on when SJ may be excused from attendance at a hearing. Despite its age, this principle continues to hold good: that the Court must, in the best exercise of its discretion and judgment, act in a manner best calculated to promote justice: Ware v Cumberlege (1855) 20 Beav. 503, pp.511, Sir John Romilly, MR.

ANALYSES

16.It can be seen from the written submission of Mr Lok, counsel for the Plaintiffs, that he relies much on the stance of SJ before Wilson Chan J, to support this Summons. It is said that SJ envisaged then that he would participate and render assistance in these proceedings.

17.However, I do not find sufficient bases to order SJ to attend and participate in the trial for the following reasons given by SJ.

18.Firstly, there is no dispute that no relief or remedy is claimed against SJ. This is different from the situation in 釋照月 where relief was sought against SJ to temporarily control the Tong and to have better administration of the trust (§8 of the Decision).

19.If the Plaintiffs are successful after trial, there will be declarations and a money judgment against BCHK. That does not require SJ to supervise its execution. Any involvement of SJ will, at best, be after judgment, if the Court declares that there is a charitable trust, when SJ may have to ensure that the charitable trust is properly administered.

20.Secondly, like any party’s attendance, SJ’s role is to assist the Court on the law and the facts. However, the Plaintiffs and BCHK, are legally represented. On questions of law, Mr Lok is simply unable to show what point SJ may be able to advance that the Plaintiffs and BCHK would not be able to. On questions of facts, indisputably SJ has no personal knowledge of the facts to enable it to eg cross-examine the witnesses. The presence of SJ will only duplicate the efforts of other counsel.

21.This is very different from the situation in Li Kim Sang Victor v Chen Chi Hsia [2016] 1 HKLRD 1118, §18, where one party was a litigant in person. There, SJ produced an opening submission on the legal principles applicable to charitable interests to assist the Court (at §18). Even in that scenario, where the issue was one of existence of a charitable trust over land, SJ only attended on a watching brief.

22.Mr Lok points out that, in addition to the question as to whether a charitable trust exists, there are serious allegations as to misapplication of trust property. It was SJ’s own submission before Wilson Chan J that “the gravity of the allegations made under the Plaintiffs’ Charitable Trust Claim warrants [SJ’s] participation in these proceedings”. Participating at the trial will at least give SJ an opportunity to hear the evidence in relation to the internal management of the trust and to grasp a full and wider picture of any problems, no matter what the outcome of the Court’s finding of each of the issue will be: 釋照月, §51.

23.I am unable to see how these can advance the Plaintiffs’ case. The grave allegations of maladministration and mishandling of trust money, if established, will end up with a money judgment. The reliefs sought by the Plaintiffs do not anticipate SJ participating in eg the better administration of the trust in this case after hearing the grave allegations.

24.Thirdly, SJ’s involvement and participation in the trial will unnecessarily incur costs on public funds and/or the trust funds.

25.As Mr Leu, SGC, points out, SJ does not just serve one single charitable organization or one piece of litigation but many, and with different priorities. SJ needs to allocate resources to handle matters arising from all charitable institutions in Hong Kong from time to time which require his input and, sometimes, his consent. In reality there are human and financial restraints of DOJ when it comes to protecting numerous large and small charities and their litigation.

26.In this case, there is no certainty of outcome as to whether a charitable trust would be established. Just on documents alone, there are 311 items. Preparation for trial would consume time and limited public resources. Even if SJ may be able to recover costs from the trust fund, that would consume part of the trust funds to the detriment of the trust.

27.Mr Lok submits that the trial judge retains a wide discretion as to costs. What SJ refers to in the preceding paragraph indicates that SJ/DOJ may not even read the papers.

28.In my view, despite the judge’s discretion on costs, no party, including SJ, should incur costs unnecessarily. In the case of SJ, it is not only a question of public money to be incurred in the first place, but also manpower. I agree with Mr Leu that the role of SJ is not only a neutral guardian of charitable trusts but also one who uses and should use limited human and financial resources prudently.

29.Further, with respect to Mr Lok, it is not the function of the Court to supervise a party to ensure that he/she will read the file papers. Even if the Court were to compel SJ’s attendance at the trial, Mr Lok has not suggested how this could ensure that SJ/DOJ would read the papers.

30.Fourthly, based on the principle of proportionality, SJ believes that the limited assistance that he can render to the trial judge would not be proportional to the time, costs and resources to be incurred. I agree.

31.The current stance of SJ is not inconsistent with his position before Wilson Chan J. SJ has expressly reserved his “right to take part in these proceedings to such extent and in such manner (including taking a more active role) as may be required by her duty as parens patriae.” His current request to be excused from attending the trial is made after considering the 4 reasons analyzed above. It is an exercise of discretion made on proper and rational bases and should not be interfered with.

CONCLUSION

32.In view of the above analyses and the 2 Letters before Summons, excusing SJ’s attendance at the trial best promotes justice. The Summons is thus dismissed, with costs to be borne by the Plaintiffs.

33.On a nisi basis,

(1)  costs to SJ are summarily assessed at $57,441;

(2)  costs to BCHK are summarily assessed at $20,300.

34.I thank counsel for their assistance.

Mr Michael Lok, instructed by Sit, Fung, Kwong & Shum, for the Plaintiffs

Ms V. Wong of Or & Partners for the 1^st Defendant

Mr Brian Leu, Senior Government Counsel, of Department of Justice for the Secretary for Justice