Shing Yuen Hing and Others v. Yu Wing Chung David and Another

__________

Coram : Hon. Penlington, Bokhary and Mortimer, JJ.A.

Date of Hearing : 1 December 1993

Date of Judgment : 1 December 1993

________________

J U D G M E N T

________________

Mortimer, J.A.: The plaintiffs and the defendants are members and representatives of voting members of the Hong Kong Judo Association ("HKJA"). At an election of officers of the Association which was held on 21st June 1993, disputes arose. The plaintiffs were ruled ineligible to stand for office; the defendants were elected and afterwards proceedings were commenced by the plaintiffs challenging the validity of the election and the actions of the 2nd defendant as chairman at the EGM.

2. On 22nd July the plaintiffs applied for and obtained from Deputy Judge Yam an interlocutory mandatory injunction, requiring the defendants to convene another EGM on 12th August and hold elections for the 12 positions claimed with conditions. At the same time the judge refused the plaintiffs' application for other orders designed to prevent the defendants from acting in the HKJA's affairs. The defendants appealed and on 30th July Nazareth J.A. granted a stay pending this appeal. The defendants now appeal to set aside the judge's order and ask for directions for an early trial.

3. The plaintiffs ask for the judge's order to be maintained, and also cross-appeal for further orders restraining the defendants from acting on behalf of the HKJA; holding themselves out as representatives of it and dealing with its assets; and also for an order restraining the defendants from electing or admitting any new members. Finally they also ask for an early trial.

4. At this hearing issues between the sides have narrowed because on the application for an order preventing the defendants from admitting or electing new members, Mr Cheung for the defendants informs the court that an undertaking providing for this was given before the judge although it was recorded erroneously. This does not matter because the undertaking has been repeated before this Court.

5. The primary issue is whether or not the judge was plainly wrong in making the order.

6. I turn briefly to the reasons given by the judge. He appreciated rightly that any interim mandatory injunction can only be made in the most exceptional circumstances. He found that there had been little dispute that there were serious issues to be tried in relation to the election - the result of which would decide its validity or otherwise. Having considered the balance of convenience he decided that it was "well balanced on both sides" and that he was inclined to maintain the status quo by refusing to grant the injunction sought. However, he was attracted by the application for a new election on the basis that both sides said that they had the majority support of the Association and that this matter ought to be "sorted out as soon as possible" and that any delay would not be in the interests of the Association.

7. He had heard submissions about the effect of the uncertainty brought about by the proceedings. He decided that it would be just and convenient that "a new nomination should be held in order to reflect the true wishes of the Association". He added:

"The Plaintiffs are desirous of such a new election and the Defendants said they are not afraid of such an election, it is just logical and sensible to order an election to take place as one of the supervising power of the Court in dealing with a dispute such as the kind before the Court."

8. Mr Chow, for the plaintiffs, supports the making of the order

on a number of grounds. He submits that this is a necessary order, in accordance with the merits and the decision of the judge that the plaintiffs had a high probability of success. He refers to a passage of the judge's reasons where he said:

"Mr Cheung has not submitted to my satisfaction why the failure to circulate their written consents would not render their nominations irregular and therefore void. I am persuaded by Mr Bartlett that there is no real defence put forward in respect of the Defendants' irregularity."

Based upon that decision - on the evidence before him - the judge decided to take this most unusual course.

9. Mr Chow seeks to support the order in a number of other submissions with which in the particular circumstances it is not necessary for this Court to deal. The reason is this. The judge was faced with this dispute. He had to consider, of course, the merits. He decided that there were real issues to be tried. He had to consider then what was just and convenient between the parties - as he puts it the balance of convenience. No court should make an interlocutory mandatory injunction unless it has no choice in the matter and unless justice between the parties makes the order necessary - I am tempted to say absolutely necessary - so that it cannot find any other way of dealing with the matter properly. In this case there were ways in which the judge could easily have balanced justice and convenience between the parties and maintained the status quo satisfactorily. He could have done it simply by accepting the undertaking from the plaintiffs that they could not admit any new members. This would satisfy the other party who were afraid that the defendants who were in fact, but not necessarily in law, elected would build up a power base by admitting members who were favourable towards them. That was one of the major disputes.

10. By means of that and the order for an early trial so that the issues concerning the election could be resolved at the earliest moment, the judge could have easily balanced the convenience and justice.

11. The order he in fact made had considerable drawbacks. Far from making the matter more certain, it seems to me, that he made the matter much more uncertain. It involved a further election; perhaps a change of the executive committee which, under the order made, could only survive up to the trial when the issues would be decided as to the validity or otherwise of the original election. The judge seems to have thought that by making the order he would avoid that dispute and that a resolution would be achieved. Of course, this could not be the case.

12. In these circumstances, for my part, I am of the opinion that the judge in making the order was plainly wrong. He failed to take a course which was simple and fairly obvious, although it must be said that he did it for the best of reasons. He thought by making this order he would resolve the disputes between the parties. Unfortunately, he could have only done that if both parties had agreed to hold new elections and to abide by them as a resolution of their dispute. For my part, I would allow the appeal.

13. So far as the cross-appeal is concerned, the issues are simply these - they have not been seriously pursued - whether the orders restricting the defendants from acting on behalf of the Association and dealing with their assets ought to be made. Clearly there are no grounds upon which these orders should be made. The Association has to be run between now and trial. It is not suggested by the plaintiffs that there has been any mismanagement of the Association. The Association has continued to be run and managed and the only evidence of any suggested malpractice is the election of members who are inclined to support the defendants. In these circumstances I would make no order on the cross-appeal but I would accept the undertaking given.

14. The Court should make directions for an early trial. In the circumstances I would propose the following: there should be 7 days for an exchange of lists of documents; 7 days thereafter for inspection. The case should be set down in the running list with 3 days reserved. We should hear counsel further about the length of time for setting down but there being already a number of affidavits which have been exchanged between the parties, for my part, I would not order the exchange of witness statements.

Bokhary, J.A.: Uncertainty is bound to remain until after the trial. Such uncertainty cannot be removed. Indeed, it would be increased by an order such as the one which the learned Deputy Judge made. Two things are needed. One is an early trial. The other is an interim relief, by way of injunction or to preserve everyone's position meanwhile, to the extent that it is necessary and legitimate to preserve the same.

15. The problems which confront the Hong Kong Judo Association are unfortunate. But they are not unique. The courts can provide an effective remedy in such situations. That is to be done not by elaborate orders but rather by simplicity and expedition. The order made by the learned Deputy Judge was of course well motivated. Unfortunately, however, it was counter-productive.

16. I agree with the orders proposed by my brother Mortimer and would allow the appeal to that extent accordingly.

Penlington, J.A.: I would also allow this appeal and I agree with the orders proposed.

I also join in with all that has been said by Mortimer J.A. and have no doubt that the trial judge was acting with the best of intentions to solve this problem and I have no doubt that the order he proposed did seem to him to be the best way of resolving this very unfortunate issue. But in the absence of agreement from both sides that this action should be abandoned and that there simply be fresh elections it was unfortunately not the proper course to take.

Representation:

Mr Timothy Cheung (M/s S.K. Wong & Lee) for Appellants/Defendants

Mr Anderson Chow (M/s Clyde & Co) for Respondents/Plaintiffs