LEE CHICK CHOI v. SOCIETY OF WINE EDUCATORS - HONG KONG CHAPTER AND ANOTHER

bjbj HCMP 1203/2013 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1203 OF 2013 BETWEEN LEE CHICK CHOI Plaintiff and SOCIETY OF WINE EDUCATORS 1st Defendant - HONG KONG CHAPTER HOUGHTON LEE 2nd Defendant Before: Deputy High Court Judge Whitehead, SC, in Court Date of Hearing: 10 September 2013 Date of Judgment: 10 September 2013 J U D G M E N T By originating summons dated 27 May 2013, the plaintiff seeks an injunction against the defendants in respect of the granting of an honorary title to a Mr Tommy Lam. In short, the plaintiff says that at a meeting held on 21 January 2013, the executive committee of the 1st defendant, hereinafter referred to as Ex-Co , resolved not to grant an honorary title to Mr Lam. However, in a later meeting of Ex-Co which took place on 31 March 2013, it was then resolved to grant the honorary title to Mr Lam. The plaintiff says that the 31 March meeting was void and invalid as it was not held in accordance with clauses 9, 19, 20 and 42 of the 1st defendant s constitution, and, furthermore, that the prior meeting held on 21 January and the decisions made thereat were final and conclusive. Hence, the plaintiff claims for an injunction to restrain the defendants from conferring the title of Honorary Adviser upon Mr Lam. By its summons dated 17 July 2013, the defendants seek to strike out the plaintiff s originating summons under Order 18, Rule 19 of the Rules of the High Court and the inherent jurisdiction of the court on the grounds that the same discloses no reasonable cause of action and that it is frivolous or vexatious or otherwise an abuse of process. On 26 July 2013, Madam Justice Au-Yeung ordered that the originating summons and the strike-out be heard together. Background The 1st defendant society was formed on 12 December 2012. It was registered in accordance with the provisions of section 5A(1) of the Societies Ordinance. The 2nd Defendant is its chairman. On 21 January 2013, five Ex-Co members of the society, including the 2nd defendant and the plaintiff, held an Ex-Co meeting at a restaurant. Three persons, including the plaintiff and the 2nd defendant, allegedly agreed not to give an honorary title to Mr Lam, whilst the other two members did not express an opinion. On 31 March 2013, another Ex-Co meeting was held of which the plaintiff said he was not notified. The evidence is that the plaintiff had by that time ceased to be an Ex-Co member, although he remained as a member of the society. The 2nd defendant attended this meeting as chairman, together with six Ex-Co members. At that meeting it was resolved, with six in favour and one abstention, that Mr Lam might use the title Honorary Adviser until the next AGM in 2015. This resolution was subject to Mr s acceptance. The relevant clauses of the Society s constitution The relevant clauses are as follows: - Clause 28: An executive committee is formed and shall be entrusted with the general management and carrying on of the activities and businesses of the SWEHK and shall have all powers in accordance with this constitution and resolutions at general meetings to do all such acts and things on behalf of SWEHK as it may consider necessary or desirable. Clause 29: The executive committee shall be composed of seven voting officers and a number of optional non-voting officers. Clause 33: Only voting officers can vote on resolutions during executive committee meetings. Clause 56: The executive committee may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit, and may determine the quorum necessary for the transaction of business. Clause 57: Unless and until otherwise determined by the executive committee, three voting officers present in person shall be a quorum. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. Clause 58: A voting officer may at any time and on the request of any voting officer, the secretary or the chairman, call a meeting of the executive committee. Notice of meetings shall be given to all officers, and notices shall be deemed to be duly given to an officer if it is given to him personally or by word of mouth or sent in writing to him at his last known email or address given by the officer to the executive committee for this purpose. Clause 61: The executive committee has by simple majority vote of the voting officers the right to exercise the following powers, but not limited thereby and not contrary to other clauses of the constitution to: create a new class of memberships. ........................................................................................................ Mr Lee relies in his application upon clauses 9, 19, 20 and 42. Clause 9 reads as follows: All general meetings other than AGM shall be called extraordinary general meeting ( Clause 19: Convening of extraordinary general meeting shall be notified by the executive committee to all members by emails at least 10 calendar days before such meeting. Clause 20: Every notice of meeting shall specify the place, the day and the time of the meeting and, in the case of special business, the general nature of such business.: Clause 28 I have already detailed. Clause 42: The office bearers and voting members, after the elections at general meetings, should sign some agreements with terms agreed among themselves to appropriately limit and distribute the liabilities amongst themselves. Just to be clear, Mr Lee also relies on clause 17: The executive committee may convene an extraordinary general meeting whenever they think fit. Discussion I have had regard to the multifarious affirmation evidence filed by the plaintiff and also to the evidence filed by the defendants. I have further had regard to the very helpful written submissions provided both by Ms Fong of counsel and indeed by the plaintiff, Mr Lee, and I have listened today to their oral submissions. I make the following findings. (1) As all seven Ex-Co members attended the meeting on 31 March 2013, there is no question of notice not validly given for this meeting. (2) At the relevant time, the plaintiff, although a member of the society, had ceased to be an Ex-Co member, and as such was not entitled to receive notice of this meeting. (3) The meeting of 31 March was validly convened and the business dealt with at the meeting was within the powers of the Ex-Co. (4) The clauses relied upon by the plaintiff are not engaged. They are applicable to an EGM, and I find that the meeting of 31 March was not an EGM. (5) Assuming that the resolution on 21 January 2013 was passed, there is no bar to the Ex-Co reaching a different resolution at a subsequent Ex-Co meeting being the one held on 31 March 2013. (6) The 1st defendant, as a registered society, is not a legal entity and cannot be sued. (7) The plaintiff pursues a standalone injunction without any discernible cause of action entitling him to substantive relief. It is in these circumstances that I come to consider the defendants application to strike out the originating summons. I am grateful to Ms Fong of counsel for reminding me of the well established principles applicable to such an application. I have no doubt that no reasonable cause of action is disclosed in this matter, and the claim is both frivolous and vexatious and otherwise an abuse of process. There will be an order to this effect. If I am wrong about this, I would in my discretion in any event have declined to grant an injunction. The proper way to challenge a resolution of the society is contained in clause 18 of the society s constitution, which reads as follows: Extraordinary general meetings shall also be convened by the executive committee upon the expressed requisition of at least two current professional members. Thus there being a recognised avenue to resolve this matter in accordance with the constitution, in my view an order of injunction in any event is not appropriate. (Submissions on costs) Ms Fong, counsel for the defendants, has made an application for costs on the indemnity basis. I am not persuaded that this is an appropriate case to award indemnity costs. Mr Lee has raised objection to the summary of costs presented by Ms Fong, such costs that I am asked to deal with by way of summary assessment. Mr Lee says that the costs are inflated in that there is a certain degree of repetition of work, and further points out that this case might have been dealt with by way of mediation, but that the defendants refused to co operate in mediation. Ms Fong counters this and has presented me with some emails which appear to establish that both parties did in fact make some effort to appoint a mediator to settle their disputes. This came to nothing in the end, which I note is hardly surprising, given the nature and circumstances of the dispute between the parties. In the event, I think both parties have made some effort towards mediation, and the absence of mediation in this case does not in any way impact upon my decision as to this summary assessment of costs. The defendants claim a total of $167,780 in their statement of costs for summary assessment. The bill before me and the explanation of the work done appears to me to be a reasonable one. However, as indicated, I am not awarding costs on an indemnity basis, and thus I intend to make a reduction to reflect this. Doing the best I can, I assess costs in this case to be paid by the plaintiff to the defendants in the sum of $130,000. (Discussion re time to pay) I make an order that the plaintiff is to pay to the defendants a sum of $130,000 within the next 28 days. 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