LAW CHIN PANG v. THE KARATEDO FEDERATION OF HONG KONG, CHINA LTD AND ANOTHER

HCA 529/2017

[2025] HKCFI 1345

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 529 OF 2017

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HCA 987/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 987 OF 2019

(Transferred from DCCJ 1694/2017 pursuant to the Order

of Master B. Mak of the District Court dated 7 May 2019)

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HCA 988/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 988 OF 2019

(Transferred from DCCJ 1695/2017 pursuant to the Order

of Master B. Mak of the District Court dated 7 May 2019)

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(Tried together pursuant to the Order of DHCJ H. Au-Yeung

dated 19 October 2023)

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JUDGMENT

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A.  INTRODUCTION

1.  This is the Judgment of the trial of 3 civil actions which have been ordered to be heard at the same time.  All these actions concern a policy of The Karatedo Federation of Hong Kong, China Limited (中國香港空手道總會有限公司) (“the Federation”) which reads:

“為鼓勵成績優異學員回饋所屬道場，所有香港代表隊、潛質運動員、初級培訓隊及青苗初級培訓運動員提出轉會後實施四個月「冷凍期」，完成後入隊需重新申請 。” [1]

(“the Policy”)

2.  In HCA 529/2017, Mr Law Chin Pang (who will be referred as “the 1^st plaintiff” in this Judgment) sues the Federation for having implemented the Policy on him which allegedly had caused him to lose his status as an “Elite Athlete” under the Sports Scholarship Scheme organised by Hong Kong Sports Institute (“HKSI”), and as a result has caused him loss and damage.  He also sued Mr Lee Yiu Kwan (on his own behalf and on behalf of all other members of Ken Go Kai Karate Do Hong Kong Headquarter (拳剛會空手道香港本部)), for having terminated his membership with Ken Go Kai wrongfully and without any valid justification and/or reasons, which in the end made it necessary for him to join another dojo (道場), and which in turn led to the application of the Policy by the Federation on him.

3.  The 1^st plaintiff and Mr Lee Yiu Kwan came to a settlement agreement shortly before the commencement of the trial, and as a consequence, the Federation has become the only defendant at the trial. 

4.  In HCA 987/2019 (which was transferred from the District Court), Ms Lo Sum Man, by her mother (“Ms Cheung”), sues the Federation for having applied the Policy on her.  This had led to the termination of her Elite Sports Scholarship Athlete Status and, as a result, she has suffered loss and damage.  Ms Lo will be referred to as “the 2^nd plaintiff” in this Judgment.

5.  In HCA 988/2019 (which was also transferred from the District Court), Ms She Ching, by her father (“Mr She”), sues the Federation for applying the Policy on her.  Like the situation faced by the 2^nd plaintiff, this had led to the termination of her Elite Sports Scholarship Athlete Status and, as a result, she has suffered loss and damage.  Ms She will be referred to as “the 3^rd plaintiff” in this Judgment.

B.  BACKGROUND

6.  The undisputed/indisputable background may be summarised as follows.

B1.  Management of the Federation

7.  The Federation is a Hong Kong company limited by guarantee, being operated in accordance with its Memorandum of Association and Articles of Association (“the Articles of Association”).  It is a National Sport Association entrusted with the sole governance of the sport of karate in Hong Kong.

8.  Clause 3 of the Federation’s Memorandum of Association, insofar as it is relevant to the present proceedings, set out, inter alia, the following 2 objects:

(1)  to promote and develop the true art and spirit of karatedo for self-defence in Hong Kong;

(2)  to establish and promote good standards of practice, to repress malpractice, to settle disputed points of practice and to decide all manner of questions of usage or courtesy between or among the participant(s) of karatedo.

9.  According to the Articles of Association, the Federation’s management is entrusted to the General Committee (Article 17) which shall be responsible for organizing and transacting all business of the Federation pursuant to its objects (Article 19).  Questions arising at any meeting shall be decided by a simple majority on show of hands (Article 28).

10.  For effective management, Article 34 of the Articles of Association empowers the General Committee to appoint sub-committees as it considers necessary and to delegate in writing any such sub-committee any of its powers and duties.  Article 1 further stipulates that any reference to the General Committee in the Articles of Association would include a reference to any properly constituted sub-committee appointed by the General Committee.

11.  The Coaching Committee was a properly constituted sub-committee appointed by the General Committee pursuant to the above-mentioned power.  At the material time, the Coaching Committee was headed by the Coaching Director (教練總監) – Mr So Chi Kwong (蘇志剛) (“Mr So”).

B2.  The passing and the promulgation of the Policy

12.  According to the Coaching Committee minutes (“the CC Minutes”), the Coaching Committee had held a meeting on 18 July 2013 (“the CC Meeting”). The CC Minutes read:

“本委員會於7月16日收到正德館負責人趙xx女士電郵有關中止譚xx會籍及所發証書，教練總監指出由於譚的會籍已被所屬道場中止，其在總會之會籍亦隨之失效，而所有初級培訓、代表隊或潛質運動員最初進入初級培訓隊時均需得到所屬道場負責人推[薦] ，譚現在推[薦]已失效並應立即暫停其代表隊隊員身份，此結論獲與會委員一致通過。

杜永成先生指出，為鼓勵成績優異學員回饋所屬道場，建議日後所有初級培訓、代表隊或潛質運動員提出轉會後實施四個月 ‘冷凍期’，完成後入隊需重新申請，此提議獲與會委員一致通過並建議提交執委會。

[…]”[2]

13.  The General Committee then convened a meeting on 30 August 2013 (“the GC Meeting”), and the proceedings of which had been recorded in a set of meeting minutes (“the GC Minutes”).  Item No.8 of the GC Minutes read:

“教練總監蘇志剛先生手上匯報譚xx事件。

根據二零一三年七月十八日教練委員會會議紀錄 ，蘇志剛先生提出「建議日後所有初級培訓、代表隊或潛質運動員提出轉會後實施四個月 ‘冷河期’，完成後入隊需重新申請。」

[…]

兩項提議均由教練委員會於二零一三年七月十八日教練委員會上一致通過。”

14.  The Circular was then issued in the name of the Federation by Mr So as the Coaching Director.  It reads:

“有關香港代表隊、潛質運動員、初級培訓隊及青苗初級培訓轉會事宜

中國香港空手道總會有限公司執委會於二零一三年八月三十日的第十次執行委員會會議上就有關二零一三年七月十八日教練委員會會議紀錄中， 一致通過由即日起執行以下決議案：

1) 為鼓勵成績優異學員回饋所屬道場，所有香港代表隊、潛質運動員、初級培訓隊及青苗初級培訓運動員提出轉會後實施四個月「冷凍期」，完成後入隊需重新申請 。”

15.  It is noted that, surprisingly, apart from 香港代表隊 (National Squad Members), 潛質運動員 (Potential Athletes) and 初級培訓隊 (Preliminary Athletes), the Policy was also said in the Circular to be applicable to 青苗初級培訓運動員 (Feeder Athletes) (collectively, “the Targeted Athletes” [3]). This was apparently neither proposed nor discussed, not to mention approved, in the CC Meeting or in the GC Meeting at all.  Be that as it may, such a discrepancy would not affect the outcome of these actions, as the plaintiffs accept for the purpose of these actions that they were covered by the Policy as Elite Athletes.

B3.  Membership with the Federation

16.  Article 7 of the Articles of Association provides that there are different classes of members in the Federation.  For the purpose of the present proceedings, the relevant types of membership are Voting Members, Full Members and Junior Members.

17.  Voting Members are entities with a karate dojo (道場 – a training venue) and a supervising karateka qualified at 2^nd Dan or above (Karate Master).  Article 1 of the Articles of Association requires any dojo to have at least 11 Full Members so as to qualify as a Voting Member. The voting right belongs to the dojo representative (道場代表).  Every dojo registered with the Federation is affiliated with a Karate Society[4]. A Karate Society may have more than one affiliated dojo. Each Karate Society is recognized by the Federation as being governed by the decision maker (決策人).

18.  Full Members are individual adult members of the Federation.  To become a Full Member, the adult is required to join a Voting Member and pay the Federation an annual membership fee of $80. The membership identity of a Full Member is registered with the Federation not just as a particular person but as a person of a particular dojo. Whenever a Full Member changes his affiliated dojo, his identity changes from being a person of the old dojo to a person of a new dojo. There would be a new membership whenever a Full Member changes his affiliated dojo, and as a result, he is liable to pay the $80 annual membership fee under the new membership for the rest of the same year, even if he has already paid annual membership fee for that same year under his old membership.

19.  The Federation’s Full Members are eligible to enjoy different privileges such as attending karate seminars, coach training courses, referee training courses, and participating in local competitions.

20.  Full Members may also be endorsed by the Federation to join the Elite Training Programme organized by HKSI.

21.  Junior Members (who are individuals under the age of 18), enjoy similar privileges but require parental consent.

22.  At the material times, the 1^st plaintiff was a Full Member of the Federation whereas the 2^nd and 3^rd plaintiffs were Junior Members.

B4.  The Elite Training Programme of HKSI

23.  The Elite Training Programme of HKSI (“the Elite Training Programme”) is designed by the HKSAR Government to support eligible athletes through HKSI as the delivering agent.  HKSI devises sport training systems for elite athletes of Hong Kong to pursue excellence in the international sporting arena.  To this end, it provides a comprehensive range of support for elite athletes of karate and other designated sports.  Under the Elite Training Programme, eligible athletes are entitled to receive a monthly Elite Training Grant (“ETG”) and other training supports such as accommodations, meals, coaching and opportunities for overseas trainings and competitions, etc.

24.  In order to take part in the Elite Training Programme, a sport needs to be identified by the Government as a high performance sport in the first place. The corresponding National Sport Association would then be entitled to endorse suitable athletes to participate in the said Programme. Athletes enrolled in the Programme are commonly described as “Elite Athletes” (精英運動員).

25.  An Elite Athlete obtains corresponding elite status based on his/her past achievements in overseas competitions.  For the sport of karate, at the material time, the different categories of elite status for adult athletes in descending order are Elite A, Elite B+, Elite B, Elite C and Senior Squad.  The different categories of status for Elite Athletes who are still minors are Junior A, Junior B, Junior C and Junior Squad.

26.  Those in the higher categories (highest being “Elite A” for adult athletes and “Junior A” for junior athletes) receive more grants than those in the lower categories (lowest being “Senior Squad” for adult athletes and “Junior Squad” for junior athletes).

27.  HKSI’s evaluation of an athlete’s performance is principally based on his/her achievements in tournaments, having regard to the standard of the tournament, the number of participating countries/regions and the number of participants in the athlete’s competing event as well as the ranking achieved by the athlete.

28.  Karate has been recognized as a high performance sport since 1 April 2009.  The Federation, as the corresponding National Sport Association, has assumed the exclusive power to endorse suitable karate athletes for taking part in the Elite Training Programme since then.

29.  The provision under the Elite Training Programme is for a period of 12 months beginning on 1 April based on an agreement between HKSI and the individual athlete. Re-enrolment in the Elite Training Programme with ETG for a further 12 months requires fresh application from the athlete in November. HKSI’s approval depends on inter alia the athlete’s achievements in overseas tournaments and the continued support from the Federation, whose endorsement of an athlete’s enrolment in turn depends on the endorsement of the karate master of the Karate Society to which the athlete is affiliated.

30.  The Federation also runs its own training initiatives: the Preliminary Training Programme for those over 16 years old (“Preliminary Athlete”) (初級培訓運動員) and the Feeder Training Programme for those under 16 (“Feeder Athlete”) (青苗初級培訓運動員). A person may be selected to join the Preliminary Training Programme after winning a top five spot in a local competition organised by the Federation.  As far as the Feeder Training Programme is concerned, a person may be enrolled through the nomination of a dojo.

31.  On top of the aforesaid, an athlete may also be recommended by the National Sport Association to take part in HKSI’s training as a Potential Athlete (潛質運動員).  A Potential Athlete is not entitled to any ETG but may receive other subsidies if he attains more than 10 hours’ training with HKSI per week.

B5.  The plaintiffs’ respective Elite Athlete status

32.  The 1^st plaintiff became a part-time Elite Athlete in July 2009 and he turned full-time in April 2010.  He became an Elite C Athlete in 2013/14, and retained such a status in 2014/15 and 2015/16.

33.  The 2^nd plaintiff started her training with HKSI as a Potential Athlete in year 2013/14.  She then became a part-time Junior Squad member in year 2014/15 and achieved part-time Junior B status in year 2015/16.

34.  The 3^rd plaintiff joined as a part-time Junior Squad member in year 2013/14.  She achieved part-time Junior B status in year 2014/15 and retained that status in 2015/16.

B6.  The imposition of the Policy on the 1^st plaintiff

35.  The 1^st plaintiff was a member of the Mongkok Dojo (“the Mongkok Dojo”) of Ken Go Kai (拳剛會).  He learnt under Mr Chan Chi Chuen (陳志泉) (“Master Chan”) who was the founder and the dojo representative of the Mongkok Dojo.

36.  Master Chan left the Mongkok Dojo and Ken Go Kai sometime before 17 April 2015.  The 1^st plaintiff therefore could no longer maintain his membership under the Mongkok Dojo as the said Dojo no longer existed.

37.  On 14 May 2015, Ken Go Kai informed the Federation by letter of even date that the 1^st plaintiff’s membership with Ken Go Kai had been terminated.

38.  By an email dated 30 June 2015, the Federation requested HKSI to terminate the 1^st plaintiff’s ETG with immediate effect. The email reads:

“As per the attached letter dated 20 May 2015 from Dojo in charge of Hong Kong Ken Go Kai Karate-do that Mr Law Chun (sic) Pang is terminated and his membership is invalid under that dojo, and his status under this name would be invalid especially on the National Squad Member of HKSI and other membership under that club, therefore his being a member of the preliminary and national squad is temporary suspended. Please kindly terminate Mr Law Chun (sic) Pang’s Elite Training Grant 2015/2016 (Elite C) effective from now.”

39.  On the same day, the then Chairman of the Federation sent a similar email to the 1^st plaintiff.  The only difference was that it did not mention about the Federation’s instruction to HKSI to terminate the issuance of ETG right away.  The email reads:

“As per the attached letter dated 20 May 2015 from Dojo in charge of Hong Kong Ken Go Kai Karate-do that you are terminated and your membership is invalid under that dojo, and your status under this name would be invalid especially on the National Squad Member of HKSI and other membership under that club, therefore your being a member of the preliminary and national squad is temporarily suspended.”

40.  The 1^st plaintiff then submitted an “individual member” application form dated 1 July 2015 to the Federation, in which he stated that he has joined Zenbukan (全武館).

41.  On 8 July 2015, Mr Choi Tsz Ming (High Performance Administration Manager of HKSI) (“Mr Choi”) informed the Federation by email that:

“[…] Accordingly (sic) to your [email dated 30 June 2015], based on the fact that Mr Law Chun (sic) Pang is no longer a member of the National Squad of [the Federation], we will terminate his HKSI Scholarship Athlete status accordingly.”

42.  By an email dated 9 July 2015, the 1^st plaintiff wrote to the Federation’s then Chairman, and urged the Federation to process his individual membership application as soon as possible, since HKSI has informed him that his Elite Athlete status would be terminated soon.

43.  By an email dated 10 July 2015, the Federation confirmed that the 1^st plaintiff’s application for individual membership had been received on 2 July 2015.  It further stated that:

“所有香港代表隊、潛質運動員、初級培訓隊及青苗初級培訓運動員提出轉會後實施四個月「冷凍期」，完成後入隊需重新申請 。”

44.  On 13 July 2015, Mr Choi wrote to the Federation again and stated that:

“With regard to the below mentioned HKSI Scholarship Athlete status of Mr Law Chin Pang, we have already learnt that he has recently been admitted by another Dojo and therefore he is now applying to [the Federation] to resume his National Squad status. Can I have your confirmation whether his National Squad status would be resumed shortly so that his HKSI Scholarship Athlete status would not be affected? Otherwise, we will suspend his HKSI Scholarship Athlete status for the time being.

Please kindly advise so that we can proceed accordingly.”

45.  On 17 July 2015, the Federation replied Mr Choi as follows:

“Attached please find the policy approved by General Committee Meeting date 30 August 2013 for your information. We follow the policy (as attached) in any cases mentioned, I hope this can reply your enquiry accordingly.”

46.  HKSI then terminated the 1^st plaintiff’s ETG on 23 July 2015.

47.  The 1^st plaintiff’s freezing period ended in November 2015. On 9 December 2015, the 1^st plaintiff submitted a letter to the Federation in which he asked for the resumption of his Elite Athlete status.

48.  On 24 December 2015, the Federation requested the 1^st plaintiff by email to submit an application form for the above purpose.

49.  The 1^st plaintiff then submitted on 5 January 2016 an application form which was designated for applying to rejoin the Elite Training Programme after the freezing period for the remainder of year 2015/16.  He also wrote separately to ask the Federation to deal with his application for year 2016/17.

50.  By a letter dated 31 March 2016, the Federation invited the 1^st plaintiff to enroll as a Preliminary Athlete for year 2016/17 which the 1^st plaintiff refused. The Federation did not make a separate response to the 1^st plaintiff’s application for re-enrolment in respect of the remainder of year 2015/16.

51.  The 1^st plaintiff never managed to become an Elite Athlete again.

B7.  The imposition of the Policy on the 2^nd plaintiff

52.  The 2^nd plaintiff was a member of the Lee Yu Mun Dojo of Morita Karate-do Association (森田會鯉魚門道場).

53.  On around 7 December 2015, the Federation received from the 2^nd plaintiff an individual membership application form dated 13 November 2015 in which it was stated that she was affiliated to U Shin Kai Karate Dojo (宇心會道場).  The application form was signed by both the 2^nd plaintiff and her mother Ms Cheung.

54.  On 23 December 2015, the Federation sent a letter to the 2^nd plaintiff and Ms Cheung confirming the receipt of her application for change of Karate Society.  The letter further stated:

“基於閣下為香港體育學院精英資助運動員計劃 (part-time) 成員，於轉會之同時，總會會執行運動員協議書四個月「冷凍期」之規定，完成後可以重新申請入隊 […]”

55.  By email dated 24 December 2015, the Federation requested HKSI to terminate the 2^nd plaintiff’s ETG from 1 January 2016.

56.  By letter dated 30 December 2015, HKSI informed the 2^nd plaintiff that:

“As advised by The Karatedo Federation of Hong Kong China, your National Squad status is temporary suspended due to change of Dojo membership.

In view of this, your ETG as well as your scholarship athlete’s status for 2015-16 has been terminated with effect from 1 January 2016.”

57.  By letter dated 26 February 2016, the 2^nd plaintiff’s then solicitors wrote to the Federation, and demanded the latter to remove immediately the 4 months’ freezing period which was imposed on the 2^nd plaintiff.

58.  On the same day, the General Committee of the Federation resolved to suspend the application of the Policy with immediate effect.  Such suspension is still in place up to today.

59.  On 1 March 2016, the Federation’s then solicitors informed the 2^nd plaintiff’s solicitors that the Federation was prepared to suspend the application of the 4 months’ freezing period on the 2^nd plaintiff.

60.  By letter dated 7 March 2016, the Federation informed the 2^nd plaintiff that the said resolution on suspension of the Policy did not have retrospective effect.  Therefore she would still be required to make an application for re-enrolment after the expiry of the 4-month freezing period.

61.  On 8 April 2016, HKSI informed the 2^nd plaintiff that she would be enrolled as a member of the Junior Squad in the year 2016/17 with effect from 1 April 2016.

62.  On 12 May 2016, the 2^nd plaintiff and Ms Cheung wrote to HKSI and complained about the 2^nd plaintiff’s being demoted from the status of Junior B to Junior Squad.

63.  By letter dated 31 May 2016, the Federation wrote to HKSI and sought HKSI’s review of the 2^nd plaintiff’s Elite Athlete Status in year 2016/17.   The letter, among other things, reads:

“[…] In order that eligible athletes are not affected by the changing policy of the Federation, we would like to request for a special consideration for these cases on the basis that both athletes are actually eligible for ‘Junior B’ support in 2016/17 according to the HKSI’s funding criteria. They are only unfortunately affected by the Federation’s ‘Freezing Period’ policy which is no longer valid starting from April 2016.”

64.  On 30 June 2016, HKSI informed Ms Cheung that the 2^nd plaintiff would be granted “Junior B” status in year 2016/17 with retrospective effect from 1 April 2016.

B8.  The imposition of the Policy on the 3^rd plaintiff

65.  The 3^rd plaintiff was a member of Java Dojo under Go Shin Kan (罡心館渣華道場).

66.  On 13 November 2015, she submitted an individual membership application form to the Federation, in which she stated that she has become a member of Ken Do Kai Shatin Dojo (拳道會沙田道場).

67.  On 27 November 2015, the Federation informed the 3^rd plaintiff that the 4-month freezing period would be applicable and she might apply for re-enrolment after the expiry of the said period.

68.  By email dated 7 December 2015, the Federation requested HKSI to terminate the 3^rd plaintiff’s ETG from 1 December 2015.

69.  By letter dated 8 December 2015, HKSI informed the 3^rd plaintiff the followings:

“As advised by The Karatedo Federation of Hong Kong China, your National Squad status is temporary suspended due to change of Dojo membership.

In view of this, your ETG as well as your scholarship athlete’s status for 2015-16 has been terminated with effect from 1 December 2015.”

70.  By letter dated 26 February 2016, the 3^rd plaintiff’s then solicitors wrote to the Federation, and demanded the latter to remove immediately the 4 months’ freezing period which was imposed on the 3^rd plaintiff.

71.  As aforesaid, on the same day, the General Committee of the Federation resolved to suspend the application of the Policy with immediate effect. 

72.  On 1 March 2016, the Federation’s then solicitors informed the 3^rd plaintiff’s solicitors that the Federation was prepared to suspend the application of the 4 months’ freezing period on the 3^rd plaintiff.

73.  By letter dated 7 March 2016, the Federation informed the 3^rd plaintiff that the said resolution on suspension of the Policy did not have retrospective effect.  Therefore she would still be required to make an application for re-enrolment after the expiry of the 4-month freezing period.

74.  On 8 April 2016, HKSI informed the 2^nd plaintiff that she would be enrolled as a member of the Junior Squad in the year 2016/17 with effect from 1 April 2016.

C.  CREDIBILITY OF WITNESSES

75.  In Hu Lan v David Golden [2023] HKCFI 873, this Court held that:

“36. When I consider the credibility of various witnesses who had given evidence in court, I shall take the following matters into account:

(1) Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;

(2) Importance should be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events;

(3) The court will also attach importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement;

(4) The court should consider a witness’ motive for deliberately not giving truthful testimony.  For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest;

(5) It is essential to have regard to the entirety of a witness’ evidence. A witness can make mistakes, but the mistakes do not necessarily affect other parts of his evidence. Likewise, a witness may lie. However, lies themselves do not mean necessarily that the entirety of that witness’ evidence is to be rejected.  A witness may lie in a stupid attempt to bolster his case, but the actual case nevertheless remains good irrespective of the lie;

(6) On the other hand, where it is shown that a witness has been discredited over one or more matters to which he has testified, this fact is relevant to the assessment of his overall credibility; 

(7) While the court is entitled to take demeanour into account when assessing testimony, it should be borne in mind that demeanour can be deceptive and is therefore to be approached with care.”

76.  I will bear the above in mind when I consider the credibility of the witnesses in the present case.

77.  At the trial, apart from the 3 plaintiffs, Mr Kwong Kwan Ming (a former Chairman of the Federation and the Head Coach of Karate in HKSI between 2010 and 2015) (“Mr Kwong”), Mr Tang Chung Kay (Secretary of the Federation’s Coaching Committee in 2013) (“Mr Tang”), Ms Cheung, Mr She and Ms Wong Lai Yan Zoey (the 3^rd plaintiff’s mother) (“Ms Wong”) have also given evidence in support of the plaintiffs’ respective cases.

78.  On the other hand, the Federation has adduced the evidence of Mr Leung Wai Man (the current Chairman of the Federation) (“Mr Leung”) and Mr Choi at the trial.

79.  Generally speaking, subject to some remarks which I will make below, I find that all the witnesses are credible and they have been trying to assist the Court.  This is particularly true in respect of Mr Choi, who is an independent witness. 

80.  For Mr Kwong, he has left the Federation and HKSI for a long time (since 2010 and 2015 respectively).  Although he has known the 1^st plaintiff since 2010 (when Mr Kwong joined HKSI), I see no reason why he has any motive to give false or misleading evidence.  He has also impressed this Court as a witness whose evidence is comprehensive and detailed.  The Federation’s counsel had drawn this Court’s attention to Mr Leung’s evidence that the Federation had proposed to HKSI in March 2015 that Mr Kwong should be replaced by another as Head Karate Coach of HKSI because the then newly elected General Committee of the Federation was not satisfied with Mr Kwong’s work.  However, I do not think this is something which would affect my assessment of Mr Kwong’s credibility.  Indeed, it has never been put to Mr Kwong during cross-examination that he had any motive to deliberately mislead the Court.

81.  In relation to the other witnesses, while they are credible, their evidence would have to be assessed cautiously for different reasons:

(1)  In relation to the plaintiffs and their parents, it is obvious that they have interest in the results of these claims;

(2)  Mr Tang was a part-time Karate coach engaged by HKSI, and as a result, he had trained the 1^st plaintiff since around 2009.  Be that as it may, I see no reason why he has any motive to give false or misleading evidence for the purpose of advancing the 1^st plaintiff’s case.  Having said that, in my view, his evidence on the meaning of the CC Minutes is unreliable.  I will explain further in Section D2 below;

(3)  For Mr Leung, he was not the Chairman of the Federation at the time when the relevant incidents took place in 2013.  Therefore, much of his evidence in this regard is hearsay evidence.  Further, it must not be forgotten that he is giving evidence in this case as the current Chairman of the Federation.  He is therefore obliged to defend the Federation’s position. Indeed, I have a strong impression that sometimes he had given his evidence with some constraint in the sense that while he had to give evidence so as not to prejudice the Federation’s position in its defence, at the same time, he was also trying not to mislead the Court. 

D.  LIABILITY

D1.  The Issues

82.  In my view, this Court has to resolve the following issues on liability which are common to all the plaintiffs:-.

(1)  Whether the Policy has been validly passed as a resolution in accordance with the Articles of Association;

(2)  Whether the Policy is ultra vires on the ground that it is contrary to the Federation’s object, namely, to promote and develop the true art and spirit of Karatedo in Hong Kong;

(3)  Whether the Policy is unreasonable, capricious and wrongful and therefore in breach of the express terms (Clause 7(c)) and an implied term of the Articles of Association, in that the Federation would not act unreasonably and arbitrarily which would be detrimental to its members’ interest;

(4)  Whether the Policy itself and/or its enforcement against the plaintiffs individually are contrary to public policy.

83.  In relation to the 1^st plaintiff, there is an additional issue, namely, whether the Policy was applicable to him whose membership with the former dojo was terminated by that dojo.

D2.    Whether the Policy has been validly passed

84.  It is the pleaded case of the Federation that its General Committee had endorsed a valid and binding resolution of its Coaching Committee to adopt the Policy. 

85.  The relevant parts of the CC Minutes and the GC Minutes which have recorded the proceedings in the CC Meeting and the GC Meeting respectively have been set out in [12] and [13] above.

86.  The plaintiffs have called Mr Tang to give evidence in support of their contention that the Policy has not been passed by the Coaching Committee at all.  In a gist, he told the Court that:

(1)  It was he who wrote the CC Minutes;

(2)  The choice of words in the CC Minutes which recorded the discussion of the Policy was not perfect.  What he actually meant to put down in the CC Minutes was that it was unanimously agreed to refer the matter to the General Committee for consideration;

(3)  While 3 matters were recorded as being “unanimously passed” in the CC Minutes, only the resolution in relation to the Policy contained the phrase “建議提交執委會”, because it was the only matter that actually had not been passed in the CC Meeting and therefore had to be followed up by the General Committee, and it was his usual practice to use such wordings only when the matter had to be handed over to the General Committee for a decision, because otherwise “submission to the General Committee” was a routine and there was no need to say so specifically;

(4)  The Policy had to be passed to the General Committee for consideration because there was doubt as to whether the Coaching Committee had the authority to decide on the Policy.

87.  I do not accept Mr Tang’s evidence on what actually had been agreed in the CC Meeting because:

(1)  As accepted by Mr Tang, this part of his evidence was given not on the basis of any record as such.  In effect, while he did not agree to this when it was put to him in cross-examination, I am of the view that the sole basis of his evidence in this regard was his memory.  Given the CC Meeting was held more than 10 years ago, the reliability of such evidence is questionable;

(2)  As Mr Tang admitted, he had a lot of experience in taking minutes at the material time.  Hence, if the actual resolution was only that the matter should be referred to the General Committee for consideration rather than that it had been unanimously passed, he would not have put down “此提議獲與會委員一致通過並建議提交執委會” in the CC Minutes;

(3)  If there was any particular worry on the part of the Coaching Committee about its power which led to the decision that no resolution on the Policy should be passed in the CC Meeting, it is natural that such a fact would have been included in the CC Minutes.  However, there was no such record in the CC Minutes;

(4)  As admitted by Mr Tang, the CC Minutes had been approved by the Chairman of the Coaching Committee, and no other committee member of the Coaching Committee had raised any query on the correctness of the CC Minutes subsequently. In my view, if the CC Minutes had indeed wrongly recorded what had been agreed, it is more likely than not that members thereof would have pointed out this obvious mistake back then;

(5)  It was recorded in the GC Minutes that Mr So reported at the GC Meeting that the Policy had been passed by the Coaching Committee already.  If what Mr Tang said was true, it is extremely strange why Mr So saw fit to misrepresent what happened in the CC Meeting, given allegedly it was the decision of the Coaching Committee not to decide on the matter (and Mr Tang did not say that Mr So disagreed to this at the CC Meeting).  Furthermore, when Mr So reported the matter in the GC Meeting, 2 other members (Mr To Wing Shing and Mr Choi Chi Ping) who had attended the CC Meeting were also present. However, apparently none of those 2 members had pointed out right away in the GC Meeting that the Policy had in fact not been passed by the Coaching Committee.  This is most unlikely if what Mr Tang said was true, particularly when the worry of the Coaching Committee was on its authority of making the Policy.

88.  The plaintiffs’ counsel was at pains to point out that all along the Federation’s management was of the understanding that the Policy had been passed by the General Committee because this was their pleaded case until the re-amendment of the Federation’s Defence on 6 November 2020 when it was finally pleaded that the General Committee “endorsed a valid and binding resolution of the Coaching Committee”.  It was said that this reinforces the truthfulness of Mr Tang’s evidence that the Policy had been submitted to the General Committee for decision because the Coaching Committee was in doubt as to its authority in respect of the matter.

89.  I do not accept this argument because the management’s alleged understanding was contradictory to the CC Minutes and the GC Minutes.  In my view, the confusion was caused by the Federation’s practice of placing a sub-committee’s resolution before the General Committee Meeting even though strictly speaking it was not required to do so.  That in fact has not only led to confusion on the part of the then management of the Federation, but also even on the part of the current Chairman, Mr Leung, who had not been able to give straight forward answers when he was cross-examined as to when exactly a resolution should be considered effective.

90.  The plaintiffs’ counsel further submitted that the Federation should have called Mr So to give evidence because he had attended both the CC Meeting and the GC Meeting and therefore he should be in the best position to confirm that the resolution on the Policy had indeed been passed in the CC Meeting.  It was also argued that there was no valid reason why the Federation did not call Ms Tang Po Ling who prepared the GC Minutes to give evidence.  This Court is therefore invited to draw adverse inference against the Federation. 

91.  In Ip Man Shan Henry v. Ching Hing Construction Co Ltd (No 2) [2003] 1 HKC 256, Deputy High Court Judge Lam (as Lam PJ then was) had the following to say at [155]:

“[…] Mr Yu relied on Cross & Tapper on Evidence, 9th Edn, p.36-38 and invited this court to draw adverse inference against Arnold. In my judgment, the relevant principles applicable to civil proceedings can be summarized as follows,

(a) if a prima facie case is made out, and if there are evidence available to the party against whom the case is established which could displace the prima facie case, and he omits to call such evidence, an inference could be drawn;

(b) however, the inference could be rebutted by a plausible explanation by the party who elected not to call the evidence;

(c) if an inference is to be drawn, it would be an inference that such available evidence, even if adduced, would not displace the prima facie case;

(d) it is also open to a tribunal of fact, upon the drawing of such an inference, to take it into account in respect of a matter with respect to which the person not called as a witness could have spoken,

i. in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party;

ii. in deciding whether to draw inferences of fact, which are open to them upon evidence which has been given.”

92.  In Tullett & Tokyo International Securities Ltd v APC Securities Co. Ltd. [2001] 2 HKLRD 356, Le Pichon JA followed the principle explained by Fuad JA in Hongkong and Shanghai Banking Corporation v Chan Yiu-wah and Another [1988] 1 HKLR 457 at 467 C – H:

“In relation to the fourth point above, Mr Huggins SC prayed in aid the maxim omnia praesumuntur contra spoliatorem ("the maxim") sometimes referred to as the principle in Armory v Delamirie (1722) 1 Str 505. Excerpts expounding that principle from Wigmore on Evidence (Chadbourn Revision) (1979) Vol. 2, at paras. 285 and 291 were quoted in the judgment of Fuad JA in Hongkong and Shanghai Banking Corporation v Chan Yiu-wah and Another [1988] 1 HKLR 457 at 467 C - H :

‘285. Failure to produce evidence, as indicating unfavorable tenor of evidence: (1) In general. ... The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated, serves to indicate, as the most natural inference, that the party fears to do so; and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavorable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions; and they are also open always to explanation by circumstances which make some other hypothesis a more natural one than the party's fear of exposure. But the propriety of such an inference in general is not doubted.

The non-production of evidence that would naturally have been produced by an honest and therefore fearless claimant permits the inference that its tenor is unfavorable to the party's cause. Ever since the case of the Chimney Sweeper's Jewel [Armory v. Delamirie] this has been a recognised principle.

291. (3) Documents or chattels destroyed or not produced. The applicability of the general principle to an opponent's non-production or suppression of documents or chattels has always been assumed. In England from the beginning of the recognition of the principle, some sort of inference has been acknowledged to be legitimate. In this country, similarly, the tradition has been continued and steadily enforced, in numerous instances, where the opponent has destroyed, suppressed, or refused or failed to produce a document or chattel whose contents or quality came into issue or became relevant under the issues.’ ”[5] (emphasis added)

93.  In my view, the plaintiffs have failed to make out a prima facie case that relevant part of the CC Minutes was incorrect.

94.  In any event, I accept that the Federation had offered plausible explanation as to why it had not called Mr So nor Ms Tang Po Ling as witnesses:

(1)  According to Mr Leung, the Federation had indeed invited Mr So to give evidence as a witness, but he had never replied.  Mr So had not even responded on the Federation’s request to provide information which was related to issues arising in these actions.  He apparently had, by his conduct, demonstrated that he did not want to have anything to do with these civil actions;

(2)  Mr Leung also said that he had tried to approach Ms Tang Po Ling, who did not want to give evidence in Court, and therefore the Federation did not want to trouble her.

95.  I therefore hold that no adverse inference should be drawn against the Federation as suggested.

96.  Having considered the factors set out in section 49(2) of the Evidence Ordinance (Cap.8, Laws of Hong Kong), I am of the view that the CC Minutes and the GC Minutes should be given due weight.  I find that the Policy had indeed been passed by the Coaching Committee during the CC Meeting.  It had become effective already.  While it was not strictly necessary, the matter was then reported in the GC Meeting, in which no one had raised any query on the matter.

97.  I therefore find that the Policy has been validly passed.

D3.  Whether the Policy is ultra vires

98.  The question which this Court has to consider is whether the Policy is ultra vires on the ground that it is contrary to the Federation’s object, namely, to promote and develop the true art and spirit of Karatedo in Hong Kong.

99.  Mr Chiang accepted on behalf of the Federation that it should be regarded as being bound by the said object clause despite the provision of section 98(1) of the Companies Ordinance (Cap.622, Laws of Hong Kong) (which came into force on 3 March 2014) which stipulates that:

“A condition that immediately before the commencement date# of this Division was contained in the memorandum of association of an existing company and was in force is, for all purposes, to be regarded as a provision of the company’s articles”

100.  The effect of the said section 98(1) has been explained by Lok J in Re Kam Lan Koon [2015] 5 HKLRD 79 at [102] as follows:

“[…] Section 98 is a new section which was not in existence in 2011. In any event, s 98 does not have the effect of making the object clause ‘conditions’ of the Articles. Section 98 is a new section to cater for the fact that under the new Ordinance, a company no longer requires a memorandum, and provisions like the registered office and share capital, which hitherto were found in the memorandum, are now to be provided for in an incorporation form as specified in s 67 of the new Ordinance. For existing companies, those, but not the object clause, would be deemed to be part of the articles […]”

101.  The above view had been endorsed by the Court of Appeal in Lau Man Wai Joseph & Others v Cheung Sun Ling Sanny, the Administratrix of the Estate of Kwan Yau Hang, deceased & Others (CACV 191 & 192/2016, unreported, 28 July 2017)[6] at [60].

102.  Mr Poon for the plaintiffs submitted that the Re Kam Lan Koon case is distinguishable because the Federation assumes a “semi-public position performing an important public role”, and therefore its object clause should be regarded as “condition” of the Articles of Association.

103.  In my view, since the said section 98 does not distinguish between a company serving semi-public or public role and other companies, Mr Poon’s argument must be rejected.  This Court is bound by the said Court of Appeal decision, and therefore the object clause in the Federation’s Memorandum of Association cannot be treated as part of the Articles of Association.

104.  The significance of such a finding is that even if the plaintiffs succeed on this ground, they would only be entitled to a declaration but not damages.

105.  With the above background, I now come to the crux of the matter: Is the Policy contrary to the Federation’s object – to promote and develop the true art and spirit of Karatedo in Hong Kong?

106.  Mr Chiang for the Federation argued that the Policy is not ultra vires.  He submitted that:

“Arising from a complaint from the karate master of a karate association in 2013 concerning the dojo transfer of an HKSI ETG athlete, [the Federation] has formed the view that an elite athlete’s departure from the dojo and the karate association which nurtured him or her for joining a new dojo affiliated to a different karate association should be discouraged for the following reasons:

(1) it goes against the spirit of karatedo which emphasizes discipline as well as loyalty and respect towards karate masters and coaches (尊師重道); and

(2) it is not conducive to the healthy development of karate; the accomplished elite athlete owed much to the dojo where he or she departs from but he or she fails to pay back (for example, in the form of coaching the juniors in that dojo) and thus contributing to further success to that dojos and the karate association concerned (薪火相傳).”[7]

107.  The Federation relied on, inter alia, Mr Leung’s evidence in support of the above submissions.  In paragraph 29 of Mr Leung’s witness statement, he had the following to say:

“The matter was discussed in [the Federation]’s Coaching Committee and [General Committee]. Both the subcommittee and [General Committee] recognized that members have the freedom to choose the dojo and karate association they would like to join but considered that such behaviour should be discouraged on the following grounds.”

108.  He then went on to explain in paragraphs 30 and 34 in the same witness statement:

“30. First, it goes against the spirit of karatedo which emphasizes discipline as well as loyalty and respect towards karate masters and coaches. The notion of ‘respect for the teacher’ (尊師重道) as a ‘do’ (道) of karate-do (空手道) is inculcated in karate and exemplified in the dojo commands and dojo etiquettes.

[…]

 34.    Further, change of dojo membership by an HKSI elite athlete is not conducive to the healthy development of karate.  […] The continued affiliation of HKSI’s elite trainees to the dojos and the karate association which nurtured them is therefore very much treasured by the dojos and karate association as the accomplished athletes act as role models for junior students in the dojos and the karate associations.  They can also assist in coaching the athletes in that karate association, thus bringing further success to the dojos and karate association.  This healthy payback model is preferred to the disruptive model whereby athletes forsake the dojos and karate associations which used to nurture them once they become successful.”

109.  However, it is undisputed that Mr Leung had attended neither the GC Meeting nor the CC Meeting.  He therefore did not have personal knowledge of the discussions at the said meetings.

110.  During cross-examination, Mr Leung admitted that he had never enquired with members of the Coaching Committee as to what they had considered when they passed the Policy. There is therefore totally no basis for Mr Leung to give evidence in this regard.

111.  In relation to the GC Meeting, Mr Leung said he had only asked Master Sung Ka Kui, who was a General Committee member, as to what had been considered.  Master Sung told him that he felt that 尊師重道was something that was in the General Committee members’ mind.

112.  I am not surprised that Master Sung could only say what he “felt”, because it is evident (which is also the Federation’s case) that since no one had raised any query on the Policy in the GC Meeting, there was no discussion on the Policy at all thereat.  Hence, there could not have been any explanation by anyone at the GC Meeting as to the rationale behind the Policy.

113.  In other words, Mr Leung’s evidence set out in paragraph 29 of his witness statement must be rejected.

114.  In order to find out the rationale of the Policy, in my view, the starting point is the CC Minutes which I have quoted in [12] above. 

115.  It can be seen from the CC Minutes (and it has been confirmed by Mr Leung in his evidence) that the making of the Policy was triggered by a single “change of karate society” incident. 

116.  It can also be gathered from the CC Minutes that the purpose of the Policy was to:

“鼓勵成績優異學員回饋所屬道場”

117.  There was no mention therein about “discipline as well as loyalty and respect towards karate masters and coaches (尊師重道)”.

118.  That is not surprising, because the Policy would only be operative vis-à-vis a particular karate athlete if he/she switched from one Karate Society to another.  In this regard, it is important to bear in mind that:

(1)  A Karate Society may have more than one affiliated dojo;

(2)  A dojo is where a karate athlete learnt karate, that is, the place where the athlete was nurtured by his/her Karate Master (師傅);

(3)  The Karate Societies are recognized by the Federation as being governed by the decision makers (決策人);

(4)  A karate athlete would belong to one dojo only: his/her identity as a Full Member is registered with the Federation not as a particular person but as a person of a particular dojo, and whenever a Full Member changes his affiliated dojo, his identity changes from being a person of the old dojo to a person of a new dojo;

(5)  The Policy would not be operative against a particular karate athlete even if he/she switched from one dojo to another dojo, so long as both dojos belong to the same Karate Society.

119.  On the basis of the above, it is obvious that even if a karate athlete left his/her dojo (that is, his/her Karate Master), and joined another dojo ran by a different Karate Master, he/she would not be subject to the operation of the Policy so long as the new dojo belonged to the same Karate Society as the old dojo, even if the fact that he/she left the old dojo ran by his/her karate Master demonstrated disloyalty.

120.  More importantly, according to Mr Leung’s oral evidence in Court, even the change from one Karate Society to another Karate Society does not necessarily mean non-compliance of the virtue of 尊師重道.

121.  Furthermore, at the material time, while the Federation had more than 2,000 Full Members, it only had around 200 Elite Athletes, Potential Athletes, Preliminary Athletes and Feeder Athletes.  There was no explanation whatsoever as to why, if the virtue of 尊師重道 was the rationale, then why the Policy was only applicable to a small group of athletes rather than all other members (with different appropriate consequences). 

122.  Hence, it is my finding that 尊師重道 was not one of the purposes of the making of the Policy at the material time.  The use of this concept to support the making of the Policy is an after-thought. 

123.  Another rationale which the Federation tried to rely on was “薪火相傳”: Karate athletes have to pay back (for example, in the form of coaching the juniors in that dojo) and thus contribute to further success of the dojo and the karate association concerned.

124.  This argument seems to be stronger because it was indeed expressly stated in the CC Minutes that the purpose of the Policy was to “鼓勵成績優異學員回饋所屬道場[8]”. 

125.  However, as mentioned above, a karate athlete would not be subject to the Policy even if he/she left his/her 所屬道場, if the new dojo which he/she joined belonged to the same Karate Society. 

126.  Therefore, as a matter of fact, the alleged purpose was actually not the rationale at all.  In my view, it is more likely than not that that purpose was put down as an attempt to justify the Policy even though that was not the real purpose behind the Policy.

127.  Mr Chiang argued that the staying of the athletes in the same Karate Society would “reinforce karate masters to continue contributing to the karate association and to promote karatedo generally in Hong Kong”[9]. I do not accept this submission because:

(1)  This was not supported by evidence as a purpose of the Policy;

(2)  As pointed out above, the operation of the Policy would only be triggered if an athlete moved from one Karate Society to another, but not from one dojo to another (if that newly joined dojo belonged to the same Karate Society).  In other words, it was still possible for a Karate Master to lose his/her nurtured athlete to another dojo.  This shows that this argument is also an after-thought.

128.  Then what was the real purpose of the Policy?

129.  In my view, the real purpose of the Policy was to restrain karate athletes with better quality to change from one Karate Society to another.  The whole purpose of the Policy was to protect the “decision-maker” (決策人) of the Karate Society which the particular dojo in question belonged to.  This is also accepted by Mr Leung as the effect of the Policy.

130.  In order to promote and develop the true art and spirit of karatedo, it is important that karate athletes have the free choice of dojos and karate masters from whom they would like to learn karate.  In Mr Chiang’s submissions, he emphasised time and again that, despite the Policy, the karate athletes concerned always had the freedom to decide whether they would like to switch from one Karate Society to another, and therefore it cannot be said that they were “restrained” to do so. 

131.  With greatest respect, Mr Chiang’s submissions is made to be rejected, because it was made in total disregard of the reality: The cruel reality created by the Federation by virtue of the Policy was that no matter why a Targeted Athlete had to join another Karate Society, the Policy would be applicable to him/her, and there would be a 4-month freezing period which would bring serious consequences.  Take the 1^st plaintiff as an example, the termination of his Elite Athlete status means that he would lose his full-time job for at least 4 months, during which he would not receive any ETG.  That means he would have no income for at least 4 months.  Neither would he be able to benefit from the professional training provided by HKSI during the freezing period.  It goes without saying that that would have great impact on not only his development as a professional karate athlete, but also, more fundamentally, his livelihood.  In effect, once he had decided to change from one Karate Society to another, there would be an automatic penalty imposed on him, regardless of the reason behind the change.

132.  Even in respect of those who were not full-time athletes (such as the 2^nd and 3^rd plaintiffs), the effect of the freezing period was that they would be deprived of the professional training and support from the HKSI for at least 4 months, which would have great impact on their professional development. 

133.  Viewed in such light, I cannot see how it could be said that the making of the Policy was to achieve the object of “promoting and developing the true art and spirit of karatedo for self-defence in Hong Kong”.  In my view, what the Policy achieved was the contrary.  It deterred the Targeted Athletes from changing to dojos which belonged to another Karate Society for no good reason, even if the change was made with good cause.  The effect is that the Targeted Athletes are discouraged to learn karate at the dojo which they prefer.

134.  Mr Chiang further argued that the Federation could not just have in mind the interest of individual members, but also the entire sport as a whole, and therefore, when formulating the Policy, the Federation had struck a balance between the interest of the Federation as a whole and the interest of individual members who might be affected by the Policy. 

135.  With greatest respect, such submission was made without evidential basis, because it was not mentioned in the CC Minutes that such a balance had been struck at all, and therefore must be rejected.

136.  In any event, the so-called “balance”, even if made, was apparently tilted in favour of a category of people known as “decision-makers of Karate Societies”.  I have great difficulty to understand how it could be said that the Policy was for the interest of the Federation as a whole.  In this regard, it must also be borne in mind that the making of the Policy was caused by one single incident which was recorded in the CC Minutes as follows:

“本委員會於7月16日收到正德館負責人趙xx女士電郵有關中止譚xx會籍及所發証書，教練總監指出由於譚的會籍已被所屬道場中止，其在總會之會籍亦隨之失效，而所有初級培訓、代表隊或潛質運動員最初進入初級培訓隊時均需得到所屬道場負責人推[薦]，譚現在推[薦]已失效並應立即暫停其代表隊隊員身份，此結論獲與會委員一致通過。”

137.  The CC Meeting was held on 18 July 2013.  In other words, it was because there was a complaint received 2 days before the CC Meeting from a decision maker of a Karate Society about the departure of a karate athlete, that the proposal about the Policy was made and passed.  That is a clear indication that the Policy was made to protect decision-makers of Karate Societies only.  I take the view that that clearly has gone beyond the limit of the power given to the management of the Federation because there was total disregard on the part of the Federation of the interest of individual karate athletes.  The Policy was passed so as to unfairly and capriciously restrain the Targeted Athletes from changing Karate Society even if to do so was for the purpose of their better future development.

138.  To conclude, the Policy was for the purpose of restraining some of the Federation’s members from choosing a Karate Society of his/her own choice.  It must be contrary to the Federation’s object in promoting and developing the true art and spirit of karatedo for self-defence in Hong Kong.  It is therefore my conclusion that the Policy is ultra vires.

D4.  Whether the Policy is in breach of the Articles of Association

139.  The issue here is whether the Policy is unreasonable, capricious and wrongful and therefore in breach of the express terms (Clause 7(c)) and an implied term of the Articles of Association, in that the Federation would not act unreasonably and arbitrarily which would be detrimental to its members’ interest.

D4.1  Article 7(c) of the Articles of Association

140.  This issue may be dealt with quickly.

141.  Article 7(c) of the Articles of Association provides that:

“The General Committee shall have the power hereinafter contained by written notice to suspend the membership of any member who fails to abide by the Memorandum and Articles of his membership shall be terminated forthwith if the decision of the General Committee is endorsed by members in General Meeting. Notwithstanding, the member being suspended shall be entitled to be heard on the intended resolution at the General Meeting before he is being expelled from the Federation.”

142.  The plaintiffs argued that the Policy had, in substance, the effect of suspending their membership with the Federation, as it prevented them from meaningfully enjoying any privilege which their memberships would confer on them.  Hence, it was said, the Policy was a breach of the said Article 7(c) which only allows suspension of membership when a member was guilty of failing to abide by the Memorandum and Articles of Association.

143.  I do not accept this submission. Apart from the privilege of being endorsed by the Federation to join the Elite Training Programme, it is evident that all other rights which came with the Federation’s membership were not affected by virtue of the Policy.  For example, the Targeted Athletes were still allowed to participate in competitions[10] and seminars organised by the Federation.  Hence, the Policy did not have the effect of suspending a member’s membership with the Federation. 

D4.2  Implied term of the Articles of Association

144.  Under this part, the plaintiffs argued that there was an implied term of the Articles of Association that the Federation would not act unreasonably and arbitrarily which would be detrimental to its members’ interest.

145.  Mr Chiang for the Federation accepted that a term can be implied into the contract between the Federation and its members to the effect that the General Committee and its sub-committees would not act unreasonably and arbitrarily in the exercise of their fiduciary duties.[11]

146.  However, by relying on the case of Hong Kong Rifle Association v Hong Kong Shooting Association [2007] 4 HKLRD 121, the Federation argued that such an implied term was only related to “procedural fairness” when the Federation exercised its powers.

147.  In my view, such an argument is misconceived, because the above case authority was about the Hong Kong Shooting Association’s exercise of its discretion pursuant to its Articles of Association whether to admit or reinstate the membership of a candidate.  The focus of the Court at the time was whether the discretion had been exercised by Hong Kong Shooting Association wrongfully, in particular, by failing to take into account all the relevant factors which might exist when the application for readmission/reinstatement was made. 

148.  In other words, the Hong Kong Rifle Association case is not an authority in support of the Federation’s contention that its duty not to act unreasonably and arbitrarily is only confined to procedural fairness.

149.  If anything, the Hong Kong Rifle Association case is against the Federation, for it was held by Saunders J therein at [127] that:

“[…] The special responsibility, and right held by the HKSA, to govern the sport of shooting in Hong Kong, imposes upon it an obligation to administer its affairs in such a way as not to unfairly impinge upon the rights of shooters in Hong Kong to take part in the sport, both locally and internationally.”

150.  In my view, the above comment must be applicable to the Federation in relation to its administration of affairs such as the making of policies which governed its members.  Indeed, the Federation admitted that the implementation of the Policy might lead to loss of opportunities for karate athletes to take part in overseas tournaments as well as to achieve the required results for Elite Training Enrolment for the coming year.[12]

151.  Under Section D3 above, I have explained why I take the view that the Policy is against the Federation’s object in promoting and developing the true art and spirit of Karatedo in Hong Kong. 

152.  For the same reason, I consider that the Federation was unreasonable and capricious when it made the Policy, and therefore it was in breach of an implied term of the Articles of Association.

D5.    Whether the Policy and/or its enforcement was contrary to public policy

153.  The plaintiffs submitted that the Policy itself was contrary to public policy.

154.  Furthermore, it was also argued that its implementation was contrary to public policy.

155.  I will deal with these 2 questions in turn below.

D5.1  Was the Policy contrary to public policy

156.  Heavy reliance had been placed by the plaintiffs on the case of Nagle v Feilden [1966] 2 QB 633 in their submissions that the Policy was contrary to public policy.

157.  In this case, the plaintiff, as a trainer of racehorses, applied to the stewards for a licence.  They refused, and the sole reason was that she was a woman.  She said that it is the practice of the stewards to refuse a licence to train racehorses to any female applicant.  This was borne out by the fact that they had granted licences to men servants who were employed by her, in particular to her “head lad”.  This showed that they had no objection to her capacity and fitness as a trainer, but they refused simply because she was a woman.  The plaintiff was aggrieved by the refusal of a licence to her, so she brought an action claiming a declaration that the practice of the stewards (in refusing a licence to any woman trainer) was void as against public policy.  The stewards applied to strike out her statement of claim on the ground that it disclosed no cause of action.  The application was acceded to by a Master, whose decision was affirmed by a Judge.   The plaintiff then appealed to the Court of Appeal.

158.  In his Decision, Lord Denning M.R. had the following to say at 644G – 645B:

“[…] The common law of England has for centuries recognised that a man has a right to work at his trade or profession without being unjustly excluded from it. He is not tobe shut out from it at the whim of those having the governance of it. If they make a rule which enables them to reject his application arbitrarily or capriciously, not reasonably, that rule is bad. It is against public policy. The courts will not give effect to it […]”

159.  His Lordship continued at 646A – B and 647A – B:

“[…] We live in days when many trading or professional associations operate ‘closed shops.’ No person can work at his trade or profession except by their permission. They can deprive him of his livelihood. When a man is wrongly rejected or ousted by one of these associations, has he no remedy? I think he may well have […]

[…] If they reject him arbitrarily or capriciously, there is ground for thinking that the courts can intervene […]”

160.  Salmon L.J. also added at 653D – 655F:

“Quite apart from social clubs, there are monopolistic associations, such as trade unions, the Stock Exchange and the Inns of Court which control certain trades or spheres of human activity in which no man can earn his living unless he is admitted to membership of the association. In such cases the question arises as to a man’s right to work or, more precisely, his right not to be capriciously and unreasonably prevented from earning his living as he wills. There is no doubt that such associations may lay down such minimum qualifications for admission as they in their discretion consider necessary for the protection of the public and for the protection of their trade or profession, Rex v. Askew.Nor do I think they need ascribe any reasons for refusing to admit any candidate. If, however, it can be shown from the reasons which they may give, or from other sources, that a candidate has been capriciously and unreasonably refused admission, it is certainly arguable that the law will intervene to protect him […]

[…]

In the present case there is no question of the plaintiff seeking election to the Jockey Club. This is a monopolistic self-elected body which controls what today is a nation-wide industry in which it can effectively prevent anyone from earning a living. No doubt in general it carries out its functions admirably and all those connected with racing owe it a debt of gratitude. Trainers and jockeys who seek to earn their living in the racing industry do not of course apply for membership of the Jockey Club but they must apply to the Jockey Club for a licence to carry on their occupations. If associations such as a trade union, the Stock Exchange and the Inns of Court may not capriciously and unreasonably refuse to admit candidates to membership, it would follow a fortiori that the Jockey Club may not capriciously or unreasonably refuse a licence.

[…]

It has been argued on the stewards’ behalf that even if they capriciously and unreasonably refused a licence, the courts have no power to intervene […] One of the principal functions of our courts is, whenever possible, to protect the individual from injustice and oppression. It is important, perhaps today more than ever, that we should not abdicate that function. The principle that courts will protect a man’s right to work is well recognised in the stream of authority relating to contracts in restraint of trade. The courts use their powers in the interests of the individual and of the public to safeguard the individual’s right to earn his living as he wills and the public’s right to the benefit of his labours.

[…]

I certainly refuse to believe that it is not even arguable that in such circumstances the courts have power to protect the individual citizen. It follows that the plaintiff may succeed in this action if she can show that the defendants, whilst recognising her good character and long experience and ability as a trainer, have refused her a licence solely on the ground that she is a woman. It would be as capricious to do so as to refuse a man a licence solely because of the colour of his hair […]”

161.  It was submitted by the plaintiffs that the Federation, as a monopolistic association governing the sport of karate in Hong Kong, was obliged not to act unreasonably, capriciously or arbitrarily.  However, it had made the Policy which was bad in that it was a general and discriminatory rule preventing those Elite Athletes, Potential Athletes, Preliminary Athletes and Feeder Athletes who changed Karate Societies from practising karate as their career irrespective of the reasons behind their changes, their competences or their performances in the trainings.

162.  The Federation argued that Nagle (supra) can be distinguished because it was concerned with far more substantial and important issues than those in the present case.  This Court’s attention had also been drawn to the comments made by Lord Justice Buxton in Bradley v The Jockey Club [2005] EWCA Civ 1056, which explained the limitations of Nagle:

“29. […] Much was said on behalf of Mr Bradley, and much was relied on, on the basis of the case of Nagle v Fielden in 1966, it being suggested that that case had identified a ‘right to work’ that was a relevant consideration when one was considering disciplinary control of the members of the members of the particular profession. As my Lord has pointed out, it is paradoxical, to say the east, for someone who has broken the rules of his profession then to seek to claim that he has nonetheless a right in uncontrolled terms to practise it.

30. Secondly, and more generally, Nagle v Fielden went no further than to say that the court could intervene when there was a general and discriminatory rule preventing a certain category of people practising a profession irrespective of their behaviour, their competence, or their disciplinary record. That comes out very clearly, for instance, and only for instance, in the judgment of Salmon LJ (page 655E) where he compared the Jockey Club’s rule excluding women from holding a licence to a rule preventing a man from holding a licence because of the colour of his hair. He described that, in my respectful judgment entirely rightly, as capricious, just as Phillips J had described the then rule of the Jockey Club as dictatorial.

31. That is clearly addressing a completely different circumstance from that which is involved when someone who is allowed into the profession breaks the rules of it. I think that the Court of Appeal in Nagle v Fielden would have been astonished to think that their general observations could be used to undermine disciplinary decisions that were otherwise perfectly lawful. The considerations ventilated in Nagle v Fielden have, of course, now been overtaken by legislation. The rule that was struck down in Nagle v Fielden would nowadays be regarded not only as wholly unlawful but also as completely laughable. The case is a valuable general reminder of the extent to which professions can control their entry, but it says little or nothing in respect of how professions should conduct their disciplinary functions. Both functions are to be controlled by the rules set out by Richards J, which were properly and fully applied by the Jockey Club in this case.”

(Mr Chiang’s emphasis)

163.  Mr Chiang then submitted:

“Echoing the remarks of Lord Justice Buxton above, and bearing in mind that the true nature of the present cases is KFHK taking compliance action against Ps in accordance with Clause 3(d) of the Memorandum (not termination of membership with KFHK), it is paradoxical for Ps who knew or ought to know the Policy and still ventured to be caught by the Policy then to seek to claim they have nonetheless a right in uncontrolled terms to defy the Policy, resist enforcement of the Policy against them and seek monetary compensation for enduring the consequences of enforcement they should have expected.”[13]

164.  With greatest respect, I am at a loss as to why counsel for the Federation described the incidents as “taking compliance action against the plaintiffs”.  This is plainly contrary to the Federation’s stance that the Targeted Athletes were free to choose whatever dojo they liked.  The comments made by Lord Justice Buxton in Bradley are also inapplicable because there cannot be any suggestion that the Targeted Athletes had breached any rules by joining another Karate Society. 

165.  Mr Chiang had made reference to Object (d) of the Federation which reads:

“to ensure compliance by participant(s) of karatedo with relevant by-laws, codes, regulations and practice directions”

166.  This is simply a non-starter, because there is no rule which prohibited the changing of one’s dojo or Karate Society.

167.  On the other hand, I accept the plaintiffs’ argument. It cannot be emphasised enough that the Federation is the sole organisation governing the sport of karate in Hong Kong.  It was given the power to endorse suitable athletes to participate in the Elite Training Programme.  There is no doubt that there is a public policy to see that the Federation would not unreasonably, capriciously or arbitrarily take away or refuse to give the endorsement.  However, in my view, the Policy had done exactly this, because it is undeniable that the Federation had refused to endorse the plaintiffs’ participation in the Elite Training Programme simply because of their change of Karate Society. 

168.  I therefore find that the Policy was contrary to public policy.

D5.2  Was the enforcement of the Policy contrary to public policy

169.  The plaintiffs further argued that the enforcement of the Policy was contrary to public policy.

170.  In light of the conclusion above, I would only deal with this sub-issue briefly.

171.  First of all, Mr Chiang argued that the plaintiffs should not be allowed to argue on this issue because while he had originally included “Whether the 1^st plaintiff should be afforded the opportunity to be heard and present his case?” as one of the issues, this proposed issue was crossed out by the plaintiffs’ counsel and as a result it could not find its way into the “Agreed List of Issues”.

172.  With respect, I am not surprised that the proposed issue was crossed out, because it simply could not pinpoint the issue which has to be resolved by this Court.

173.  On the other hand, there is plainly another issue in the Agreed List of Issues which reads:

“Whether the Policy itself and/or its enforcement against the 1^st, 2^nd and 3^rd plaintiffs individually are contrary to public policy”

174.  Pausing here, it should be noted that each of the plaintiffs had taken out a summons returnable at the Pre-Trial Review for amendment of their respective Statement of Claim.  One of the common additions as proposed was the following paragraph:

“[The Federation] is the sole governing body for the sport of karate in Hong Kong and it performs various public functions. One of the public functions is to refer/recommend karate athletes to be enrolled in the Sports Scholarship Scheme and become members of the national squad of Hong Kong. As such, [the Federation] is carrying out its public function when deciding which karate athletes are to receive its referral/recommendation for the aforesaid enrollment. [The Federation] is required, as a matter of public policy, not to act unreasonably, capriciously or arbitrarily when exercising its powers incidental to the performance of its public functions. Nonetheless, the Resolution and its implementation are unreasonable, capricious, arbitrary and/or a breach of natural justice.”

175.  At the Pre-Trial Review, Mr Poon told this Court that he agreed with Mr Chiang’s view that the above amendments were unnecessary because the then state of the Statements of Claim was wide enough to entitle the plaintiffs to take the points included in the proposed new paragraph anyway. Mr Chiang also confirmed unequivocally to this Court at the said hearing that that was his stance.  As a result, the proposed amendments were not pursued by the plaintiffs at the Pre-Trial Review.

176.  That being the case, I do not think Mr Chiang is entitled to say that the plaintiffs should not be allowed to make the “breach of natural justice” argument, which was plainly incorporated in the agreed list of issues (under the “public policy” limb) and had also been confirmed by Mr Chiang himself at the Pre-Trial Review that the plaintiffs should be allowed to run such a point.

177.  Coming back to the substantive merit of the “breach of natural justice” argument, it is beyond dispute that, under the Policy, there was no opportunity for the Targeted Athletes to be heard.  Indeed, it seems that that was deliberate.  In Mr Leung’s witness statement, he explained that:

“44. The Policy is not meant to determine which party is guilty or blameworthy when an athlete joins a new dojo of a different karate [society]. The breakdown of relationship between a departing athlete and the dojo and/or karate [society] is not amenable to logical reasoning for determining who is right or wrong. It would be meaningless to investigate into a particular case to ascertain who initiates the termination of an athlete’s [society] with a dojo and/or karate [society]. Accordingly, the implementation of the Policy does not provide for a hearing to listen to the parties concerned before enforcement.

45. In any event, the consequence of enforcing the Policy against an athlete is only a 4-month suspension from the elite training programmes.  This temporary and short-lived outcome makes it impracticable and unmeaningful for [the Federation] to arrange a hearing for the affected athlete.  If a hearing is to be held, by the time hearing of the parties’ mutual recrimination is completed, the suspension would have long elapsed.”

178.  However, it is undeniable that the Policy might bring serious consequences to the Targeted Athletes.  Applying the Policy to the Targeted Athletes irrespective as to the reason why they had to change from one Karate Society to another is clearly unjustified.  The explanation that it is difficult to judge who is right and who is wrong actually highlights the unreasonable, capricious and arbitrary nature of the Policy itself.

179.  Mr Leung’s confirmation in Court that the Policy should not have been applied to the 1^st plaintiff if his alleged reason for changing Karate Society was genuine indeed further reinforces the argument that he should have been given a chance to explain to the Federation.

180.  In this regard, Mr Chiang argued that it was in fact open to the 1^st plaintiff to state his case to the Federation for the purpose of thwarting the suspension before it was imposed on him or asking the Federation to review its enforcement action against him once the suspension has commenced.  He further blamed the 1^st plaintiff for applying for legal aid right away rather.  Counsel for the Federation further referred to the 2^nd and 3^rd plaintiffs who, by contrast, contested against the Federation’s decision and issued solicitors’ letter, which led to the suspension of the Policy.

181.  With greatest respect, such an argument is totally unmeritorious, because this was simply contradictory to the Federation’s pleaded case.  In paragraph 17 of the Federation’s Re-Amended Defence filed in the 1^st plaintiff’s action, it was pleaded that:

“[…] It is denied that [the 1^st plaintiff] has a right to be heard and present his case before [the Federation] updated the HKSI about [the 1^st plaintiff]’s termination of membership in Ken Go Kai.”

182.  Further, the reference to how the Federation reacted to the protest of the 2^nd and 3^rd plaintiffs only served to highlight the Federation’s attitude at the material time:  The 1^st plaintiff’s case was not reviewed at all because he did not engage any private lawyer to threaten the initiation of legal proceedings.   To the contrary, the Federation reacted right away and even suspended the implementation of the whole Policy once it received a demand letter from solicitors.

183.  To conclude, I am also satisfied that the enforcement of the Policy was contrary to public policy.

D6.    Whether the Policy was applicable to the 1^st plaintiff

184.  This issue only concerns the 1^st plaintiff.  It was argued that the Policy should not have been applied to him because his case did not involve transfer of membership as such, but rather, he was terminated by Ken Go Kai as its member on 14 May 2015, and he then obtained membership at another Karate Society (i.e. Zenbukan) on 1 July 2015.  He therefore did not have any valid membership with the Federation for 1.5 months.

185.  In the light of the various findings under different sections above, there is in fact no need to consider this issue further.  However, if I were required to make a finding under this issue, I would hold that the Policy would be applicable to the 1^st plaintiff despite the gap of 1.5 months between the termination of membership with his previous Karate Society (i.e. Ken Go Kai) and his joining of another Karate Society (i.e. Zenbukan).  This is because, objectively, he did switch from one Karate Society to another.  As pointed out by the Federation, it cannot be the case that the Policy would have no application to a particular athlete where the switch was not “seamless”. 

186.  Having said that, I must say that the applicability of the Policy on the 1^st plaintiff only served to highlight the unreasonableness of the Policy: It was certainly not because of the 1^st plaintiff’s own preference that he had to join another Karate Society.  It was only because of Ken Go Kai’s refusal to keep him as a member that led to the 1^st plaintiff’s action to join another Karate Society.  Indeed, it is evident that Ken Go Kai issued a letter to the Federation confirming such termination of membership without informing the 1^st plaintiff, who had actually informed Mr Lee Yiu Kwan of Ken Go Kai that his intention was to stay despite the departure of his own Karate Master, Master Chan.  Yet, the Federation decided to apply the Policy to him, which regrettably had ruined his career as a karate athlete. 

D7.  Conclusion on liability

187.  I therefore conclude that the Policy was ultra vires, in breach of the Federation’s Articles of Association, and was contrary to public policy, and therefore void.

188.  The Federation is liable to pay damages to the plaintiffs which I will further consider below.

E.  QUANTUM

E1.  The 1^st plaintiff

E1.1  The period of claim

189.  It is the 1^st plaintiff’s case that:

(1)  By reason of the operation of the Policy, he had lost his Elite Athlete status and, as a result, HKSI terminated his ETG on 23 July 2015;

(2)  Although his freezing period pursuant to the Policy ended on 23 November 2015, he was not allowed to resume his previous Elite C Athlete status for the remaining period in year 2015/16 (which ended on 31 March 2016), because he had to re-apply to join the Elite Training Programme. It is undisputed that there were 8 months and 1 week left in that year;

(3)  It is the 1^st plaintiff’s contention that, but for the Policy, he would have been selected to participate, as part of the kumite team, in the 13^th Asian Karatedo Championship (“the 2015 Asian Championship”) which was held in September 2015.  He further stated that if he had done so, he would have been promoted to Elite B in year 2016/17 just like other team members in the said kumite team;

(4)  For year 2017/18, the 1^st plaintiff alleged that he would be able to retain his Elite B or alternatively Elite C status.

190.  On the above basis, the 1^st plaintiff claims damages covering 3 years of Elite Training Programme.

191.  The 1^st plaintiff has not made it clear as to the exact period covered by his claim.  The Federation took it that he was claiming for damages up to 30 June 2018.  In my view, since the provision under the Elite Training Programme is for a period of 12 months beginning on 1 April every year, the 1^st plaintiff should be regarded as claiming for his loss up to the end of the 2017/18 year (i.e. 31 March 2018).  In other words, he is claiming for his loss incurred in years 2015/16, 2016/17 and 2017/18.  That should be apparent from “Table A” of his Closing Submissions.

192.  On the above basis, there is no doubt that the 1^st plaintiff should be entitled to be compensated at least up to 31 March 2016 (i.e. for the period of 8 months and 1 week), because it has not been suggested by the Federation that his Elite Athlete status would be terminated in the middle of a Programme year for any other reason.

193.  Whether the 1^st plaintiff should be compensated for the years 2016/17 and 2017/18 would be more complicated.

194.  As aforesaid, the 1^st plaintiff’s argument is that he would have been selected to take part in the kumite team competition for the 2015 Asian Championship but for the Policy. The kumite team got the 5^th place which gave all team members status of Elite B in the years 2016/17 and 2017/18.

195.  The first question here is whether he would have been selected as 1 of the 7 kumite team members.

196.  In Chitty on Contracts (Sweet & Maxwell, 35^th edition (2023)), Volume 1, the learned author stated that:

“30-086 The claimant’s lost opportunities: hypothetical consequences

The claimant may claim that, in the absence of the defendant’s breach of contract, he might have obtained a benefit or avoided a loss: this consequence was not certain to follow proper performance of the contract but the breach deprived the claimant of the opportunity to benefit from it. The question usually arises when the defendant has failed to do something, but it could arise where his performance had been inadequate or deficient in some way. The law distinguishes three situations: where the hypothetical consequence involves the hypothesis of the claimant’s act, where it involves that of a third person and where it involves the occurrence of a contingency outside the control of either party to the contract. It seems, however, that the second and third cases are treated in the same way.

30-087 A hypothetical action of the claimant

This situation arises where a particular contingency depends on the hypothetical question whether the claimant himself would have acted in a certain way. It is illustrated by the case where a solicitor failed to give proper advice to his client and the issue is whether the client would have accepted the advice and acted on it in a particular way. The client must prove, on the balance of probabilities, that he would have done so: unless he can prove this, he fails to establish the causal link between the defendant’s omission and the loss he would have avoided if he had accepted and acted on the hypothetical advice. But if he can satisfy this burden of proof, it is not a case of loss of a chance, because the claimant has proved what he would have done and damages must be assessed on this basis.

30-088 A hypothetical action of a third party

This situation arises where a particular contingency depends on whether a third party would have acted in a certain way. Where the claimant claims that, in the absence of the breach of contract by the defendant, a third party would have acted in a particular way, so as to benefit the claimant, he need not prove that hypothetical action on the balance of probabilities. Provided that the claimant can prove that in the absence of the breach there was a ‘real’ or ‘substantial’ (not a speculative) chance of the third party’s action, and the loss of chance is not too remote, the court must assess the chance of that action resulting (usually as a percentage) and then discount the claimant’s damages for his loss by reference to that percentage. In the leading case of Chaplin v Hicks [1911] 2 K.B. 786, CA the defendant, by a breach of contract in conducting a contest, deprived the plaintiff, one of 50 finalists, of the opportunity to compete for one of the 12 prizes.  Although there could be no precision in calculating the value of her lost chances, she was entitled to substantial damages.  Similarly, where the breach of contract caused the claimant to lose his chance of success in litigation, the question is what chance the claimant would have had of a favourable outcome.  So where the client’s claim became statute-barred because his solicitor failed to bring proceedings within time, the measure of the client’s damages recovered from the solicitor was the expected proceeds of the original claim; what he might have recovered in the original claim must be discounted by reference to his chances of success in recovering it.  ‘The more the contingencies, the lower the value of the chance or opportunity of which the plaintiff was deprived.’ Where one contingency may depend on another, the chance should be evaluated as a percentage of a percentage.”

197.  The principles have also been succinctly summarised by Cheung JA in Hong Jing Co Ltd v Zhuhai Kwok Yuen Investment Co Ltd [2013] 1 HKLRD 441 as follows:

“83. Loss of chance is an identifiable head of loss:

‘The circumstances in which the law is prepared to recognize the loss of a chance as itself an identifiable head of loss, as itself constituting compensable damage, are when the provision of the chance is the object of the duty that has been breached. … An alternative formulation is that it can be said that the essence of the breach of duty is that it deprives the claimant of the chance or opportunity of securing a favourable outcome.’ [McGregor on Damages, 18^th Ed., paragraph §8-039.]

84. The plaintiff may claim that in the absence of the defendant’s breach of contract, he might have obtained a benefit; this consequence was not certain to follow proper performance of the contract but the breach deprived it of the opportunity to benefit from it. This question usually arises in two broad situations. First, where the hypothetical consequence involves the hypothesis of the plaintiff’s act. Second, when it involves that of a third party (cf. Chitty, paragraph 26-042). This case is concerned with the second situation, namely, whether BOCGI would have concluded the deal with the defendant so as to benefit the plaintiff.

85. Where the plaintiff claims that, in the absence of the breach of contract by the defendant, the third party would have acted in a particular way, so as to benefit the plaintiff, he need not prove that hypothetical act would have occurred on the balance of probabilities. Provided that the plaintiff can prove that in the absence of the breach there was a ‘real’ or ‘substantial’ (not a speculative) chance of the third party’s act, the Court must assess the chance of that act resulting (usually as a percentage) and then discount the claimant’s damages for his loss by reference to that percentage (Chitty, paragraph 26-044). Stuart-Smith LJ observed in Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602 at 1614 that,

‘the plaintiff must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one.  If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and near certainty on the other.  I do not think that it is helpful to seek to lay down in percentage terms what the lower and upper ends of the bracket should be.’ ”

198.  It is undisputed that since 2015, the Federation has implemented a new selection process of National Squad members.  Under this new process, all athletes qualified for individual competitions would be automatically included in the kumite team.  Since there were 6 categories of individual competitions, it is the Federation’s case that the 1^st plaintiff’s only hope to join the team was by securing the 7^th place.

199.  It is also undisputed that, at the end of the day, the 7^th place was occupied by a Mr C. F. Lee (“Mr Lee”), who was from the Senior Squad.  It is the Federation’s case that:

(1)  Even if the 1^st plaintiff were eligible to join the selection process at the material time, such a process would require him to beat Mr Lee in a selection match so as to secure a place in the kumite team;

(2)  However, since the 1^st plaintiff’s performance at the material times showed that he had passed his peak (高峰已過) while Mr Lee’s performance was getting better and better, the 1^st plaintiff had less than 50% chance to beat Mr Lee in a selection match.

200.  On the other hand, Mr Kwong, on the basis of what he had been told by Mr Mahmoud, the then person-in-charge of the HKSI Karate Coaching Team, alleged that in fact Mr Lee was initially not selected as a member of the kumite team at the time, but another athlete who was not an athlete coming from HKSI and was a total stranger to the HKSI Karate Coaching Team.  Mr Mahmoud was very dissatisfied with the selection result because it was really dangerous for somebody who was unknown to the Coaching Team to be sent to an important competition like the 2015 Asian Championship.  He therefore protested to the Federation which in the end agreed to select Mr Lee instead.

201.  Mr Tang also told this Court that Mr Lee had also informed him that he did not play in any selection match as such before he was included as part of the kumite team.

202.  In my view, no matter whether a selection match had to be played between the 1^st plaintiff and Mr Lee, it is certain that the 1^st plaintiff would be selected to join the kumite team for the 2015 Asian Championship:

(1)  If a selection match had to be played, it is the evidence of both Mr Kwong and Mr Tang that they considered that the 1^st plaintiff would be able to beat Mr Lee because while the 1^st plaintiff had much more experience, Mr Lee had only played in one adult competition beforehand;

(2)  I do not accept the Federation’s argument that, by reference to some comment sheets of both athletes, the 1^st plaintiff was a player who was going downhill while Mr Lee was improving all the time.  As Mr Tang (one of the coaches who in fact filled in the comment sheets) explained, it is unfair to do a comparison between the 2 athletes by reference to the comments and marks on those comment sheets because different standards had been applied to those 2 players (given the 1^st plaintiff was a full-time athlete while Mr Lee was still a Junior athlete at the material time);

(3)  On the other hand, if no selection match had to be played and the selection was made purely upon the recommendation of the HKSI Coaching Team, then according to the evidence of both Mr Kwong and Mr Tang, which I accept, but for the unavailability of the 1^st plaintiff, the HKSI Coaching Team would definitely have recommended him as a member of the kumite team. This was also reflected by the 1^st plaintiff’s competition target set out in the Elite Training Programme application form for year 2015/16, which, as Mr Kwong explained, was set upon discussion between the 1^st plaintiff and himself at the beginning of the 2015/16 year.

203.  Given my acceptance of Mr Kwong and Mr Tang’s evidence that Mr Lee had been selected without going through any selection match, and since they had told this Court that they definitely would have chosen the 1^st plaintiff to join the kumite team rather if he were available to be picked, I accept the 1^st plaintiff’s case that it is 100% certain that he would have been selected under these circumstances.

204.  The next question is: If the 1^st plaintiff was indeed selected to participate in the 2015 Asian Championship in the place of Mr Lee, what the chance is for the kumite team to achieve the same result?

205.  I am of the view that there is a real or substantial chance that the kumite team would have achieved the same result, if not a better result, because it is the undisputed evidence of Mr Kwong that the 1^st plaintiff had been trained for a long time to be a kumite team member.  Without disrespect to Mr Lee, the inclusion of the 1^st plaintiff would have enhanced the overall competitive level of the whole team.  I therefore do not see fit to apply any discount to the damages under “loss of opportunity”.

206.  Hence, but for the Policy, the 1^st plaintiff would have been an Elite B athlete in 2016/17.

207.  Paragraph 9.2 of the ETG Operation Guideline provides that:

“9. For athletes not fully meeting the required level of performance, but fulfilling either one of the following four conditions, the same results could be considered for support for a further 12-month period maximum:

9.2 Lack of equivalent events due to the intervals of the relevant major competitions i.e. Olympic Games, Asian Games, World Championships, Asian Championships, World Junior Championships, Asian Junior Championships, on the condition that athletes must have taken part in at last one other competition during the year.”

208.  On the basis of the above stipulation, so long as the 1^st plaintiff has participated in one competition in 2016/17, he would be entitled to maintain his Elite B status in 2017/18.

209.  The 1^st plaintiff has been an Elite C Athlete since 2013/14, until his Elite Athlete status was taken away by the Policy.  He had participated in a number of competitions during the said period.  In my view, the above objective fact is sufficient for this Court to come to the conclusion that it would be more likely than not that he would have participated in at least one competition in 2016/17 if he were still a full-time athlete at that time.  Indeed, it has been held in Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 at 1610E by Stuart Smith LJ that where the action required of the plaintiff is clearly for his benefit, the court will have little difficulty in concluding that he would have taken it.

210.  I therefore find that but for the Policy, the 1^st plaintiff would have been able to maintain his Elite B status in 2017/18.

211.  The Federation argued that since the Policy only envisaged a cessation of members’ participation in the Elite Training Programme for 4 months, the 1^st plaintiff’s alleged losses based on events beyond the 4-month “suspension period” was plainly not the ordinary consequence of a contractual breach of the kind that the Federation could have reasonably foreseen.  With greatest respect, I disagree, because as a matter of fact, the 1^st plaintiff’s status as Elite Athlete was not “suspended” but terminated under the Policy, which required him to re-apply to HKSI for re-admission into the programme.  Worse still, because such an application would be regarded as a new application in the middle of a year (commenced on 1 April and ended on 31 March in the following year):

(1)  The 1^st plaintiff would at most only be re-admitted as a member of the Senior Squad;

(2)  The previous achievement in international competitions which earned him his Elite C status in 2015/16 could not be re-used as such an achievement would be regarded as “spent”.

212.  The Federation’s argument is therefore rejected[14]. 

213.  By reasons of the aforesaid, I take the view that the 1^st plaintiff should as a matter of principle be compensated for his loss up to 31 March 2018.

E1.2  Residence

214.  As a full time athlete, the 1^st plaintiff had been living in “athlete hostel” provided by HKSI.  He had been deprived of this right because of the incident.  He therefore claims for a sum of $28,800 as his loss ($2,400 x 12 months) for 3 years.  He explained that he regarded a monthly sum of $2,400 as his loss because this was the figure used internally by HKSI for accounting purpose.

215.  The Federation did not challenge the figure of $2,400.  Rather, its arguments against such a claim are premised upon the followings:

(1)  Elite Athletes do not receive such “grants and subsidies” from HKSI as of right.

(2)  Such “grants and subsidies” represent the centralized training expenses that HKSI may incur if the athletes are in training.

216.  The above arguments are also deployed in opposition to a number of other heads of claims not only made by the 1^st plaintiff but also the other plaintiffs.  I will deal with these arguments once and for all.

217.  In my view, these arguments are misconceived.

218.  Although it is accepted by the 1^st plaintiff that he would not be paid any allowance in money terms in the event he did not elect to live in the hostel while he was still an Elite Athlete, it is undisputed that he did live in the hostel, and that his right to continue to do so had been lost.  Since it is this Court’s finding that his loss of right was caused by the Federation’s breach of contract, what was held in British Westinghouse Electric & Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd (No.2) [1912] A.C. 673 at 689 is applicable:

“[…] I think that there are certain broad principles which are quite well settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed […]”

219.  Hence, the 1^st plaintiff should be compensated for his loss of the right to live in the hostel.  The fact that he did not lease any new accommodation upon his moving out of the hostel is neither here nor there.

220.  However, since his Elite Athlete status was only terminated on 23 July 2015, there is no reason why he should be granted damages for 3 full years.  He should only be entitled to recover his loss for 32 months and 1 week.

221.  I therefore assess his loss under this head at $77,400 ($2,400 x 32¼ months).

E1.3  Meals

222.  The 1^st plaintiff’s case is that, as a full-time athlete, he was entitled to have free meals in HKSI.  His original claims were as follows:

(1)  Breakfasts: $30 x 31 days x 12 months = $11,160

(2)  Lunches: $62 x 31 days x 12 months = $23,064

(3)  Teas: $14 x 31 days x 12 months = $5,208

(4)  Dinners: $62 x 31 days x 12 months = $23,064

223.  During re-examination, the 1^st plaintiff clarified that on average he had only consumed 6 breakfasts, 6 lunches, 5 teas and 7 dinners on a weekly basis.  He therefore reduced his amount of claim under this head as follows:

(1)  Breakfasts: $30 x 6 days x 52 weeks = $9,360

(2)  Lunches: $62 x 6 days x 52 weeks = $19,344

(3)  Teas: $14 x 5 days x 52 weeks = $3,640

(4)  Dinners: $62 x 7 days x 52 weeks = $22,568

224.  The Federation did not challenge the unit cost of the meals, as no submission has been made in that regard.  It only submitted that he could not have taken so many meals as alleged.

225.  Reliance has been placed on Mr Choi’s evidence that according to HKSI’s meal booking records, the 1^st plaintiff did not take any meal in HKSI in the period from 1 April 2015 to 22 July 2015.

226.  However, Mr Choi admitted during cross-examination that he was not sure whether the booking records were accurate.  He further accepted that athletes could in fact have meals at the HKSI Canteen without making any booking in advance, which was consistent with the 1^st plaintiff’s evidence.  Indeed, since the 1^st plaintiff was a full-time athlete at least for the whole month in April 2015, it is most unlikely that he did not have a single meal in HKSI.  Bearing all the above matters in mind, I do not think HKSI’s booking records should be given any weight.

227.  On the other hand, I accept the 1^st plaintiff’s evidence on the average number of meals which he had had in HKSI, despite Mr Chiang’s submissions that the 1^st plaintiff is not a credible witness for the reason, inter alia, that he had initially inflated his claim.

228.  On the basis of the 1^st plaintiff’s reduced claims, his weekly loss is $1,056 which may be broken down as follows:

(1)  Breakfasts: $30 x 6 days = $180

(2)  Lunches: $62 x 6 days = $372

(3)  Teas: $14 x 5 days = $70

(4)  Dinners: $62 x 7 days = $434

229.  The 1^st plaintiff’s loss under this head for the period of 2 years 8 months and 1 week is therefore assessed at $144,672 ($1,056 x (52 weeks + 52 weeks + 33 weeks)).

E1.4  Overseas trips

230.  The 1^st plaintiff claims that but for the Policy, he would have the chance to participate in at least 10 overseas competitions and trainings. 

231.  It is the evidence of Mr Choi that the average expenditure incurred for sending a Karatedo athlete to attend overseas tournaments and trainings (including air tickets, accommodation, meals, event entry fee and other incidental expenses but excluding travel insurance) in the year 2015 – 2016 was in the total sum of $13,400, in respect of which the 1^st plaintiff does not dispute.  The 1^st plaintiff therefore claims for the sum of $134,000 under this head for each year.

232.  However, in my view, what the 1^st plaintiff has really lost was the opportunity to participate in overseas competitions (which will be considered under a different head of damages), rather than, for example, the chance to travel by plane.

233.  Furthermore, the award of damages under this head would lead to double-counting in respect of items such as accommodation and meals.

234.  I therefore do not agree that the 1^st plaintiff should be awarded damages under this head.

E1.5  Travel insurance

235.  The 1^st plaintiff also claims the costs of travel insurance in respect of the aforesaid overseas trips. 

236.  I am of the view that such expenses on travel insurance cannot be said to be his loss at all.

237.  I therefore dismiss this head of claim.

E1.6  Local and fitness training

238.  It is Mr Choi’s evidence that:

(1)  As a full-time HKSI athlete, the 1^st plaintiff was required to attend 25 hours of training (inclusive of fitness training) per week;

(2)  In 2015 – 2018, full-time HKSI coaches were paid monthly salaries whereas part-time HKSI coaches were paid at the rate of $350 – $450 per hour, depending on the particular coach’s qualification.

239.  On the above basis, the 1^st plaintiff claims that since he had lost the training by HKSI, he should be compensated for the sum of $540,000 ($450 x 25 times x 4 weeks[15] x 12 months) for each year.

240.  The Federation opposes the 1^st plaintiff’s claim on 2 grounds.

241.  Firstly, it was said that since it is the 1^st plaintiff’s evidence that he enjoyed free fitness training as a fitness trainer after he ceased to be a full-time athlete, his claim made on the basis of 25 hours’ training should be reduced accordingly.

242.  This argument is rejected, because the 1^st plaintiff has already made it clear in his Opening Submissions that he would only claim for his loss in “local training” and would abandon his claim on “fitness training”.  The 1^st plaintiff’s entitlement to use fitness training equipment free of charge is therefore irrelevant. 

243.  In any event, the 1^st plaintiff’s claim is not about the right to use fitness training equipment in the first place.

244.  Secondly, the Federation relied on Mr Choi’s evidence that the 1^st plaintiff did not meet HKSI’s requirement on training hours in the month of April 2015, as he had only attended 68 hours of training. 

245.  However, it is the evidence of Mr Kwong that the 1^st plaintiff’s absence in training in April 2015 had been approved by him at the time because of his study.

246.  The Federation submitted that whether the 1^st plaintiff’s absence had been approved or not is irrelevant for our purpose.  I disagree.  This is because if the 1^st plaintiff’s absence in April 2015 had been approved, then it cannot be said that he had failed to make use of his right without reason in the past, which would have an adverse effect on his claim that he had lost his right by reason of the Federation’s breach of contract. 

247.  In any event, insofar as it is alleged that the 1^st plaintiff had failed to attain the training requirement, April 2015 is the only month which has been cited as an example.  No complaint has been made in this regard in respect of any other month. 

248.  Mr Chiang further submitted that given the 1^st plaintiff’s evidence that, having become a fitness trainer, he had been too busy to receive any training, he would be placed in a better position than if there had been no breach on the part of the Federation.  I do not accept this argument, because what the 1^st plaintiff earned from his job of being a fitness trainer would be deducted from the amount of damages which he is entitled (see further below).

249.  What had troubled me is whether there would be any double-counting if the 1^st plaintiff is awarded loss in trainings and loss of ETG at the same time, because it seemed to me at first sight that the main purpose of receiving those trainings was for him to achieve results in international tournaments, so that he could maintain his (or achieve a higher) Elite Athlete status, which in turn would render him eligible to receive ETG.

250.  However, at the end of the day, I have come to the conclusion that there should not be any concern as such because :

(1)  The trainings were indeed what the 1^st plaintiff had lost, and as a matter of principle, he should be compensated and be placed in the same position as if the contract had been performed as far as money can do it;

(2)  The criteria of receiving ETG was to receive trainings for the minimum of 25 hours per week.  If this requirement was not met for a particular month, while the 1^st plaintiff would not be entitled to the ETG for that month, that would not affect his entitlement to receive trainings in the following month.   Viewed in this light, it seems that the 2 heads of losses are separate and should not be mixed up or considered together.  Take April 2015 (when 1^st plaintiff only received a total of 68 hours of training because of his study) as an example.  He was not paid any ETG that month.  If for some reason he had been deprived of his training time in April 2015, then while it could not be said that such deprivation of trainings had led to his loss of ETG (because, with the benefit of hindsight, he would not meet the training hours requirement anyway), in reality he had still been deprived of the 68 hours’ training time.  If such deprivation was unlawful, there is no reason why he should not be compensated;

(3)  Looking at the matter from another angle, there were indeed many months in which the 1^st plaintiff had attended at least 25 hours of training every week and as a result received the corresponding ETG.  That means he had received both benefits at the same time.

251.  I therefore take the view that the 1^st plaintiff should be compensated for his loss in trainings.  However, as mentioned above, I do not think the 1^st plaintiff should be granted damages for 3 full years.  He should only be entitled to his loss for 2 years 8 months and 1 week.

252.  The 1^st plaintiff’s loss for each week is $11,250.  Adopting the 1^st plaintiff’s approach that there are 4 weeks within a month, I would grant the 1^st plaintiff’s claim in full under this head at $1,451,250 ($11,250 x 4 x (8 + 12 + 12) + $11,250).

E1.7  Physiotherapy

253.  The 1^st plaintiff claims for a sum of $38,400 per year under this head, on the basis that he would receive 48 sessions of physiotherapy of 1 hour each within a year, and that the market rate of physiotherapy was $800 per hour.

254.  Mr Choi gave evidence that during the period from 1 April 2015 to 22 July 2015, the 1^st plaintiff did not attend any physiotherapy session at HKSI at all.  He also told this Court that there was always a shortage of the number of physiotherapists in HKSI, and as a result, 10 odd physiotherapists employed by HKSI had to serve the entire HKSI which had around 1,000 athletes at the material time.  Moreover, he stated that the actual frequency of an athlete attending physiotherapy sessions depends on the actual injury situation of the athlete.

255.  On the other hand, while the 1^st plaintiff accepted that he needed to book before he could receive physiotherapy treatment, he alleged that the HKSI’s records (which show that he did not attend any physiotherapy session during the said period) were incorrect. 

256.  While generally speaking I accept the 1^st plaintiff as a credible witness, I doubt whether his memory is reliable in this regard.  After all, he was giving evidence in relation to events which took place specifically in the period between April 2015 and July 2015.    I doubt whether the 1^st plaintiff could really remember whether he had attended any physiotherapy session within those few months. 

257.  On the other hand, I accept Mr Choi’s evidence because he spoke by reference to HKSI’s records on physiotherapy, which seem to me to be much more reliable than the aforesaid meal booking records. 

258.  It should also be borne in mind that there was a shortage of physiotherapists in HKSI, and therefore it is more likely than not that all physiotherapy sessions must have to be pre-booked, and there is no reason why HKSI’s booking records would be incorrect.

259.  The shortage problem also has an impact on the 1^st plaintiff’s claim in another way.  For example, in the extreme case, despite the 1^st plaintiff’s entitlement to receive physiotherapy treatment, if he had never been able to book successfully and therefore he had never received such treatment, then in reality he needs not be compensated for the purpose of putting him in a position as same as the pre-breach situation.

260.  In my view, it is simply impossible for the Court to assess the 1^st plaintiff’s loss in this respect.  Given he has the burden to prove loss, I find that he has failed to do so, and therefore I would not grant him any damages under this head.

E1.8  Loss of opportunity

261.  Under Section E1.1 above, I have made a finding of fact that, but for the Policy, the 1^st plaintiff would have been an Elite B Athlete in 2016/17 and 2017/18.

262.  It is evident that the ETG for Elite B for year 2016/17 and year 2017/18 were at least $13,280 and $14,170 respectively.

263.  However, the 1^st plaintiff only limited his claim to $11,190 per month for those 2 years.

264.  I therefore allow his claim under this head for $268,560 ($11,190 x 24 month).

E1.9  Loss of ETG during 2015/16

265.  In paragraphs 248 – 249 of the Federation’s Closing Submissions, Mr Chiang submitted that:

“248. P1 received an ETG monthly payment of $11,190 up to 22 July 2015 before the Suspension and commenced full-time employment in Physical Health Centre Hong Kong Limited since 2 October 2015, earning monthly salaries higher in dollar amount than the ETG payment.

249. On this basis, [the Federation] concedes that if breach of contract is substantiated, [the Federation] would owe P1 [9/31 + 2 + 1/31] x $11,190 = $25,990.”

266.  At the trial, Mr Poon for the 1^st plaintiff agreed that the 1^st plaintiff’s loss of ETG for 2015/16 could be assessed at $25,990 as conceded by the Federation.

267.  However, the matter is not as straight-forward as it seems.

268.  As stated above, the 1^st plaintiff had received ETG up to 22 July 2015.  But for the Policy, he would have received ETG for 2015/16 up to 31 March 2016.  That means the 1^st plaintiff had suffered a loss of $92,768 ((9/31 + 8) x $11,190).

269.  On the other hand, it is undisputed that the 1^st plaintiff had earned the total remuneration of $85,708 in the financial year 2015/16 for being a fitness trainer, and that such income should be set-off against the 1^st plaintiff’s loss (at least in relation to his loss of ETG, see Section E1.13 below).  Viewed in such light, it is difficult to understand why the Federation agreed that it should be liable for $25,990 as the 1^st plaintiff’s ETG loss in that year.  The matter was further complicated by the Federation’s stance as expressed in paragraph 106 of its Reply Submissions which stated that:

“Finally it is emphasised that the concession made in §249 in [the Federation’s Closing Submissions] as regards the compensation payable by [the Federation] in the event of a substantiated breach of contract is still subject to mitigation from the income earned by P1 for the claim period.”

270.  In other words, it is the Federation’s contention that the “agreed” amount of $25,990 should be subject to further reduction by reason of the 1^st plaintiff’s mitigation of his loss.

271.  To simplify the matter, I propose that I do not take the 1^st plaintiff’s remuneration into account at the moment.  The reduction of damages by way of mitigation of loss will be considered at one go in Section E1.13 below.  In the meantime, I would only record that the 1^st plaintiff has suffered the loss of ETG during 2015/16 in the sum of $92,768, before any reduction.

E1.10   Cash Grant under the Elite Athletes Performance Recognition Scheme (“Cash Grant”)

272.  On the basis of the scenario that the 1^st plaintiff would be an Elite B Athlete for both year 2016/17 and year 2017/18, it was alleged that he would be eligible to receive an one-off Cash Grant if he chooses to retire at the end of year 2017/18.  The figure for an Elite Athlete having attained Elite B, as confirmed by Mr Choi in his oral evidence, would be based on 6 months of the standard monthly ETG entitled by an Elite A+ athlete. The standard monthly ETG of Elite A+ was $33,040 for year 2017/18. It is therefore claimed that the corresponding sum which the 1^st plaintiff would be entitled to should be $198,240 ($33,040 x 6).

273.  However, according to Mr Choi’s explanation, one of the conditions for obtaining this grant is that the applicant has achieved at least one Elite Vote Point 4 or above according to the EVSS Generic Scoring Table.

274.  It is undisputed that up to the termination of the 1^st plaintiff’s Elite Athlete status, he has never attained such an achievement.  Neither is there any evidence nor submission to establish/argue that there is a real or substantial chance for him to be able to attain such an achievement.

275.  I therefore find that the 1^st plaintiff has failed to prove this claim.

E1.11 Intervening act

276.  Mr Chiang for the Federation has referred this Court to paragraph 30-080 of Chitty on Contracts (supra), Volume 1, which states that:

“There may be a break in the chain of causation where the claimant, following the defendant’s breach of contract, has suffered loss through his own voluntary act or omission even though the loss was not of a kind that was unforeseeable, so that it was not too remote.”

277.  He submitted that there were intervening acts on the part of the 1^st plaintiff which had broken the chain of causation between the suspension of 4 months and his alleged loss, namely:

(1)  He did not apply for selection to participate in the 5^th EAKF Senior Championships and therefore had deprived himself of the opportunity to attain achievements for the purpose of re-enrolment in HKSI’s Elite Training Programme in 2016 and in subsequent years;

(2)  he has refused to take up the joint offer of the Federation and HKSI to get enrolled in the Federation’s training programme as a Preliminary Athlete in 2016/17;

(3)  he did not in subsequent years participate in any open selection events for re-enrolment in the Federation’s training programme, thus depriving himself of the opportunities of re-enrolment in the Elite Training Programme.

278.  As far as the 5^th EAKF Senior Championships is concerned, the selection process was conducted on 29 March 2015, which was before the Federation’s breach of the contract.  Therefore this cannot be an intervening event as such.

279.  As to the Federation’s invitation to join its training programme as a Preliminary Athlete, I accept the 1^st plaintiff’s evidence that, as a matter of reality, he simply was not in a position to accept such an offer, because, having lost his status as a full-time athlete and the monthly grant in the form of ETG, he had no choice but to seek another full-time job so as to support himself.  He had become a fitness trainer which required him to work for 6 days a week from 12 noon to 11pm.  Such a work schedule did not allow him to train regularly as a karate athlete, not to mention that it clashed with the training of Preliminary Athletes which took place at 7 – 9pm once/twice a week.  It was thus reasonable for the 1^st plaintiff not to take up the Federation’s invitation.

280.  Furthermore, the 1^st plaintiff’s refusal to take up the said offer is simply not an independent act or event.

281.  The Federation’s reliance on the 1^st plaintiff’s failure to “participate in open selection events” may also be dealt with in the same way: It was the Federation’s breach which had deprived the 1^st plaintiff the privilege of training full-time as a karate athlete.  It would be most unreasonable if the Federation would be allowed to rely on such a situation to relieve its own liability to compensate the 1^st plaintiff.  Furthermore, as explained by Mr Leung himself in paragraph 25(b) of his witness statement:

“[The Federation] organises annual local competitions. Adult athletes (aged 16 and above) who achieved the top 5 places in these annual events may be invited (but not as an automatic right) to join the elite training programmes organised by [the Federation]. As distinct from HKSI’s elite athletes who are trained by HKSI-appointed full-time and part-time coaches, these [Federation] elite trainees are trained by part-time professional coaches appointed by [the Federation]. Adult trainees (aged 16 and above) are called Preliminary Athletes (初級培訓運動員) and junior athletes are called Feeder Athletes (青苗初級培訓運動員).”

282.  It can therefore be seen that even if the 1^st plaintiff did participate in and win any open competitions organised by the Federation, this would at most (but not necessarily) bring him the Preliminary Athlete status.  Viewed in such light, it is not understood why the Federation saw fit to rely on this matter as a separate “intervening act/omission”.

E1.12   Remoteness of damages

283.  The Federation’s argument on remoteness of damages is applicable to the claims of all plaintiffs.  I will therefore deal with such argument once and for all here.

284.  In a gist, it is the Federation’s argument that the plaintiffs’ claims for loss and damages do not satisfy the test of remoteness because:

(1)  The Federation is a non-profit making body run by volunteers elected into the General Committee by voting members at Annual General Meetings. Financially it is almost wholly dependent on Government subvention for funds.  Income from membership fees is meagre;

(2)  The liability of the Federation’s members is limited.  In the event it is wound up, a member is obligated to contribute only an amount not exceeding $100 to the Federation’s debts and liabilities and the cost of winding up;

(3)  The plaintiffs’ respective claims, even if looked at individually and separately, are simply beyond the Federation’s affordability;

(4)  The amounts of the claimed items were so high that it was clearly not within the reasonable contemplation of the Federation at all levels of the organisation’s hierarchy: The Coaching Committee when the Policy was formulated and approved unanimously, the General Committee when the Policy was endorsed, and the Annual General Meeting when members’ attention was drawn to the Policy;

(5)  The plaintiffs’ claims for ETG, subsidies and benefits were payable and provided by HKSI under separate agreements between each of the plaintiffs and HKSI.  However, the plaintiffs only chose to sue the Federation for compensation, but not to include HKSI as a co-defendant in the proceedings. This approach cannot be said to be a natural outcome and “according to the usual course of things”.  The Federation could not possibly be held liable for this particular type of loss.

285.  First of all, the defence of “remoteness of damages” has never been pleaded in the Federation’s pleadings, and therefore it should not be allowed to run such a defence at the trial.

286.  Mr Chiang argued that since the Federation was not obliged to plead law pursuant to Order 18 rule 11 of the Rules of the High Court, there was no need to plead “remoteness of damages” in the Federation’s pleadings.  With greatest respect, this argument must be rejected, for it is trite that the functions of the Federation’s pleadings, among other things, were to[16]:

(1)  inform the plaintiffs of the nature of the case that they had to meet;

(2)  prevent the plaintiffs from being taken by surprise at the trial;

(3)  enable the plaintiffs to know what evidence they ought to be prepared with and to prepare for trial;

(4)  limit and define the issues to be tried.

287.  Further, the plaintiffs should not be required to second-guess how the Federation would make use of the material facts pleaded in its pleadings so as to resist the plaintiffs’ claims.

288.  Even if the Federation was only required to plead the material facts in support of its argument on “remoteness of damages” without expressly referring to this defence (which I disagree), the situation here is that the Federation has simply failed to plead the afore-mentioned facts in its Defence, apart from stating that the Federation was not a party and thus not privy to the terms of any contractual agreement between the individual plaintiffs and HKSI in relation to the provision of ETG by HKSI. Therefore, Mr Chiang’s argument is futile in any event.

289.  The Federation’s argument on “remoteness of damages” may therefore be dismissed for the above reasons alone.

E1.13   Mitigation of damages

290.  It is undisputed that, as can be shown by a number of employer’s returns and the 1^st plaintiff’s own tax returns, the 1^st plaintiff had earned remuneration in the total sum of $729,116[17] from the 2015/16 financial year up to the 2017/18 financial year.

291.  While, as a matter of principle, Mr Poon for the 1^st plaintiff agreed that the aforesaid remuneration should be taken into account when the amount of damages is calculated, he submitted that such remuneration might only be set-off against the 1^st plaintiff’s loss of ETG because the Inland Revenue Department only regarded ETG as income.

292.  With respect, I disagree with Mr Poon’s submissions.  It is the 1^st plaintiff’s case that, on top of the ETG (which may be regarded as his monthly income), he had also lost a number of benefits, which he had successfully claimed by converting them into money terms.  These items, together with the ETG which he would have received, formed his entire loss.  As accepted, he was under a duty to mitigate his loss.  In his case, he got a full-time job, from which he had earned the aforesaid remuneration.  There is no reason why the aforesaid remuneration should only be used to set-off the ETG which was only part of his loss.  In my view, since the 1^st plaintiff is now claiming for loss covering nearly 3 years, the overall remuneration earned during that period should be used to set-off the total loss, which is not limited to the loss in ETG.

E1.14 Summary of the damages awarded to the 1^st plaintiff

293.  I summarise the items of damages which are awarded to the 1^st plaintiff as follows:

Residence Meals Local and fitness training Loss of opportunity Loss of ETG during 2015/16	$77,400 $144,672 $1,451,250 $268,560 $92,768
Sub-total:	$2,034,650
Less: Remuneration earned	($729,116)
	----------------
Total:	$1,305,534

E2.  The 2^nd plaintiff

294.  There is no dispute that the 2^nd plaintiff’s freezing period started from 1 January 2016.  She was informed about being re-admitted into the Elite Training Programme on 8 April 2016 with retrospective effect from 1 April 2016.

E2.1  ETG

295.  Parties agreed that the 2^nd plaintiff’s loss of ETG should be calculated on the basis of 3 months, and therefore a sum of $5,040 should be awarded.

E2.2  Meals

296.  The 2^nd plaintiff was not a full-time athlete at the material time.  She therefore confined her claim under this head to 4 dinners per week from 1 January 2016 up to 8 April 2016: $62 x 4 days x 14 weeks[18] = $3,472.

297.  Reliance has been placed on Mr Choi’s evidence that according to HKSI’s meal booking records, the 2^nd plaintiff had only had 8 dinners in HKSI from 1 October 2015 to 31 December 2015, and did not take any meal in HKSI in the period from 1 April 2016 to 30 June 2016.

298.  However, as aforesaid, Mr Choi admitted during cross-examination that he was not sure whether those booking records were accurate.  He further accepted that athletes could in fact have meals at the HKSI Canteen without making any booking in advance. 

299.  On the other hand, I accept the 2^nd plaintiff’s case on the average number of meals which she had had in HKSI.

300.  Having said that, the 2^nd plaintiff’s claim under this head is made on the assumption that she would have attended the trainings as required by HKSI.  However, it was the evidence of Mr Choi that:

“[…] The normal local training requirement for part-time athletes is 15 hours over 4 days per week. During the period from 1 October 2015 to 31 December 2015 and the period from 1 April 2016 to 30 June 2016, [the 2^nd plaintiff] met this requirement except for the month of December 2015 when she undertook no training at all. […]”[19]

301.  Mr Choi did not explain why he had only referred to the above periods in his supplemental witness statement.  It seems from the evidence of Mr Choi quoted under Section E3.1.1 below that HKSI did keep training records at least up to early 2014, and it was not the evidence of Mr Choi that the 2^nd plaintiff did not submit training log from April 2015 onwards.  I will therefore infer that December 2015 was the only month when the 2^nd plaintiff did not meet the 15 hours’ requirement set by HKSI in year 2015/16.

302.  There were a total of 9 months (April 2015 – December 2015) in year 2015/16 up to the time when the 2^nd plaintiff’s Elite Athlete status was taken away by virtue of the Policy.  The 2^nd plaintiff had been absent for the whole month of December 2015.  That means her attendance in that year was at the rate of 8/9.

303.  I therefore take the view that her compensation under this head, if granted, should be discounted accordingly.

304.  As far as the 2^nd plaintiff is concerned, the Federation had made an additional point that since her status had been resumed retrospectively on 1 April 2016, she had suffered no loss in relation to the first week of April 2016.  This argument is only sensible in relation to ETG (and that is why the 2^nd plaintiff could reach an agreement on the amount of loss under Section E2.1 above, on the basis that she had received her ETG in respect of the period starting from 1 April 2016). However, the same cannot be said of the other heads of claim such as meals, because the resumption of the 2^nd plaintiff’s status was not confirmed until 8 April 2016, and hence she could not have taken advantage of her Elite Athlete status earlier.

305.  I therefore award her the sum of $3,086.22 ($62 x 4 days x 14 weeks x 8/9).

E2.3  External training

306.  The 2^nd plaintiff’s case is that she had to engage an external coach to maintain the level of training during the freezing period.  

307.  Ms Cheung has provided various invoices for the fees which the 2^nd plaintiff was liable to pay the external coach.  It can be seen that the hourly rate charged by the external coach was $1,000, and 15 hours of training had been arranged each week.  She gave evidence that $1,000 per hour was the market rate at the material time.

308.  On the above basis, the 2^nd plaintiff claims for the sum of $210,000 ($1,000 x 15 hours x 14 weeks[20]).

309.  The Federation opposed this claim on 3 grounds:

(1)  the intensity of the training arranged for the 2^nd plaintiff during the suspension period was much more than the normal training which she had received before 1 January 2016;

(2)  the remuneration of the coach engaged was very much higher than that of the part-time instructors employed by National Sports Associations and the HKSI part-time coaches, and it is out of proportion to the advantage gained by the 2^nd plaintiff;

(3)  the 2^nd plaintiff has failed to discharge her burden to prove that the self-arranged training did take place, as the alleged training is not supported by any written record nor receipts.

E2.3.1  Intensity of training

310.  The 2^nd plaintiff is claiming for 15 hours of training for week.  However, as explained under Section E2.2 above, the 2^nd plaintiff’s attendance in 2015/16 was taken to be 8/9. 

311.  I therefore agree that she should not be entitled to the alleged full loss.

312.  I take the view that her compensation under this head, if granted, should also be calculated by applying a rate of 8/9 accordingly.

E2.3.2  Remuneration of the coach

313.  The Federation submitted that the remuneration of the coach engaged by the 2^nd plaintiff was very much higher than that of the part-time instructors employed by National Sports Associations and the HKSI part-time coaches, because:

(1)  it is the evidence of Mr Choi that the part-time coaches engaged by HKSI were paid at the rate of $350 – $450 per hour at the material time;

(2)  it is the evidence of Mr Leung that the rate of part-time instructors engaged by National Sports Associations for squad training programmes subvented by the Leisure and Cultural Services Department was $399 in the period between 1 August 2015 and 31 July 2016.

314.  On the other hand, it was the evidence of Ms Cheung that the market rate of karate personal coaches at the material time was $1,000 per hour.

315.  In my view, the hourly rates adduced by the Federation are not helpful because:

(1)  It is unclear whether the part-time coaches engaged by HKSI were teaching the athletes on one-on-one basis;

(2)  Even if so, the bargaining power of HKSI is apparently stronger than a private user in the market and therefore as a result it is more likely than not that HKSI would be able to obtain a lower rate;

(3)  The hourly rate set by the Leisure and Cultural Services Department which National Sports Associations were bound to adopt has even less probative value.  Apart from the similar problem that this was not a rate obtained from the private market, the rate was applicable across the board, that means not limited to karate coaches. 

316.  As the Federation has not adduced evidence on the hourly rate charged by personal karate coaches in the private market, I would accept Ms Cheung’s evidence and adopt the rate of $1,000 for the present purpose.

317.  It was further submitted by Mr Chiang that the amount of damages is out of proportion to the advantage gained by the 2^nd plaintiff on the basis that it could not be seen that the 2^nd plaintiff had remarkable performance after the freezing period.  This submission is rejected:

(1)  The Court should not take into account whether the 2^nd plaintiff had indeed improved before deciding whether she should be entitled to be compensated for the lost hours of training;

(2)  In any event, there is no evidence on the 2^nd plaintiff’s performance at all.  This Court refuses to draw any inference on her performance merely by reference to her results in various competitions which she had participated because it is common sense that competition results can be affected by many factors other than performance.

E2.3.3  Did the training actually take place

318.  Lastly, the Federation queried whether the training had really taken place, on the basis that the alleged training was not supported by written records, nor was the payment of the training fees supported by any receipt issued by the external coach.

319.  I do not accept these arguments, as I have no hesitation to accept the evidence of Ms Cheung that the 2^nd plaintiff had indeed received training given by an external coach during the freezing period despite the grounds put forward on behalf of the Federation.

E2.3.4  Out-of-pocket expenses

320.  It was the evidence of Ms Cheung that out of the total sum of external coach fees incurred, she had only settled partially and there is still a sum of $85,000 which is yet to be paid to the coach.

321.  Be that as it may, I do not think this should be an obstacle of the claim, so long as this Court accepts (and I do accept) that the total costs of $210,000 had indeed been incurred.

E2.3.5 Calculation of damages

322.  For the above reasons, the amount of damages should be assessed at $186,666.67 ($1,000 x 15 hours x 14 weeks x 8/9).

E2.4  Physiotherapy

323.  The 2^nd plaintiff claims for 1 session of physiotherapy at $800 each for 14 weeks. The total amount of her claim is therefore $11,200 ($800 x 14).

324.  According to HKSI’s record, during the period from 1 October 2015 to 31 December 2015 and from 1 April 2016 to 30 June 2016, the 2^nd plaintiff had not attended any physiotherapy session at HKSI.

325.  Further, according to the evidence of Mr Choi which I accept, the actual frequency of an athlete attending physiotherapy sessions depends on the actual injury situation of the athlete.

326.  Moreover, Mr Choi told this Court that there had been a shortage of physiotherapists in HKSI.  In other words, even if the 2^nd plaintiff had tried to make a booking, there was a possibility that she might not be able to secure a physiotherapy session.

327.  Hence, for the same reason explained in Section E1.7 above, I refuse to grant any damages under this head.

E2.5  Protective equipment

328.  The 2^nd plaintiff claims for her loss of use of protective equipment at $300 per week during the period between 1 January 2016 and 8 April 2016.  The total amount of claim is thus $4,200.

329.  Ms Cheung testified that “protective equipment” included sport tapes for training and analgesic gel which contained no banned athletic performance-enhancement drugs. She gave an example that a roll of sport tape costed $100 around 10 years ago and several rolls were needed by the 2^nd plaintiff every week.

330.  This claim was not challenged at all.  I therefore award the 2^nd plaintiff the claimed sum of $4,200.

E2.6  Loss of opportunities

331.  The 2^nd plaintiff also claims that the Policy had prevented her from participating in the selection for 3 international competitions, and as a result, she missed the chance to compete in those competitions which were held in year 2016/17 and had thus been deprived of the opportunity to achieve the necessary result for promotion to become a Junior A (or alternatively Junior B) Athlete in year 2017/18.  She therefore claims for the difference in ETG for the year 2017/18 between Junior Squad and Junior A (or Junior B, as the case may be).

332.  Those 3 international competitions were:

(1)  The 15^th AKF Cadet, Junior & U-21 Championship held in November 2016 (“the AKF Championship”) (the selection date was 31 January 2016) ;

(2)  The 6^th EAKF Senior Championships & 5^th EAKF Junior & Cadet Championship held in June 2016 (“the EAKF Championship”) (the selection date was 31 January 2016);

(3)  The 9^th WKF Youth Training Camp & Karate 1 WKF Youth Cup held in June – July 2016 (“the WKF Youth Cup”) (it is accepted by the Federation that if the 2^nd plaintiff were selected to participate in the AKF Championship, she would be automatically selected to compete in the WKF Youth Cup).

333.  According to Mr Choi’s evidence which is undisputed:

(1)  The 2^nd plaintiff must win a gold or silver medal in the AKF Championship in 2016 in order to get enrolled as a Junior A Athlete in 2017/18; 

(2)  Even if the 2^nd plaintiff could win a gold medal in the EAKF Championship, that would only have got her a Junior Squad status in the following year;

(3)  The best that the 2^nd plaintiff could achieve by winning a medal in the WKF Youth Cup was a Junior B status in the following year.

334.  Hence, the questions are:

(1)  Whether there was a real or substantial chance that the 2^nd plaintiff would be selected to join the AKF Championship;

(2)  whether there was a real or substantial chance that the 2^nd plaintiff could win a gold or silver medal in the AKF Championship in 2016 or a medal in the WKF Youth Cup.

335.  Pausing here, I note that it is Mr Chiang’s argument that the test should be whether, on the balance of probabilities, the 2^nd plaintiff would get selected to participate in the AKF Championship and, if she were selected, whether on the balance of probabilities she would win the necessary medal as explained by Mr Choi.  With respect, I do not think those are the appropriate questions to ask, because whether the 2^nd plaintiff would be selected and whether she would win the competitions would depend on whether some third parties would act in a certain way and this would involve the occurrence of a contingency outside the control of the 2^nd plaintiff.

336.  Coming back to the 1^st question of whether the 2^nd plaintiff would be selected to join the AKF Championship, I note that she has been selected to participate in this competition in the 16^th AKF (held in 2017). 17^th AKF (held in 2018) and 18^th AKF (held in 2019).  With these track records, I am of the view that she must have a real or substantial chance of being selected to join the same competition in 2016 but for the Policy saga.  I would assess such a chance at 90%.

337.  The next question is whether she would be able to get the required result in the AKF Championship and the WKF Youth Cup.

338.  As the 2^nd plaintiff herself fairly accepted, there are many factors which could affect the result in a competition and some of those factors are simply out of the athlete’s control (for example, the drawing of lots which decide on who she was going to face at the early stage of the competition).

339.  Indeed, it can be seen that while the 2^nd plaintiff had won a silver medal in the following AKF Cadet, Junior & U-21 Championships held in July 2017, she only got 5^th place in the same event which was held in May 2018. 

340.  This demonstrates the uncertainty in the matter.

341.  Having said that, as pointed out by the plaintiffs’ counsel, it has long been recognized that while assessment of damages may sometimes be incapable of being carried out with certainty and precision, that does not relieve the wrongdoer from paying damages: Chaplin v Hicks [1911] 2 KB 786 at 792, followed in Ka Da Watch Co. Ltd. v Skyworld Air Express Ltd. (CACV 62/1990, unreported, 9 April 1991).  The Court should still do the best it can.

342.  Doing the best I can, I assess that there is a 50% chance that 2^nd plaintiff would be able to win a gold or silver medal in the AKF Championship in 2016 which would entitle her to get enrolled as a Junior A Athlete in 2017/18.

343.  It is evident that the monthly ETG for Junior A athlete in year 2017/18 was $6,600.  Applying my findings above, she should not be entitled to the full sum of $6,600, as this sum should be discounted for the possibility that she would not be selected and the chance that she would not win either a gold or silver medal in the AKF Championship.  The discounted figure should be $2,970 ($6,600 x 90% x 50%).  Since this sum is less than the monthly ETG for Junior Squad members in year 2017/18 ($3,590[21]), she has not suffered from any net loss.

344.  As far as the WKF Youth Cup is concerned, I would infer that this is a less important competition as compared to the AKF Championship because the Federation accepts that participation in the WKF Youth Cup was meant to provide “training by competition” for athletes who were going to participate in the AKF Championship.  On that basis, I would further infer that the competition is less fierce in the WKF Youth Cup.  Moreover, to earn herself a Junior B Athlete status in the following year, all that the 2^nd plaintiff required is to get a medal, which must be easier than getting a gold or silver medal in the AKF Championship.

345.  With all the above in mind, I assess that there is an 80% chance that the 2^nd plaintiff would be able to achieve her aim in the WKF Youth Cup.

346.  It is evident that the monthly ETG for Junior B athlete in year 2017/18 was $4,880.  While I am satisfied that the 2^nd plaintiff has a real or substantial chance to win a medal in the WKF Youth Cup, a discount should be applied to reflect my finding that it is not a certainty.  Hence, the ETG for Junior B status in 2017/18 should be taken to be $3,513.60 ($4,880 x 90% x 80%). Since this sum is less than the monthly ETG for Junior Squad members in year 2017/18 ($3,590), she has not suffered from any net loss.

347.  Therefore, the claim under this head is rejected.

E2.7  Summary of the damages awarded to the 2^nd plaintiff

348.  I summarise the items of damages which are awarded to the 2^nd plaintiff as follows:

ETG Meals External training Protective equipment	$5,040.00 $3,086.22 $186,666.67 $4,200.00
	----------------
Total:	$198,992.89

E3.  The 3^rd plaintiff

349.  The Policy was applied to the 3^rd plaintiff on 1 December 2015 until 12 March 2016.  She was only able to return to the Elite Training Programme on 1 April 2016.  Hence, the total period in which she had lost her Elite Athlete status was four months or 16 weeks[22].

E3.1  External training

350.  During the 4-month suspension period, the 3^rd plaintiff had engaged her mother (Ms Wong) who was a qualified and experienced karate coach as her personal coach.  She provided karate training to the 3^rd plaintiff in her karate dojo “K Kids Sport”.

351.  On the above basis, the 3^rd plaintiff claims for $50,000 which is the total cost of 160 hours’ training (40 hours per month, ie. 10 hours per week, at the hourly rate of $312.5). 

352.  The Federation raised objection against this head of claim on the following grounds:

(1)  the intensity of the training arranged for the 3^rd plaintiff during the freezing period was much more than the normal training which she had received before 1 December 2015;

(2)  applying the test of reasonableness, the cost of the self-arranged training is not reasonable because it was out of proportion to the advantage to be gained by the 3^rd plaintiff;

(3)  the 3^rd plaintiff has failed to discharge her burden to prove that the self-arranged training did take place, as the alleged training is not supported by any written record nor receipts. While Ms Wong alleged that the fees payable by the 3^rd plaintiff had been off-set by Ms Wong’s salaries payable by K-Kids, no accounting record of K-Kids had been produced in support.

E3.1.1    Intensity of training

353.  It was the undisputed evidence of Mr Choi that:

“10. […] regarding local training (inclusive of fitness training), the normal training requirement for part-time athletes is 15 hours over 4 days per week. During the scholarship period of [the 3^rd plaintiff], she did not meet the required training hours in in the following months:

Year	Month	Training hours undertaken	Year	Month	Training hours undertaken
2014	Feb	0	2015	Jun	8
2014	Mar	0	2015	Jul	12
2014	Oct	12	2015	Oct	0
2014	Nov	12	2015	Nov	12
2015	Mar	24	Jul 2016 – Mar 2017		No training log submitted by [the 3rd plaintiff]

[…]”

354.  As a matter of fairness and reasonableness, I am of the view (which her counsel also agreed) that the 3^rd plaintiff’s loss under this head of claim should be calculated by reference to the actual average amount of training which she had received before the freezing period.

355.  While the 3^rd plaintiff joined as part-time Junior Squad in June 2013, I am of the view that only the statistics for the year 2015/16 should be taken into account, because personal circumstances might have changed over time.  Considering the statistics in 2013/14 and 2014/15 would not be the fairest way to deal with the matter.

356.  There was a total of 8 months since April 2015 up to November 2015 (the freezing period began to run on 1 December 2015).  Out of those 8 months, the 3^rd plaintiff met the training requirement for 4 months.  Therefore, it is assumed that the total training in those 4 months amounted to 240 hours (15 hours x 4 weeks x 4 months).  Taking into account the training hours set out in the table above (counting June, July October and November 2015 only), the total number of training hours was 272 hours. Adopting the 3^rd plaintiff’s approach that there were 4 weeks within a month, the average number of training hours per week was 8.5 hours (272 hours / 8 months / 4 weeks).

E3.1.2  Disproportionate to the advantage gained

357.  The Federation made the same argument that the amount of damages is out of proportion to the advantage gained by the 3^rd plaintiff on the basis that it could not be seen that she had remarkable performance after the freezing period. 

358.  This argument is rejected for the same reasons explained in Section E2.3.2 above.

E3.1.3  Did the training actually take place

359.  It was the evidence of Ms Wong that K-Kids had charged the 3^rd plaintiff and such fees had been set off against her salaries payable to her by K-Kids.

360.  While the 3^rd plaintiff has not produced any accounting record of K-Kids in support of her claim, given my view that Ms Wong is a credible witness, I would accept her evidence in this regard.  Hence, I find that the training did take place as asserted and the 3^rd plaintiff had indeed been charged by K-Kids.

E3.1.4  Calculation of damages

361.  Adopting the hourly rate of $312.5 and the average training of 8.5 hours, the damages to be awarded to the 3^rd plaintiff under this head should be $42,500 ($312.5 x 8.5 hours x 4 weeks x 4 months).

E3.2  Fitness training

362.  The 3^rd plaintiff was required, as a part-time athlete of HKSI, to receive training for at least 15 hours each week, and such training was inclusive of fitness training.

363.  As explained above, the average training which the 3^rd plaintiff received in 2015/16 (up to November 2015) was only 8.5 hours.  I therefore hold the view that there should not be further compensation under the head of “fitness training”.

E3.3  Meals

364.  The 3^rd plaintiff was not a full-time athlete at the material time.  She therefore confined her claim under this head to 4 dinners per week from 1 December 2015 up to 31 March 2016: $62 x 4 days x 16 weeks[23] = $3,968.

365.  I have explained why this Court should not place weight on HKSI’s meal booking records in Sections E1.3 and E2.2 above, and I will not repeat the same here.

366.  However, I am of the view that the 3^rd plaintiff’s claim on meals should be considered by reference to her training records in 2015/16.  As calculated under Section E3.1.1 above, on average she only trained for 8.5 hours per week in year 2015/16.  Her attendance rate was thus 56.6% (8.5/15 x 100%).  In my view, this discount should be applied to the claim under this head.

367.  The 3^rd plaintiff’s claim is therefore assessed at $2,245.89 ($62 x 4 days x 16 weeks x 56.6%).

E3.4  Physiotherapy

368.  The 3^rd plaintiff claims for 1 session of physiotherapy at $800 each for 16 weeks. The total amount of claim is therefore $12,800 ($800 x 16).

369.  According to HKSI’s record, the 3^rd plaintiff did not receive physiotherapy treatment in HKSI from 1 September 2015 to 30 November 2015, but she did attend 5 physiotherapy sessions from 1 April 2016 to 30 June 2016.

370.  Further, according to the evidence of Mr Choi which I accept, the actual frequency of an athlete attending physiotherapy sessions depends on the actual injury situation of the athlete.

371.  By reason of the problem of shortage of physiotherapists in HKSI as explained in Section E1.7 above, I do not think the Court should grant the 3^rd plaintiff the full amount claimed. 

372.  However, having taken into account her past record of attending physiotherapy sessions, I am of the view that it would be fair if the costs of 5 physiotherapy sessions (i.e. $4,000) be awarded.

E3.5  Protective equipment

373.  The 3^rd plaintiff claims for her loss of use of protective equipment at $400 per week during the 4-month freezing period.  The total amount of claim is $6,400 ($400 x 16 weeks).

374.  This claim was not challenged at all[24].  I therefore award the 3^rd plaintiff the claimed sum of $6,400.

E3.6  Nutritional supplements (Pocari Sweat)

375.  The 3^rd plaintiff claims for two packs of Pocari Sweat Powder per week at the total amount of $1,468.8 ($45.9 x 2 x 16).

376.  However, according to HKSI’s record, in the period from 1 April 2016 to 30 June 2016, the 3^rd plaintiff had only received 4 boxes of Pocari Sweat Powder.

377.  Mr She (the 3^rd plaintiff’s father) explained that the 3^rd plaintiff in fact got nutritional supplements from the HKSI nutritionist, and as a result, HKSI did not have the full record of what she had received.  However, he described such supplements as “營養條”[25], so he was talking about a different kind of supplement.

378.  I therefore assess the 3^rd plaintiff’s loss on the basis of HKSI’s record.  Her entitlement is fixed at $183.6 ($45.9 x 4).

E3.7  Sport Psychologist

379.  The 3^rd plaintiff claims for one session of sport psychologist consultation per month at $2,500 per session, totaling $10,000 ($2,500 x 4).

380.  The 3^rd plaintiff’s case is that psychologist consultation was recommended by HKSI coaches. Mr Choi also confirmed that she had attended 3 sessions of psychologist consultation between 1 April 2016 and 30 June 2016.

381.  According to Mr She, the Policy had significant impact on the 3^rd plaintiff psychologically and she needed to consult sport psychologist as a result of her being “frozen”.  This allegation was indeed in line with the HKSI records that she had only attended psychologist consultation after 1 April 2016 but not before the commencement of the freezing period.  

382.  Mr She further informed this Court that the 3^rd plaintiff had consulted psychologists 4 times during the freezing period.

383.  The 3^rd plaintiff’s psychological issue is also supported by a contemporaneous email dated 13 May 2016 sent by her mother to HKSI, in which it was stated that the 3^rd plaintiff had been deeply affected psychologically by the imposition of the Policy on her.

384.  As such, the need for the service of the psychologist is beyond dispute.

385.  Regarding the price for each consultation session, it was the unchallenged evidence of Mr She that the price which was paid for the same service in the market during the freezing period was $2,500 per session.  I accept his evidence.  I also accept his evidence that the 3^rd plaintiff had attended 4 sessions of psychological consultation during the freezing period.

386.  I therefore allow the 3^rd plaintiff’s claim under this head in full (i.e. $10,000).

E3.8  Sport Nutritionist

387.  The 3^rd plaintiff now claims for $4,000 for this item based on her need to have two sessions of consultation at $2,000 each.

388.  I do not think there can be any dispute that the 3^rd plaintiff was in need of such consultation, because Mr Choi also confirmed that the 3^rd plaintiff did attend 2 sessions of nutritionist consultation between 1 April 2016 and 30 June 2016.

389.  In Mr She’s witness statement, he initially claimed for a total sum of $48,000 on the basis of 32 consultation sessions. In other words, the cost per session was $1,500.  He explained in Court that he would only put down the figure in his witness statement based on what he had actually spent.  I accept his evidence.

390.  I therefore assess this item at $3,000 ($1,500 x 2).

E3.9  ETG

391.  Parties agreed that the 3^rd plaintiff’s loss of ETG should be calculated on the basis of 4 months, and therefore a sum of $6,720 should be awarded.

E3.10   Summary of the damages awarded to the 3^rd plaintiff

392.  I summarise the items of damages which are awarded to the 3^rd plaintiff as follows:

External training Meals Physiotherapy Protective equipment Nutritional supplements (Pocari Sweat) Sport Psychologist Sport Nutritionist Loss of ETG	$42,500.00 $2,245.89 $4,000.00 $6,400.00 $183.60 $10,000.00 $3,000.00 $6,720.00
	--------------
Total:	$75,049.49

F.  ORDER

393.  I therefore make the following orders:

(1)  A declaration that the Policy was in breach of the Federation’s Memorandum of Association and the Articles of Association, and was contrary to public policy, and therefore void.

(2)  The amounts of damages which the Federation is liable to pay the plaintiffs respectively are as follows:

(a)  The 1^st plaintiff (i.e. the plaintiff in HCA 529/2017): $1,305,534.00;

(b)  The 2^nd plaintiff (i.e. the plaintiff in HCA 987/2019): $198,992.89;

(c)  The 3^rd plaintiff (i.e. the plaintiff in HCA 988/2019): $75,049.49.

G.  COSTS

394.  I make a costs order nisi that the Federation shall bear the costs of the 3 actions, to be taxed if not agreed.

395.  The respective own costs of the plaintiffs shall be taxed in accordance with the Legal Aid Regulations.

396.  The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be disposed of on paper) within 14 days hereof.