WOO KWOK PING v. THE INCORPORATED MANAGEMENT COMMITTEE OF TSUEN WAN TRADE ASSOCIATION PRIMARY SCHOOL

DCCJ 3296/2020

[2022] HKDC 308

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3296 OF 2020

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JUDGMENT

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A.      BACKGROUND[1]

1.  Tsuen Wan Trade Association Primary School (“the School”) is an aided primary school operating in Tsing Yi Estate.  Its sponsoring body is TWTA Education Foundation Ltd (“the Foundation”).  In 2007, the Incorporated Management Committee of the School (“the IMC”) was established as the incorporated body for the management of the School pursuant to section 40AD of the Education Ordinance (Cap. 279, Laws of Hong Kong).

2.  The plaintiff became a Certified Mistress of the School on 1 September 1986. She was appointed as the acting principal of the School with effect from 1 September 2007, and was confirmed as its principal on 9 September 2009.  But for her dismissal, she was due to retire on 31 August 2014.

3.  The plaintiff was employed by the IMC as the principal of the School by virtue of a contract of employment dated 19 May 2007 (“the Contract”). The Contract included a Letter of Acceptance for Principals of Aided Schools (資助學校校長聘書) and Conditions of Service of Teachers of Aided Schools (資助學校教師服務條件) (“Conditions of Service”).

4.  From 2012 onwards, the IMC began to complain that the plaintiff had failed to properly handle the administrative and financial affairs of the School.  Eventually, the IMC had issued 15 reminders and warnings altogether to the plaintiff in the period between August 2012 and July 2013.

5.  The reminders and warnings were as follows:

(1)     On 20 August 2012, a verbal reminder concerning the proposed purchase of a laptop computer and router/printer from JP Networking Solutions for $11,730 was given.  It was alleged that the plaintiff had failed to follow the requisite procurement procedure issued by the Foundation on 31 January 2012, and had caused the School to impermissibly share its resources with a private institution, i.e., 鍾來幼稚園 (“the Kindergarten”), a private kindergarten also sponsored by the Foundation (“Reminder 1”);

(2)     On the same day, another verbal reminder for admission of overage students to the Kindergarten and the School within the same school year was given to the plaintiff on the basis that it would disrupt the learning and teaching progresses within the School (“Reminder 2”);

(3)     On 26 November 2012, a warning letter was issued to the plaintiff for her serious defiance of the IMC’s instructions, in that she had, in the name of the School, participated in the 2012 跨境學童香港教育展 (“the SZ Exhibition”) and operated a cross-border service centre in Shenzhen (“the SZ Service Centre”) without the IMC’s approval and in spite of the IMC’s directions not to expend time or resources in cross-border recruitment (“Warning 3”);

(4)     On the same day, another warning letter was issued for the plaintiff’s mismanagement of the School’s finances in respect of the expenses on cross-border recruitment, sponsorship fees for Ta Ku Ling Ling Ying Public School (“the Ta Ku Ling School”), and the costs of graduation photo DVDs. It was alleged that the plaintiff had incurred costs in cross-border recruitment, shared resources with the Kindergarten, and failed to follow procurement procedure in obtaining approval for the expenses (“Warning 4”);

(5)     Also on 26 November 2012, a warning letter was issued for the plaintiff’s maladministration in retaining staff who exceeded the retirement age prescribed by the Foundation in its letter dated 20 April 2009 (“Warning 5”);

(6)     A record of verbal warning replacing a record of verbal warning given earlier on 20 August 2012 was also issued on 26 November 2012 for the plaintiff’s maladministration in issuing 4 warning letters on a single day to a Ms. To, a teaching staff of the School who was found guilty of plagiarism in setting examination papers (“Warning 6”);

(7)     On 25 May 2013, a warning letter was issued for the plaintiff’s maladministration in paying for the employees’ contribution to Mandatory Provident Fund (“MPF”) for some of the staff members, and subsequently increasing their salaries without the IMC’s approval after she was asked to rectify the situation (“Warning 7”);

(8)     On the same day, a serious warning letter was issued by the IMC to the plaintiff for her serious maladministration in leasing out classrooms on the 6^th floor of the School (“the 6/F Classrooms”) to Hong Kong Arts Association (“HKAA”) without the IMC’s approval (“Warning 8”);

(9)     On the same day, a warning letter replacing a warning letter issued on 20 August 2012 was issued for the plaintiff’s maladministration in wrongly representing that the School did not have sufficient resources to hire substitute teachers, and in representing subsequently when the mistake was discovered that her mistake was caused by the wrong calculation done by Mr. Chiu Yu Ho (趙汝豪), a clerical staff of the School (“Mr Chiu”) (“Warning 9”);

(10)     On the same day, a warning letter was also issued for the plaintiff’s maladministration in entering into an employment contract with Mr. Chan Ka Chiu (陳嘉釗) (“Mr. Chan”) without the IMC’s authorisation (“Warning 10”);

(11)     Another warning letter was also issued on 25 May 2013 for the plaintiff’s financial mismanagement in respect of the renovation costs of toilets in the School, in that the plaintiff had split up the renovation costs of various toilets to circumvent the procurement requirements imposed by the Education Bureau (“EDB”) and the Foundation (“Warning 11”);

(12)     A serious warning letter dated 25 May 2013 was issued to the plaintiff for her serious financial mismanagement in failing to comply with the procurement requirements imposed by the EDB and the Foundation in relation to the Community Care Fund After-School Care Pilot Scheme (“Community Care Fund Scheme”) (“Warning 12”);

(13)     On 27 July 2013, a warning letter was issued for the plaintiff’s maladministration in improperly carrying out structural alterations to the Principal’s Room in the School (“Warning 13”);

(14)     On the same day, a warning letter was issued to the plaintiff for maladministration in respect of her delay in distributing book lists to the students (“Warning 14”);

(15)     A warning letter for maladministration in respect of the plaintiff’s persistent failure and delay in complying with instructions of the IMC and the Supervisor of the School was also issued on 27 July 2013 (“Warning 15”).

6.  On 27 July 2013, the IMC dismissed the plaintiff summarily.

7.  On 31 July 2013, Mr Chu Tak Wing (“Mr Chu”), the supervisor of the School, reported the dismissal of the plaintiff to EDB.

8.  On 21 August 2013, the Foundation and the IMC appointed Mr. Wong Kam-on (“Mr Wong”) as the acting principal of the School for the period between 28 July 2013 and 27 January 2014.

9.  On 16 October 2013, Mr Wong’s appointment as acting principal of the School was approved by the Permanent Secretary for Education (“the Permanent Secretary”).  

10.  On 28 January 2014, the Permanent Secretary approved Mr. Chow Kim-on (“Mr Chow”) as the principal of the School on an acting basis.  Mr Chow’s appointment was confirmed subsequently on 29 December 2014.

B.      PARTIES’ RESPECTIVE CASES – AN OVERVIEW

B1.    The plaintiff’s case

11.  The plaintiff claims that the IMC had acted in breach of the Contract, the Education Ordinance and the Employment Ordinance (Cap. 57, Laws of Hong Kong) in that: 

(1)     The IMC had been guilty of wrongful termination of the plaintiff’s employment as none of the statutory grounds for summary dismissal under section 9 of the Employment Ordinance was present;

(2)     The IMC had failed to comply with the guidelines set out in inter alia section 57(g) of the Code of Aid for Primary Schools (“the Code of Aid”) in dismissing the plaintiff[2], and the IMC had thereby acted in breach of the Contract;

(3)     The IMC had failed to comply with sections 55 to 57 of the Education Ordinance in failing to give prior notice to, and/or obtaining prior approval from, the Permanent Secretary of EDB before dismissing the plaintiff. The IMC has thereby acted in breach of its statutory duty and/or the Contract[3].

12.  By reason of the aforesaid breach of statutory duty and/or the Contract and/or unlawful and wrongful dismissal by the IMC, the plaintiff claims that she is entitled to damages as follows[4]:

(1)     The salaries payable for the period between the date of her dismissal and her original date of retirement (28 July 2013 – 31 August 2014) in the sum of $789,183.87;

(2)     Balance of provident fund to be contributed by the IMC for the plaintiff’s benefit during the aforesaid period in the sum of $118,377.58;

(3)     Balance of provident fund contributed by the IMC for the plaintiff’s benefit from the date of commencement of the plaintiff’s employment to the date of dismissal (1 September 1996 – 27 July 2013);

(4)     5% guaranteed dividend on the provident fund from the date of her dismissal to her original date of retirement in the sum of $4,066.64.

13.  The plaintiff also claims that the provident fund balance from 1 September 1996 to 27 July 2013 was unlawfully withheld by the IMC, and that she is entitled to its return even if her summary dismissal was valid.

B2.     The IMC’s case

14.  The IMC’s case is that it had duly complied with the Contract, the Employment Ordinance and the Education Ordinance in the plaintiff’s dismissal.

15.  It is alleged that the plaintiff had acted in breach of the Contract through her gross misconduct which had led to the issuance of the 15 reminders and warnings. 

16.  As a result, the IMC was entitled to summarily dismiss the plaintiff pursuant to section 9 of the Employment Ordinance and/or section 57(g) of the Code of Aid; alternatively, the plaintiff’s misconduct also satisfied the grounds under section 56 of the Education Ordinance for the Permanent Secretary to withdraw her approval of the plaintiff as the principal of the School.

17.  In any event, the plaintiff had ceased to be the principal when the School sought the Permanent Secretary’s approval for another principal, or when the Permanent Secretary approved another acting principal or principal.

18.  The IMC also counterclaims against the plaintiff for loss and damage arising from her breach of duties, which had given rise to substantial accumulated deficit of up to $1,055,771.70 in the School’s General Funds Account as of 31 August 2014.  Pursuant to the EDB’s order, the School had to use its own funding from the Foundation in the amount of $1,067,801.50 to make good the accumulated deficit.

B3.    The court’s consideration of the justification of summary dismissal

19.  As it can be seen above, a large number of reminders and warnings had been issued by the IMC to the plaintiff.  In respect of each of those reminders/warnings, there were various allegations made against the plaintiff.

20.  However, it is noted that in its Re-Re-Amended Defence and Counterclaim, the IMC did not plead all the grounds relied on in such reminders/warnings.

21.  I should emphasize that the IMC is bound by its pleadings, and therefore it is not entitled to rely on grounds which were not pleaded in its pleadings, even if such grounds had been mentioned in the warning/reminder letters issued to the plaintiff.  For this purpose, I do not think I need to cite any authority other than Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663, in which Chief Justice Ma had the following to say in paragraph 21 of the Reasons for Judgment:

“It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited [2005] 2HKC 638, at 643G-H (para 6(1))]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Limited v Crystal Jet International Limited:

“(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be ‘slipped in’ when evidence is being given in the hope that the other side is not sufficiently alert to object.”

22.  On the other hand, it is also well established that it is immaterial even if the IMC had originally relied on grounds which were without substance, so long as there were valid grounds to justify summary dismissal at the time. This would be so even if the IMC only discovered those grounds subsequently[5]. Similarly, the IMC is entitled to rely herein on reasons not disclosed at the time to support the plaintiff’s dismissal, provided that there is adequate factual basis to substantiate such reasons[6]. But of course, those reasons and factual matters must have been properly pleaded in this action in the first place.   

23.  It will therefore be seen that in the discussion of a number of the reminders/warnings below, I would have to quote the pleadings of the parties extensively so as to make sure that the battle lines are clearly drawn in this Judgment.

24.  For the avoidance of doubt, in the event I take the view that the IMC has not established the allegations as pleaded in relation to a particular reminder/warning, I would hold that the IMC was not justified in issuing that reminder/warning, even though there were other grounds which were mentioned in such a reminder/warning (and even if those other unpleaded grounds might well be sound). 

25.  On the other hand, in the event I hold that the IMC was justified in issuing a particular reminder/warning, for the reasons explained above, that finding should not be interpreted to cover any allegations contained in such reminder/warning which were not upheld or pleaded herein.

C.      THE ISSUES

26.  The main issues to be resolved by this court are as follows:

(1)     Was the IMC justified in summarily dismissing the plaintiff?

(2)     Does the plaintiff have an actionable claim against the IMC for the alleged contravention of sections 55 – 57 of the Education Ordinance and/or section 57(g) of the Code of Aid?

(3)     If the answer to issue (1) is “No” and/or the answer to issue (2) is “yes”, what are the heads and quantum of damages to which the plaintiff is entitled?

(4)     If the answer to issue (1) is “Yes”, is the plaintiff liable to pay damages to the IMC for her breach of duties in managing the School?

27.  Issue (1) is a very complicated issue because the IMC has raised 15 matters herein in support of the plaintiff’s summary dismissal.  This court has to, first of all, rule on each of those 15 matters, and then consider the established “fault(s)” together and decide whether they would justify the eventual summary dismissal of the plaintiff. 

28.  Before this court undertakes this task, it would be useful if I set out the relevant legal provisions, regulations and principles covering various aspects which are relevant to issue (1).

D.      STATUTORY PROVISIONS, REGULATIONS & LEGAL PRINCIPLES

D1.    The IMC

29.  Pursuant to section 40AE(2) of the Education Ordinance, the IMC shall be responsible for:

“(a) formulating education policies of the school in accordance with the vision and mission set by the sponsoring body;

(b) planning and managing financial and human resources available to the school;

(c) accounting to the Permanent Secretary and the sponsoring body for the performance of the school;

(d) ensuring that the mission of the school is carried out;

(e) ensuring that the education of the pupils of the school is promoted in a proper manner; and

(f) school planning and self-improvement of the school.”

30.  Pursuant to section 40AF of the Education Ordinance, the IMC is vested with a number of powers to carry out the management of the School:

“(1) An incorporated management committee of a school may do anything that appears to it to be necessary or expedient for the purposes of, or in connection with, the proper management, administration or operation of the school in accordance with the vision and mission and the general educational policies and principles set by the sponsoring body of the school.

(2) Without limiting subsection (1), an incorporated management committee of a school may—

(a) take on lease, purchase or otherwise acquire, and hold, manage and enjoy property of any description, and sell, let or otherwise dispose of the same;

(b) subject to section 40AG, employ such teaching staff and non-teaching staff as it thinks fit and determine the terms and conditions of service of such staff;

(c) engage the service of such professionals or other persons as it thinks fit and determine their remuneration;

(d) use and dispose of the funds and assets owned by it;

(e) handle funds and assets received from the Government in the capacity of a trustee;

(f)     […]

(g)     […]

(h) apply for and receive any grant in aid on such terms as may be expedient;

(i) solicit and receive gifts or donations, whether on trust or otherwise, and act as trustee of moneys or other property vested in it on trust;

(j) enter into any contract, agreement or arrangement; and

(k) do such other things as are provided for by this Ordinance or as are necessary for, or incidental or conducive to, the furtherance of the object of the school.

(3) The exercise of the power of an incorporated management committee shall be subject to—

(a) the provisions of this Ordinance or any other law;

(b) guidelines (if any) issued by the sponsoring body of the school for—

(i) raising funds (including borrowing money); or

(ii) entering into any contract, agreement or arrangement involving funds other than funds received from the Government;

(c) (in the case of an aided school) the relevant code of aid;

(d)-(e) […]

(4) Without prejudice to the generality of subsection (3), if a person is employed by the incorporated management committee of an aided school to occupy a post in the establishment of staff provided for in the relevant code of aid, his terms and conditions of service determined pursuant to subsection (2)(b) must conform with those provided for in the relevant code of aid in relation to the post.

(5) In this section, relevant code of aid means –

(a)  in relation to an aided school which is a primary school, the code of aid for primary schools […]”

D2.    The Supervisor’s functions

31.  Every school must have a supervisor.  Section 40AK of the Education Ordinance provides that the supervisor’s functions shall be as follows:

“(1) The supervisor of a school shall—

(a) preside over the meetings of the incorporated management committee of the school;

(b) within one month from the happening of any of the following events, give notice of the event to the Permanent Secretary—

(i) any person ceases to be a manager of the school;

(ii) the principal of the school ceases to hold office as such;

(iii)-(v) […]

(c) sign the statement of accounts of the committee;

(d)    […]

(e) perform such functions as may be provided for in the constitution of the committee.

(2)     […]

(3)      A notice required to be given by the incorporated management committee shall be given in the name of and signed by the supervisor.”

D3.    The Principal’s functions

32.  Functions of a principal have been stipulated under section 58 of the Education Ordinance as follows:

“(1) The principal of a school shall, subject to the directions of the management committee or incorporated management committee (as may be appropriate), be responsible for the teaching and discipline of the school and for such purposes shall have authority over the teachers and pupils of the school.

(2) The Permanent Secretary may address the principal of a school on any matter relating to the teaching and discipline in the school, and in such case the principal shall conduct correspondence directly with the Permanent Secretary.”

D4.    Summary dismissal

33.  Section 9(1) of the Employment Ordinance provides that:

“An employer may terminate a contract of employment without notice or payment in lieu –

(a) if an employee, in relation to his employment –

(i) wilfully disobeys a lawful and reasonable order;

(ii) misconducts himself, such conduct being inconsistent with the due and faithful discharge of his duties;

(iii) is guilty of fraud or dishonesty; or

(iv) is habitually neglectful in his duties; or

(b) on any other ground on which he would be entitled to terminate the contract without notice at common law.”

34.  This section was considered in the case of Allidem Mae G v Kwong Si Lin [2006] 1 HKC 252, in which Deputy High Court Judge Carlson had the following to say:

“29. There are many decided cases on what amounts to conduct which justifies summary dismissal. A helpful decision in this regard is that of Barnett J in So Ching v Kwan Hang Ching & Another [1987] 2 HKC 297. The headnote to the report sufficiently reflects the position:

‘(2) What must be looked for was whether what was done by the employee was something which was expressly or impliedly a repudiation of the fundamental term of contract such as to justify an instant dismissal.

(3) The conduct which was relied on by an employer for dismissing an employee might be a single incident, such as one refusal to obey a lawful order, or it might be the cumulative effect of a series of incidents on the part of an employee.’

At common law summary termination is justified for gross misconduct meaning really serious misconduct which would amount to conduct sufficiently grave to amount to a repudiation of the contract by the employee. Lord Evershed MR in Laws v London Chronicle Newspapers Ltd [1959] 1 WLR 698 and 700 described it as conduct involving ‘a disregard by the employee of a condition essential to a contract of service.’

30. It also needs to be remembered that the burden of proving the conduct said to justify such a dismissal lies on the employer.  See for example Chow Koon Sing v Fan Kok Choy LTA 26/1989 and Chong Hau Sai v Mok Kuen Shing & Ors LTA 75/1995 (paras 5 and 8 of the judgment).”

35.  Section 57(g) of the Code of Aid also provides that:

“The School Management Committee shall only dismiss a teacher for good and sufficient reasons (see Appendices 7 and 8). A teacher shall be liable to summary dismissal if it appears to the School Management Committee that he has been convicted of a criminal office or has committed a grave breach of duty.”

(emphasis added)

D5.    Assessment of credibility of witnesses

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.

(See: Hui Cheung Fai v. Daiwa Development Ltd (HCA 1734/2009, unreported, 8 April 2014, at paragraphs 77 – 82); Lee Fu Wing & Another v Yan Po Ting Paul & Another [2009] 5 HKLRD 513, at paragraph 53; Lam Rogerio Sou Fung v Tan Soon Gin George (HCA 2576/2005, unreported, 5 May 2011, at paragraph 41); Ting Kwok Keung v Tam Dick Yuen [2002] 5 HKCFAR 336, at paragraphs 36 – 38; Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd (HCA 3523/2002, unreported, 13 August 2005, at paragraph 12))

37.  In the particular circumstances of the present case, in which witnesses were recounting events which took place no less than 8 years before the trial, this court should also bear in mind the difficulties faced by the witnesses in recalling clearly what happened at the material time.  As HH Judge Keyser QC put it in Moorgate Capital (Corporate Finance) Ltd v H I G European Capital Partners LLP [2019] EWHC 1421 (Comm) at paragraph 68:

“[…] It is not uncommon in the experience of the courts for witnesses to deceive themselves in what are essentially honest but nonetheless false recollections. In determining where the truth lies it is more helpful to focus on objective indicia, both in the documents and in the inherent probabilities, than to rely on evidence as to a witness’s memory, especially when the events in question took place a considerable time ago. (Like many other judges, I find helpful the remarks of Leggatt J in Gestmin SGPS SA v Credit Suisse Securities (Europe) Ltd [2013] EWHC 3560 (Comm) at [15] – [22] and in Blue v Ashley [2017] EWHC 1928 (Comm) at [65] – [69].)”

38.  The “helpful remarks” of Leggatt J made in Gestmin SGPS SA v Credit Suisse Securities (Europe) Ltd [2013] EWHC 3560 (Comm) are as follows:

“15. An obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory.

16. While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people’s memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate.

17. Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called ‘flashbulb’ memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description ‘flashbulb’ memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness’s memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory).

18. Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.

19. The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.

20. Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness’s memory has been ‘refreshed’ by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness’s memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.

21. It is not uncommon (and the present case was no exception) for witnesses to be asked in cross-examination if they understand the difference between recollection and reconstruction or whether their evidence is a genuine recollection or a reconstruction of events. Such questions are misguided in at least two ways. First, they erroneously presuppose that there is a clear distinction between recollection and reconstruction, when all remembering of distant events involves reconstructive processes. Second, such questions disregard the fact that such processes are largely unconscious and that the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth.

22.      In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.  This does not mean that oral testimony serves no useful purpose—though its utility is often disproportionate to its length.  But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events.  Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

39.  These remarks have also been found to be helpful in Hong Kong Courts, see for example, Sarah Sally Chan-Kent v Chim Sau Ching [2019] HKCFI 3066 (at paragraph 45).

40.  However, we should remember the reminder given by G Lam J (as G Lam JA then was) in Maryo Development Limited v Tsang Yau May & Others [2020] HKCA 845:

“[…] The comments of Leggatt J in Gestmin were directed at the fallibility of witness evidence generally as opposed to documentary evidence. The observations there serve as a useful reminder of the fallibility of human memory and of the need to approach witness evidence based on recollection with a proper realisation of its potential unreliability due to various reasons. Those observations do not in any way suggest that different and inconsistent accounts given by a witness are readily explicable by the fluidity or malleability of memory, or that it would be wrong to disbelieve a witness or treat his evidence as undermined where he has given inconsistent evidence […]” (at paragraph 42)

41.  In the present case, the plaintiff had given evidence herself but not called any other witness.  On the other hand, the IMC had called Mr Chu (the supervisor of the School), Mr Lee Chi Fung (one of the managers of the IMC) (“Mr Lee”) and Ms Iu Ka Wai (the secretary of the Foundation) (“Ms Iu”). 

42.  Out of the above witnesses, the evidence of the plaintiff and Mr Chu are the most important because, as it can be seen below, there will be a number of issues which concern what had been discussed or agreed between them.

43.  However, I regret to say that neither of them was reliable as a witness.

44.  The plaintiff had appeared, both in court and in various meetings, that she could be very disorganised when she offered her explanation on various matters.  This may make it quite difficult to understand what she actually meant in her explanation.    

45.  However, even if allowance had been given to her poor ability to express herself clearly, I find that she had given different explanations on the same matter from time to time, not only in these proceedings (by way of witness statements and viva voce evidence at the trial), but also in various meetings with the managers of the IMC.  She had given this court a strong impression that she would say whatever which came up to her mind, not caring whether they were true or not.

46.  In relation to Mr Chu, as I will elaborate when I analyse the IMC’s individual complaints below, he had demonstrated on different occasions that he was very eager to find someone to be held responsible so that the IMC and he himself could be exonerated from any allegations by EDB of mismanagement of the School.  This is an important matter to be borne in mind because this attitude would render his evidence or assertion, for example, that the plaintiff had never sought his approval on a particular matter, much less believable. 

47.  Despite the observations which I made in respect of the evidence given by the plaintiff and Mr Chu, I would not say that I should reject their evidence altogether.  My observations above only render it even more important for the court to rely on contemporaneous evidence and the inherent probability of the assertions made by the parties in the present case. 

48.  I will now proceed to consider the reminders and warnings issued by the IMC, and make relevant factual findings insofar as necessary.

E.      REMINDERS AND WARNINGS – DISCUSSIONS

E1.     Reminder 1 – Purchase of computer equipment

49.  On 20 August 2012, a verbal reminder concerning the plaintiff’s proposed purchase of a laptop computer and router/printer at the total price of $11,730 was given.  It was alleged that the plaintiff had:

(1)     failed to follow the requisite procurement procedure issued by the Foundation on 31 January 2012; and

(2)     caused the School to impermissibly share its resources with the Kindergarten which is a private institution sponsored by the Foundation.

E1.1   Compliance with the procurement procedure

50.  Paragraph 14(1)(c) of the Re-Re-Amended Defence and Counterclaim pleaded that:

“In contravention of the EDB Circular No.15/2007 and the 31/01/2012 Letter, the Plaintiff failed to obtain the required number of quotations and to ask for the approval from the Defendant before the Plaintiff made an order for the purchase of (i) laptop computer and (ii) router and printer with the total value at or around HK$11,730.00 from one JP Networking Solutions on or about 6th August 2012.”

51.  “EDB Circular No.15/2007” which was issued on 14 December 2007 set out the requirements on procurement arrangements at different financial limits as follows (“EDB’s Procurement Guidelines”):

Financial limits	Procurement arrangements
$5,000 or below	Competitive bidding not required for procurement of any stores or services provided that a member of school staff at an appropriate level certifies that such procurement is essential and the prices are fair and reasonable
Above $5,000 to below $30,000	At least 2 verbal quotations
$30,000 to $50,000	At least 2 written quotations
Above $50,000	At least 5 suppliers shall be invited for tender

52.  The alleged “requisite procurement procedure issued by the Foundation on 31 January 2012” pleaded in the Re-Re-Amended Defence and Counterclaim was contained in “the 31 January 2012 Letter” (“the Foundation’s Letter dated 31 January 2012”).  The said letter reads:

“致：屬校校董及校長

敬啟者：有關各屬校任何重要事項，除緊急事故外，必須交回教育基金董事會通過，以便更妥善處理校務，及避免各自為政等問題出現；維修工程等項目金額如為港幣伍仟元或以上必須招標，最少有三份或以上報價單，經校董召開會議商討後，交回教育基金通過才可落實進行。[…]”

(emphasis added)

(“the Foundation’s Procurement Guidelines”)

53.  The plaintiff’s arguments were that:

(1)     The Foundation’s Procurement Guidelines had never been adopted by the School and therefore were not binding on the School;

(2)     It was doubtful whether the Foundation’s Procurement Guidelines were applicable to the purchase of the computer equipment, as the said guidelines appeared to be intended to apply to maintenance works (維修工程) only;

(3)     In January 2012 to February 2012, Mr Chu had verbally agreed that the School would only have to follow the EDB’s Procurement Guidelines, but not the Foundation’s Procurement Guidelines;

(4)     The router/printer was a separate item and was intended to be used by the School only. Hence, the purchase of the laptop computer and router/printer should not be treated as a single transaction.  The purchase price of the router/printer was only $2,480.  In other words, it was less than $5,000.  Therefore, no quotation was required to be obtained;

(5)     It was originally intended that the laptop computer would be co-owned by the School and the Kindergarten with half share each.  The purchase price of the laptop computer was $9,250.  Hence, the School’s share only worth $4,625 which was lower than the threshold of $5,000.  Therefore, no quotation was required to be obtained;

(6)     In any event, the School’s IT staff had on the plaintiff’s instructions obtained 4 quotations, which had been merged into a summary on 31 July 2012.

54.  In my view, the court has to consider the following issues:

(1)     Whether the Foundation’s Procurement Guidelines or the EDB’s Procurement Guidelines were applicable to the School at the material time?

(2)     Did the plaintiff fail to comply with the relevant guidelines?

E1.1.1 Which set of guidelines was applicable?

55.  There is no dispute that the EDB’s Procurement Guidelines must be complied with by the School.  The question is whether the Foundation’s Procurement Guidelines, which have imposed more stringent requirements, should be followed.  If so, then any compliance with the EDB’s Procurement Guidelines per se would not assist the plaintiff.

56.  At the outset, I have to deal with a “pleadings point” raised by the IMC.

57.  In the plaintiff’s argument, it was submitted that the Foundation’s Procurement Guidelines had never been adopted by the School and therefore were not binding on the School.

58.  On behalf of the IMC, Mr Laurence Li SC (leading Mr Harrison Miao) submitted in their written closing submissions that:

“121.5. Moreover, during Chu’s cross-examination, P suggested that the Foundation’s guidelines were not applicable until the IMC has ratified them. This argument is not open to P:

(a) This was a clear departure from P’s pleaded case, were (sic) P alleged that the guidelines were applicable to the Kindergarten but not the School: RRAR ¶9(2)(b) [A/61].

(b) Even in P’s witness statement, she only claimed that the Foundation’s guidelines had never been agreed by the IMC, and that the Foundation had no power to give instructions on behalf of the IMC: Woo ¶10 [A/162].

(c) As such, P never claimed that the Foundation’s guidelines were to be applied to the School pending the IMC’s ratification.”

59.  With respect, I do not agree with the IMC’s submission that the plaintiff had never claimed that the Foundation’s Procurement Guidelines could not be applied to the School pending the IMC’s ratification.  The plaintiff had plainly done so in her witness statement, when she stated that “the Foundation’s [Procurement Guidelines] had never been agreed by the IMC, and that the Foundation had no power to give instructions on behalf of the IMC”.  In my view, the plaintiff only expressed the same meaning in a different way.

60.  However, even though the plaintiff had expressed such a stance in her witness statement, she did not make that clear in her Re-Re-Amended Reply and Defence to Counterclaim.  On the applicability of the Foundation’s Procurement Guidelines, she only pleaded that “the guidelines as set [out] in the 31/01/2012 Letter were only applicable to the Kindergarten, but not the School”[7]. In my view, that is not enough, for a party should not be allowed to “slip in” unpleaded issues in this way.  The assertion that the IMC had not approved or ratified must be a material fact which must have been included in the plaintiff’s pleadings.

61.  The plaintiff’s counsel argued in their written reply submissions that:

“[…] it is not the Plaintiff's case that the Foundation's guidelines were not applicable until the IMC had ratified them, only that the Foundation's guidelines were not automatically binding on the Defendant […]”[8]

62.  With respect, there is no difference between the two concepts.

63.  I will therefore refuse to consider the plaintiff’s argument that the Foundation’s Procurement Guidelines were not automatically binding on the School.

64.  I now turn to the question of whether the plaintiff was supposed to be following the Foundation’s Procurement Guidelines when she proposed to purchase the laptop computer and the router/printer.

65.  In my view, she was not, for the following reasons:

(1)     When we seek to find out the meaning of the Foundation’s Letter dated 31 January 2012, it must be borne in mind that we should not treat it as if we are interpreting statutory provisions.  In the said letter, it was stated that the guidelines contained therein were applicable to “維修工程等項目”.  The court should consider what reasonable meaning should be given to those words, bearing in mind that the readers thereof are people who are responsible for school management.  Adopting that approach, I hold the view that those words should be interpreted to mean that only procurements relating to renovation work should be covered. 

(2)     I agree that adopting such a meaning would in effect be disregarding the word “等”.  That may seem to be unreasonable.  However, on the other hand, it would be even more unreasonable if it is said that the guidelines were intended to cover procurement of all purchases of goods and services.  If the latter meaning is adopted, the reference to renovation work in the guidance would be most misleading, and in effect we would be disregarding the words “維修工程等”.

(3)     More importantly, it is evident that, at the material time, the IMC as a matter of fact did not follow the Foundation’s Procurement Guidelines.  This can be seen from the transcripts of the IMC meeting held on 25 May 2013.  In this meeting, as accepted by the defendant’s counsel, the IMC was discussing the proper tendering guidelines in light of the EDB’s request for it to devise a specific system, and in the course of which Mr Chu, the supervisor of the School, stated that the requirements would be as follows:

“原則上跟教育局指引，5,000 元以上兩書面報價， 5,000 至 30,000 兩書面報價，30,000 至50,000 三書面報價，50,000 以上 5 個報價。”[9]

If the IMC had all along been following the Foundation’s Procurement Guidelines, I wonder why Mr Chu would say in the said IMC meeting that only two quotations would be required for procurements of more than $5,000, which was different from the requirement of 3 quotations as stipulated under the Foundation’s Procurement Guidelines.

(4)     This is consistent with Mr Chu’s evidence in court that the Foundation’s letter dated 31 January 2012 appeared to suggest that the procurement guidelines were only applicable to works similar to “維修工程”.

(5)     The IMC argued that the fact that the IMC was discussing the appropriate procurement procedures is not inconsistent with the Foundation’s Procurement Guidelines being applicable before then.  I do not accept this argument, because if the Foundation’s Procurement Guidelines were indeed applied beforehand, there was no reason why it was not mentioned at all in the meeting.  In fact, if the Foundation’s Procurement Guidelines had been strictly followed at the time of the meeting, there was no room for discussion, because in such a case the IMC would have no choice but to continue the practice of following such guidelines (there is no evidence that the Foundation had directed in or before May 2013 that there was no further need to follow such guidelines).

(6)     The above conclusion is also supported by what Mr Chu said in another IMC meeting which was held on 18 May 2013 (i.e. 7 days prior to the meeting held on 25 May 2013), when the IMC was discussing about renovation of the toilets (which undisputedly must be categorised as “維修工程”):

“朱：咁響13年嘅3月7號，收到校長亦都交嚟一張列表啦，咁廁所工程地下至三樓，二十六萬零一百蚊嘅附件，咁呀校長係冇依照教育局、冇依照教育局資助學校招標同埋呢個採購嘅程序，亦都係涉及金頷亦都係非常之龐大啦，咁呀亦都係，即係我自己覺得啦，我自己作為校監，咁我自己覺得係有需要向阿校長就呢件事情，亦都係作出警告嘅。校長亦都係屢勸不改啦，咁我地響學期初，或以至之前已經多番同校長講，所有嘅嘢，所有嘅購買呀，採購呀，超過5000蚊，都係要有一個嘅既定嘅報價嘅。咁呀，亦都係響會議上多次提及，咁呀希望向阿校長發出呢個嘅警告，咁我覺得為使到呢個制度更加完善呢，亦都係請問大家有冇反對？如果冇反對嘅，希望大家再次通過，我意思係再次通過個招標程序，其實我地係好簡單嘅啫。

跟番個則例，教育則例係五千蚊，就需要口頭報價，但我地呢? 淨係五千蚊呢度呢需要係有個書面嘅報價嘅啫，即係Call番兩份報價返嚟，兩份就OK 架喇，之後呢，超過唔知幾多錢，開始全部都係，個程序係乜嘢呀?

姚： 教育局果個定係教育基金果個呀?

朱： 基金果個同教育局果個差唔多。

姚： 基金果個就最少有三個報價，然之後要過會。

朱： 係喇。

姚： 咁，但係教育局果個呢就。

朱： 就，嗱!教育局就係至少要有兩份口頭報價啦，但係我地希望呢有書面嘅報價，就唔係口頭，五千蚊以上都要，同埋係需要係過番我地會，即係追認番嘅。即係每一次法團校董會呢，之前有啲乜嘢係諮詢大家嘅，要追認番。

姚： 唔係追認番喎，係通過番，響個會度。

朱： 唔係，即係佢趕嘅時候就…

姚： 而家佢做咗就追認番，你好麻煩，係通過，喺個會度通過。

朱： 咁如果大家係同意嘅，都係跟番個採購程序啦好嘛? 咁呀，五萬蚊以上呢，係最少有五個供應商嘅投標，三萬至五萬呢，要兩份書面嘅報價。”[10]

(emphasis added)

I am satisfied that it was not a slip of tongue on the part of Mr Chu nor that he had said what he said out of a moment of confusion, because he had been expressly reminded that the Foundation’s Procurement Guidelines had imposed a more stringent requirement. Yet, Mr Chu unequivocally stated that only 2 written quotations would be required for procurement of items which were over $5,000.

(7) It must also be noted that the conversations quoted above took place in May 2013, that is, after the IMC issued Reminder 1 and Warning 3 to the plaintiff on 20 August 2012 and 26 November 2012 respectively which, among other things, alleged that the plaintiff had failed to comply with the Foundation’s Procurement Guidelines. Be that as it may, Mr Chu in effect unequivocally indicated repeatedly in IMC meetings in May 2013 to the effect that the Foundation’s Procurement Guidelines would not be strictly followed.

(8) It was further pointed out by the IMC that no resolution had been passed upon the aforesaid discussion in the meeting on 25 May 2013. In my view, that is beside the point. The fact that no one ever mentioned about the Foundation’s Procurement Guidelines in that meeting when the procurement procedure was discussed speaks volume.

(9) In the light of Mr Chu’s evidence and what he said in the IMC meetings held on 18 May 2013 and 25 May 2013 referred to above, I accept the plaintiff’s evidence that Mr Chu had in fact represented to her that there was no need to follow the Foundation’s Procurement Guidelines.

(10) The IMC’s counsel went as far as to suggest that the plaintiff, as an ex-officio member of the IMC, was required under the IMC’s Articles of Association to apply the Foundation’s educational policies, monitor the School’s performance, and ensure that the management of the School would bear its responsibility, and as a result, even if Mr Chu had stated that the Foundation’s directions need not be followed, it would have been the plaintiff’s responsibility to correct Mr Chu. This argument must be rejected because the warning concerned herein is not about the plaintiff’s failure to correct Mr Chu, the supervisor, of his mistake. This argument is also contradictory to the main contention adopted by the IMC that the plaintiff, as the principal of the School, should only be responsible for the teaching and discipline of the school[11].

(11) The fact that the IMC was following the EDB’s Procurement Guidelines at the material time was confirmed by Mr Lee who gave evidence at the trial, during which he accepted unequivocally that only two verbal quotations were required at the material time for purchase between $5,000 and $30,000.

66.  Hence, at the time when the plaintiff was minded to purchase the laptop computer and the router/printer, all she was required to do was to comply with the EDB’s Procurement Guidelines.

67.  I should add that it is in fact quite ironic for Mr Chu to allege that the plaintiff had failed to comply with the Foundation’s Procurement Guidelines.  While Mr Chu had on numerous occasions confronted the plaintiff for her failure to follow the said guidelines, and he even proposed in the IMC meeting held on 25 May 2013 to issue Warning 11 to the plaintiff on the basis of her not following the Foundation’s Procurement Guidelines[12], he had, as I noted above, unequivocally represented in the IMC meetings held on 18 May 2013 and 25 May 2013 to the effect that such guidelines would not be followed strictly.    

E1.1.2 Did the plaintiff comply with the EDB’s Procurement Guidelines?

68.  To recap, according to the EDB’s Procurement Guidelines, the plaintiff had to obtain 2 verbal quotations if the purchase price concerned was over $5,000 but less than $30,000.  No quotation would be required to be obtained if the purchase was of an amount of no more than $5,000.

69.  The plaintiff argued that no quotation was required to be obtained for the purchase of the laptop computer and the router/printer because:

(1)     The purchase of the router/printer should not be considered together with the purchase of the laptop computer because they were two separate purchases for different purposes.  The cost of the router/printer was only $2,480 which was less than the $5,000 threshold;

(2)     The purchase price of the laptop computer was intended to be borne by the Kindergarten and the School equally.  Hence, the School was only required to pay 50% of the total cost of $9,250 (i.e. $4,625), which was less than the $5,000 threshold.

70.  In any event, the plaintiff contended that she had, upon the instructions of Mr Chu, asked a member of the IT Team of the School to obtain 4 quotations for the laptop computer, and therefore she had complied with the EDB’s Procurement Guidelines (and indeed, the Foundation’s Procurement Guidelines as well).

71.  I would first of all consider whether the purchase of the laptop computer on one hand and the router/printer on the other hand should be considered as one purchase or two separate transactions. 

72.  In my view, they should be regarded as two different transactions because:

(1)     The original intention was that the laptop computer was to be co-owned by the School and the Kindergarten, while the router/printer was to be solely owned by the School.  Indeed, it is undisputed that after the saga, the School did proceed with the purchase of the router/printer, but the laptop computer was not bought at all;

(2)     The words “先由小學代支全數，跟進鍾來付一半費用” were only written on the invoice dated 6 August 2012 issued by JP Networking Solutions in relation to the laptop computer but not on the invoice dated 7 August 2012 issued by the same supplier in respect of the router/printer.

73.  Although the original arrangement was that the School would settle both invoices (for the laptop computer and the router/printer respectively) together by the same cheque, that would not affect my ruling on the matter, as I accept that that was done for the sake of convenience only.

74.  I therefore accept that there was no need to obtain quotation for the purchase of the router/printer.

75.  As aforesaid, the plaintiff stated that upon the instruction of Mr Chu, she had asked a member of the IT Team of the School to obtain 4 quotations, and as a result, a summary of the quotations dated 31 July 2012 had been provided, which she had disclosed in this action together with the quotations as follows:

(1)     A quotation of PCCW Limited dated 10 July 2012;

(2)     An undated quotation of Dell;

(3)     A quotation issued by Wave Technology Co. dated “25-7-20” (the date was not entirely legible, but I would infer that the quotation was dated 25 July 2012);

(4)     An invoice issued by JP Networking Solutions dated 6 August 2012.

76.  In relation to these quotations, the IMC had made the following arguments.

77.  Firstly, it was submitted that among the 4 “quotations”, only those from PCCW Limited and Wave Technology Co. clearly stated that they were quotation documents.  While the “quotation” from Dell was only a screen capture from its website, the document issued by JP Networking Solutions was an invoice.  It was doubted whether the last two documents could qualify as quotations.

78.  I do not think the word “quotation” must be printed on a document before such a document could be treated as such.  Neither do I think there is any problem for getting a quotation from a supplier’s website.

79.  The invoice issued by JP Networking Solution, on the other hand, has created a slight problem, for it was dated 6 August 2012, which means it was issued after the summary of quotations was prepared on 31 July 2012.  However, I would infer that the staff member of the IT Team must have asked JP Networking Solution for a quotation verbally before the summary of quotations was compiled, otherwise the staff member could not have done the summary which was consistent with the figures contained in the said invoice issued by JP Networking Solution subsequently.

80.  In any event, under the EDB’s Procurement Guidelines, for purchase above $5,000 and below $30,000, only two verbal quotations would be required.

81.  Secondly, it was alleged by Mr Lee that he was not provided with those quotations when he was first asked to sign the relevant cheque.

82.  I have serious doubt as to whether Mr Lee had paid attention to whether the quotations were attached to the cheque at the material time for the following reasons:

(1)     As he confirmed in court, out of the two invoices issued by JP Networking Solutions, he could only recall that he had seen the first one with the handwritten words “先由小學代支全數，跟進鍾來付一半費用” but had no impression that he had seen the other invoice.  Given the fact that the relevant cheque was issued to settle the aforesaid two invoices, there was no reason why only one of the invoices was attached thereto.  Both invoices should be there.  This demonstrates that some documents attached could escape Mr Lee’s attention at the material time;

(2)     Indeed, according to Mr Lee, his attention at the time was caught by the Chinese handwritten words referred to above. It is not surprising that he did not pay attention to what other documents were attached.

83.  In any event, pursuant to the EDB’s Procurement Guidelines, there was no requirement that approval had to be sought from the IMC.  So long as the principal was satisfied that the requirements under the aforesaid guidelines had been complied with, the principal might cause the School to place the order.[13]

84.  Thirdly, the IMC had placed great reliance on a document dated 3 October 2012 (“the plaintiff’s 13 October 2012 Response”).  This was prepared by the plaintiff for the purpose of urging the IMC not to issue 4 warning letters to her, and one of which was about the purchase of the laptop computer, in respect of which the plaintiff explained that:

“1. 依程序叫本校資訊科技員査詢報價(此情況屬口頭報價，不用招標)，機件性能主要是文件不會因客觀環境而令資料消失; 校長明白購買程序並依程序進行。(見附件)

2 . 此手提電腦與鍾來幼稚園招生共用於招生工作(共同分擔費用)，由於跨境收生獲朱德榮校監同意及指示進行方式，一切環境轉變或人事紛爭，不應加罪於小學校長，是故不應發警告函予小學校長。”

85.  The plaintiff had indeed only attached the quotation obtained from the website of Dell to the plaintiff’s 13 October 2012 Response.

86.  The IMC pointed out that if the plaintiff had really obtained various quotations as alleged, it would be surprising that she only attached the quotation from Dell to the said response.

87.  While I can see the force of this argument, I would still accept that the plaintiff had obtained the 4 quotations as she asserted.  Holding that the plaintiff did not obtain the quotations as she did would necessarily require a finding that the summary of quotations dated 31 July 2012, the quotation of PCCW Limited dated 10 July 2012 and the quotation issued by Wave Technology Co. dated “25-7-20” were false documents.  I am not prepared to make that finding at all.  I have no hesitation in accepting that the summary was prepared on the date as stated thereon.

88.  I therefore find that the plaintiff had complied with the EDB’s Procedure Guidelines in the purchase of the laptop computer and the router/printer.

89.  That being the case, it is not necessary for the court to consider the plaintiff’s argument that there was no need for the School to obtain quotations for the laptop computer since the cost to be shared by the School was only 50% of the total price (i.e. $4,625).

E1.2   “Sharing of resources”

90.  The IMC pleaded in paragraph 14(2) of the Re-Re-Amended Defence and Counterclaim that the plaintiff had breached her duties in:

“failing to separate the use and/or ownership and/or resources funded from the Government exclusively to the School being an aided school with the resources of private institutions:

(a)     According to section 72(a) of the Code [of Aid], where the school management committee operates a private section or boarding section which does not receive financial assistance under the Code [of Aid], the accounts of such private section or boarding section shall be kept separately from those of the aided section and audited; accordingly, the assets or resources of the aided school, which were funded from the Government, shall not be co-shared with such private section or boarding section.

(b)     In contravention thereto, the Plaintiff attempted to have the computer equipment as described under item (1)(c) herein above shared with the Kindergarten which is a private educational institution.

(c) – (d) […]”

91.  Section 72(a) of the Code of Aid provides that:

“Where the School Management Committee operates a private section or boarding section which does not receive financial assistance under this Code of Aid, the accounts of such private section or boarding section shall be kept separately from those of the aided section and audited; and shall specify any subvention received from departments of the Government other than the Education Bureau. The accounting year, to which such accounts shall refer, shall be from the first day of September of one year to the thirty-first day of August of the next, except for financial year basis as approved by the Permanent Secretary.”

92.  On Day 5 of the trial, Mr Li SC for the IMC informed the court of his acceptance that the said section 72(a) of the Code of Aid is not applicable to the circumstances of the present case.

93.  With Mr Li’s concession, the whole basis of the IMC’s complaint on “sharing of resources” has gone.  I would have thought that that would be the end of the IMC’s case in this respect.

94.  However, in the IMC’s written reply submissions, it was argued that:

“32. Further, it is irrelevant whether [the Code of Aid], s. 72(a) is applicable to the sharing of resources between the School and a separate private school:

32.1   The IMC’s allegation was not that P had acted in breach of a particular EDB’s guideline in causing the School to share its resources with the Kindergarten, but simply that the School (being an aided school) should not use or own resources or assets together with the Kindergarten (which is a private school) […]

32.2   Even if the prohibition against the sharing of resources was imposed by the IMC rather than EDB, P would still have acted in defiance of the IMC’s instructions in causing the School to share its resources with the Kindergarten.”

95.  With greatest respect, I do not accept the IMC’s arguments.  The applicability of section 72(a) of the Code of Aid must be relevant in the present case because this is the only basis on which the IMC built its case against the plaintiff on “sharing of resources”.

96.  As a matter of fact, unless the IMC had pleaded its case clearly, there was no way that the plaintiff could deal with the allegation of “sharing of resources” (“共用資源”) properly.  To start with, I must say at the outset that I find this term inappropriate, because what the IMC was really complaining was that the plaintiff should not have caused the School to “co-own asset with a private school”.   If the plaintiff’s intention was for the School to pay half of the costs of the laptop computer and for the Kindergarten to pay the other half, in other words, each paid for its own share, there was no “sharing of resources”. This illustrates the point that the plaintiff had to be informed clearly of the basis on which the IMC alleged that it was impermissible for the School to co-own asset with others, so that the plaintiff could deal with that basis, be it a statutory provision, regulation, or otherwise.  However, now that the only pleaded basis was accepted by the IMC to be inapplicable, there is nothing on which this allegation can find support.

97.  I can appreciate the force of the IMC’s argument that the sharing of resources (or “co-ownership of assets”) would create practical problems for the School.  However, that is not the IMC’s pleaded case. Therefore, I do not think that it is appropriate for the court to consider this further.

98.  I therefore hold that the IMC has failed to justify Reminder 1 by the allegation made on the basis of “sharing of resources”. 

E1.3   Conclusion

99.  For the above reasons, I am of the view that the IMC could not justify the issuance of Reminder 1 to the plaintiff.

100.  Without disrespect to counsel, I do not think it is necessary for the court to make any finding on factual disputes such as when the words “先由小學代支全數，跟進鍾來付一半費用” handwritten on one of the invoices were deleted and the plaintiff’s involvement in the cheque-signing process.

E2.     Reminder 2 – Admitting overage students in 2^nd term

101.  On 20 August 2012, the IMC issued another verbal reminder to the plaintiff for having admitted overage students in the 2^nd term while those students had studied in the Kindergarten during the 1^st term of the same academic year.  It was alleged that such a practice had seriously affected the teachers and the students’ learning progress.  Reminder 2 was therefore issued for the plaintiff’s “failure to effect proper administration”.

102.  According to the evidence of Mr Chu, the background of this complaint was that:

(1)     On 1 February 2012 and 7 February 2012, the Chairman of the School’s sponsoring body, Mr Chu Chung Sing (“Chairman Chu”) had had a meeting with the plaintiff and the principal of the Kindergarten (“Madam Lee”), and discussed about the lack of students in the Kindergarten. According to the record of the meeting (which was prepared by Ms Iu), Madam Lee admitted that while the Kindergarten had presented graduation certificates to 10 Pakistani students in 2010, those students remained as K3 students in the Kindergarten in 2011 and they were also registered as students of the School. The record also showed that there were 10 Pakistani students (who were more than 8 years old) who attended the Kindergarten in the 1^st term and the School in the 2^nd term and that the plaintiff responded that it was what the parents wanted, and those students’ registration had been approved by the EDB.  At that time, Chairman Chu suggested that “Pakistani students should only be allowed to attend ‘make-up classes’ at the Kindergarten but should not be regarded as students of the Kindergarten”.

(2)     On 15 August 2012, Mr Chu and Ms Iu had had a meeting with Mrs Chan Fok Kwai Fun from the EDB (a Senior School Development Officer in Kwai Ching District) (“Mrs Chan”), during which Mrs Chan expressed that she did not want to see that there were older students who attended the Kindergarten to “make up the numbers” first, and then registered as the School’s students.

(3)     It was then decided in the IMC meeting held on 20 August 2012 that the verbal reminder be issued to the plaintiff.

103.  The plaintiff argued that the IMC’s complaint in this regard was totally groundless because:

(1)     EDB had approved the admission of the students concerned into the School;

(2)     Mr Chu accepted that he must have known about EDB’s approval of the admission of those overage students and that pursuant to guidelines issued by EDB, the School may admit overage but not underage students;

(3)     Mr Chu further accepted that the plaintiff and the IMC had no control on how the Kindergarten registered its students;

(4)     There was no evidence that the EDB had issued any letter to the School for “making up the number of students”;

(5)     There was no evidence that the admission of overage students affected teachers and other students;

(6)     There was no evidence that the School had received any complaint from parents or teachers of the School or the IMC about the overage students.

104.  Although the term “overage students” had been frequently mentioned when this complaint was touched upon at the trial, I think the focus should not be placed on the age of the students concerned, but on the fact that some Pakistani students had been admitted into the School at the beginning of the 2^nd term only while they had been admitted as K3 students in the 1^st term of the same academic year.  Indeed, it was stated in the “verbal reminder” that:

“如教局已批准學生就讀鍾來幼稚圜，必須完成該學年才能升讀本校。”

105.  Hence, it can be seen that the reminder did not say that the students concerned should not be admitted into the School at all, but should only be admitted in the following academic year (which means they would be even more “overage”).

106.  The question is: was the IMC justified to issue a reminder to the plaintiff on 20 August 2012 for her failure “to effect proper administration of the School”?

107.  I hold the view that it was not, for the following reasons:

(1)     It was the Kindergarten rather than the School which was at fault for “making up the numbers”.  Indeed, it can be seen from the report of Chairman Chu dated 15 February 2012 that the problem at the material time was the lack of students at the Kindergarten;

(2)     As Mr Chu admitted during cross-examination, the plaintiff and the IMC could not control how the Kindergarten admitted its students;

(3)     What the plaintiff did was to admit students at the beginning of the 2^nd term of the academic year when those students had been registered as the Kindergarten’s student in the 1^st term of the same academic year.  It is undisputed that the EDB had approved the School’s admission of those students.  Mr Chu also accepted that, as supervisor, he also knew about such approval.

108.  The position may be different if there was any conspiracy between the principal of the Kindergarten and the plaintiff that the Kindergarten and the School would (with the consent of the parents concerned) share students in such a way.  However, there was no such allegation in the IMC’s pleaded case. 

109.  Pausing here, I note that it was the IMC’s submission in paragraph 134.5 of its written closing submissions that:

“In a similar vein, during cross-examination of Chu and Lee, P also made reference to whether P had control over how the Kindergarten would admit its own students. This is entirely yet another attempt for her to shift the focus of the IMC’s case against her:

(a)      […]

(b)      The arrangement for the students to spend the first term in the Kindergarten, and only to attend the School in the second term, was surely within P’s control.”

110.  I must make it clear that, insofar as paragraph 134.5(b) quoted above implied that the plaintiff had a part to play for the students concerned to study in the Kindergarten in the first term before being admitted into the School in the 2^nd term, I would refuse to consider that allegation, for this was simply not pleaded.

111.  On the other hand, it was the plaintiff’s explanation that it was the parents of those Pakistani students who wanted to send their children to the Kindergarten for one term before admitting them into a primary school.  In this regard, the IMC doubted whether this was really the case because, it was said, the plaintiff had not mentioned about this in the plaintiff’s 3 October 2012 Response nor in the IMC meeting held on 22 November 2012 when the written Reminder 2 was issued to her.  However, I note that it was recorded in the note of the meeting between Chairman Chu and the plaintiff held on 7 February 2012 that the plaintiff did explain that:

“共有10 名8 歲以上巴藉學生，上學期在鍾幼就讀，下學期則在小學就讀，胡國萍校長回應屬家長意願，且人讀小學均須由教育局批准，沒有犯例。” (emphasis added)

112.  Therefore, I am satisfied that it was not something which the plaintiff fabricated subsequently.

113.  I can understand that the IMC might consider it very undesirable for students to skip the 1^st term of Primary One and started to learn the curriculum of the 2^nd term of Primary One right away after those students had left kindergarten.  For this purpose, the IMC could of course set its own policy for the principal to follow.  However, before such a policy was set, I do not think it is right for the IMC to accuse the principal for having admitted such students. 

114.  Lastly, it was submitted by the IMC that the plaintiff’s assertion that the School had received no complaint about the disturbance created by reason of the admission of new students in the 2^nd term was suspicious and in any event irrelevant.  I think the answer to this submission is that there was simply no evidence that any complaint had been received.  

115.  In any event, I hold the view that it was unfair to the plaintiff for her to be accused of having failed to effect proper administration of the School by virtue of Reminder 2 when she was accepting new students in the 2^nd term without a clear guideline or policy from the IMC that this was not permissible. 

E3.     Warning 3 – SZ Exhibition and SZ Service Centre

116.  Counsel for the defendant summarized this warning as follows:

“A warning letter for P’s serious defiance of IMC’s instructions, injury of the School’s reputation and causing loss of resources in cross-border student recruitment (跨境招生). P had in the name of the School participated in the 2012 跨境學童香港教育展 (‘SZ Exhibition’) and operated a cross-border service centre in Shenzhen (‘SZ Service Centre’) without the IMC’s approval and in spite of the IMC’s directions not to expend time or resources at cross-border recruitment.”

E3.1   The SZ Exhibition

E3.1.1 The plaintiff’s case

117.  It is undisputed that the School had participated in the SZ Exhibition on 15 – 16 September 2012.  However, the plaintiff asserted that the IMC had never prohibited cross-border recruitment by relying on the following matters:

(1)     Mr Chu had in fact given verbal approval in around February 2012 for the plaintiff to do cross-border recruitment.  He (and 2 other managers of the School as authorized signatories) had been signing cheques between February and October 2012 for expenses relating to cross-border recruitment. It could be seen from the summaries attached to these cheques that those expenses related to cross-border recruitment.  The IMC had also approved expenses incurred in respect of cross-border recruitment by approving the 2012/2013 Financial Report;

(2)     In the IMC meeting held on 20 August 2012, Mr Mak Wing Yan (“Mr Mak”), one of the managers of the School, had asked the plaintiff to negotiate down the fees payable for the SZ Exhibition;

(3)     In the same IMC meeting, Mr Chu also stated that “本地及跨境可以雙線收生”;

(4)     Mr Chu had never indicated during the meeting with the plaintiff held on 3 September 2012 that the School should not attend the SZ Exhibition, and he had in fact signed a cheque for the SZ Exhibition on 30 August 2012;

(5)     In the meeting held on 14 September 2012 among Mr Mak, Mr Lee and the plaintiff, Mr Lee only expressed concerns regarding the costs of cross-border recruitment, and said that the plaintiff could admit cross-border students locally;

(6)     On 15 September 2012, when the plaintiff called up Mr Chu and sought his clarification as to the stance of the IMC on the School’s participation in the SZ Exhibition, Mr Chu stated that Mr Mak and Mr Lee did not represent him, and that he (Mr Chu) would allow the plaintiff to go ahead and participate in the SZ Exhibition;

(7)     Mr Lau Yiu Wing (a director of the Foundation) and Mr Lam Kin Tak (“Mr Lam”) (a director of the Foundation as well as a manager of the School) had also attended the SZ Exhibition, which showed that they were supportive of cross-border recruitment;

(8)     Mr Chu further confirmed during a meeting of the IMC held on 15 October 2012 that he agreed to cross-border recruitment.

E3.1.2 The IMC’s case

118.  The IMC’s case may be summarised as follows:

(1)     The IMC had never put any policy in place for cross-border recruitment;

(2)     When the School incurred expenses on cross-border recruitment between February 2012 and October 2012, the plaintiff did not inform the IMC that those expenses were incurred for such a purpose;

(3)     The plaintiff had disregarded the IMC’s instructions against cross-border recruitment but booked for and attended the SZ Exhibition;

(4)     Mr Chu had objected to the use of the School’s resources on cross-border recruitment during a meeting between the plaintiff and several managers of the IMC on 20 August 2012 after the IMC meeting held on the same day;

(5)     When the plaintiff submitted a cheque for the SZ Exhibition for signature at a meeting on 3 September 2012 held among the plaintiff, Mr Chu, Mr Lee, Mr Mak, Mr Ho and Ms Iu, the managers had refused to sign the cheque;

(6)     Although the IMC had objected against cross-border recruitment, the plaintiff attended the SZ Exhibition as scheduled on 15 – 16 September 2012.

E3.1.3 The necessity to obtain the IMC’s approval

119.  The first crucial question which this court has to decide is whether it was necessary for the plaintiff to obtain the IMC’s approval before the School engaged in any activities involving cross-border recruitment of students.

120.  This is not a straight forward question to answer.  As Mr Chu admitted in court, the plaintiff had never been told on the rule or direction which drew the line between matters in respect of which the IMC’s approval had to be sought and those which approval was not required.  Mr Chu said as a matter of principle, the plaintiff had to seek consent from the IMC on “important” matters, and the plaintiff should decide herself what matters would amount to “important matters”.

121.  Having said that, the court’s attention had been drawn to section 40AE of the Education Ordinance which governs, among other things, the functions of the IMC.  Sub-section (2) thereof provides that:

“The incorporated management committee of a school shall be responsible for—

(a) formulating education policies of the school in accordance with the vision and mission set by the sponsoring body;

(b) planning and managing financial and human resources available to the school;

(c) accounting to the Permanent Secretary and the sponsoring body for the performance of the school;

(d) ensuring that the mission of the school is carried out;

(e) ensuring that the education of the pupils of the school is promoted in a proper manner; and

(f)     school planning and self-improvement of the school.”

122.  On the other hand, a principal’s functions have been set out in section 58 of the Education Ordinance as follows:

“(1) The principal of a school shall, subject to the directions of the management committee or incorporated management committee (as may be appropriate), be responsible for the teaching and discipline of the school and for such purposes shall have authority over the teachers and pupils of the school.

(2)      The Permanent Secretary may address the principal of a school on any matter relating to the teaching and discipline in the school, and in such case the principal shall conduct correspondence directly with the Permanent Secretary.”

123.  On the basis of the above statutory provisions, I am of the view that before the plaintiff engaged in recruitment activities in the Mainland, she should have sought approval from the IMC first, because:

(1)     As a principal, the plaintiff was supposed to be responsible for the teaching and discipline of the School only.  Matters which do not fall within the ambit of “teaching and discipline” are not something which the plaintiff could decide on her own;

(2)     Pursuant to section 40AE(2)(a) of the Education Ordinance, it was the responsibility of the IMC to formulate education policies.  Conducting recruiting exercise outside Hong Kong must be regarded as an education policy;

(3)     Any recruitment exercise which was conducted outside Hong Kong must necessarily involve financial and human resources.  It is stipulated under section 40AE(2)(b) of the Education Ordinance that the planning and management of such matters are the responsibilities of the IMC.

124.  In fact, even the plaintiff accepted during cross-examination that the IMC’s approval should be required before any recruitment exercise could be conducted outside Hong Kong.

125.  There is no dispute that there had never been any IMC resolution to the effect that the plaintiff was authorised to conduct recruitment activities in the Mainland. 

126.  Therefore, strictly speaking, the IMC was right in that the plaintiff should not have participated in the SZ Exhibition without the IMC’s approval.

E3.1.4 Other matters to be taken into account

127.  Despite the conclusion reached above, does it necessarily mean that the IMC was justified in issuing Warning 3 to the plaintiff in relation to the SZ Exhibition? 

128.  I am of the view that the court should not jump to any conclusion so quickly, without regard to what had happened in the whole period between February and September 2012, which I will examine more closely below.  As it can be seen below, there had been different discussions between the plaintiff and various managers (including the supervisor) of the IMC during the aforesaid period on cross-border recruitment of students.  There was also an IMC meeting held on 20 August 2012 in which the managers had talked about the SZ Exhibition. 

129.  I now proceed to consider the aforesaid discussions in turn below.

E3.1.5 The supervisor’s alleged approval in February 2012

130.  According to the plaintiff’s evidence, she had expressly asked Mr Chu for approval in around February 2012 before she started to conduct recruitment exercise outside Hong Kong.  She stated that Mr Chu had agreed to her proposal.  This was what she stated in paragraph 34 of her witness statement:

“於2012年2月，本人終於聯系上一些接收跨境學生的學校校長，如打鼓嶺嶺英公立學校，寶覺學校等，從他們那裹學得一些招收跨境生的方法，如在福田、羅湖等跨境生出沒的地方擺攤宣傳。本人其後與一直處理招生事務的林校董商量，討論招收跨境生的策略，林校董其後又着本人問朱校董[14]是否同意開展跨境招生活動。本人便與朱校監於電話中討論上述工作，他表示支持，亦同意與鍾來合作招生，以分擔經費。”

131.  The plaintiff also stated that upon Mr Chu’s approval, she had caused the School to incur various expenses from February 2012 onwards on cross-border recruitment, and Mr Chu had signed cheques which were issued for such a purpose.

132.  Mr Chu did not mention about such matters in his witness statement, in which he stated that the plaintiff only mentioned about recruitment of students in the Mainland for the first time in the IMC meeting held on 20 August 2012.  He also stated in paragraph 85 of his witness statement that:

“於2012年11月22日舉行的2012-2013年度第一次校董會會議中，校董會就胡女士擅自設立跨境服務中心及參與跨境招生展覽作出討論。其間，本人指出胡女士沒有依照程序召開校董會會議通過跨境招生的事項，因此引致多達港幣14萬的支出，並與其他學校共用資源。胡女士於會議其間突然聲稱已問了本人，並得到本人的同意及指示下才進行。本人當時即時表示需要在會議上正式通過才是合法，而當有校董問及胡女士有沒有其他校董知道跨境招生的事情，胡女士指鍾來幼稚園林建德校監知道。另外，胡女士亦辯駁稱本人有份簽發跨境支出的支票，所以理應知道跨境招生一直有在進行。對於胡女士的指控，本人要指出其實由胡女士發來的支票摘要內並沒有詳細列明是跨境招生的支出，只是註明是招生支出，本人亦質疑胡女士有向校董會故意隱瞞。本人亦在會上引述指，當有校董到荃商要求支票摘要時，荃商趙書記表示摘要已被銷毀。”

133.  During his cross-examination, Mr Chu also stated that the summary (摘要) was vague, and he did not know the exact purpose of the cheques concerned.

134.  I do not accept Mr Chu’s evidence in this regard.

135.  First of all, it is noted that the summary of a number of the cheques clearly stated that the purpose of issuing the cheques was “境外聯絡攤位支出”[15].  If Mr Chu had read the summary as alleged, I do not think he would have difficulty in knowing immediately that the School was spending money on recruitment exercise conducted outside Hong Kong.

136.  Further, Mr Chu’s alleged ignorance about the plaintiff’s action was contradicted by what he said in the Board meeting of the Foundation held on 15 October 2012:

“咁第二樣，就係我地就算你話之前我地冇阻止你去做任何嘅跨境啦，你話我地2月份開始冇阻止你吖嘛，當然我唔阻止得啦，因為你要係當其時我地係同意你係幫吖嘛，幫鍾來手去搞D 跨境學生架嘛，咁而我地都當其時唔知這我地學校係唔可以同鍾來一齊搞架嘛，呢樣野。

咁喺8月份見完教統局，我地係唔可以同鍾來一齊搞嘅，咁我哋咪要縮開囉，就係咁簡單。咁我地喺8月20號，亦都好清晰話俾你聽，我地唔做得，咁而之前做咗乜野野嘅，咁或者資源上呀點樣，咪大家攞出嚟吖。我完全唔知你做過咗D乜野喎。[…]”[16] (emphasis added)

137.  The above clearly shows that Mr Chu knew that the School was conducting the cross-border recruitment exercise together with the Kindergarten at the material time, as he explained that he had given his approval on the assumption that it was permissible for the School and the Kindergarten to recruit together, and he alleged that the plan had to be changed upon being told by EDB in August 2012 that such cooperation was not permissible.[17]

138.  The explanation given by Mr Chu that he thought the plaintiff was only “assisting” (幫) the Kindergarten is incredible. That does not sit well with the fact that the School was incurring expenses in the Mainland.  I will come to this part of the evidence below.

139.  Mr Chu’s evidence that he did not know that the cheques concerned were issued to pay for cross-border recruitment expenses was also contradicted by his own explanation given in the IMC meeting held on 22 November 2012, in which there was the following dialogue:

“羅[18]:	求先我睇番果D 單呢，好多單真係是寫明咩大陸收生呀，大陸中港巴士呀，咁樣係唔係？跟住都係大陸嘅一D飛仔，當時俾我地簽嘅係咪都係嗰D黎架？都係嗰D飛仔嚟？而家嘅影印都係用正本影印架嘛？有兩張細細張果D收據是大陸收條。
朱：	佢嗰陣時講的話是墊支，幫鍾來出住先，就叫我地簽，我諗住幫鍾來出住先，你係墊支嘅，你會攞番錢返嚟架嘛，係咪？但後尾唔係喎，原來係夾份喎，咁但係我哋真係唔知，咁同埋呢，我地開會。
羅:	幫鍾來出住先咁大鍋? 幫鍾來出住先。
朱：	係啊，很多嘢我哋初初果時都攪唔清楚，咁後尾我地見完教育局之後問清楚，咁我地於8月20號之後，我地就冇再簽有關嘅嘢喇，因為見教育局之後，佢指引咗，指引咗之後冇理由再簽㗎[…]”[19]

140.  The excuse given by Mr Chu in the IMC meeting was not that he had no idea that the expenses were incurred in the Mainland or that he did not read the summary of the purpose of the expenses, but that he thought the cheques were only issued for and on behalf of the Kindergarten first which the Kindergarten would reimburse the School later.  He also stated that he only knew afterwards that the Kindergarten and the School would share expenses together.  Such an explanation was totally incredible.  It can be seen that there were quite a number of cheques issued in the period since February 2012.  If those expenses were entirely the Kindergarten’s expenses, there was no reason why the School had to pay for the Kindergarten first on so many occasions.  In my view, Mr Chu was only trying to shift the blame to the plaintiff.  I find that he all along knew that the Kindergarten and the School were sharing the expenses together and he had approved such a modus operandi.    

141.  Taking all the evidence into account, I accept the plaintiff’s evidence that she had indeed obtained Mr Chu’s approval in conducting the recruitment exercise in the Mainland.  It is understandable as to why such an approval was given: it is undisputed that the School was under constant risk of closure, and such closure could only be avoided if the School would have enough intake of Primary One students.  I also find that Mr Chu had approved that expenses might be incurred for such cross-border recruitment activities, for this must be a natural consequence of engaging in recruitment activities outside Hong Kong.

142.  Counsel for the IMC argued that even if Mr Chu had indeed given his verbal consent for the plaintiff to undertake cross-border recruitment activities, that would not amount to the IMC’s approval.  While I agree with this proposition as a matter of principle, I do not think the court should totally ignore such consent which came from the supervisor of the School.  As a matter of fact, even the IMC itself was relying on the discussions in informal meetings when accusing the plaintiff of ignoring “the IMC’s instructions” at the trial (see further below). 

143.  I should add here that as far as the cheques which were drawn to pay for the cross-border recruitment expenses are concerned, I would not accept, as contended by the plaintiff’s counsel, that once the other 2 authorised signatories had signed those cheques, those 2 managers should be taken to have consented to and approved the cross-border recruitment exercise, for it is not clear whether they were fully apprised of the nature of the underlying transactions, and they (there is not even evidence as to who they were) might have signed the cheques negligently, without reading carefully what the cheques were about.

E3.1.6 IMC meeting held on 20 August 2012

144.  The only IMC meeting, in which the topic on recruitment of students from the Mainland (or cross-border recruitment exercise) was discussed before the SZ Exhibition took place on 15 September 2012, was held at 2pm on 20 August 2012.

145.  In the minutes of the IMC meeting which was signed by Mr Chu on 10 June 2013, it was recorded that the IMC had the following discussions:

“3.4	13-14 年度小一招生事宜
胡:	1.     由本年2 月起進行招生工作。 2.     鍾來幼稚園招收跨境學生情況：K1-K2 約40 人，K3 約20 人，合共約60 人。 3.     2013-2014 年度可收生至9 月底，若有26 人，可以開2 班，51 人則可開3 班。
何：	＊什麼本地、跨境、K1-K3? 究竟來年度收到有多少學生?
胡：	＊ 2012-2013 年度收到跨境學生8 人; 2013-2014 年度收到本地學生約有10 人，預算跨境有20 人。
何：	＊如以校長所說2 月起招生，卻2012-2013 年度只有跨境學生8 人，那麼本校更不應招收跨境，可到其他本港地區招收，無必要要到內地招收，必須著重本地，甚至本區的學生。
朱：	＊政府未來政策或會限制跨境學童來港就學；自行收生階段，教育局是否對區內及區外的招生有百分比之限制?” (emphasis added)

146.  A related topic concerning cross-border school bus was also discussed in the same meeting.  The minutes read:

“4.2	簽署跨境學童校車合約事宜
胡:	1.     希望大家通過授權本人代表本校聯同鍾來幼稚園與跨境校車公司簽署合約；另開設銀行戶口專門收取學生校車費每位HK$1,500; 由於校車供應緊張，宜盡快簽約。 2.     建議委環球校車公司承辦，一部跨境學童校車可以接載60 人，其中包括兩位褓母及58 位跨境學童，費用是6 萬元，免落地簽証，直達香港。 3.     學校可由新女教師助理擔任褓母的工作。
朱：	＊本校的教師流失率已比往年高，若聘請教師助理同時兼任褓母，角色重疊，恐防會有勞資糾紛，本人不同意。
姚：	＊校長臨時提案，請問有沒有合約給予閱覽？請問何時開始？
胡：	＊沒有，未草擬好， 2012 年8 月28 日開始試行。
朱：	＊由於議題敏感，建議待2 位出席之教師校董避席後才討論。”

147.  It was Mr Chu’s evidence in his witness statement that plaintiff only mentioned about cross-border recruitment for the first time in this IMC meeting:

“78. 於2012年8月20日舉行的2011-2012年度第三次校董會會議上，胡女士在匯報招生事宜期間，首次提及到招收跨境學生。當時有校董成員表示無必要到內地招收跨境學生。及後胡女士又突然動議連同鍾來幼稚園與環球校車公司簽署跨境校車服務合约，並聘請相關校車保母，在2012 年8月28日開始接載鍾來幼稚園的40名跨境學生及荃商的8 名跨境學生。胡女士事前沒有向本人或任何成員提出相關議程。當時姚秘書要求胡女士提供該份服務合約以供參考，但胡女士卻稱服務合約還在草擬中。校董會最後沒有通過胡女士有關跨境校車動議。[…]

[…]

109.    如本人所知及在上述跨境招生事件部分提到，胡女士在2012年8月20日的校董會會議才第一次提出跨境招生，在之前從來沒有向校董會提出跨境招生的議案或得到校董會通過任何議案撥款支援跨境招生。[…] ”

148.  I have the following observations:

(1)     The said minutes did not record that any resolution had been passed or any concluded view had been reached by the IMC as a whole in relation to the cross-border recruitment exercise. Instead, the minutes only recorded (i) Mr Ho Wai Ming[20] (“Mr. Ho”)’s view that it was not necessary to do recruitment in the Mainland and (ii) Mr Chu’s view or query on the future policy of the Hong Kong Government on the admission of cross-border students;

(2)     What Mr Chu had clearly indicated in this IMC meeting related to the plaintiff’s signing of contract with the proposed school bus company under the name of the School but not in respect of the cross-border recruitment exercise. 

149.  Not only was there no documentary evidence showing that Mr Chu had expressed his objection against cross-border recruitment, there was evidence pointing to the contrary.  Ms Liu Shui Ka (“Ms Liu”), a teacher manager of the IMC, in her contemporaneous notes taken during the meeting, wrote that Chu had said:

“跨境/本地雙線招生”[21]

150.  I accept that this was apparently a shorthand form of what Mr Chu had said in the meeting.  Although this line was not contained in the approved version of the minutes nor in the notes taken by Ms Cai (“Ms Cai”), the alternate teacher manager who also took notes for this meeting, I have no doubt that this was not made up by Ms Liu because:

(1)     There was no suggestion at all by the IMC as to why Ms Liu had to make these notes up;

(2)     Taking into account the position of the words and the punctuation marks written on the notes, I believe that those notes were written down by Ms Liu at one go and Ms Liu did not insert those Chinese words into her notes subsequently;

(3)     It is more likely than not that Ms Cai did not take down those words only because she had omitted to do so rather than because Mr Chu did not say those words in the meeting. 

151.  The IMC argued that these words could be interpreted to mean “cross-border recruitment exercise” or “admission of Mainland students”.  I agree that both are the possible literal meanings of those words.  However, I tend to think that it should mean the former, for it is consistent with what Mr Chu had agreed in the past. 

152.  Another pointer which shows that there was no clear indication from the IMC that the plaintiff should cease all cross-border recruitment activities is that, if there was such a clear instruction or decision, I do not believe that the plaintiff would have presented a cheque for the authorised signatories to sign on 30 August 2012 (to Mr Chu and another manager), and 3 September 2012.  I will come back to this later.

153.  I am also aware that it was Mr Lee’s evidence that he and others had already expressed in the IMC meeting on 20 August 2012 that the School should not engage in recruitment activities outside Hong Kong. Mr Lee had emphasised this when he met the plaintiff on 14 September 2012.

154.  In this regard, it is important to pay attention to the fact that, in Ms Liu’s handwritten notes, the words “跨境/本地雙線招生” appeared as the “last words” said on this topic in the meeting.  There was no further record that anything was said by anyone else after Mr Chu had expressed the aforesaid view. 

155.  On the basis of the above, I find that the IMC did not come to any agreement during the IMC meeting on 20 August 2012 that the plaintiff should cease all cross-border recruitment activities right away.  On the other hand, if the supervisor had expressed the view of “跨境/本地雙線招生” and no one had raised any objection against that, it would be reasonable for the plaintiff to proceed with cross-border recruitment activities even though there was no resolution passed to that effect.

156.  I should emphasise that what I stated above should not be taken to be a general endorsement that the IMC should operate in such a way.  However, in my view, when a school decides whether a warning should be issued to a principal or a teacher, “reasonableness” must be one of the most important yardsticks.  Take this case as an example, I think it would be quite unfair to the plaintiff if a warning was issued to her on the basis that no formal resolution had been passed to authorise her to conduct cross-border recruitment exercise if a reasonable impression of the conclusion of the IMC meeting was that it was permissible for her to proceed with what she had been doing. 

E3.1.7 IMC informal meeting held on 20 August 2012

157.  It may be recalled that in the course of the discussion on cross-border school bus in the IMC meeting on 20 August 2012, it was proposed by Mr Chu that the discussion should be carried on later upon the departure of the two teacher managers “in the light of the sensitivity of the topic”.  While I do not entirely understand why that was necessary (for example, there was no suggestion at the meeting that there was any conflict of interest on the part of the teacher managers), no one raised any objection against the supervisor’s suggestion.  However, what was strange was that, after the IMC had completed the discussion of another item (on the request of a teacher for the School to waive his payment in lieu of notice), the meeting came to an end at 4pm without going back to the issue of cross-border school bus. 

158.  In paragraph 78 of his witness statement, Mr Chu explained that:

“在該校董會會議的正式會議後， 一眾基金會指派的校董及胡女士續討論此問題，本人明言基於保險等問題及不可與鍾來幼稚園共用資源及成效存疑等原因，反對授權胡女士簽署跨境校車合約及投放資源招收跨境學生。”

159.  Before I go on, I should say a few words on the nature of the discussions (which took place after 4pm on the day – “在該校董會會議的正式會議後”) referred to by Mr Chu. 

160.  According to the minutes and the transcripts of the IMC meeting held on 25 May 2013, there seemed to be different views as to whether the IMC meeting had ready finished at 4pm on 20 August 2012.  Mr Lam and Mr Law maintained that there had been a formal pronouncement at that time that the IMC meeting had finished, and it was only because of this that they had left the venue of the meeting.  In the end, it was agreed in the IMC meeting held on 25 May 2013 that the “2^nd part of the meeting” which started at 4pm on 20 August 2012 should not be regarded as a formal IMC meeting.  For this reason, the record of this informal meeting was labelled as “memorandum of the meeting”.

161.  In this informal meeting, the issue on cross-border school bus was further discussed.  The said memorandum recorded that:

“(一)	簽署跨境學童校車合約事宜
朱:	繼續討論剛才校長提出的跨境校車問題。
胡：	由於校車供應緊張，希望大家今天通過授權本人代表本校簽署跨境校車合約，承包校車一部(60座) 6 萬元，扣除褓母2人，最多可載學生58人。另開設銀行戶口處理校車費，收取每位學生校車費HK$1,500，而(2012-2013年度)接載鍾幼學生約40人，本校學生8人；若以48人計算*l,500 = 72,000 元，若58人*l,500 = 87,000 元。
朱:	反對授權校長簽署跨境校車合約，基於保險等問題，荃小是資助學校，鍾幼是私校，資源不可共用，且如校長所說本校只有跨境學生8人，卻要派本校教師作褓母等等實為不當，不同意派本校付錢聘請教師助理作褓母跟車；既要投放大量資源，又未必有成效，則不要投放資源招收跨境學生。”

162.  It is indeed confusing to note that Mr Chu had stated “不要投放資源招收跨境學生” in this informal meeting. There is a question as to whether he was only objecting against the School entering into a contract with the school bus company or whether he was objecting against the School conducting cross-border recruitment altogether. 

163.  Taking into consideration the fact that Mr Chu had expressed that there should be “跨境/本地雙線招生” in the IMC meeting held on the same day, I am of the view that it was more likely than not that Mr Chu’s view “不要投放資源招收跨境學生” was made in the context of the arrangement of cross-border school bus only but not generally on cross-border recruitment.   It should also be noted that the words “不要投放資源招收跨境學生” were included in the section in which the issue on “cross-border school bus” was discussed, rather than under the topic of “cross-border recruitment”.  Further, as the IMC’s counsel reminded the court during the trial, one has to be very careful to distinguish the concept of “招收跨境學生” and “跨境招收學生”. Only the latter phrase involves recruitment activities conducted out of Hong Kong.

164.  The said interpretation of those Chinese words is also consistent with:

(1)     the fact that Mr Chu had subsequently signed a cheque on 30 August 2012 to book a booth at the SZ Exhibition.  I will come back to this point later (see section E3.1.8 below); and

(2)     Mr Lee’s evidence in paragraph 28 of his witness statement that: “校董會於2012 年8 月20 日的校董會會議中首次聽到胡女士有意簽署跨境學童校巴合約。不過，校董會當時拒絕了胡女士的提議”.  He indeed did not say that the IMC had also reached any consensus that the plaintiff should not conduct any recruitment exercise in the Mainland.

165.  Before I complete my discussion on this informal meeting, I should add one more observation on the interpretation of IMC meeting minutes and other memorandum of informal meetings in the present case. 

166.  I note that from many minutes and memorandum, it was not clear whether any decision or consensus had been reached upon IMC members’ discussions.  While some of the items were recorded to have been voted on, there were other items in respect of which there was no such record, and the minutes/memorandum concerned only recorded the discussions.    

167.  The informal meeting held on 20 August 2012 serves as a very good example.  As can be seen above, the memorandum only recorded Mr Chu’s objection against the plaintiff signing any contract with the cross-border school bus company.  It gave an impression that that was the consensus reached in the meeting.  However, a subsequent email sent by Ms Iu to the plaintiff (with Mr Lee, Mr Ho and Mr Mak copied) on 25 August 2012 showed that it was not.  The email reads:

“致胡國萍校長

有關老師請假信件及跨境校車服務合约草稿，已電郵給朱德榮校監，並另送李智鋒校董，麥榮欣校董，何偉明校董，他們商議後，表示反對共同簽署上述合约，由於：兩校學生人數比例差異(小學～ 8人 鍾幼～ 44人)；且教局曾提示小學屬資助學校，鍾幼屬私營學校，兩校資源必須分清楚；合約內容沒有清晰責任等問題，以免日後爭拗，或被追究法律責任。朱松勝主席(教育基金)與林建德校監(鍾幼)商議後，決定全權由鍾幼稚園負責簽署上述合約，如小學學生乘車鍾幼安排之跨境校車，只須付給該學生之校車費予鍾幼，無須付上額外款項及任何負任。小學不能為該跨境校車提供褓母， 敬請校長務必遵照指示為荷！ 有關＜ 服務合约＞， 簡述提示/建議如下， 煩請轉告鍾幼： 一 沒有提及保險問題?二 甲乙雙方提供2位聯絡人及電話， 乙方商業登記號碼三3.1 (自行修改擬訂)有權優先包車2 年，但1年後，可提前三個月通知是否繼續 四 4.1.1 於本合約履行期間，乙方必須優先提供甲方學校所有跨境學童接送服務。五 10.1 錯字：[機] 構 Regards,

Ava Iu Secretary

TWTA LTD

TWTA EF LTD”

168.  This email was sent in response to the plaintiff’s email to Ms Iu dated 24 August 2012 by which the plaintiff stated that:

“姚小姐， 有勞打印附件交朱校監。胡校長”

169.  From Ms Iu’s email dated 25 August 2012, it seems that the plaintiff had attached a draft contract to her email dated 24 August 2012 for Mr Chu’s consideration.

170.  If it had been decided in the informal meeting on 20 August 2012 that the plaintiff shall not sign any contract with the cross-border school bus company, I wonder:

(1)     Why Ms Iu had to copy Mr Lee, Mr Mak and Mr Ho when she sent the draft email to the supervisor for his consideration;

(2)     Why the aforesaid managers and Mr Chu had to further discuss whether the School should enter into the said contract.

171.  In my view, the inference that can be drawn is that there was no decision made on 20 August 2012 as to whether the School should enter into the contract under its own name, despite Mr Chu’s objection as expressed in the informal meeting.

172.  This highlights the potential danger that can arise if the court draws inference on the decision reached from the views of individual managers as recorded in the minutes or memorandum.

E3.1.8     Meeting on 3 September 2012

173.  On 3 September 2012, some managers went to the School again.  Mr Chu described this occasion in the following way in paragraph 79 of his witness statement:

“於2012年9月3日，本人連同姚秘書、李智鋒校董、麥榮欣校董、何偉明校董於荃商校舍與胡女士會面。會面期間校董們再次指出荃商要著重本地招生，不能投放太多時間及資源在跨境招生事宜上。同一次會面上，胡女士亦呈上了一張支票予校監、校董簽署，用途是為了租借深圳舉辦跨境學生招生展覽的一個攤位，由荃商獨自使用，費用為港幣7,600 元。校董當場認為太貴且不符合學校政策，拒絕胡女士的申請，並拒絕簽署支付跨境招生展覽攤位租借費用的支票。”

174.  Mr Chu then further explained:

“於2012年9月4日早上，本人指示姚秘書致電主辦跨境招生展覽的香港國際社會服務社的鄧小姐。據姚秘書於致電後跟本人會報，當時鄧小姐向姚秘書表示胡女士一共申請了兩個攤位，其中一個給予鍾來幼稚園使用，亦表示如不交款則作取消處理。鄧小姐隨後傳真了一份荃商的申請表及該跨境學童香港教育展的參展辦法指引給姚秘書。該參展辦法指引列出展覽日期為2012年9月15日和16日，每個攤住費用為港幣3,800元。胡女士於2012 年9月3日向校董的報告與姚秘書從鄧小姐得到的資訊的內容，如一個攤位的價錢，都有很大的出入。”[22]

175.  A memorandum had been prepared by Ms Iu to record what had happened in this meeting.  The relevant parts thereof read:

“(二) 校董指示胡校長：

長遠不能依賴非華語學生及跨境學生，不能投放太多時間及資源在「跨境招生」上；日後要着重本地招生，尤其青衣區[…]

(三) 當日要求胡校長提供資料如下：

請校長提供15-16/9/2012「跨境學童香港教育展」租借場地資料?

當日胡校長呈上支票予校監校董簽署，其中一張支票係申請15-16/9/2012「跨境學童香港教育展」租借場地費用7,600 元，校董詢問：校長為何費用那麼貴? 此費用是否一個攤位，還是與鍾幼一同申請(即共2個攤位)? 校長回應：沒有與鍾幼一同申請，本校只是申請一個攤位招收跨境學生，校董表示不申請及不簽署有關支票，校長卻表示不能取消申請，故校董命秘書用手機拍照有關文件及査詢情況。

(4/9/2012致電該展鄧小姐，獲回覆：胡校長申請了2個攤位，胡校長曾表示其中一個給幼稚園使用的，每攤位共二天3,800元 X 2 = 7,600元，不付款則當作取消，並傳真申請表給本會査看。)”

176.  The plaintiff stated in her evidence that Mr Chu had already signed the said cheque on 30 August 2012, and therefore she only needed one more manager to sign the cheque on 3 September 2012 before it could be submitted to the organiser of the SZ Exhibition.  In other words, the plaintiff did not require Mr Chu to sign this cheque again on 3 September 2012.  I accept her evidence in this regard, because it can be seen from a copy of the cheque dated 30 August 2012 that two signatures are on the cheque on which the “CANCELLED” chop was affixed. 

177.  This leads to the question: why would Mr Chu sign this cheque on 30 August 2012 despite the alleged consensus reached on 20 August 2012 that the School should not conduct any recruitment exercise in the Mainland? 

178.  In my view, Mr Chu’s conduct was consistent with his stance all along.  In February 2012, he had given his approval for the plaintiff to undertake recruitment exercise in the Mainland.  In the IMC meeting held on 20 August 2012, he stated that there should be “跨境/本地雙線招生”.  He then signed the cheque on 30 August 2012.  Furthermore, the said memorandum did not record that Mr Chu had raised any objection or query on 3 September 2012 on the payment of $7,600 (see further below).  All these corroborate the plaintiff’s evidence that Mr Chu had been supportive of what she had done in the Mainland.

179.  It is also remarkable to note in the memorandum referred to above that it was not recorded that Mr Chu had raised any objection against conducting recruitment exercise in the Mainland, and it seems that only the managers who were present were not agreeable to this, for Ms Iu only recorded that “校董指示胡校長: 長遠不能依賴非華語學生及跨境學生，不能投放太多時間及資源在「跨境招生」上；日後要着重本地招生，尤其青衣區 […]” and “校董表示不申請及不簽署有關支票，校長卻表示不能取消申請，故校董命秘書用手機拍照有關文件及査詢情況。” I am sure that if the instructions were given by Mr Chu, Ms Iu would have put down “supervisor” rather than “manager” in the memorandum.  This also supports my view that Mr Chu was in fact supportive.  However, he probably could not do anything about the managers’ refusal to sign the cheque at this meeting.  This is also supported by Ms Iu’s evidence in paragraph 57 of her witness statement in which she stated that:

“於2012年9月3日，本人連同朱校監、李智鋒校董、麥榮欣校董、何偉明校董於荃商校舍與胡女士會面。會面期間校董們再次指出荃商要著重本地招生，不能投放太多時間及資源在跨境招生事宜上。同一次會面上，胡女士亦呈上了一張支票予校監、校董簽署，用途是為了租借深圳舉辦跨境學生招生展覽的一個攤位，由荃商獨自使用，費用為港幣7,600 元。校董當場認為太貴，拒絕簽署支付跨境招生展覽攤位租借費用的支票，並作調査。本人當時有將該會面的內容以書面紀錄。”

E3.1.9 Meeting on 14 September 2012

180.  On 14 September 2012, Mr Lee, Mr Mak, Mr Ho and Ms Iu had a meeting with the plaintiff again.  These were the same people who met the plaintiff on 3 September 2012 (save that Mr Chu could not attend this time).

181.  There is no evidence as to who initiated this meeting.  According to Mr Chu, since he had been admitted into the hospital in early September 2012, he had instructed the aforesaid managers and Ms Iu to follow up with the investigation into the matter concerning the SZ Exhibition. It was probably because of this that the meeting was held.

182.  The audio recording and transcripts of this meeting had been placed before the court.  The following parts of the transcripts[23] (the plaintiff did not dispute the accuracy thereof) which recorded what the plaintiff said in the meeting should be noted:

“明天去羅湖火車站及葵涌房屋署，你地話唔做，7 仟幾支票唔肯簽，咁我地咪自己比錢做囉，後來佢肯減價至3 仟多元，校監都話唔簽唔做，由我俾錢。”

“一早訂左的時候是幫幼稚園(鍾幼)做埋，由本校墊支，佢比返錢我地，鍾幼會還給3,800 元，後來話幾多錢都唔做。”

“由頭到尾2 間一齊做，20/8之後，你地話分清、唔做，手尾之前做落，但我口頭應承左主辦機構去做2個攤位，你哋好明確話唔做，咁我哋去取消啦，佢哋唔肯，咁無辦法啦，唔肯就我哋自己去做。”

“冇簽約，可以退，但口頭也是承諾，不想做壞，又去又不去，咁我自己私人去做，明天及後日均是放假，有2 個老師放假自願跟我上去，蔡慧芳、周雪、廖瑞家(負責統籌)、周錦培書記。”

(emphasis added)

183.  I am of the view that what the plaintiff said in this meeting as quoted above are important because they show that:

(1)     Even if Mr Chu had given his support in the past, the plaintiff must have known in around early September 2012 that he might have had a change of mind (“校監都話唔簽唔做”), or at least his stance was not as clear as before;

(2)     The plaintiff had not been truthful in her explanation about the handling of the SZ Exhibition:

(a)     While she had represented that there had been a “reduction of price from $7,000 odd to $3,000 odd”, in fact that admittedly was not really a “reduction of price” (減價), but the price of one booth instead of two booths;

(b)     On one hand, the plaintiff stated that the School was not allowed to cancel the booking of the booth, on the other hand, she said that while it was possible to cancel the booking, she did not want to because she wanted to honour her promise.

184.  On the question of whether the School could withdraw from the SZ Exhibition, I note that it was one of the rules and regulations of the SZ Exhibition (which was attached to the application form) that:

“巳報名參展的學校須向主辦單位發出書面通知才可退展，所繳納的費用概不退還。”

185.  However, given what the plaintiff said in the meeting, and taking into account the result of the enquiry made by Ms Iu with the organiser of the SZ Exhibition (“不付款則當作取消”[24]), I find it as a fact that it was possible for the School to withdraw from the SZ Exhibition without paying.

186.  In any event, it is very clear that the managers who attended this meeting had expressed their views that they objected against spending further financial recourses of the School on the SZ Exhibition, and that the plaintiff was not allowed to proceed with cross-border recruitment even with her own money.

187.  However, the problem is, what is the significance of the view of the managers who were at this meeting?  As the IMC’s counsel recognised, “neither [Mr] Chu nor a few members of IMC could approve matters on behalf of the whole IMC.  This is a matter of law and the IMC’s articles”[25]. Only three managers were there.  If a few members of the IMC could not validly approve matters, the reverse must also be true – a few members could not disapprove matters.  Of course, I have not forgotten the IMC’s argument that “the plaintiff should not undertake certain act without the IMC’s approval”. But as it can be seen from my analysis in various issues in this Judgment, it is evident that the IMC had not always followed such a principle.

188.  Hence, taking the IMC’s case to the highest, it can only be said that three managers had indicated their disagreement for the plaintiff to conduct recruitment exercise in the Mainland.

189.  At the end of this section, I feel necessary to say a few words on the role of Ms Iu in the operation of the IMC.  It is noted that, at the material time, she was a secretary of the Foundation, but she was not a manager of the School.  However, she had attended most of the IMC meetings and other informal meetings of managers of the IMC. 

190.  According to her:

“自2012年2月起，荃商收到教育局轉介針對胡女士的投訴，分別是荃商杜惠蘭老師投訴胡女士於擬題事件上及代課安排事件上的不妥當行為 (該兩項投訴及事件的詳情會在下文敍述)。由此項投訴開始，本人受基金會委派，協助朱校監處理及調查該等由教育局轉介針對胡女士的投訴，及協助和草擬回覆教育局的調査報告及信件。在調査中，本人一直從旁跟進並協助朱校監，亦列席學校及校董會會議，協助基金會及校董們準備文件(包括警告函和會議紀錄等)，所以對本案件的事實背景及爭議都熟悉。”[26]

191.  Ms Iu described herself as having been “in attendance” (“列席”) at IMC meetings and other meetings concerning the School.  With respect, in my view, that does not reflect the reality.  As revealed by the transcripts and audio recordings of various IMC meetings and other meetings, she had not only attended the aforesaid meetings, but had also actively participated in the discussion of various matters as if she were a manager of the School.  At times, she had even interrogated the plaintiff in those meetings.  The only thing that she did not do was to vote.  I do not think it is an overstatement to say that her participation (in terms of asking the plaintiff questions, confronting the plaintiff, making suggestions, giving her views, etc.) in various IMC meetings had been more active than many other managers. 

192.  I should make it clear that in the course of considering what had been discussed in the IMC meetings (especially those in which no clear resolution had been passed or consensus reached), I shall disregard Ms Iu’s views expressed in those meetings.  When considering the effect of certain informal meetings among managers, I would bear in mind that Ms Iu should not be counted as a participant since she was not a manager at all.

E3.1.10     15 – 16 September 2012

193.  As aforesaid, it is undisputed that the School had participated in the SZ Exhibition.  In this regard, the plaintiff explained in her witness statement that:

“56. 於2012年9月14日，麥榮欣校董和李智鋒校董與我會面，叫我可以考慮去香港仔等地招跨境生，不必上深圳。李校董表示關心開支問題，不希望荃小花費太多錢在跨境招生上，我表示如果純粹是因為資金的問題，我可以先個人墊資支付教育展費用。本校一直提供很多款項資助本地生，每年本地生的免費校車就已超過50萬，跨境生則自付校車費用， 收取跨境生質際上有利於節省開支。

57. 教育展在2012年9月15日舉行，本人在當日上午起行前往深圳前致電了朱校監，希望再次確認被告人的意思。朱校監表示李校董和麥校董的意見不代表他，同意我繼續去教育展。我出於對荃小利益的考慮，先墊付了相關的費用，最後甚至沒有向學校申請報銷。

58.      此外，教育基金董事劉耀榮、林校董亦有出席教育展，足以證明教育基金及校董知道並支持相關的活動。”

194.  It is not an easy task to decide on whether the plaintiff had indeed called up Mr Chu in the morning of 15 September 2012.  On one hand, if the plaintiff considered it necessary to seek further clarification from him, I would have thought it would be more logical if she did that soon after the meeting on 3 September 2012:

(1)     Given the plaintiff was unable to use the School’s money to pay for the booth in the SZ Exhibition despite Mr Chu’s support (since the managers refused to sign the cheque issued for that purpose on 3 September 2012), she might want to solve the problem as soon as possible. However, on the other hand, it is also noted that the plaintiff was quite eager to attend the SZ Exhibition, so much so that she was willing to pay for such costs herself[27].

(2)     What was the point of seeking such clarification in the morning of 15 September 2012 when she was about to set off to the Mainland?  If the plaintiff had to cancel the trip because of Mr Chu’s objection, it must be better if that was known at least before the day of the exhibition if not earlier, especially when there were other teachers involved.

195.  With some hesitation, I come to the view that it was more likely than not that the plaintiff had indeed called up Mr Chu on 15 September 2012 as alleged:

(1)     It should be apparent to the plaintiff at the material time that different managers had different views on whether recruitment activities should be conducted in the Mainland and whether she should join the SZ Exhibition.  It is therefore not surprising that she had decided to seek further clarification from Mr Chu.

(2)     With greatest respect to the plaintiff, although she was a principal, she did not impress me as an organised person.  If she were more organised or a person with better planning, there would be little doubt that she would have sought confirmation with Mr Chu earlier.  However, she was not such kind of person.  This, in my view, makes it more possible for her to make that call only on the day of the exhibition. 

196.  I also accept, though not without hesitation, that in effect Mr Chu had asked her to ignore the view of Mr Lee and Mr Mak.  When coming to this conclusion, I have reminded myself that, for reasons which I have explained earlier, I should think twice before accepting the plaintiff’s oral evidence when such evidence is not supported by documentary evidence. However, as I pointed out, there is no evidence (apart from Mr Chu’s witness statement) which shows that, as at 15 September 2012, Mr Chu was holding a view against conducting recruitment activities in the Mainland.

E3.1.11      Was the IMC justified to warn the plaintiff?

197.  Having considered different episodes in relation to the SZ Exhibition, I now turn to the crucial question: Was the IMC justified to issue Warning 3 in relation to the SZ Exhibition?

198.  Before I do so, I should set out the IMC’s case as pleaded in paragraph 14(8) of the Re-Re-Amended Defence and Counterclaim:

“14. During the course of her employment as the Principal of the School, the Plaintiff maliciously, negligently, purposefully breached her duties pleaded in paragraph 13 of this Re-Re-Amended Defence above, which breaches included:

[…]

(8) Failing to appropriately and suitably apply the resources of the School to the admission of local students in accordance with the overall mission and objective of the School as a Government-aided primary school for local students, and in accordance with the Defendant’s instructions and directions:

(a) According to the policy of the School as set by the Defendant and made known to the Plaintiff and/or as a matter of the overall mission and objective of the School as a Government-aided primary school serving local students, the resources of the School shall be applied towards the admission of local students but not cross-border students.

(b) The Defendant had never implemented any policies or plans to intake cross-borderstudents for the School.

(c) From February 2012 to August 2012, the Plaintiff incurred expenses of theSchool which were alleged to be for ‘students recruitment’in order to getthe Defendant’s counter-signature for the payments, without informing theDefendant that the actual use of such expenses was for the recruitment ofcross-border students which the Defendant would not have approved of orauthorized had it known and for the reasons set out under items (8)(a) and(b) hereinabove.

(d) Upon the Defendant’s suspicions of the Plaintiff’s unauthorized expensesspent on the recruitment of cross-border students in or around August 2012,the Defendant investigated into the matter and discovered by October 2012that expenses around the sum of HK$146,273.00 had been incurred. TheDefendant had since its suspicions of the Plaintiff’sirregular practicerepeatedly reminded the Plaintiff of the School’s policy set out under items(8)(a) and (b) hereinabove and stressed the importance of strict compliancewith such policy, and directed that the Plaintiff shall not incur expenses ofthe School for the admission of cross-border students.

(e)     […]

(f) On 3^rd September 2012, the Defendant rejected the request of the Plaintiffto apply for exhibition booths in Shenzhen, China from the InternationalSocial Service Hong Kong Branch for an event called ‘2012 跨境學童教育展’ held in Shenzhen on 15^th to 16^th September 2012 (the ‘ISS Event’).

(g)     Notwithstanding the express refusal of the Defendant as set out under item (6)(d) above, and in the willful and/or negligent violation of the instructionsand directions of the Defendant, the Plaintiff disregarded the Defendant’srefusal but booked an exhibition booth for the ISS Event by herself, which booth incurred expenditure of HK$38,000.00, in addition to the other expenses totaling HK$146,273.00 already wrongfully incurred as a result ofthe Plaintiff’s breaches.  The said exhibition booth expenditure of HK$38,000.00 was subsequently held by the Education Bureau to be wrongly charged to the Newly Arrived Children Support Grant in 2011/12 school year by the Plaintiff which, in fact, was not within the ambit of such Support Grant and the School was required to be repaid to the Government Fund Account.”

199.  When considering the crucial question referred to above in this action, this court should ask: Has the IMC proved its pleaded case?

200.  I find that it has not, for the following reasons:

(1)     The focus of the IMC at the trial was that the plaintiff had engaged in cross-border recruitment, which was different from the case as pleaded in the main paragraph of paragraph 14(8) of the IMC’s pleadings.   This court has received no evidence from the IMC to the effect that the plaintiff had failed “to appropriately and suitably apply the resources of the School to the admission of local students”;

(2)     Indeed, from the transcripts, it could be seen that the plaintiff had not only engaged in recruitment activities in Shenzhen but also in Hong Kong[28];

(3)     This court accepts that Mr Chu had initially given his approval to the plaintiff in engaging in cross-border recruitment activities;

(4)     When the topic of cross-border recruitment was brought up in the IMC meeting on 20 August 2012, it was the view of Mr Chu that there should be “跨境/本地雙線招生” and no other manager had raised any objection against that;

(5)     It is this court’s finding that Mr Chu, the supervisor, had approved the plaintiff in incurring expenses for cross-border recruitment activities;

(6)     Although it must have been clear to the plaintiff that, by the end of the meeting on 14 September 2012, Mr Lee, Mr Mak and Mr Ho had very strong view against the School’s participation in the SZ Exhibition, however, there is no basis for the IMC to say that these managers have the authority to represent the IMC;

(7)     I have also found that Mr Chu had indicated his approval on 15 September 2012 for the plaintiff to proceed as planned;

(8)     Hence, I do not think there is any valid basis for the IMC to plead in paragraph 14(8)(f) that “the Defendant rejected the request the Plaintiff to apply for exhibition booths in Shenzhen”;

(9)     In relation to the expenses of $38,000, they were all spent on “境外聯絡攤位支出” in the period between 25 February 2012 and 23 June 2012[29]. As I have found that Mr Chu had knowledge and approved these expenses, I do not think the plaintiff should be blamed for incurring these expenses. The fact that EDB had disallowed these expenses to be reimbursed from the Newly Arrived Children Support Grant, in my view, is neither here nor there for the purpose of this action given the supervisor’s consent in the first place.

201.  It is therefore my finding that the IMC was not justified in issuing Warning 3 in relation to the SZ Exhibition.

202.  I have not lost sight on the IMC’s complaint that the plaintiff had given inconsistent account on whether she had applied for 1 or 2 booths at the SZ Exhibition and whether the School’s booking could be cancelled before the event.  As I have found above, the plaintiff had indeed not been truthful in her explanation on these matters.  However, as this was not part of the IMC’s pleaded case, I do not think I should take these matters into account.

203.  Furthermore, given (i) the then practice of the IMC that it would not pass resolution on all necessary matters and (ii) the split views of the managers in relation to cross-border recruitment, I do not think it is fair to the plaintiff if a warning was issued to her on this matter.

E3.2   The SZ Service Centre

204.  The IMC pleaded its case in respect of “SZ Service Centre” under Warning 3 in paragraph 14(8)(e) of its Re-Re-Amended Defence and Counterclaim as follows:

“In the willful and/or negligent violation of such policy of the Defendant, andwithout the prior knowledge, consent and/or approval of the Defendant, thePlaintiff incurred expenses to be borne by the School to rent a flat inShenzhen, China jointly with the Kindergarten as a cross-border servicecenter.”

205.  The plaintiff’s case in answer to this complaint is that the SZ Service Centre was operated pursuant to the express approval given by Mr Chu, the supervisor of the School.

206.  In my view, the same approach should be adopted, namely, that the court should not consider only (and rigidly) whether there was any resolution passed by the IMC for the operation of the SZ Service Centre, but should consider all the background facts and decide what is fair in the circumstances.

207.  I accept that the SZ Service Centre was related to the recruitment activities conducted in Shenzhen.  Therefore, the discussion above on SZ Exhibition should be equally applicable to the issue concerning SZ Service Centre.

208.  I therefore accept the plaintiff’s evidence that Mr Chu had given his consent for the SZ Service Centre to be operated. 

E3.3  Conclusion

209.  I therefore conclude that the IMC was not justified in issuing Warning 3 to the plaintiff.

E4.     Warning 4 – Mismanagement of the School’s finances

210.  On 26 November 2012, the IMC issued another warning letter to the plaintiff for her mismanagement of the School’s finances in respect of the expenses incurred on cross-border recruitment, sponsorship fees for the Ta Ku Ling School, and the costs of graduation photo DVDs.

211.  The IMC’s pleaded case in the Re-Re-Amended Defence and Counterclaim was as follows:

Paragraph 14(2)

“Failing to separate the use and/or ownership and/or resources funded from the Government exclusively to the School being an aided school with the resources of private institutions:

(a)     According to section 72(a) of the Code for PS, where the school management committee operates a private section or boarding section which does not receive financial assistance under the Code for PS, the accounts of such private section or boarding section shall be kept separately from those of the aided section and audited; accordingly, the assets or resources of the aided school, which were funded from the Government, shall not be co-shared with such private section or boarding section.

(b)     […]

(c)     Furthermore and in contravention of the requirement under the Code for PS to separate the use and/or ownership and/or resources funded from the Government with the resources of private institutions, the Plaintiff issued a cheque of the School in the sum of HK$1,800.00 to one Fashion Photo Studio for graduation photos of students taken from the joint school graduation ceremony of the School and the Kindergarten. The photos were saved in 50 CDs, which the Defendant later discovered that around 28 CDs out of the 50 CDs were supplied to the Kindergarten. The Plaintiff only arranged to reimburse the School after the Defendant discovered and warned the Plaintiff of such malpractice.

(d)     As a result of the specific breach on the Plaintiff’s part as set out under item (2)(c) above, the Defendant issued a Warning Letter to the Plaintiff”

Paragraph 14(9)[30]

“Failing to obtain the Defendant’s authorization before incurring expenses:

(a)     In contravention of the 31/01/2012 Letter, the Plaintiff, without the prior knowledge and/or consent of and approval by the Defendant, sponsored a fund raising event of Ta Ku Ling Ling Ying Public School(打鼓嶺嶺英公立學校) on 28^th June 2012 jointly in the name of the School and the Kindergarten, thereby causing the School to donate the sum of HK$7,360.00 unbeknownst to the Defendant which was regarded by the Education Bureau to be a gravely inappropriate use of the Government’s subsidy to an aided school.

(b)     The specific breach on the Plaintiffs part as set out under item (9)(a) abovewas condemned and complained of by the Education Bureau as seriousadministrative malpractice in the IMC Audit Inspection (as definedhereinafter).”

212.  I will now discuss the allegations in turn.

E4.1   Cross-border recruitment

213.  The complaint on cross-border recruitment under Warning 4 is “sharing of resources”. 

214.  The same issue had already been dealt with in section E1.2 in the earlier part of this Judgment which is applicable herein. In short, once the IMC has accepted that section 72(a) of the Code of Aid is inapplicable, that would be the end of the IMC’s case as far as paragraph 14(2) of the Re-Re-Amended Defence and Counterclaim is concerned.

215.  I should also add that I do not agree that there was any “sharing of resources” anyway.  As Mr Chu accepted, out of the total sum of $146,273, the School was only responsible for $71,572, and the Kindergarten was obliged to pay for the remaining $73,701.  In other words, the School and the Kindergarten only paid for their own respective shares. 

E4.2    Graduation photo DVD

216.  The IMC’s pleaded allegation in relation to the graduation DVD was also made on the basis of section 72(a) of the Code of Aid. For the reason which I explained under section E1.2 of this Judgment, the IMC’s case must be dismissed.

E4.3    Ta Ku Ling School

217.  Under this item, the IMC alleged that the plaintiff had caused the School to sponsor a sum of $7,360 towards a fund-raising event of the Ta Ku Ling School on 28 June 2012 in the name of the School and the Kindergarten without prior approval of the IMC.

218.  The sponsorship was in the form of an advertisement placed in the booklet published by the Ta Ku Ling School for the said fund-raising event.  The advertisement (which occupied half a page of the publication) served to introduce the School with an emphasis that it would only take 20 minutes to travel to the School from Huanggang (皇崗).   There were also words of compliments published under the joint names of Mr Chu (as supervisor of the School) and Mr Lam (as supervisor of the Kindergarten).

219.  It was the evidence of the plaintiff in her witness statement that:

“42. 約於2012年5月左右，本人已口頭向朱校監匯報該筆資助，並取得其同意方才進行，這也是荃小慣例。被告人事後也以通過財務報告的方式認可該筆支出。該筆資金先由鍾來支付全數，其後退還給鍾來，相關支票都經朱校監與兩位校董簽名確認。

43. 教育局每年發出的「擴大的營辦開支整筆津貼 － 設有法團校董會的資助學校運用指引」第7條規定：「學校不得把撥款用作採購那些只為操練學生應付評估的服務或教材。學校也應盡量減少為慶典、娛樂，以及典禮活動或向其他學校致意而購買花籃、果籃、花圈及其他類似物品方面的開支。」該規定只是讓學校減少向其他學校致意的開支，並未禁止相關支出。再者，該筆款項實際上並不是‘捐款’或‘贊助’， 而是 ‘廣告費’ 。對方確實有在他們的場刊中刊登荃小的招生廣告，當日活動的刊物上還印有朱校監及林校董的聯名題詞。

44.  正如上文提及，荃小策略上需要招收跨境生，以避免殺校。打鼓嶺嶺英公立學校長期有大量跨境生報讀，而該學校並沒有足夠學額接收所有跨境生。因此，在其籌款晚會的刊物上刊登荃小的廣告，是為了吸引未能入讀該學校的跨境生的家長，讓其子女報讀荃小。”

220.  Mr Chu accepted that the plaintiff did ask him to support the fund-raising event and that he had answered positively.  This was what he stated in his witness statement:

“113. 本人大約在2012年8月至9月份時發現胡女士曾在同年6月份聯同鍾來幼稚園贊助打鼓嶺嶺英公立中學2012年6月28日的籌款晚會，一共港幣14,720 元，先由鍾來幼稚園支付全數港幣14,720元，然後胡女士於2012 年6月25日未經校董會同意下從荃商政府帳戶退回7,360元予鍾來幼稚園。本人記得，大概在該晚會的數天前，胡女士致電向本人粗略提及一個打鼓嶺嶺英公立中學的活動及詢問本人荃商能否支持活動，本人當時表示可以支持。根據以往經驗，通常學校會買一個大概數百港元的花籃送到另一間學校，以表友好及支持。所以當時本人以為胡女士是指買一個花籃或差不多價值的禮物送予該學校。但如果是一份超過港幣5,000元的禮物，胡女士應先取得校董會的批核；而如果支持的方式並不是送贈紀念品而是以現金方式支付的贊助費，教育局是不容許的。

115. 本人亦因為在打鼓嶺嶺英公立中學2012年6月28日的籌款晚會的場刊中發現胡女士在未有取得校董會及本人同意而假借本人的名義代荃商與鍾來幼稚園刊登聯合賀詞及招生廣告而感到非常詫異，覺得胡女士有關舉動是以「先斬後奏」的方式向校董會施壓以使其追認通過及批准有關贊助費。

120. 胡女士在2018年4月19日的第二次修改的「答覆書及回應反申索的抗辦書」(Re-amended Reply and Defence to Counterclaim)中聲稱該贊助費實為用以替荃商宣傳的費用， 原因是荃商可以在打鼓嶺嶺英公立中學的場刊賣廣告，以便吸引及招收因打鼓嶺嶺英公立中學未有足夠學位供應而未獲招收的跨境學生。基於在上文所已經陳述的事實，本人認為胡女士這樣的解釋實在是非常牽強。而且，宣傳費用亦理應按照基金會採購及招標通知的要求進行。不過，事實反映胡女士並沒有就該贊助費或她聲稱的宣傳費提交校董會通過。因此，無論胡女士如何辯解，該筆贊助費都是沒經校董會同意下而支付的。”

221.  There are 3 different limbs of complaint in relation to the sponsorship:

(1)     Failure to obtain consent from the IMC;

(2)     Contravention of the Foundation’s Letter dated 31 January 2012; and

(3)     The sponsorship had been considered by EDB as a gravely inappropriate use of the Government’s subsidy.

E4.3.1 The IMC’s approval

222.  There is no dispute that the plaintiff had not obtained formal approval from the IMC before placing the advertisement.

223.  However, the question is, if the IMC had never insisted that the plaintiff should obtain the IMC’s approval of all matters, was it reasonable for the IMC to suddenly make an allegation against the plaintiff that she had been guilty of misconduct so as to justify the issuing of a warning?  I do not think so.

224.  In my view, the court should pay close attention to the timing and chronology of all matters.  It must be noted that the sponsorship fees to the Ta Ku Ling School were incurred in June 2012.  At that time, no warning or reminder had ever been issued to the plaintiff.  It must still be unclear at the time as to when the plaintiff should obtain a formal approval from the IMC before certain act was done.    

225.  Mr Lee had explained in court about when a resolution of the IMC was required but I think he was referring to this as part of the approval procedure under tendering/quotation process which in my view is not applicable to the sponsoring fees paid to the Ta Ku Ling School.  As I said, I do not accept that the Foundation’s Procurement Guidelines were followed by the IMC at the material time. 

226.  It is also unrealistic for Mr Chu to suggest in his witness statement that the Foundation’s Procurement Guidelines should have been followed as if the plaintiff was placing an advertisement on a newspaper.   

227.  On the other hand, I have referred above to Mr Chu’s oral evidence given in court that the plaintiff had to decide herself whether any matter was important enough for a prior approval to be sought from the IMC.  I suppose this must be right, as I can imagine that a school principal has to deal with many different situations and would have to make a lot of decisions every day.  However, one must appreciate that there may be occasions when a clear line cannot be drawn. 

228.  In relation to this complaint, I would have to firstly decide whether I accept the plaintiff’s evidence that she had sought the supervisor’s approval before she went ahead with committing to the sponsorship on behalf of the School.

229.  When I consider this question, I must bear in mind Mr Chu’s admission that the plaintiff did consult him about supporting an event of Ta Ku Ling School and that he had agreed to it.  This is an important starting point.

230.  If the plaintiff had asked Mr Chu for his approval, then the next question would be: was it likely that the plaintiff did not explain further what “support” she proposed the School to give?  In this regard, I find it odd to see that Mr Chu, upon admitting in paragraph 113 of his witness statement that the plaintiff had asked him about supporting the event, did not go on and elaborate on the conversation which followed.  I would have thought that if the plaintiff had asked Mr Chu to give support to a fundraising event, it would be natural for Mr Chu to find out more about what support the plaintiff had in mind.  However, Mr Chu did not explain further in his witness statement on this.  Instead, he changed the focus, and started to talk about what he thought the support would be according to his own experience, as if the conversation ended there.   With respect, that does not make sense to me.  What he was asking the court to believe was that he agreed to show his support to a fundraising event without knowing exactly what the proposed support was.  This is incredible. 

231.  He even tried to suggest in his witness statement that the plaintiff had only mention about the event “briefly” (粗略), so as to give others an impression that he did not know much about the event.  This would only reinforce my view that if the plaintiff had really been so brief, then he would have asked for more details rather than giving his consent in such circumstances.

232.  Taking into account the plaintiff’s rationale in supporting this fundraising event, the fact that the advertisement published in the booklet was apparently advocating the concept that the location of the School was close to the border (hence, convenient to cross-border students) and Mr Chu’s support of the idea of recruiting students from the Mainland, I hold that it is more likely than not that the plaintiff had indeed sought and obtained approval from Mr Chu to do what she did, namely, to sponsor the fundraising event by placing an advertisement in the booklet.

233.  Furthermore, it is noted that a cheque dated 25 June 2012 was issued for the payment of $7,360.  According to the plaintiff’s explanation, this cheque must have been issued to the Kindergarten as reimbursement of the School’s half share, as the Kindergarten had paid Ta Ku Ling School in full first.  The summary of the cheque was “贊助賀打鼓嶺嶺英公立學校2012籌款晚會”.  Mr Chu was one of the signatories of this cheque (as he must be one of the three authorised signatories of all the cheques issued by the School).   In other words, this cheque must have been signed by Mr Chu shortly after he had indicated his approval to pay for the sponsorship fees.  If, as Mr Chu alleged, he only expected that a small amount of money would be spent on buying a flower basket or a small gift of a value of a few hundred dollars, he must have been shocked to see that this cheque was issued.  However, there was no such evidence. 

234.  In my view, all of the above show that the plaintiff had indeed sought Mr Chu’s approval before the School committed to pay the sponsorship fees to Ta Ku Ling School.  I do not think it is fair for the IMC to blame the plaintiff for not seeking the IMC’s approval before doing so, for even the supervisor did not advise the plaintiff that a formal resolution from the IMC was necessary before the plaintiff went ahead with the sponsorship.  

E4.3.2     The Foundation’s Letter dated 31 January 2012

235.  The IMC alleged in its pleadings that in sponsoring the Ta Ku Ling School fundraising event, the plaintiff had contravened the Foundation’s Procurement Guidelines. 

236.  However, this was no longer argued by the IMC’s counsel at the trial. 

237.  In my view, counsel must have made the right decision in not arguing this point, for the Foundation’s Procurement Guidelines are clearly inapplicable. 

238.  Further, as I found above, the IMC was actually not following the Foundation’s Procurement Guidelines at the material time.

239.  Moreover, as mentioned, it should not be treated as if the plaintiff was placing an advertisement in a newspaper, which would render it necessary for her to compare the advertisement fees charged by different newspapers.

E4.3.3     Use of Government’s subsidy

240.  The last complaint was that the plaintiff had used money in the “Government Funds” account to pay for the sponsorship fees. According to EDB, this was not permissible, and therefore the School had to deposit the equivalent amount of the sponsorship fees into its “Government Funds” account by using its own funding.

241.  I agree that it must be a mistake on the part of the plaintiff in causing the sponsorship fees to be paid from the “Government Funds” account.

242.  However, there is no evidence that the plaintiff did that intentionally. 

243.  Issuing a warning letter to the principal is a serious matter, which was not supposed to be done lightly.  In my view, paying an item of expenditure from the wrong account per se and for the first time, would not warrant such a serious treatment.  

E4.3.4     Sharing of resources

244.  The IMC also alleged in its written closing submissions that there was a problem of “sharing of resources”.  It was argued in paragraph 175.4 thereof that:

“Further, the sponsorship fees plainly involved the sharing of resources between the School and Kindergarten. By paying the sponsorship fee in return for an advertisement space in the brochure of the Ta Ku Ling School’s event [B/1836], P had in essence pooled the resources of the School and Kindergarten for advertisement.”

245.  With respect, I do not understand how the School could be said to have shared its resources with the Kindergarten by agreeing with the Kindergarten to pay for half of the sponsorship fee each for publishing a whole page of advertisement in the booklet, with the School and the Kindergarten occupying half page each.  As the IMC’s counsel put it, they had just pooled their resources together. 

246.  In any event, the allegation of “sharing of resources” pleaded in paragraph 14(2) of the Re-Re-Amended Defence and Counterclaim did not concern sponsorship fees.  In other words, as far as the sponsorship fees are concerned, the allegation of “sharing of resources” was not pleaded. Hence, the IMC is not entitled to rely on this complaint in the action herein anyway.

E4.4  Conclusion

247.  I therefore conclude that the IMC was not justified in issuing Warning 4 to the plaintiff.

E5.     Warning 5 – Retirement age

248.  On 26 November 2012, the IMC issued a warning letter to the plaintiff for her maladministration in retaining staff who exceeded the retirement age prescribed by the Foundation in its letter dated 20 April 2009 (“Foundation’s 20/4/2009 Letter”).

249.  The Foundation’s 20/4/2009 Letter reads:

“現經本教育基金董事會本年四月十五日通過決議案：

有關訂定本會屬校教職員工之退休機制；依照教育局條例：「教師須於年屆六十歲之學年完結時退休」之規定一體辦理。”

250.  There is no dispute that at the material time, there were indeed five (5) staff members working for the School who were over the age of 60.

251.  In paragraph 9(12) of the plaintiff’s Re-Re-Amended Reply and Defence to Counterclaim, in answer to the allegation under this warning, she pleaded that:

“(a) According to s.58 of the [Code of Aid], only the head, teachers, education psychologists and clerical staff of a school employed from the Salaries Grant are usually required to retire at the age of 60. The staff members in questions were not the type of staffs governed by the [Code of Aid] and thus the policy of compulsory retirement at the age of 60 was not applicable to them.

(b) Further or alternatively, upon being consulted by the Plaintiff about complying with the Retirement Policy, the Supervisor instructed the Plaintiff that the School only has to comply with the [Code of Aid].

(c)     Further or alternatively, it would be unlawful for the Plaintiff to terminate the staffs’ contracts earlier and had them retired at the age 60 because there were specified dates of termination in their respective employment contracts.”

252.  I reject these arguments.

253.  Firstly, it is futile for the plaintiff to focus on the applicability of the Code of Aid to the staff members concerned because it is crystal clear to this court that the intention of the Foundation’s 20/4/2009 Letter was apparently to extend the applicability of the Code of Aid to cover those who were initially not so covered.

254.  Secondly, I do not agree with the plaintiff’s counsel that the Foundation’s 20/4/2009 Letter was only minded to cover those staff members who were “within the establishment”, because if it was so, there was no point in issuing the said letter at all. 

255.  In relation to this, the plaintiff’s counsel argued that since some schools under the Foundation were unaided, it was necessary to ensure that those unaided school would also follow EDB’s guideline on retirement age.  I do not accept this argument, because it is apparent that the plaintiff as the principal of the School was also one of the recipients of the Foundation’s 20/4/2009 Letter.  There is no evidence that the said letter was issued to the plaintiff by mistake.

256.  Thirdly, I do not accept the plaintiff’s argument that the term “教職員工” meant “teaching staff” only, which cannot be the natural meaning of this term.  The term clearly means more than teaching staff, for example, clerical staff and janitors.

257.  Fourthly, I do not accept the plaintiff’s evidence that she had sought clarification from Mr Chu on this matter.  Neither do I accept that Mr Chu had ever told her that there was no need to follow the instructions under the Foundation’s 20/4/2009 Letter.  This is because the wordings of the said letter were so clear that I do not think the plaintiff, as a principal, would need further assistance on its interpretation.  Furthermore, if Mr Chu had really told her that there was no need to follow the Foundation’s instructions, I am sure the plaintiff would have mentioned this in the IMC meeting held on 22 November 2012 when she was given a chance to explain her alleged breach of the Foundation’s 20/4/2009 Letter.  However, the plaintiff did not give this straight forward explanation in that meeting.  Rather, she mainly relied on the “within the establishment” argument at the time.

258.  Fifthly, the pleaded case under paragraph 9(12)(c) that it would be unlawful for the plaintiff to terminate the staff members’ contract prematurely is rejected for it is unsupported by evidence.

259.  Finally, in their written closing submission, the plaintiff’s counsel further argued that the IMC had never adopted the Foundation’s 20/4/2009 Letter as its policy.  I refuse to consider this new argument as this had not been pleaded in the plaintiff’s pleadings.

260.  To conclude, I accept that the IMC was justified to issue Warning 5 to the plaintiff.

E6.     Warning 6 – 4 warning letters to Ms To

261.  A record of verbal warning replacing a record of verbal warning given earlier on 20 August 2012 was issued on 26 November 2012 for the plaintiff’s maladministration in issuing 4 warning letters on a single day (6 February 2012) to a Ms. To, a teaching staff of the School, who was found guilty of plagiarism in setting examination papers.

262.  On this matter, the IMC pleaded in paragraph 14(4) of the Re-Re-Amended Defence and Counterclaim that the plaintiff had breached her duties in:

“Ineffectively administering and managing the School by, without the approval of the Defendant, issuing 4 warning letters to one teacher by the name of Ms. To Wai Lan (‘Ms. To’) on 6^thFebruary 2012 regarding the plagiarism of past examination papers”

263.  There was no dispute that Ms To had indeed practised plagiarism when she set examination papers for 4 different examinations.  It also seems that the IMC agreed that the misconduct on the part of Ms To was serious enough for warning letter to be issued.  However, the IMC contended that only one warning letter should have been issued to Ms To.

264.  The plaintiff, on the other hand, alleged that Mr Chu had given his approval to issue 4 warning letters to Ms To.  She also explained that it was appropriate to issue 4 warning letters because 4 different examinations were involved.

265.  In their written reply submission, Mr Li and Mr Miao made it clear that “it is not the IMC’s contention that the plaintiff required the IMC’s approval before issuing any warning letter to Ms To”[31].

266.  That being the case, and with the aforesaid background, what this court has to consider is:

(1)     Whether Mr Chu had given his approval for issuing warning letter to Ms To; and

(2)     whether it was “maladministration” for the plaintiff to issue 4 warning letters rather than a single warning letter to Ms To.

267.  Before I consider these questions, it is necessary to set out the following matters:

(1)     On 15 February 2012, the IMC had convened an urgent meeting because of this “plagiarism incident”.  The plaintiff had gone through the chronology of the events related to Ms To’s plagiarism in this meeting.  It is also clear that she had told the managers in the meeting that “警告函” had been issued.  As the minutes were written in Chinese, it was not apparent on the face of the wordings whether only one or more than one warning letter had been issued.  However, what is clear is that no one in the meeting had ever queried why the plaintiff had issued warning letter to Ms To before a formal approval was given by the IMC. 

(2)     It is also clear from the said minutes that Mr Chu was involved in the matter, because it was recorded that it was he who proposed that warning letter should be issued to Ms To, and that the plaintiff had asked for Mr Chu’s opinion when Ms To requested to postpone her meeting with the principal for a few days.

(3)     By its letter dated 23 February 2012, EDB informed Mr Chu that Ms To had made a complaint against the plaintiff (via Hong Kong Professional Teachers’ Union (“HKPTU”)) about, among other things, the plaintiff’s unrealistic demand in requiring her to set examination papers for the whole academic year within a short time.  EDB requested Mr Chu to investigate into the matter.  From my reading of the complaint letter, the focus of Ms To’s complaints was not on the number of warning letters at all, even though the fact that 4 warning letters had been issued was mentioned therein.

(4)     Upon the request of Mr Chu, the plaintiff provided him with a written explanation on Ms To’s complaint on 5 March 2012, in which she had given her version of what had happened in relation to her instructions to teachers on the setting of examination papers.  She also stated that although 4 different warning letters were issued to Ms To, it should be treated as a single warning by reference to the procedure and the date of the letters (“日期與程序是一次警告”).

(5)     On 29 March 2012, Mr Chu submitted a report to EDB.  Among other things, he stated that:

“校長承認同一時間內 (2月6日) 發出4封警告信，做法不妥善，今次事件視作1封警告信處理，本校口頭警告校長警惕發警告信之程序，於日後發出任何警告信件必須呈送副本予校監。”

(6)     By letter dated 18 May 2012, EDB replied:

“閣下確認校長是次在同一日內向杜老師發出四封警告信的處理有欠妥善。然而，校方認為杜老師抄襲試題實屬嚴重錯誤，有必要給予一封警告信。就此，本局再次提醒貴校日後向老師發出警告信，務必按資助則例所列的程序公平處理。就是次安排，請閣下澄清是否已撤銷前述的四封警告信及改為一封，並請將該信件的副本送交本局存檔。”

(7)     Mr Chu then replied on 8 June 2012:

“[…] 而有關警告信已面見杜老師，並更正為一封(附件)；本會已提醒校長日後，務必按程序辦事 […]”

268.  It is important to note that, according to the minutes of the IMC meeting held on 15 February 2012, neither did the IMC nor Mr Chu had ever complained therein that there was any procedural problem when the plaintiff issued warning letter to Ms To.  In particular, Mr Chu did not say in that meeting that he was not informed at all before any warning was given by the plaintiff to Ms To.  In my view, that is because there was no dispute that Mr Chu had been kept informed about the issuance of warning to Ms To all along.

269.  That being the case, I am astonished that the IMC decided to issue a verbal warning to the plaintiff for the fact that 4 warning letters instead a single warning letter had been issued to Ms To. While the IMC had kept emphasising that it was “maladministration” for 4 warning letters to be issued in such circumstances, this court had never been enlightened as to the significance of issuing 4 warning letters (with each letter covering one examination) as opposed to 1 letter (which covers all four examinations), nor did the IMC refer to any basis (such as the Code of Aid or any circular issued by EDB) for saying that the plaintiff was wrong in issuing 4 warning letters.  In my view, there was no difference at all in substance. The only difference was in form.  If the School were to take further action against Ms To subsequently (for example, pursuant to the procedure provided under Appendix 8 of the Code of Aid), I do not think the School could realistically say that because 4 warning letters (which covered one examination each) were issued, the matter should be treated more seriously than if there was only 1 warning letter (which covered 4 examinations in total).

270.  The IMC alleged that EDB had not indicated that the warning letters had been properly issued.  In this regard, I have the following observations:

(1)     First of all, I should point out that even though the court would take EDB’s view on the matter and the basis thereof into account, such a view is not binding on this court at all. 

(2)     Secondly, I must say that I am not impressed by how EDB drafted its letter dated 18 May 2012 which I quoted above.  If one reads that letter carefully, one would appreciate that EDB in fact had not expressed any view on the matter at all, for it only repeated the supervisor’s admission that there was something wrong in the procedure, and then emphasised that it was important to comply with the Code of Aid.   The letter was just stating the obvious, which was totally unhelpful.

(3)     Thirdly, it should also be noted that EDB, by asking the School whether the 4 warning letters had been replaced by a single letter, was only following up the matter in accordance with what Mr Chu stated in his report dated 29 March 2012. 

(4)     Fourthly, even if EDB’s letter dated 18 May 2012 could be interpreted to mean that EDB also considered that there was something wrong in the procedure, it had not given any basis in support of any allegation of impropriety on the part of the plaintiff to issue 4 warning letters.

271.  Because of the fact that there was no difference in substance (as opposed to form) in the two ways in the handling of the same matter, I am of the view that it was more likely than not that the plaintiff did not ask Mr Chu specifically for permission to issue 4 warning letters instead of 1 warning letter to Ms To.  However, I do not think that matters, because I accept that Mr Chu had agreed to warn Ms To in principle. 

272.  In my view, the only procedure which the plaintiff had probably omitted to follow was to provide Mr Chu with copies of the warning letters issued to Ms To (as there was no evidence from anyone that such copies had been provided by the plaintiff to Mr Chu for record). However, even if that was the case, it would not affect the ruling herein, because such omission, in my view, was not the focus of the complaint in this action, and in any event, such omission per se would not warrant the issuance of a verbal warning to the plaintiff.

273.  Before I complete this section, it is necessary for me to deal with one more matter, which has an impact on the court’s overall evaluation of Mr Chu’s evidence.  It is this.  While considering the evidence on Warning 6, I find that, with greatest respect, the way Mr Chu handled this matter had reflected very poorly on him. 

274.  It may be recalled that, Mr Chu had submitted a report dated 29 March 2012 to EDB.  In this report, he alleged that the plaintiff had confessed that it was improper (“做法不妥善”) to issue 4 warning letters on the same day.  He even stated that he had given a verbal warning to the plaintiff.

275.  I have already referred to the plaintiff’s written explanation dated 5 March 2012.  In this document, the plaintiff did not make any confession as such. 

276.  Although Mr Chu had stated in his witness statement that he had talked to the staff member(s) concerned before issuing the written report dated 29 March 2012 to EDB, he did not mention that he had ever talked to the plaintiff during such a process. 

277.  I therefore wonder when the plaintiff had made such alleged confession (“做法不妥善”) to him.

278.  In this regard, it was the evidence of the plaintiff that she had confronted Mr Chu on the content of the said report:

“當本人就報告質問朱校監時， 朱校監則安撫我， 稱此舉僅僅是為了盡快解決事情，大事化小，他亦承諾不會因此事而對本人發出任何警告。”

279.  Having taken into account the matters referred to above, I regret to say that I find that Mr Chu, facing Ms To’s complaint which EDB required him to follow up, had conveniently shifted the blame to the plaintiff, and misrepresented that the plaintiff had admitted her wrongdoing when she had never made any such admission at all.  I also hold that it was more likely than not that Mr Chu did comfort the plaintiff as alleged.

280.  The above conclusion is also reinforced by the complaint letter issued on behalf of Ms To on 24 May 2012.  It was issued in relation to another complaint which I will discuss below.  However, part of the letter concerned this complaint.  It reads:

“杜老師向本會表示，她透過本會向貴局於2月作出申訴後，校監曾三次與她會見 (分別是2月28日、3月13日和4月26日) ，期間校監向她指稱已了解整件事情，表示校長和她都有錯，希望她可以撤銷投訴，讓他可以趕及在3月16日前向貴局回信交代 […]”

281.  This is consistent with my view that Mr Chu’s prime objective was to make sure that EDB would not lay any blame on him as the supervisor of the School, even if that means he had to accuse others unjustifiably.

282.  To conclude, it is my finding that the IMC was not justified to issue Warning 6 to the plaintiff.

E7.     Warning 7 – MPF Contributions

283.  On 25 May 2013, a warning letter was issued in relation to the plaintiff’s handling of the employees’ contribution to MPF for some of the staff members, and her increment of their salaries without the IMC’s approval after she was asked to rectify the situation.  This complaint was pleaded in the following way in paragraph 14(10) of the Re-Re-Amended Defence and Counterclaim:

“Failing to properly manage the recruitment and the payroll of the staff members of the School:

(a) The Plaintiff omitted to deduct the Employees’ Contributions to theMandatory Provident Fund from the salary to be paid to the staff membersin breach of the relevant rules and regulations governing the MandatoryProvident Fund, and, without prior authorization from the Defendant, usedthe School’s administrative fund (totaling HK$222,768.29 from 2008 to2012) to cover such Employees’ Contributions;

(b)  Upon the discovery of the Plaintiff’s breached (sic) under item (8)(a) above inor about November 2012, the Plaintiff arbitrarily increased the salaries of5 of the staff members without the prior knowledge, consent and/orapproval of the Defendant; […]”

284.  In this regard, the following factual matters are undisputed:

(1)     From around 2007, since the plaintiff considered that the salary level of 5 staff members was on the low side, it was decided necessary to give them more benefit by causing the School to pay for their own 5% MPF contribution (in addition to the School’s normal contribution of 5% as required under the law) so that they would be able to get their salary in full (“the MPF Arrangement”);

(2)     It was agreed in the IMC meeting held on 22 November 2012 that the matter had to be rectified;

(3)     In December 2012, the plaintiff, on behalf of the School, agreed with the 5 staff members involved that their respective salaries would be increased by around 5%, and upon such increment, they shall make their own MPF contribution.

285.  The plaintiff’s defence, in a gist, was that all the arrangements regarding MPF contribution and the corresponding increment in the staff members’ salaries had been approved by Mr Chu.  She pleaded in paragraph 9(15) of the Re-Re-Amended Reply and Defence to Counterclaim as follows:

“(a) the former MPF arrangement for the 5 staffs was suggested by the Plaintiff and agreed and approved by the Supervisor when the staffs entered into their respective employments with School in or around 2007/2008. Such arrangement of having the School to bear 10% MPF contribution was to secure employment of these staffs whose salaries were too low.

(b) In or around November 2012, the Supervisor requested the Plaintiff to implement a new MPF arrangement in place of the former MPF arrangement as described in the preceding paragraph to the effect that the School would only contribute 5% of the staffs’ basic salary as their MPF.

(c) As a result of the aforesaid, the Plaintiff, upon the approval of the Supervisor, reduced the School’s MPF contribution for those 5 staffs from 10% to 5%, and on the other hand increased their basic salaries by roughly 5% to ensure that there was no reduction of salary for those staffs.

(d) At all the material times, the Supervisor was fully aware of the new MPF arrangement and the 5% increase in salary for these 5 staffs. Furthermore, the Supervisor was required to sign on the payroll for the 5 staffs on a monthly basis and his signing was a clear indication of his approval thereof. In fact, in a meeting of the Defendant held on 18^th May 2013, the Supervisor admitted that he had on 5^th January 2013 received relevant MPF documents from the Plaintiff which had informed him about the said pay rise arrangement.

(e) The above matters were also discussed in the meeting of the Defendant held on 28^th March 2013 and were approved. The Defendant had never complained and/or criticized the Plaintiff for the said arrangement.

(f)  In any event, the Defendant had never objected to or disapproved the Plaintiff to increase the salaries of these 5 staffs by roughly 5% so that they could make the 5% MPF contribution.”

286.  In my view, before the proposal for the School to pay for the 5 employees’ 5% MPF contribution was implemented, it should have been approved by the IMC by way of a resolution, because that involved the usage of the funding of the School.  There is no dispute that no such resolution had ever been passed by the IMC at the material time.

287.  Be that as it may, if Mr Chu had indeed verbally approved such an arrangement, I do not think it would be fair for the IMC to issue a warning to the plaintiff, as Mr Chu should have brought this matter up for the IMC’s approval himself, bearing in mind that he, as the supervisor of the School, was responsible for setting the agenda of IMC meetings[32].

288.  The question is: Did the plaintiff seek Mr Chu’s approval back in 2008 as alleged?

289.  The only pieces of documentary evidence relied on by the plaintiff in support of her case that she had sought Mr Chu’s approval were the “Expense Summaries” which had been placed in IMC meetings for the managers’ consideration.  The plaintiff argued that on the face of those documents, the MPF Arrangement must have been apparent to the managers as well as the supervisor, and it was undisputed that neither Mr Chu nor the managers had raised any objections before 2012.

290.  There were indeed entries in those “Expense Summaries” which appeared as follows in each and every month:

“強積金校工 (鄭偉光/葉翠莉/范燕群/梁燕萍) (僱主供款) 1,595.00

強積金校工 (鄭偉光/葉翠莉/范燕群/梁燕萍) (僱員供款) 1,595.00”[33]

291.  Mr Chu explained in court that the “Expense Summaries” were printed in very small fonts and that many managers could not read the wordings because they were suffering from presbyopia.  I find it difficult to accept such an explanation, because if they were really minded to read what the “Expense Summaries” presented, I am sure they could have asked for copies printed in larger fonts.

292.  However, insofar as it is the plaintiff’s argument that the “Expense Summaries” had presented the situation clearly, I am unable to accept either.  This is because even in the normal circumstances in which the staff members had made their own MPF contributions, the employer would hold up such 5% contributions from the employees’ salaries first before paying the balance of 95% of the salaries to the employees.  Hence, even in such situations, it is possible to see from the ledgers of the employer that the employer had paid both the employees’ contributions and the employer’s contributions, just that the source of the employees’ contributions was from the employees’ salaries.  In other words, on the face of the “Expense Summaries”, the real position may not be as clear as the plaintiff contended.

293.  That is the reason why I think the “Expense Summaries” do not assist the plaintiff’s case.

294.  I now turn to consider what happened in November 2012. 

295.  As aforesaid, the matter was brought up for discussion in the IMC meeting held on 22 November 2012.  The relevant part of the minutes thereof read:

“3.14 強積金與公積金

朱： 全體教師助理、職工應簽訂合約，教育局陳太也表示，不宜由001 帳戶代支職工的強積金供款。(此時羅校董離去)

胡： 因職工薪低，故由校方代供，如果不代供則要加薪，本校也向勞工處及強積金組査詢，沒有說我們犯法，校方相對付出較少(與加薪相比)。

朱： 教育局陳太也是說這樣做不適當，請校長糾正處理，依正手續去做。

東[34]： 不明白如何代供強積金等如省了錢，加不加薪與強積金是兩回事，相反代供款相對付出較多。因強積金供款是法例，不宜於灰色地帶行事，宜各自供款。

姚： 教育局指出本校利用001 戶代支職工的強積金，有否問題尙待査證，但本校需要呈交相關資料予教育局。”

296.  Having listened to the audio recording of this part of the meeting[35], I found that the followings had not been recorded or emphasised enough in the minutes:

(1)     In the course of the discussion, the plaintiff had said that “如果我哋唔幫佢供呢，我哋要加人工俾佢，佢份人工就會高啲嘞”[36];

(2)     The plaintiff also said that: “咁你話而家唔好嘞，我哋整番佢嘞，我哋要同個員工去商量囉，去簽合約囉”[37].

(3)     In response to what the plaintiff said, Mr Chu stated:

“嗱呀因為呢個係阿陳太佢覺得係有問題，佢向我哋提出，咁佢向我哋提出呢，咁我哋當然係要交俾阿校長去處理啦，咁點樣去同啲員工去Er…Er…跟番更正番呢，咁呢樣嘢就交番俾阿校長啦好冇呀，咁但係我覺得呢，啱啱聽完阿李校董嗰個嗰個解釋呢，其實嗰個係強積金嘅精神，咁其實我哋覺得，Er 如果無需要嘅話呢，就唔好攪咁多呢啲咁嘅嘢，即係即係即係唔係好正規嘅動作，就寧願呢，因為嗰五個就唔會係太多，寧願係跟番正嚟到嚟到供款，佢有佢供，我哋有我哋供，咁呢，唔使俾人哋質疑呀，喀，咁Er，我諗相信大家對呢件事，喀，咁Er，同唔同意，如果同意Er….”[38];

(4)     Then there seem to be a number of people saying “同意” in the background, but it is not clear who they were.  Then the plaintiff said: “咁我同佢哋講啦，同佢哋加番”;

(5)     After that, there was another manager who reminded that: “因為積金局係一個法例嚟㗎，即係如果有咩差池呢，學校可能會俾人告”;

(6)     Mr Chu then followed: “咁Er好嘞，咁校長就去跟進嘞，咁我哋下次開會嘅時候呢，跟…即係做好咗之後再報告番俾我哋聽，喀，咁 Er 3.18…”[39];

(7)     Ms Iu interrupted at this point and reminded Mr Chu that the School needed to submit information to EDB so that EDB could consider further whether it was alright for the MPF contribution to be paid from the School’s “001 account”.  Having got the reminder, Mr Chu said: “總之你要糾正番，你一定要糾正番，即係你要譬如你要同個職工攞番嗰個錢，擺番落去，填番嗰條數，就話番嗰度係即係代佢出咗佢吖補番佢嘞，佢哋自己供番，係嘞，好冇”[40]

297.  The discussion ended there.

298.  This seems to be the first time when Mr Chu was involved when the topic of MPF Arrangement was brought up for discussion with the plaintiff[41].

299.  However, it is noted that, during the whole conversation, Mr Chu did not query why the plaintiff had implemented the MPF Arrangement without asking for his/IMC’s approval.  No other manager had raised this query either in the said meeting. 

300.  Taking this into account, I am of the view that it was more likely than not that Mr Chu knew and had approved the MPF Arrangement.  If he had never heard about it from the plaintiff, I wonder why he did not challenge the plaintiff right away in the IMC meeting.  Instead, he decided to let the plaintiff resolve the matter herself.  This is quite inconsistent with Mr Chu’s evidence that everything was initiated and implemented by the plaintiff herself without consulting him.

301.  The IMC’s counsel argued that the plaintiff’s case that she had asked for Mr Chu’s approval was incredible because there was no reason why the plaintiff could not have simply asked the IMC or Mr Chu to increase the staff members’ salaries, but have to enhance those staff members’ benefit in such a way.

302.  As revealed from the audio recording, the plaintiff had explained about the rationale of the MPF Arrangement in the IMC meeting held on 22 November 2012.  Briefly, she said she had used this means to keep the basic salary of the staff members at a lower level, so that when those staff left the employment of the School, and if there was any payment payable to them, such payment (which would be calculated by reference to the salary amount) would be kept at a lower level.  No matter whether this method was really helpful to the finance of the School or not, I do not think that would affect the court’s evaluation of the truthfulness of the plaintiff’s evidence in this regard, because there was no suggestion by the IMC that the plaintiff had made any personal gain out of such an arrangement, or that there was any allegation that any of those 5 staff members who were benefited from the MPF Arrangement had any close relationship with the plaintiff.  I would therefore accept that the plaintiff was having the School’s financial position in mind when she devised the MPF Arrangement.  There was nothing incredible as alleged.

303.  The IMC further argued that when Mr Chu raised this issue during the said IMC meeting, the plaintiff did not allege that Mr Chu had already approved of the MPF Arrangement.  Rather, she only made such an allegation in the IMC meeting on 18 May 2013. 

304.  With respect, there is nothing in this argument.  From the audio recording of the meeting, it is clear that there was no allegation made by anyone in the IMC meeting held on 22 November 2012 that the plaintiff had implemented the MPF Arrangement without authorisation, whereas by the time the IMC meeting was held on 18 May 2013, the consent of the IMC for the MPF Arrangement had been called into question by the auditor by virtue of the auditor’s report and letter both dated 18 April 2013.

305.  I now turn to consider the salaries increase in December 2012.

306.  The IMC argued in its written closing submissions that:

“211.1 During the IMC meeting on 22/11/2012, Chu merely instructed P to follow the proper procedure and rectify the problem that the School was paying the employee’s contribution for the staff. Chu never asked P to increase the salaries of the relevant staff members [B/416].

211.2 Following the meeting, Iu also issued an email to P, and stated that P would be responsible for handling inter alia the MPF issue, and she would have to report on how she handled the matter next time: ¶14 [B/692]. In the circumstances, it was obvious that the IMC was asking P to stop paying the employees’ contributions for the relevant staff members only; it could not be treated as a blanket approval by the IMC for P to increase the staff’s salaries.

211.3   Nonetheless, P then proceeded to increase the relevant staff members’ salaries on 28/11/2012 [B/1362-136].”

307.  From the minutes of the IMC meeting held on 22 November 2012, it is not apparent as to what exactly had been resolved by the IMC. 

308.  Reference has to be made to the audio recording which was referred to above. 

309.  In this regard, it is important to bear in mind that:

(1)     The plaintiff had made it quite clear in the meeting that if the School were to ask those 5 staff members involved to make their own 5% contribution to the MPF, then the School had to increase their salaries;

(2)     Even after the plaintiff had expressed such a view, Mr Chu asked the plaintiff to rectify the matter, without saying that she should not increase the salaries as she mentioned;

(3)     At least some (if not all) other managers expressed their consent to Mr Chu’s proposal, and no one could be heard to raise any objection;

(4)     Even at such a point, the plaintiff was heard saying that in that case, she would talk to those staff members, and “同佢哋加番”.  She was obviously referring to “increment of salary”.  No one had raised any objection against such a statement of the plaintiff;

(5)     It should also be noted that the plaintiff was not asked to make a proposal as to how she would deal with the problem in the following IMC meeting.  Instead, she was asked to report on what she had done (“即係做好咗之後再報告番俾我哋聽”).

310.  The last sub-paragraph above was supported by Ms Iu’s email which was sent to the plaintiff on the following day (i.e. 23 November 2012), by which it was recorded that:

“強積金與公積金 － 交由校長負責處理，下次交代如何處理。”

311.  Without more, I would have no difficulty at all to come to the conclusion that the plaintiff had been authorised to increase the salaries of the 5 staff members involved.

312.  The matter was made slightly more complicated by what was said by Mr Chu after (at least) some managers had expressed their consent to Mr Chu’s proposal that the plaintiff be left to rectify the problem.  It may be recalled that after a manager’s reminder that it is important to comply with the law, Mr Chu added at the very end of the discussion that:

“總之你要糾正番，你一定要糾正番，即係你要譬如你要同個職工攞番嗰個錢，擺番落去，填番嗰條數，就話番嗰度係即係代佢出咗佢吖補番佢嘞，佢哋自己供番，係嘞，好冇”

313.  It seems that Mr Chu was saying that the School should also demand the 5 staff members to reimburse the School for the 5% contribution which the School made for them in the past.  However, whether this was done or not at the end of the day is not the focus of this action.  In my view, this did not contradict the plaintiff’s proposal to increase the salaries of the 5 staff members involved. 

314.  Subsequent to the IMC meeting held on 22 November 2012, the plaintiff, on behalf of the School, had entered into new employment agreements with the 5 staff members involved on 28 November 2012, pursuant to which their monthly salaries had each been increased by around 5%, with effect from 1 December 2012.

315.  At the top right hand corner of each of those new employment agreements, there was a date chop “18 DEC 2012” affixed. According to the evidence of Ms Iu, it was her practice to stamp the date of receipt at the top of the documents which she received for the IMC.  I therefore accept that it was more likely than not that those new employment documents had been submitted to the IMC via Ms Iu.

316.  In this regard, the IMC argued that:

“Even if the relevant documents had been supplied to Iu, it did not mean that the issue had been raised for the IMC’s approval at a meeting or the documents had been circulated to all IMC members for ratification. P again failed to comply with the proper procedure in seeking the IMC’s approval. This means that P failed to ensure that the matter was raised for the IMC members’ specific attention, and simply left the matter to ‘fall through the cracks’ and take the IMC’s silence as acquiescence.”[42]

317.  With respect, I do not accept this argument.

318.  Firstly, as aforesaid, even though there was no formal resolution passed in the IMC on 22 November 2012, given what had been said in the meeting, I do not think it is fair to say that the plaintiff should be blamed for not coming back to the IMC to seek consent again after 22 November 2012.  She had indicated therein what she thought should be the way ahead, and no one had raised any objection.  What the managers were concerned was that the School should not continue with the MPF Arrangement.  Mr Chu had also asked the plaintiff to proceed with resolving the matter herself. 

319.  Secondly, given Ms Iu was just a secretary of the Foundation, it was more likely than not that she had at least passed the new employment agreements received to Mr Chu for his perusal.  The fact that Mr Chu did not raise any concern there and then supports the plaintiff’s case that she had been given the consent to proceed with increasing the staff members’ salaries.

320.  To conclude, I am of the view that the IMC was not justified to issue Warning 7 to the plaintiff.

E8.     Warning 8 –Renting out 6/F Classrooms

321.  On 25 May 2013, the IMC issued Warning 8 to the plaintiff in relation to her renting the 6/F Classrooms out to HKAA.

322.  Warning 8 contained quite a number of allegations against the plaintiff.  The plaintiff’s counsel summarised them as follows:

“(1) Signing a lease with HKAA without the approval of the Defendant;

(2) Signing a contract on behalf of the School although she is not the legal signatory;

(3) Leasing classrooms to a commercial organization without the approval of the Defendant;

(4) Reducing the rent to a profit-making organization;

(5) Lending the hall;

(6) EDB did not agree to the lease and asked that the original appearance of the classroom be restored; and

(7) Not following EDB Circular No.5/2011.”[43]

323.  The IMC’s counsel, by reference to Mr Chu’s witness statement, summarised the IMC’s case as follows in their written closing submissions:

“218. P had leased out the 6/F Classrooms to HKAA for a term of three years without prior approval of the IMC: Chu ¶155 [A/263].

219. P had only disclosed to the Foundation when she was taking out a loan for the installation of air conditioner at the School hall that a private institution would sponsor the School $23,000 per month and would borrow the School hall. It was never disclosed that the School would be leasing out the 6/F Classrooms for a term of three years: Chu ¶¶154-155 [A/263].

220. P had leased out the 6/F Classrooms at a substantially lower costs than would otherwise be chargeable for a lease of 5 classrooms ($41,700): Chu ¶155 [A/263]. P also allowed HKAA to use the School hall on 27/1/2013 and 18/2/2013 without charge: Chu ¶164 [A/265].

221. P failed to follow the EDB’s guidelines in booking the fees received from HKAA as rental income, but booked the same as sponsor fees received and paid the same into the School’s private account:[44] Chu ¶155 [A/263].

222. Some of the managers (Lee, Mak and Ho) also discovered that the 6/F Classrooms were in fact used as office premises and storage of musical instrument. A commercial sign was also placed outside of the 6/F Classroom: Chu ¶156 [A/263].

223. EDB’s representatives also took issue with the modifications carried out at the 6/F Classrooms and the potential change of user conditions of the School premises: Chu ¶¶158 & 163 [A/264-265].

224. P had failed to provide any proof that HKAA was a non-profit organisation: Chu ¶157 [A/263-264].”

324.  However, the IMC’s pleaded case was much narrower than the scope of Warning 8 and the summary above.  It was pleaded in paragraph 14(11) of the Re-Re-Amended Defence and Counterclaim that:

“Notwithstanding the fact that the Plaintiff was not authorized to enter into contracts on behalf of the School, willfully and/or negligently acting outside of her scope of authority and inappropriately renting out 5 classrooms on the 6^th floor of the School premises to HKAA for a fixed term of 3 years starting from 1^st February 2012 up to 31^st January 2015 pursuant to a contract signed by the Plaintiff as the Principal of the School with Hong Kong Arts Association (‘HKAA’) on 30^th December 2011, all without the knowledge and/or consent of the Defendant;”

325.  In other words, the allegation only focused on the plaintiff’s entering into the contract dated 30 December 2011 (“the HKAA Contract”) without the knowledge and/or consent of the IMC.

326.  As I explained at the beginning of this Judgment, parties are bound by their pleaded case.   I will therefore only deal with the IMC’s case as pleaded.

327.  The plaintiff defended the IMC’s pleaded allegation on the following grounds:

“(a) The Supervisor and/or the Defendant had full knowledge of the arrangement of allowing HKAA to use those classrooms and thus such arrangement was entered into by the Plaintiff upon the consent and authorization, implied and/or express, of the Supervisor and/or the Defendant.

(b) In fact, EDB does encourage schools to render classrooms for community useand its guidelines suggested that schools may consider allowing organizations to use the classrooms for free in some circumstances. In the case of HKAA, it offered to donate HK$23,000 per month to the School. It was the Supervisor who approved with this amount and thus the Plaintiff proceeded with the arrangement accordingly.

(c) At all material times, HKAA is a non-profit organization, the chairman of which had been working with the School since the last principal was in office.

(d) At all material times, the Plaintiff had not enjoyed or received any benefits in this matter.”[45]

328.  In essence, the plaintiff alleged in her pleadings that the plaintiff had entered into the HKAA Contract with the consent of the IMC and/or Mr Chu.

329.  Before I go on, it is necessary to set out the terms of the HKAA Contract.  It reads:

“借用場地合約

立約雙方稱謂:	1. 荃灣商會學校 (以下簡稱「甲方」)
	2. 香港藝術聯會 (以下簡稱「乙方」)

*雙方訂定借用課室細則如下：

(一) 「甲方」借出學校六樓課室五間於「乙方」

(二) 「乙方」承諾每月贊助港幣$23,000.00 以資助學校貧困家庭戶學生書簿、校服、課外活等等支出。贊助費用需於每月首日(上期支付)予「甲方」。

(三) 「乙方」需預繳一個月贊助費按金與「甲方」，以備場地有任何損毀之補償費用；當合約結束時，經檢査場地後而未有任何損毀，贊助費按金如數退還。

(四) 此合約有效期為三年(即二零一二年二月一日至二零一五年一月三十一日終止)。若雙方有需要時，可按當時情況再簽延期合約。

(五) 此合約受教育局資助則例規管，若教育局隨時指示終止合約，則須依指示執行。

(六) 若「乙方」欲終止合約，需預早兩個月通知「甲方」。

註：	1. 「乙方」舉辦藝術活動時，需借用禮堂及活動室，「甲方」須於2012年6月前將禮堂加設空調設備。
	2. 「乙方」負實美化禮堂及一樓環境，裝修費用以三個月贊助費自行支付給有關公司；即「乙方」直接交予其選用裝修公司；2012年12月20日前必須處理妥該等費用；學校不涉有關過程，惟所有裝修必須能夠易於恢復原貌。
	3. 2013年3月恢復交贊助費給學校。”

330.  Although it was not described as such, it is apparent that this is a tenancy agreement:

(1)     there was a monthly payment in exchange for the use of the 6/F Classrooms;

(2)     there was a deposit payment equivalent to one month’s payment of “sponsorship fee” which would only be refunded upon confirmation that there was no damage caused to the premises at the expiry of the agreement;

(3)     the agreement lasted for a fixed term of 3 years.

331.  As far as the “sponsorship fee” is concerned:

(1)     The plaintiff explained in her witness statement and during the IMC meeting held on 28 January 2013[46] that it was Mrs Chan who suggested that the term “sponsorship fee” should be used;

(2)     Under cross-examination in court, the plaintiff explained that she initially was minded to describe the payment as “rental” but had stated “sponsorship fee” by mistake;

(3)     The plaintiff said in the Foundation meeting held on 17 December 2012: “六樓呢個課室呢，我地借用俾人地，我地唔可以租用”[47].

332.  I have no hesitation in finding that, when she entered into the HKAA Contract, the plaintiff knew that it was improper to rent the classrooms out by a tenancy agreement.  It is also beyond imagination that Mrs Chan would endorse the plaintiff’s proposal to rent the classrooms out as alleged, and even suggest that the term “sponsorship fee” be used.  The plaintiff’s evidence in this regard is totally incredible.

333.  Further, there was no dispute that the plaintiff knew at the material time that EDB had issued a circular No.5/2011 on “Hire of Accommodation in Aided Schools”, under which, among other things, it was stipulated that:

“學校應制定租用校舍收費政策，並確保政策獲得校董會/法團校董會同意，以及不會妨礙學校正常運作。”[48]

334.  In the present case, it is undisputed that the IMC had never established any such policy for fee charging.

335.  Furthermore, it can be seen from the Schedule of Charges for Hire of Accommodation[49] (“the Schedule of Recommended Charges”) that the recommended charges for the hiring of classrooms were expressed on hourly basis.  It is not difficult to understand that, in the normal circumstances, classrooms would only be hired for hours rather than days, not to mention for weeks, months or even years.

336.  Moreover, under the HKAA Contract, the School had hired the 6/F Classrooms out at the rate of $23,000 per month.  That means the hourly rate of hiring each classroom was only $6.388 ($23,000 ÷ 30 ÷ 24 ÷ 5).  This was very substantially lower than the rate under the Schedule of Recommended Charges, even if we compare the said rate with the hourly rate of $60 applicable to non-profit-making charitable organisations.

337.  With the very unusual features of the arrangement in mind and EDB’s stipulation that the policy for levying charges had to be approved by IMC, in my view, there was no uncertainty in the mind of the plaintiff at the material time that she must seek the IMC’s approval before she entered into the HKAA Contract.

338.  In this regard, the plaintiff stated in paragraph 31 of her witness statement that:

“該份教育局借場通告 (第5/2011 號) 明確鼓勱學校盡量開放設施和校舍予公眾團體，尤其是非牟利機構，所以本人才會考慮HKAA。由於校董會從沒有通過任何租用校舍收費政策，所以本人便根據以往荃小租借場地的程序(即事後只需在校董會報告及以追認的方式並通過租借場地予第三方)，於2011年12月與HKAA 簽署租借課室合約。”

339.  The first IMC meeting after the date of the HKAA Contract was held on 15 February 2012.  The minutes thereof did not record that the plaintiff had sought the IMC’s ratification of the HKAA Contract.  Neither did the plaintiff say at any time positively that she had done so therein.

340.  In other words, even according to her own evidence, she had failed to inform the IMC about the HKAA in good time. 

341.  As in other incidents, the plaintiff alleged that she had sought Mr Chu’s approval before she entered into the HKAA Contract.  She stated in paragraph 88 of her witness statement that:

“2011年，香港藝術聯會借用荃小六樓五個課室，用以放置表演物品，例如樂器、表演服裝等等。同時香港藝術聯會每月贊助本校23,000元。本人依慣例徵詢朱校監， 並獲得其同意。因此2011年12月30日我即與香港藝術聯會簽約，租期由2012年2月1日至2015年1月31日。因香港藝術聯會覺得校舍殘舊，要求裝修，但荃小沒有額外資源，所以香港藝術聯會便扣減了三個月的贊助費，用於裝修一樓禮堂。合同內亦注明香港藝術聯會以三個月贊助費為本校裝修禮堂。”

342.  While the plaintiff might have informed Mr Chu that she had found a sponsor who agreed to pay sponsorship fee to the School on a monthly basis, I do not accept the plaintiff’s evidence that she had asked for his approval to rent the 6/F Classrooms out as alleged.  I have come to this view for the following reasons.

343.  Firstly, if the plaintiff had done so, she would have sent a copy of the HKAA Contract to Mr Chu or Ms Iu for record.  However, she had never stated in her witness statement that she had done so.  There is no evidence of any document which showed a date chop affixed on a copy of the HKAA Contract.  Neither is there any email showing that the plaintiff had sent a soft copy of the HKAA Contract to Ms Iu.

344.  Secondly, by letter dated 2 April 2012, the plaintiff requested the Foundation to lend the School $200,000 so as to pay for the air-conditioning installation fee, and proposed that the School would repay by 10 instalments of $20,000 each. However, the HKAA Contract was not attached thereto in support of the School’s application. 

345.  In my view, if the plaintiff had really informed Mr Chu about the HKAA Contract, it would be natural for the plaintiff to provide the Foundation with a copy of that document so as to persuade the Foundation that the School had the ability to repay. 

346.  I hold the view that the plaintiff did not do that because she did not want to disclose the HKAA Contract to others.  As a matter of fact, according to the minutes of the Foundation’s Board of Directors meeting held on 17 December 2012, the plaintiff had explained in the Foundation’s Board meeting on 15 May 2012 that the sponsorship fee of $23,000 to be received from a private institution was for the hiring of the use of the school hall. That reinforces my belief that the plaintiff had all along not revealed the full details of the HKAA Contract to Mr Chu.

347.  Thirdly, even if the plaintiff did inform Mr Chu that HKAA would use the 6/F Classrooms (which I doubt), I do not accept that the plaintiff had informed him about the full details of usage.  Indeed, even in paragraph 88 of her witness statement (which I quoted above), the plaintiff only mentioned that the classrooms were only used for the storage of musical instruments.  This is consistent with the explanation which the plaintiff had given to EDB as recorded in EDB’s letter 13 March 2013[50] in which it was stated that the plaintiff told Mrs Chan and a Mr Ho of EDB during their visit to the School on 7 March 2013 that the 6/F Classrooms were rented out for storage of musical instruments.  However, as can be seen from various photographs, it is undeniable that one of the classrooms was used as an office, and two other classrooms were used for rehearsals or even performances/competitions. 

348.  What is remarkable is that even though it is clear from the photographs that one of the classrooms was undoubtedly used as an office (this can be shown by, for example: (i) a number of work stations had been set up neatly with monitors; (ii) there was a printer with printed documents found on the output tray of the printer; (iii) personal belongings such as decoration and umbrella were put at one of the work stations), the plaintiff still disagreed that the classroom was in fact used as such.

349.  If the plaintiff was so reluctant to accept that one of the 6/F Classrooms was used as an office under cross-examination when she was shown photographs of the usage thereof, it is difficult for the court to accept that she had informed Mr Chu about the true position on her own initiative.  Hence, any approval given by Mr Chu (if any) would not have been an informed one and cannot be relied upon by the plaintiff herein.

350.  Fourthly, the plaintiff relied on the Expense Summary to support her case that Mr Chu knew about the HKAA Contract.  I do not accept that argument.  It is simply not apparent from the entries that the plaintiff had entered into an agreement to rent the 6/F Classrooms out to others for 3 years.

351.  Fifthly, when the plaintiff’s assertion that she had sought Mr Chu’s approval was challenged in the Foundation’s Board of Directors meeting held on 17 December 2012, there was the following dialogue:

“容[51]：係喇，你剛才話校監，已經話俾校監知，咁你有咩，有咩證據話校監知唔知先？

係啦，校監就話冇知道，咁樣你有咩證據話校監知道？

胡： 咁就口同鼻拗喇，我地每個月嘅財務呢，係有俾各位睇嘅，你會睇(賭2) 。

勝[52]： 你喺開會有冇提呢個問題，校監知呢？

胡： 有架。

勝： 校董會又有？

胡： 係呀，因為佢問過我地整冷氣冇錢個喎，咁樣。”[53]

352.  It can be seen that when the plaintiff was confronted, she initially only referred to the monthly Expense Summary.  She did not say that she had asked for Mr Chu’s approval.

353.  When she was further asked whether she had reported the matter in meetings, she answered positively.  However, it is evident that the issue concerning “sponsorship fee” (not to mention renting out of the 6/F Classrooms) had never been discussed in any IMC meeting prior to this Foundation Board Meeting:

(1)     As far as IMC meetings held before 17 December 2012 are concerned, only two sets of minutes had been placed before this court (those of the meetings held on 15 February 2012 and 20 August 2012 respectively);

(2)     In the IMC meeting held on 15 February 2012, the plaintiff reported that EDB had approved the School’s application to install air-conditioning in the school hall.  However, no finance issue had been raised or discussed in the meeting at all.  Neither the HKAA Contract nor “sponsorship fee” was referred to therein;

(3)     In the IMC meeting held on 20 August 2012, matters relating to installation of air-conditioning were not mentioned.

354.  I hold the view that the plaintiff had only bluffed in the Foundation’s Board meeting.  What she alleged was not supported by any documentary evidence.  Her gut reaction when she was challenged was just to deny any wrongdoing, no matter whether such denial was supported by any valid basis at all.

355.  I therefore conclude that the IMC was justified in issuing Warning 8 to the plaintiff.

E9.     Warning 9 – Funding for substitute teachers

356.  On 25 May 2013, a warning letter (replacing a warning letter issued on 20 August 2012) was issued by the IMC for the plaintiff’s maladministration in wrongly representing that the School did not have sufficient resources to hire substitute teachers, and in representing subsequently when the mistake was discovered that her mistake was caused by the wrong calculation done by Mr. Chiu, a clerical staff of the School.

357.  I will first of all set out the main events which led to this complaint:

(1)     In March 2012, the plaintiff, having obtained certain information relating to sick leave taken by teachers, announced in a teaching staff meeting that the funding designated for hiring external substitute teachers was nearly exhausted and therefore the teachers might need to be assigned as substitute teachers if other teachers were on leave;

(2)     On 7 June 2012, Mr Chu received a letter from EDB which forwarded a complaint lodged by Ms To via the HKPTU for his investigation.  By this complaint, Ms To alleged that the plaintiff was unfair when she assigned substitute teachers;

(3)     In reply to the aforesaid EDB’s letter, Mr Chu explained to EDB by letter dated 25 June 2012 what he found in his investigation.  He informed EDB, among other things, that the funding for employing external substitute teachers[54] had been exhausted in that academic year, and therefore the then existing teachers of the School had to assume duty as substitute teachers even if there was any teacher taking sick leave for 3 days or more[55];

(4)     On 9 August 2012, EDB wrote to Mr Chu and replied on what Mr Chu stated about the funding for employing external substitute teachers as follows:

“本局人員就以上情況向胡國萍校長了解，胡校長其後修正理解為：如有教師請病假三天或以上，仍有資源聘請代課教師。在本局人員提示下，胡校長已於七月十三日向全體老師發出對三月十六日簡報會上有關陳述的修訂。[…] 謹請貴校日後小心參照本局有關的指引/通告行事，以加強學校的管理。如有進一步査詢，請致電[…] 與陳霍桂芬女士聯絡。”

(5)     On 15 August 2012, Mrs Chan met Mr Chu and mentioned that:

“有老師投訴代課問題，如校長做錯，可在會議紀錄上向老師解釋/修正，卻前言不對後語，初說沒有資源聘請代課，其後被教局查出法團校董會有資源，又解釋書記對她說沒有資源，故信任他…，最後經本局提示才修正，有關情況已去函校監。”[56]

(6)     On 20 August 2012, a warning letter was issued to the plaintiff for her failure to verify information which led to the School having provided EDB with inaccurate information;

(7)     On 22 November 2012, the question of whether a warning letter should be issued to the plaintiff was raised for discussion again in the IMC meeting, so as to make sure that the proper procedure for issuance of warning would be strictly complied with by the IMC.  Having heard the plaintiff’s explanation that she had obtained the information relating to sick leave from Mr Chiu, the IMC voted against warning the plaintiff.  The plaintiff was instructed to warn Mr Chiu instead;

(8)     On 3 December 2012, the plaintiff submitted a written explanation to Mr Chu, who as a result instructed Ms Iu to verify the matter with Mr Chiu.  On 4 December 2012, Mr Chiu faxed a table of calculation (calculated up to August 2012) to Ms Iu which showed that the funding for hiring external substitute teachers was not exhausted yet;

(9)     On 18 May 2013, the IMC considered the issue again and agreed to issue a warning to the plaintiff.  Warning 9 was therefore given to the plaintiff.

358.  The IMC pleaded its case in the following way:

“During the course of her employment as the Principal of the School, the Plaintiff maliciously, negligently, purposefully breached her duties pleaded in paragraph 13 of this Re-Re-Amended Defence above, which breaches included:

[…]

(5) Inaccurately and/or inappropriately informing the other teachers of the School that there were insufficient funds for hiring substitute teachers and repeatedly arranging for Ms. To to be the substitute teacher for her sick colleagues, thereby causing usually heavy workload to her. Ms. To later lodged a complaint to the Hong Kong Professional Teachers’ Union (which was then referred to the Education Bureau) that she had always been required to substitute other colleagues who were on sick leave and to teach their classes. As a result of the Plaintiff’s mishandling of the matter, the Defendant received a reminder from the Education Bureau;

(6) Dishonestly fabricating her explanation when questioned by the Education Bureau in relation to Ms.To’s complaint on the substitute teachers arrangements as set out under item (5) above, namely that she was not aware of the availability of funds designated for the hiring of external substitute teachers in the School when all along the availability of funds was known to her”[57]

359.  The IMC’s complaints as pleaded are therefore 3-fold:

(1)     The plaintiff had inaccurately and/or inappropriately informed the teachers of the School that there was insufficient funding for hiring external substitute teachers;

(2)     The plaintiff had repeatedly arranged Ms To to be a substitute teacher for her colleagues who were on sick leave;

(3)     The plaintiff had dishonestly fabricated her explanation that she was not aware of the availability of funding for hiring supply teachers when she all along knew that there was funding available.

360.  The plaintiff did not deny that she had indeed informed the teachers in March 2012 by mistake that the funding designated for hiring substitute teachers was nearly exhausted and therefore the teachers might need to be assigned as substitute teachers if other teachers were on leave.  However, she had given certain explanation at the trial. 

361.  She also stated that, despite the mistake, that would not affect Ms To, because the funding could only be used to hire substitute teachers if a teacher took leave for 3 consecutive days or more.  If any teacher were to take leave for less than 3 days, it was still possible for Ms To to be assigned as a substitute teacher because it was the policy of the School that those who had taken more leave would be required to take up more lessons for other teachers who were absent.

E9.1  Assigning Ms To as substitute teacher

362.  In the IMC’s written closing submissions, the IMC had focused on the question of whether the plaintiff or Mr Chiu should be blamed but did not make submissions on the fairness in assigning Ms To as a substitute teacher repeatedly on the part of the plaintiff.  That is understandable, because it is noted that the IMC itself had explained to EDB by letter dated 25 June 2012 that according to the policy of the School, teachers who had taken more leave himself/herself would be assigned to take up more lessons as substitute teacher.  Further, the substitute teacher duty record produced by Ms To in support of her complaint showed that, during the complaint period, there was no teacher who had taken leave for 3 consecutive days or more.  Hence, no substitute teachers would be hired externally anyway even if funding was available. 

363.  That being so, I would say no more on Ms To’s complaint on fairness.

E9.2  Reason for the plaintiff’s provision of inaccurate information

364.  I now turn to consider the reason why the plaintiff had provided inaccurate information to the teachers. 

365.  In this regard, the plaintiff had provided various reasons and some of them are contradictory to one another.

366.  On 3 October 2012, the plaintiff explained to Mr Chu in writing, among other things, that:

“有關本年度(11-12)代課金計算乃按本年度初步評估作出相應行動，校長完全明白用完年度之代課金，可於擴大營辦津貼帳支取，惟該帳戶因增聘額外老師代替語文老師不足問題，時有赤字，已即時告知全體老師; 資源調動妥後，亦即時告訴老師有關財務安排; 陳太到校査詢，取走文件，亦證明沒有人因代課金事情而有不公或行政錯失等等問題; 陳太建議可補記文字，方便老師注意事件; 因此在2012年7月以文字補記上述行動，而非2012年7月才通知老師。在日常行政上會因應情況隨時變通而改動原有計劃，不應給警告函予校長。” (emphasis added)

367.  In this explanation, the plaintiff did not mention about any mistake.  It seems that she was suggesting that the reason why the situation had been changed from “funding not available” to “funding available” was because of her making adjustment to the available resources.

368.  In the IMC meeting held on 22 November 2012, the plaintiff explained that she was informed by Mr Chiu that there was no more funding available and therefore she informed the teaching staff accordingly. The relevant part of the transcripts read:

“我地響三月時通知老師呢，就係冇錢代課，就源於書記呢，話俾我聽冇錢，點解呢？佢係有原因嘅，因為呢教育局俾我地請代課嘅錢，大約兩日半嘅每個老師，但佢已經有老師夾埋已經請咗50幾日病假啦，要代課嘅呢就47日啦已經; 仲有其佢嘅老師請代課，佢一睇呢，就算心算都知道我地係冇錢，佢話俾我聽。 我地就開會啦，咁我知道，佢俾我地嘅代課錢，唔夠錢去代課，可以喺擴大營辦津貼嗰度攞嘅，咁但係我地擴大營辦津貼嗰度係冇錢啦，咁又點呢；我會響度調嗰度調。係呢段時間裏面呢，係冇一個老師因為請咗代課老師事件，而佢地要做多咗野損失咗抑或冇錢俾之類，係冇嘅。”[58]

(emphasis added)

369.  The plaintiff’s counsel submitted that the punctuation marks in the transcript in this context did not provide guidance as to who did the mental arithmetic and that it is clear that the plaintiff was told the days of sick leaves taken by the teachers rather than the result of calculation directly.  Having listened to the audio recording myself, I do not accept this submission. From what the plaintiff said, she was clearly conveying a message that she was told by Mr Chiu that there was no more funding available and that it was Mr Chiu who did the calculation.  Further, it could not be made clearer by what I highlighted in the quoted part of the transcripts above that the plaintiff said “話俾我聽冇錢”.

370.  In the written explanation which the plaintiff submitted to Mr Chu on 3 December 2012, she wrote that:

“1. 本年三月書記因應每年批核代課款項情況告訴本人謂代課帳戶沒有餘錢支付代課老師 (他根據初步掌握的資料作簡報);

本人於16-3-2012會議上通知全體老師並商議解決辦法;

及後本人提示書記可以暫借擴大營辦津貼用於代課費用; 本人亦即時通知全體老師; 這些事情可以向各位老師査詢 (在簡報會中，全體老師可以作證)。

在此段時間內不存在「沒有錢而要老師額外付出時間及勞力(代課)」。

2. 並非因「教育局調査發現有資源，才指示本校向老師修訂陳述」，其實是校長向教育局報告原本情況。

3. 書記只是按當時情況報告，自「法團校董會」成立後，不足代課款項，都可從擴大營辦津貼借用，惟本校擴大營辦津貼都出現赤字，所以書記認為沒有款項。解決此問題時，需校長遇到真實情況時，調動財務解決所需資源。

[…]”

(emphasis added)

371.  Again, the plaintiff was representing that it was Mr Chiu who informed her that there was no more available funding to hire external substitute teachers after he had done the calculation.

372.  In the IMC meeting held on 28 January 2013, the plaintiff explained that:

“代課果度呢，就因為有人投訴啦，你地話俾我聽啦，咁我哋果個因為佢計個代課請假呢，俾我哋每個老師兩日半嘅，咁事實呢，如果要咁計嘅時候呢係冇嘅，咁但係因為呢亞趙生唔清楚，佢計錯咗，話俾我聽個訊息，咁我呢就向老師宣佈[…]”[59]

373.  The plaintiff was clearly blaming Mr Chiu for his wrong calculation in this meeting.

374.  In her witness statement, the plaintiff had the following to say:

“94. 關於代課資源的誤會，並非由本人過失造成，本人亦確實不知情。是趙書記在計算學校可動用金額時出現了理解錯誤：趙書記事前不知道上一年的代課資源可以留存兩年，即可以延續至本年度使用，而這一點本人是知道的。因此趙書記誤以為學校已經沒有足夠的代課教師的資源。因此2012年大約2、3月左右，趙書記向我匯報代課資源差不多用完。因此，2012年3月，我在全體教師簡報會中，向大家報告：代課資源基本用完，到時或需要本校教師擔當代課任務。到2012年5月，經我向趙書記查證及澄清上述誤解後，發現荃小尚有代課資源餘額，因此我立即請負責代課行政的譚老師及廖主任口頭通知諸位教師。6月15日，廖主任已經通知教育局荃小尚有代課資源。之後，應教育局之建議，本人於2012年7月13日向全體老師以書面形式發出關於以上事件的修訂通知。就有關事宜，本人亦曾於2012年10月3日發信致被告人作出交代。”

375.  The plaintiff’s then changed her explanation in her supplemental witness statement which stated as follows:

“5. 就有關代課事件，[…] 本人現再補充及回應如下：－

(a)     […]

(b) 至於可用代課津貼的計算出錯一事，事緣於2012年3月16日，因為本人需要在全體教師簡報會中提及代課安排，於是事前向趙書記查詢有關2011年9月1日至2012年3月16日止荃小的教師病假總數，以便計算出那個學年荃小尚有多少可用代課津貼。趙書記翻查記錄後回覆本人爲80 天。

(c) 由於荃小在2011-2012年度的可用代課津貼為48天 (即19 人 X 2.5日)，而當時尚有約五個月才完成該學年，本人因此以為在餘下的學年，荃小已再沒有代課津貼可用，於是本人便如實通告全體老師。

(d) 其後，約於2012年5月尾，本人收到杜老師就代課安排針對本人的投訴後，便向趙書記查詢有關荃小的代課安排紀錄，才發現趙書記當日誤會了本人的問題，於是錯誤地把沒有連續請病假三天以上的病假日數也計算在內，才會得出80 天這個數字。事實上，荃小在該學年並未用完全部的代課津貼，加上之前兩個學年的剩餘代課津貼，本人隨即在2012年6月15日指示廖瑞家主任通知教育局及朱校監，更正荃小尚有代課津貼可用並傳真一份有關代課資源的備忘及相關的文件予教育局和朱校監。

(e) 本人該份備忘有本人、廖瑞家主任、譚偉華老師、趙書記及周錦培助理書記的簽署。因此，實情早於2012年6月15日，朱校監理應得悉有關誤會及更正，因此本人實在不明白朱校監在其陳述書第42-44 段的指控。

(f) 同時，本人亦有指示廖主任立刻通知全體教師。傳真過後，我亦致電教育局的陳霍桂芬主任(‘陳主任’)詢問她是否收到上述傳真及告訴她學校已向全體教師作出更正通知。當時陳主任建議本人最好以書面再通知全體老師。因此，本人隨後於2012年7月13日向全體老師發出相關更正的書面通知。

6. 因此，澄清及更正學校尚有代課津貼可用的，是本人在查證後於2012年6月15日主動向教育局報告，而並非如朱校監所指控，是教育局自己發現查證出來，而本人則更非「為了推卸責任才冤枉趙書記誤報資料」。

7.  就著趙書記所簽署的聲明，其實該聲明並沒有指控本人冤枉他誤報資料。趙書記指出80天的數字確實由他提供予本人，但他解釋指因為本人沒有向他提出所需數字是用來計算代課資源，所以他才會說出80天的數字，造成往後的誤會。雖然本人確實只要求趙書記告知教師的病假總數而沒有直接要求趙書記報告可用代課資源，但當趙書記告知本人80天這個數字後，本人隨即跟趙書記提及荃小在該學年代課資源的計算及80 天遠超過48 天這情況，因此本人當時確信趙書記應該知悉本人所要求的病假總數是用來計算代課資源的病假總數。本人從沒預計亦不知道原來趙書記當時誤會了本人的意思而提供了一個不準確的數字。”

376.  It can be seen that sometimes the plaintiff said the mistake was caused by Mr Chiu’s ignorance of certain policy, and at other times she had explained that it was due to his miscalculation, and sometimes it was said that there was misunderstanding.

377.  The IMC’s counsel submitted that the fact that the plaintiff had put forward these inconsistent accounts would by itself suggest that none of these accounts was true.

378.  While I agree that the court should not accept the plaintiff’s evidence lightly in view of her ever-changing explanations referred to above, I would not go so far as to conclude right away that none of her accounts was true.  The court should consider all the relevant evidence carefully and find, if possible, what had probably happened at the material time. 

379.  At this point, I should refer to Mr Chiu’s written explanation which he provided on 3 March 2014.  He explained what happened at the material time in the following way:

“事源於2012年3月16日早上全體老師校務會議前，收到校長電話詢問本人截至當日的教師病假總數，本人經査察後回覆爲80天。(基於本人職位並無參與校務會議，亦不知道當日之會議議程。) 其後獲悉校長於校務會議內曾提述教師提取病假數量及學校再無餘款因老師放病假而需聘請代課安排。後因杜惠蘭老師投訴代課事宜及校長提供錯誤資料回應教育局査詢(該錯誤資料其後於簡報會上修訂)。引至本人獲校長口頭警告(理由爲提供資料及計算方式錯誤)：其實當天校長於詢問本人時並無說明需要所有已曾聘代課的老師病假總數(需三天病假以上才可聘請代課)，亦沒有查詢當時的代課津貼結餘。”

380.  Ms Iu explained that the above written account was obtained from Mr Chiu in 2014 for the sake of prudence, because he was going to retire soon. 

381.  Although there might well be a conflict of interest here (it might be said that since either the plaintiff or Mr Chiu should be blamed, there might well be a motive for Mr Chiu to shift all blame to the plaintiff), I would accept that it was more likely than not that what Mr Chiu stated above represented the truth.  I therefore find that what the plaintiff explained in paragraph 5(b) and (c) of her supplemental witness statement was more likely than not to be the truth.

382.  In such circumstances, should the plaintiff be blamed and has the IMC established successfully the allegations pleaded in paragraph 14(5) and (6) of the Re-Re-Amended Defence and Counterclaim?

383.  So far as the allegation that the plaintiff had misinformed the staff members of the School on the availability of funding for hiring substitute teachers is concerned, I am of the view that that was caused by a pure misunderstanding between the plaintiff and Mr Chiu when the plaintiff asked Mr Chiu about the figure of sick leave.  With the benefit of hindsight, of course the plaintiff should have made her enquiry in a clearer way.  However, I do not think that should lead to a warning. 

384.  I should also add that in fact, it is evident that, once the plaintiff had discovered that a mistake had been made, she had informed Mrs Chan of EDB on 15 June 2012 by way of a memorandum (“the Memorandum on Sick Leave”).  The following is an excerpt of what was said during the IMC meeting held on 22 November 2012:

“廖： […] 係我地主動講番俾教育局聽，唔係陳太落嚟査架，即係冇代課津貼，或者仲有冇滾存，或者仲有冇，根本都未洗完呢。其實唔係教育局查架，係我地查架，嗱！呢個文件已簽哂架，我地做見證架，我地幾個要報番俾陳太聽，陳太先知這呢單嘢架，其實唔係陳太落嚟査，陳太落嚟査就係査亞杜老師代課安排。”

姚：    但係陳太的意思是査咗學校有資源去俾。

廖：    唔係。

姚：    其實佢果封信都講得好清楚架喇。

朱：    教育局封信你冇睇到？

廖：    冇。冇呀。

姚：    教育局封信呀。

廖；    冇睇過，但剛才你有讀過。他不斷強調代課津貼是咁用，其實係我哋覆番上去。

朱：    校董你睇睇先，信件內容，因內容係好清晰。

廖：    嗱！呢個咪6月15日，我地…

姚：    而家講緊係資源果一部份，星星果度呢，講咗學校有資源去請嘅，大家唔好講邊個有資源。

廖：    即係提示番校長其實佢係冇理解呢樣嘢囉，其實教育局下來的信是針對我們査到6月15號，開宗明義寫到6月15日，我們立即回覆更正番，於3月16 號校務會議作出錯誤的陳述，話我地冇代課津貼嘅，我地覆俾陳太，即刻成疊嘢我地要即刻fax 過去，開宗明義呢份文件我地自動投案，是我們開頭做錯咗，理解錯咗，就係咁樣，所以跟住再重申津貼係咁用咁用，全部circular 都寫明，所以最關鍵是校長同趙生第一次問佢果個代課津貼。

朱：    我諗你搞錯少少嘢啦，6月25號係我回覆。

廖：    6月15號我地果度。

姚：    呢封信是6月25號，係我地回覆俾佢果封，她所指嘅係我地俾佢果封信。

廖：    我們6月15號覆的。

朱：    是我們覆的信，不是你們覆的信。

姚：    6 月15 號你地有沒有覆我地唔知，但6月15號有俾我地，我地先知。呢疊校長有俾我地，但唔知佢有冇俾教育局丫嘛。

廖：    可以看下面果一疊。

姚：    呢一疊校長都有俾我地，但我地唔知佢有冇俾教育局？

廖：    有，我地即時傳真予陳太。

姚：    你而家講咗我地先至知，但教育局…”[60]

(emphasis added)

385.  The Memorandum on Sick Leave which Ms Liu referred to was a document which was signed by Ms Liu, Mr Tam (the teacher who was responsible for arranging for substitute teachers), Mr Chiu, Mr Chow (assistant clerk) and the plaintiff. According to Ms Liu, this was a letter which clarified that the School had made a mistake in the calculation of the funding.

386.  Pausing here, I note that the IMC’s counsel argued that it was unclear from the Memorandum on Sick Leave that it meant that the School still had funding for hiring substitute teachers.  I agree that it was indeed unclear on the face of the said document.  However, it is noted that there seem to be appendices which were sent together with the Memorandum on Sick Leave, but those appendices were not included in the trial bundle.  It is therefore unknown as to whether the position would be made clearer by those appendices.  Having said that, the Memorandum on Sick Leave appears to be the only document which the School sent to Mrs Chan before she sent a letter dated 9 August 2012 to Mr Chu (apart from Mr Chu’s letter dated 25 June 2012).  Yet, she could make the comment that the plaintiff had clarified the position on resources in hiring external substitute teachers.  I therefore find that the documents sent to EDB on 15 June 2012 should be clear enough.

387.  Coming back to the discussions in the IMC meeting held on 22 November 2012 which were quoted above, I take the view that such discussions are important because they support the plaintiff’s evidence given in the supplemental witness statement that:

(1)     she had discovered in June 2012 about the mistake on the available funding for hiring substitute teachers and as a result she had caused Ms Liu to send a number of documents to Mrs Chan for clarification;

(2)     she had caused Ms Liu to send the said documents to Ms Iu right away, and Ms Iu also confirmed in the dialogue quoted above that she had received those documents.

388.  I have not lost sight of the records taken by Ms Iu for the meeting between Mrs Chan and Mr Chu held on 15 August 2012 in which Mrs Chan stated that it was EDB which discovered the plaintiff’s mistake. However, I would accept the plaintiff’s evidence in this regard nonetheless because her case is supported by contemporaneous documents as well as Ms Liu’s explanation referred to above.

389.  If Ms Iu had already received the said documents on 15 June 2012, then it led to the question as to why Mr Chu still proceeded to confirm with EDB 10 days later on 25 June 2012 that the School had no more available funding to hire external substitute teachers in that academic year. 

390.  Given Ms Iu’s acceptance in the IMC meeting held on 22 November 2012 that she had received those documents, in my view, there is a possibility that those documents were somehow not forwarded to Mr Chu for his attention.  If that was indeed the case, then why should the plaintiff be blamed for Mr Chu’s provision of inaccurate information to EDB subsequently on 25 June 2012?

391.  However, I do not think I have to make any finding here in that regard, because, as aforesaid, I am of the view that the whole matter was caused by an unfortunate misunderstanding between the plaintiff and Mr Chiu.  In my view, a warning was not warranted in such circumstances anyway.

392.  But what was even more unfortunate was that, Mr Chu, despite Ms Liu’s explanation, maintained in the IMC meeting held on 22 November 2012 that:

“[…] 我覺得呢個係行政失當，如果阿頭唔孭嘅，其實變咗亞書記就要接受呢個警告囉，聽番亞羅校董嘅意思呢，如校長覺得係有問題嘅，佢應該係一早話俾我地聽，警告咗亞書記架喇，並督促佢以後要小心，響我地査任何資料時，我諗亞校長到而家仲未有處理到有關嘅事情啦，但係我地可以而家去表決一下警唔警告? 如果唔贊成警告校長，便要通過校長警告趙書記，只有兩個方案啫，如果唔係因交代俾教育局吖嘛，錯就係一定有人錯嘅，但邊個錯? 校長錯定係對落去趙書記錯，趙書記錯就要警告趙書記，我其實成件事就一定要有人孭，我諗呢個係我個人嘅意見，大家就呢件事用A、B方案啦。A呢就係警告校長，B呢就係警告趙書記，我會簡單小小。”[61]

393.  With respect, this is quite consistent with Mr Chu’s attitude which I have referred to in the earlier part of this Judgment[62]. As far as the mistaken belief that there was no further funding available for hiring substitute teachers is concerned, I do not agree that a warning must be issued.  Indeed, EDB had never made such an indication in its letter dated 9 August 2012, nor in the meeting held on 15 August 2012.  It seems that Mr Chu was very determined to make sure that he could report to EDB that he had “dealt with the matter” (“交代俾教育局”).  Probably more importantly from his perspective, he wanted to inform EDB unequivocally that he was not the one who was at fault.

E9.3  The plaintiff’s awareness of available funding

394.  I now come to the last allegation under Warning 9, namely, that the plaintiff had dishonestly fabricated an explanation that she was not aware of the availability of funding designated for the hiring external substitute teachers in the School when all along the availability of such funding was known to her.

395.  The IMC had not made any submission in this regard.

396.  In my view, this allegation is unsupported by the evidence adduced before the court.

E9.4  Conclusion

397.  I therefore conclude that the IMC was not justified in issuing Warning 9 to the plaintiff.

E10.   Warning 10 – Employment contract of Mr Chan

398.  On 25 May 2012, a warning letter was issued for the plaintiff’s maladministration in entering into an employment contract with Mr. Chan (陳嘉釗) without the IMC’s authorization. 

399.  The IMC pleaded its case in paragraph 14 of the Re-Re-Amended Defence and Counterclaim as follows:

“During the course of her employment as the Principal of the School, the Plaintiff maliciously, negligently, purposefully breached her duties pleaded in paragraph 13 of this Re-Re-Amended Defence above, which breaches included:

[…]

(10) Failing to properly manage the recruitment and the payroll of the staff members of the School:

(a) – (b)      […]

(c) The Plaintiff attempted to hire one Mr. Chan Ka Chiu (‘Mr. Chan’) in about August 2012 (who was subsequently discovered by the Defendant to be a director of a service provider previously involved in the Plaintiff’s unauthorized campaign of the recruitment of cross-border students), as a new teacher for the academic year 2012/2013. However, Mr. Chan demanded an immediate 3-week break period up to and including 24^th September 2012.

(d) In order to comply with the Government policy to downsize the teaching staff headcount as notified to the Defendant in mid-September 2012, the Defendant was obliged to terminate the employment of Mr. Chan upon finding out about him, as he was one of the newest staff members and had not officially started to work. However, the Plaintiff insisted on keeping him and suggested to inappropriately back-date the starting date of the employment with Mr. Chan to 1^st September 2012.

(e) The Defendant subsequently discovered that 2 concurrent employment contracts of Mr.Chan with effective dates being 1^st September 2012 and 25^th September 2012 respectively were signed, without the knowledge of the Defendant.

(f) Mr. Chan was given notice to terminate his employment on 25^th September 2012 and he had not formally worked for the School at all except for about 1.5 days. Mr. Chan was paid 3 sums of HK$9,100.98, HK$1,516.83 and HK$39,633.30 respectively due to the maladministration on the part of the Plaintiff, and such sums were paid by the Defendant out of its own pocket because the Education Bureau did not recognize Mr.Chan as ever having been employed by the Defendant in the Education Bureau’s own records, thereby causing the Defendant to suffer monetary loss and damages.

(g) The Plaintiff had failed to disclose to the Defendant the fact that Mr. Chan was a prior acquaintance of the Plaintiff in the employment of Mr. Chan and the termination thereof and placed herself in a position of conflict of interests situation.”

400.  The plaintiff’s Re-Re-Amended Reply and Defence to Counterclaim pleaded in paragraph 9(16) that:

“(a) The original employment contract of 24^th July 2012 signed with Mr. Chan stated that Mr. Chan shall commence teaching on 1^st September 2012 with a probation period of two years (‘the First Contract’). However, in or about August 2012, Mr Chan asked for study leave from 4^th September 2012 to 24^th September 2012. The Plaintiff then relayed Mr. Chan’s request to the Supervisor for approval. The Supervisor informed the Plaintiff that he did not approve the request but he would accept Mr. Chan to commence his teaching on 25^th September 2012 instead of granting him the required leave. Since the Supervisor did not approve Mr. Chan’s request, the Plaintiff, upon the Supervisor’s instructions and with the agreement of Mr. Chan, entered into a new employment contract with Mr. Chan on 4^th September 2012 to replace the old one and under the new contract, Mr. Chan shall commence teaching on 25^th September 2012 (‘the Second Contract’).

(b) ln or about mid-September 2012, EDB informed the School first orally on 17^th September 2012 and in writing on 25^th September 2012 that there were insufficient students in the School to offer two classes and thus, the original teaching vacancy to be filled by Mr. Chan no longer existed. However, as stated in EDB’s notification letter of 25^th September 2012, any teacher recruited before the said notification could remain employed until the end of the school year (i.e. 31^st August 2013) and that the School is not required to terminate the contract prior to the end of the school year.

(c) If the School was to terminatethe contract with Mr. Chan, the School might need to compensate him in accordance with the contract. Hence, the Plaintiff enquired with EDB and was told that had the Defendant approved Mr. Chan’s leave and employed him on 1^st September 2012, he could have been counted as a full-term teacher and the School could have one more staff to share the workload. The Plaintiff then relayed such information she obtained from the EDB to the Defendant for their consideration and decision without suggesting that the Defendant to backdate the Second Contract with Mr. Chan. As a matter of facts, Mr. Chan was under the employment of the Defendant and did report to duty on 1^st September 2012 and worked until 3^rd September 2012 according to the First Contract. Hence, there was no need to ‘back-date’ the Second Contract of Mr. Chan as alleged in paragraph 14(10)(d).

(d) On or about 24^th September 2012, several managers of the Defendant held a meeting to discuss about this issue and it was resolved that the School should terminate the employment with Mr. Chan and should inform him on the next day when he reported to duty according to the Second Contract.

(e) According to the Second Contract, Mr. Chan was employed for less than one year until 31^st July 2013. Hence, Mr. Chan was entitled to his salary for his employment from 1^st to 3^rd September 2012 under the First Contract and from 25^th September to 25^th October 2012 under the Second Contract. However, the Supervisor refused to pay Mr. Chan until he threatened to sue the School and upon the advice of the EDB that the Supervisor agreed to pay Mr. Chan. Accordingly, based on the advice of the district school development officer of the EDB (Mrs. Chan), Mr. Chan’s total salary was then paid out of the Capacity Enhancement Grant (CEG) instead of the Defendant’s own pocket as alleged in paragraph 14(10)(f).

(f) Mr. Chan’s total salaries were paid in three sum: the sum of HK$1,516.83 was Mr. Chan’s salary for 1^st September 2012; the sum of HK$9,100.98 was for his employment from 25^th to 30^th September 2012 (i.e. 6 days of work) and lastly the sum of HK$39,633.30 was for the period from 2^nd to 3^rd September 2012 and from 1^st to 25^th October 2012 (i.e. 27 days of work).

(g) Hence, had the Supervisor approved Mr. Chan’s request at the beginning and not instructed the Plaintiff to sign the Second Contract, Mr. Chan’s employment under the First Contract would have allowed the School to count Mr. Chan as a full-term teacher whose salary in the year of 2012/2013 could, according to the policy of EDB, still be paid out of the Expanded Operating Expenses Block Grant (EOEBG) (‘the Block Grant’) despite EDB’s notice of reduction of classes on 25^th September 2012.

(h) Further or alternatively, it is averred that at all material times, the Plaintiff has tried her very best to ensure the School has retained most staffing resources to deliver best education to the students by way of making inquiries with relevant district school development officer and exploring possibilities with the Supervisor and managers of the Defendant to resolve the problem.

(i) In the premises, it is categorically denied that it was due to the maladministration on the part of the Plaintiff that the Defendant had to pay Mr. Chan the said 3 sums of money.

(j)  The Plaintiff further avers that at all material times, Mr. Chan was not a prior acquaintance of the Plaintiff.  The Plaintiff does not know him personally or have not even met him before he attended the job interview.  Hence, the Plaintiff had not placed herself in a position of conflict of interests as alleged in paragraph 14(10)(g) or at all.”

401.  It can be seen that the plaintiff had entered into two employment contracts with Mr Chan.  The first one was dated 24 July 2012 (“the First Employment Contract”), under which the report duty date was 1 September 2012.  The second one was dated 4 September 2012 (“the Second Employment Contract”), under which the report duty date was 25 September 2012. 

402.  It seems that the following issues arise from the respective cases of the parties:

(1)     Whether the plaintiff was required to secure the IMC’s approval before entering into the aforesaid contracts of employment with Mr Chan;

(2)     Did Mr Chu ever authorise the plaintiff to sign any employment contract with Mr Chan on his behalf;

(3)     When were the two contracts of employment signed and did the IMC know about that?

(4)     Did the plaintiff propose that the Second Employment Contract with Mr Chan be backdated?  If so, what was the effect of such a proposal?

(5)     Did the plaintiff place herself in a conflict of interest situation?

403.  Before I consider the above issues, it is necessary to highlight what Mr Chu stated in his witness statement and his evidence given under cross-examination.  Once that is done, most of the crucial issues involved (apart from the one on conflict of interest) can be answered without much difficulty.

404.  In Mr Chu’s witness statement, he stated that:

“132. 任何教職員的聘請均需要依照荃商有關程序，得到校董會中兩名法團校董接見與同意，並由荃商的校監簽發僱用合約才算是完整的流程。

133. 大約於2012年8月的時候，胡女士向本人表示希望聘請一位名為陳嘉釗的老師，但陳嘉釗老師要求於開學後的2012年9月份由9月4日請假至9月24日。當時本人對於陳嘉釗老師要求一開學即申請那麼多天假期覺得不太合理，所以向胡女士建議聘請另一位人士。本人亦表示，如真的有需要聘請陳嘉釗老師，合約必須由他放假回來的日期才生效。另外，本人亦提醒胡女士需要經過荃商聘請流程，得到校董會同意才能正式聘請陳嘉釗老師。

134. 教育局於大概2012年9月17日聯絡本人，指經過探訪荃商後，發現二年級生真實數量比胡女士上報的26人為少。由於教育局有規定一級學生不足26人不能夠開設兩班，所以荃商須相應地削減教師名額，以探訪當日為限，而在2012年9月17日後才履新的老師將不獲保留。本人於是委託姚秘書查詢有關兩名需要被解僱的老師，而姚秘書回覆本人其中一名老師為上述提及的陳嘉釗老師。由於校董會從來未通過聘請陳嘉釗老師，本人也沒有簽署過任何有關的聘約，於是本人委託姚秘書致電教育局陳霍桂芬主任查詢有關陳嘉釗老師未經校董會及未經朱校監批准下聘用的問題。姚秘書後來匯報，指陳太表示任何委任教師的合同必項由校監簽署。

135. 根據姚秘書整理的會面備忘顯示，當李智鋒校董、麥榮欣校董、何偉明校董連同姚秘書在2012年9月24日與胡女士會面有討論此事。惟當時出席會面的校董均不同意更改合約日期，因為怕抵觸法例要求。

136. 其實，本人及校董們當時仍然以為陳嘉釗老師從來都未被荃商聘用。不過，經後來多番調查後，本人與姚秘書才發現胡女士與陳嘉釗老師已自行簽署了兩份載有不同試用期的聘約： —

(a) 第一份聘約在2012年7月24日簽署，入職日期為2012年9月1日；

(b)  第二份聘約在2012年9月4日簽署，條款中的入職日期由2012年9月l日改成2012年9月25日。

137.     本人認為在2012年8月份胡女士首次向本人咨詢有關聘請陳嘉釗老師的時候，胡女士其實當時已經在未經校董會的同意下私自與陳嘉釗老師簽署第一份聘約，由2012年9月1日開始聘請陳嘉釗為荃商的常額教師。而後來因為本人(在未知荃商已與陳嘉釗簽署第一份聘約的惰況下)建議胡女士於2012年9月25日陳嘉釗休假回來後才入職，於是胡女士才再度私自更改聘約， 將入職日期改為2012年9月25日。以上兩份聘約均未有按要求經過校董會審批，而胡女士均沒有得到校董會授權簽署該兩份聘約，兩份聘約更沒有本人的簽署。”

405.  When he was cross-examined by Ms Poon at the trial, Mr Chu’s evidence was quite different:

潘： [3136][63]係咪見到有你，朱校監個簽名呀?

朱 ： 係呀，係我簽名。

潘： 咁同埋個日期係2012年嘅8月1日嘅，你見到係咪?

朱： 係。

潘： 我個說法睇你同唔同意嘞，我嘅說法呢就係，你喺2012年8月1日，你簽呢一份嘅申請書啦喀，即係都係向教育局話要去招聘呢個陳嘉釗老師嘅時候，咁呢個係[⋯] 我嘅講法就係話呢份文件係要呈交去教育局嘅，你同唔同意啊?

朱： 同意。

潘： 而點解要呈交呢一份文件俾教育局呢？就係因為當時學校係打算聘請陳嘉釗老師嘅，係咪呢?

朱：係。

潘： 而因為呢嗱，我哋頭先知道啦，校長呢，佢就同陳嘉釗老師呢，就簽咗個合約，係2012年7月24日嘅，咁但係呢如果個學校真係要請到呢個老師嘅呢，其實都一定要校監你嘅簽名就係喺個申請書，喀，相關嘅申請書嗰度要有你嘅簽名呢，咁先至會得到確認而令到陳嘉釗老師呢係得以聘請嘅，係咪咁樣情況㗎 ?

朱： 係。

潘： 咁而我個講法就係因為你簽咗8月1號呢一份文件呢，咁就確認陳嘉釗老師呢就可以為學校所聘用嘞，同唔同意我咁樣講呀?

朱：同意。

[⋯]

潘： 呢啲文件係咪唔會成日都簽㗎 ?

朱： 我記憶中呢啲文件呢，就係呈報俾教育局嘅一啲老師嘅，咁每年呢，都有喺學年開始前呢，係會有呢啲文件簽嘅。

潘： 你都會睇咗份文件個內容你先至簽㗎嘛係咪呀?

朱： 通常我都唔會點睇㗎，因為請老師都係經常恆常嘅，咁，係囉每年都係恆常會攞嚟俾我簽，同埋唔止一張嘅，可能一大疊。

潘： 咁我向你指出呢就係話，其實去到2012年8月1號嘅時候呢，你因為簽咗呢個文件呢，所以你都一定知道同埋就係通過聘任陳嘉釗老師嘅，你同唔同意我咁樣講啊?

官： 乜嘢叫做通過?

潘： 即係你批准啦，或者我講，你批准，你知道同埋你批准呢，係聘任陳嘉釗老師嘅。

朱：同意。

[⋯]

潘： 我想俾番有個謄本俾你睇呢喺[2921][64]嗰度嘅，[⋯]你見到胡校長喺呢度啦，佢就話「無批俾佢呢，咁佢就願意，佢就簽過張約嘞」，咁我個講法就係話，既然要「簽過張約」，咁咪就係話之前係有第一張約，咁先至會簽過第二張約啦，你同唔同意我咁樣理解胡女士嘅呢個說話?

朱： 同意。

潘： 咁所以呢，我意思就係話，去到9月24號2012年嘅時候呢，咁其實胡校長已經表達咗喺9月24號之前，係已經同陳嘉釗老師呢，係有份合約嘅，第二份合約我意思係，同唔同意啊?

朱： 同意，不過我想指出呢，其實八月份呢，佢係八月份去喺呢一個，其中一個會議度，佢問我哋呢位老師要由3號請假請到24號，問我哋同唔同意，咁我哋已經表達咗我哋唔同意，叫佢請過第二個，因為合約未開始， 9月1號先生效，叫佢請過第二個，咁呀後尾呢校長就話，可唔可以將個日子褪後，褪到25號返工，咁後尾講咗一大輪，咁好多，好多校董呢，就後尾都答應咗，好啦，咁呢轉25號啦，咁25號先至起約啦，你重新改過份合約啦，個過程就係咁樣嘅，咁呀，呢度呢其實係好之後嘅一啲會議嚟嘅，個過程就skip咗太多嘢喇。

官： 你話呢度係好之後會議，你係咪話呢個謄本嘅嗰個會議係好之後嘅會議，你係咪咁嘅意思啊?

朱： 係呀我要睇返，我唔記得呢度係幾時啊，係之後㗎嘞，係九月份。

潘： 呢個會議嘅日期就係2012年9月24號啦。

朱： 9月24號。

潘： 我就向你指出番啦，你話俾我知你同意唔同意啦，就係當胡校長呢，去同陳嘉釗老師呢佢去簽第二份合約嘅時候呢，佢係得到你嘅准許嘅，同唔同意呀?

朱： 佢簽第二份合約嗰個時候，我哋講咗俾佢聽要點樣改吖嘛，梗係得到我哋同意啦。

潘： 亦都得到校董會嘅同意?

朱： 當日係一個基金嘅會議嚟嘅我記得，咁佢喺嗰度問，唔知8月28定幾多號我唔係好記得嘞，總之係8月20幾號嗰個時間問啦，你可以搵番個紀錄嘅。

潘： 第二份合約簽署嘅日期係2012年嘅9月4號係咪?

朱： 我唔記得咗。

406.  I now turn to consider the 5 issues identified above.

E10.1     The IMC’s approval

407.  The first issue is: was the plaintiff required to secure the IMC’s approval before entering into any employment with Mr Chan?

408.  The IMC’s counsel have referred this court to section 50(a) of the Code of Aid which provides that:

“The School Management Committee may approve the appointment of staff paid out of the Salaries Grant in accordance with the provisions of this Code of Aid and any requirements the Permanent Secretary may determine […]”

409.  I agree that approval had to be given by the IMC for the employment of teachers.   Regulation 76(1) of the Education Regulations also provided that:

“The appointment of any teacher who is to be employed in the school—

(a) to occupy a teacher post in the establishment of staff provided for in the code of aid for primary schools, code of aid for secondary schools or code of aid for special schools; or

(b) for a term for not less than 6 months,

shall be approved by the majority of the managers of the school.”

410.  Be that as it may, I find that it was not the then prevailing practice of the IMC that it would pass resolutions as such at the material time.  This is because, according to Mr Chu’s evidence, the plaintiff did relay Mr Chan’s request for a 3-week leave to various managers of the IMC sometime after 20 August 2012, on a day when there was a Foundation Board of Directors’ meeting, and it was agreed by the managers who were present at that time that Mr Chan’s employment contract should be revised such that he should only report duty on 25 September 2012.  If it had indeed been the IMC’s requirement that all appointments of teachers must be approved in a IMC meeting beforehand, I wonder why none of the managers who were present at that time had raised this query, but agreed to postpone the date of commencement of duty. 

411.  Furthermore, the plaintiff, in her supplemental witness statement, stated that the practice of her signing employment contracts with teachers had started in 2008, and she had signed a total of 6 employment contracts between 2008 and 2010 (2 contracts per year)[65].  If there was indeed any problem with such a practice, I wonder why no manager had ever raised this issue beforehand.

412.  Apart from the aforesaid 6 employment contracts and the contracts of Mr Chan, according to the plaintiff’s evidence, she had also signed 4 other employment contracts with 4 teachers on behalf of the supervisor: three contracts were signed on 24 July 2012 and one on 31 August 2012[66]. However, surprisingly, the court’s attention had not been drawn to any discussion (or complaint) in relation thereto.  If it would amount to “maladministration” for the plaintiff to sign Mr Chan’s First Employment Contract, I do not understand why it would be permissible for her to sign those other contracts at around the same time. 

413.  Furthermore, if it was indeed the necessary procedure adopted by the IMC for it to give approval before any teacher could be employed, should that requirement be equally applicable when the decision not to retain Mr Chan was made on 24 September 2012?  I have referred to the meeting held on that day beforehand, in which only 4 managers, namely, Mr Lee, Mr Mak, Mr Ho and the plaintiff, were present.   Although Mr Law and Mr Lee Tung Sing had given their views by phone that the Second Employment Contract should not be backdated, they did not attend the meeting.  Therefore, this was not a proper IMC meeting as such because the quorum of “not less than half of the number of the managers”[67] was not met.  Indeed, it was not purported to be an IMC meeting, because the record of this meeting was referred to as a “memorandum” rather than “minutes”.  In the said memorandum, it was recorded that “由於胡校長來電稱明天要覆教育局有關縮班及削減教席問題，朱德榮校監因病授權李智鋒校董代為處理，秘書致電校董即日24/9/2012 4:30pm 到會所約見胡校長”.  If the supervisor could delegate his power to deal with the issue concerning the employment of Mr Chan to Mr Lee, then how could it be said that the IMC’s approval was a must?

414.  Indeed, this is not the first time when I have referred to this phenomenon: while it was the IMC’s case that it was inadequate for the plaintiff to seek approval from the supervisor on various matters and that a resolution from the IMC was a must before she could validly and properly undertake certain act, it can be seen from the conduct of the managers themselves that they did not act in this way: a small group of them (especially those who were concurrently directors of the Foundation (i.e. the sponsoring body of the School)) would meet and give instructions to the plaintiff, as if they had the authority to represent the entire IMC, or put it bluntly, as if “they were the IMC”. 

415.  In fact, it was recognised by the IMC’s counsel that “Neither [Mr] Chu nor a few members of IMC could approve matters on behalf of the whole IMC.  This is a matter of law and the IMC’s articles”[68].  However, that was how the IMC operated at the material time.

416.  That is the reason why I hold the view that fairness requires the court to consider the next question: whether Mr Chu had given his approval for the plaintiff to handle the employment matter of Mr Chan, which I will do below.

E10.2     Mr Chu’s approval

417.  It was the plaintiff’s case that Mr Chu had authorised her to sign the employment contract with Mr Chan on his behalf, and that as a result she had proceeded to sign the First Employment Contract and the Second Employment Contract.

418.  I should point out at the outset that this was not permissible pursuant to section 55(a) of the Code of Aid, which provides that:

“A teacher shall, on appointment to an aided school, be furnished with a contract of service and, in addition, or alternatively, a letter of appointment. Such contract of service or letter of appointment shall be signed by the Supervisor of the school and shall be countersigned by the teacher on appointment.”

419.  However, in my view, such a breach of section 55(a) of the Code of Aid would not affect the analysis herein.  If Mr Chu had indeed authorised the plaintiff to sign employment contracts, then the plaintiff should not be blamed.  Whether the EDB would take any other actions is not a matter which this court should take into consideration.

420.  Mr Chu, in his witness statement which I have quoted above, maintained that he did not authorise the plaintiff to enter into employment contracts as alleged and his ignorance about the First Employment Contract and the Second Employment Contract.  I have no hesitation in rejecting such evidence as untruthful for the following reasons.

421.  Firstly, Mr Chu accepted that he had signed a document “資助小學學校聘任教學人員” on 1 August 2012 in relation to the employment of Mr Chan.  Although he said he did not spend much time to read this document (“唔會點睇”), I do not accept that he did not even notice that that was a document which was going to be submitted to EDB for the appointment of a new teacher. If he had not authorised the plaintiff to employ any new staff members, it would not be difficult to realise (when he saw the aforesaid document) that the plaintiff was doing something without his authorisation.  Yet, he had signed the document without raising any query.   

422.  Secondly, he admitted under cross-examination that he knew and approved the employment of Mr Chan.

423.  Thirdly, he admitted in court that, when the plaintiff raised Mr Chan’s request for 3-week leave on a day after 20 August 2012, various managers agreed to the plaintiff’s proposal to revise the contract so that it would only commence on 25 September 2012 (“你重新改過份合約啦”).  That undoubtedly shows that Mr Chu (and other managers who were present when the conversation took place) knew that an employment contract had already been entered into.

424.  Fourthly, Mr Chu also admitted expressly in court that “佢簽第二份合約嗰個時候，我哋講咗俾佢聽要點樣改吖嘛，梗係得到我哋同意啦”. That shows that it was a blatant lie when he and Mr Lee alleged that they thought on 24 September 2012 that the School had not yet employed Mr Chan.  They were simply pretending that they knew nothing about it so that they could shift all the blame to the plaintiff.

425.  Fifthly, as I mentioned above, the plaintiff had signed 6 employment contracts on Mr Chu’s behalf in the period between 2010 and 2012.  This was supported by what Mr Chu said in the IMC meeting held on 22 November 2012:

“校長，重點係其實每一次簽約都要經過我哋辦學團體其中一位人士簽名，方為有效果份合約，點解你成日都講生效，生效，點樣生效呢？我哋都冇有人簽過，你又冇知會過我哋有關這份合約，咁點解要架空我哋果個辦學團體校董去做這件事呢？以前所有嘅合約，都係我哋有份去簽㗎嘛，所有老師嘅合約，包括你在內，都係我哋有份簽㗎嘛，咁點解你而家請老師係唔需要我哋簽約嘅，呢個情況，我哋事後請我哋秘書，幫手去問番你攞番晒全校嘅所有老師嘅合約嚟睇，咁我哋亦發現到點解會有咁嘅情況，係唔唔需要我哋辦學團體校董去簽呢? 咁其實過往我哋從來冇取消過辦學團體校董去簽合約呢個情況[…]”[69] (emphasis added)

426.  If Mr Chu had never authorised the plaintiff to sign employment contracts, it should not be difficult for him to realise that he had not signed any employment contracts at all since 2008[70].  Yet, there is no evidence before the court that he had raised this issue before.  In my view, that is because he did give such authority to the plaintiff.

427.  When considering this issue, I have also borne in mind that the court has to be very cautious when considering the plaintiff’s evidence, because she could be unreliable at times.  This is demonstrated by the written explanations dated 19 October 2012 and 8 June 2013 respectively, in which the plaintiff wrote that Mr Chan requested on 3 September 2012 to take leave for 21 days.  This gave an impression that he only applied for leave after he had reported duty on 1 September 2012.  But in fact it is undisputed that Mr Chan’s written application for leave was dated 22 August 2012.  The plaintiff explained in court that she might not have expressed herself clearly enough and what she meant therein was that Mr Chan could only work until 3 September 2012.  I do not accept this evidence, as her meaning as expressed in the aforesaid written explanations was clear. 

428.  Be that as it may, I accept the plaintiff’s evidence that she had been authorised by Mr Chu to sign the employment contracts upon consideration of various contemporaneous documents, inherent probability and Mr Chu’s evidence given in court.

429.  The fact that Mr Chu had signed the EDB document known as “資助小學學校聘任教學人員” without querying why no IMC approval had been sought beforehand gives further support to this court’s finding under section E10.1 above that it was not the practice of the IMC to require prior approval be sought before any new teacher was employed.

E10.3     The two employment contracts

430.  The next issues which I identified above were the respective dates when the two contracts of employment were signed and the IMC’s knowledge about them.

431.  I accept that the First Employment Contract was signed on 24 July 2012.  Since the document “資助小學學校聘任教學人員” was signed by Mr Chu on 1 August 2012, the timing of the First Employment Contract makes sense to me. 

432.  As the plaintiff accepted in court, no formal approval had been sought from the IMC in relation to the signing of the First Employment Contract.  However, that would not affect the validity of the plaintiff’s act.  Nor could it be said that it was improper for the plaintiff to enter into this agreement, because, as aforesaid, it had been the practice of Mr Chu to leave the matter to be handled by the plaintiff, and it had not been the IMC’s practice to follow the Code of Aid’s requirement strictly in this regard.

433.  The Second Employment Contract was dated 4 September 2012.  I accept that it was indeed signed on that day.  This date also makes sense to me, given the fact that various managers appointed by the Foundation including Mr Chu had instructed the plaintiff sometime after 20 August 2012 (“8月20幾號嗰個時間” – see Mr Chu’s cross-examination quoted above) to revise the First Employment Contract so that the contractual term should commence on 25 September 2012.  For the avoidance of doubt, I infer that those managers who had agreed to revise the commencement date of the contract were managers appointed by the Foundation because, according to Mr Chu, the plaintiff raised this matter on a date when there was a Foundation Board of Directors meeting.

E10.4     Backdating of the Second Contract

434.  Did the plaintiff propose that the Second Employment Contract should be backdated on 24 September 2012?

435.  I accept the IMC’s submissions that, by the time when the said meeting was held, the First Employment Contract had already been superseded by the Second Employment Contract, which provided that the contract would only commence on 25 September 2012.

436.  In the meeting held on 24 September 2012, the plaintiff did propose that:

“呢個係特別嘅情況，耐D先至咁講嘅時候呢，咁就冇批佢啦，咁冇批佢嘅時候呢，咁佢就自己願意呢。佢就簽嗰張約，當佢25號到任啦。總之當代課， 1號、2號、3號返學嗰D，當代課俾返錢啦。咁樣，係喇，咁我地如果唔係因為縮班嘅時候呢，就無而家呢個會議講D野啦，因為要縮班要減人呢，我地希望多番兩個人嚟使嘅時候呢，你就當佢1號返工，咁我就批佢嗰個事假，批事假呢，亦都 […]”[71]

437.  What the plaintiff was saying was that, despite the supervisor’s earlier disapproval of granting Mr Chan the 3-week leave as requested (and as a consequence the first day of employment had been moved to 25 September 2012 pursuant to the Second Employment Contract), she hoped that the commencement date could be moved back to 1 September 2012, and it should be treated as if a 3-week leave was granted, so that Mr Chan could stay in the School for the rest of the academic year. 

438.  Mr Lee, Mr Mak and Mr Ho who were present in that meeting together with Mr Law and Mr Lee Tung Sing (who could not attend the meeting) did not agree to the plaintiff’s proposal.  As a result, there was no “back-dating” as such.

439.  Eventually, the Second Employment Contract was not back-dated as proposed.

440.  I do not think (and the IMC’s counsel did not suggest) that the mere fact that the plaintiff had made such a proposal would warrant the issuance of a warning. 

441.  I therefore do not think that this issue requires further discussion.

E10.5      Conflict of interest

442.  Lastly, the IMC submitted that the plaintiff’s procurement of Mr Chan’s employment also smacked of suspicion.  It may be recalled that it was pleaded that the plaintiff placed herself in a conflict of interest situation.

443.  In support of their contention that there was conflict of interest, the IMC’s counsel had pointed out the following matters:

“268.3 Chan was also the sole director and one of the shareholders of Kaiser Town Limited [B/1221, 1223], a company which provided transportation services to the School in relation to the School’s cross-border recruitment activities [B/936-939].

268.4 In fact, P herself admitted during cross-examination that she had recollection of ‘菁葒跨境校車服務公司(深港) Ching Hong School Bus Service Co. (Shenkong)’, i.e., the business name of Kaiser Town Limited.

268.5 Further, as seen from the invoices issued by Kaiser Town Limited to the School, the company also operated out of an address at ‘深圳市福田菩提路18號嘉福花園嘉豪國A座202 B室’, which appeared to be a residential address. The same address was used by another service provider for the School in respect of its cross-border recruitment services, i.e., ‘深港跨境學童家長會’ [B/939-940].

268.6 In fact, Chan registered the same residential address in the company records of Kaiser Town Limited [B/1223]. It was beyond doubt that Chan was behind both Kaiser Town Limited and 深港跨境學童家長會. It can also be inferred that P must have dealt with these service providers in conducting the cross-border recruitment activities on behalf of the School.

268.7 Further, the 1^st Contract [B/376] and 2^nd Contract [B/377] did not record a residential address of Chan. Instead, the only reported address was at ‘香港大嶼山梅窩碼頭道10號銀礦中心大廈五樓F室’, which appeared to be a commercial address. As seen from the Annual Returns of Kaiser Town Limited, this was in fact the registered address of the company [B/1219].

268.8 The above address was included despite that P admitted during cross-examination that as the principal of the School, she was interested in knowing where the teaching staff resided. Nonetheless, she claimed to have never ascertained whether the address recorded in the 1^st Contract and 2^nd Contract was Chan’s residential address.

268.9     As seen above, the residential address would have revealed that Chan was in fact connected with Kaiser Town Limited when the reader compares the employment contracts with the invoices. The inclusion of a commercial address instead of Chan’s residential address was at very least suspicious in the circumstances.”

444.  Despite the forensic points made by the IMC, I do not agree that there was enough evidence for the court to infer that the plaintiff knew Mr Chan beforehand.  Neither would I find that there was any conflict of interest as such. 

445.  I accept the plaintiff’s explanation that she was very eager to retain Mr Chan as a teaching staff of the School because it would be better to have more manpower.  The heavy workload of teachers in Hong Kong is notorious.  In my view, there is nothing suspicious about it. 

446.  There is nothing in this allegation and I reject it.

E10.7     Loss caused to the School

447.  The plaintiff’s counsel relied on paragraph 56 of Chu JA’s Judgment in the case of Law Ting Pong Secondary School v Chen Wai Wah [2021] 3 HKLRD 185 and argued that in general, a valid contract has legal effects and is enforceable immediately when it is made, irrespective of the time of performance and that therefore the School and the IMC could have asked EDB to pay for Mr Chan’s salary.  Hence, it was submitted that the School should not suffer any loss. 

448.  I can see the force of this argument. 

449.  Indeed, it was EDB’s policy that surplus teachers (超額教師) would be allowed to continue to be employed by the same school until the end of the academic year.  I would have thought the rationale of this policy is to minimise the impact of “cutting of classes” (縮班) on the employment of teachers, so that they would not suddenly lose their jobs after the start of the academic year.  Bearing this in mind, it seems to be more sensible if a teacher like Mr Chan in the present case would be regarded as being protected by the aforesaid policy even though he was only going to start performing his job duty under the Second Employment Contract on 25 September 2012.  However, apparently that was not the understanding even of the plaintiff herself at the material time. 

450.  In any event, I do not think I have to make a ruling on this matter, because the IMC’s counterclaim in this respect was premised only on the alleged failure on the part of the plaintiff to seek proper approval from the IMC before employing Mr Chan[72].  Since I have rejected this argument, the question of quantum does not arise.

E10.6     Conclusion

451.  For reasons of the aforesaid, I do not accept that the IMC was justified to issue Warning 10 to the plaintiff.

E11.   Warning 11 – Renovation of toilets

452.  Another warning letter was issued by the IMC to the plaintiff on 25 May 2013 for her financial mismanagement in respect of the renovation costs of toilets in the School, in that she had split up the renovation costs of various toilets to circumvent the procurement requirements imposed by EDB and the Foundation.

453.  The IMC’s case had been pleaded in paragraph 14(1)(d) of the Re-Re-Amended Defence and Counterclaim:

“In contravention of the EDB Circular No.15/2007 and the 31/01/2012 Letter, since 2010, under the arrangements of the Plaintiff and without obtaining the required number of quotations nor submitting any quotations for approval by the Defendant, the School had paid out various amounts out of the School’s funds for the renovation of the toilets and dormitories to a single contractor. The contracting value of the toilet renovation amounted to the sum HK$260,100.00 and the contracting value of dormitory renovation amounted to the sum of HK$26,160.00. In addition thereto, the costs of the materials used for the renovation were in the sum of HK$52,998.20.”

454.  The IMC alleged that although the total costs of the renovation works were in the sum of $286,260, the plaintiff did not go through the tendering process as required, and that she had deliberately split the bills for the works in order to circumvent the EDB’s procurement procedures. 

455.  It was further alleged that the quotations provided by a contractor known as 鴻達工程 were obtained by the plaintiff in 2013 after the works concerned had already been completed, in an attempt to answer the IMC’s demand for production of an adequate number of quotations.

456.  In reply, the plaintiff relied on the following lines of defence:

(1)     Since all the renovation works were started before the Foundation’s Procurement Guidelines took effect, the requirements therein were inapplicable to those works;

(2)     The renovation works in question in fact concerned various sites of the School including male and female toilets located on the ground, 1^st, 2^nd and 3^rd floors and the janitors’ dormitory and were carried out at different times throughout 2009 to 2012;

(3)     It was not financially feasible nor practicable for all the renovation works to be carried out at the same time.  Hence, the works were done separately.  No individual task of these renovation works was valued over $50,000 and hence no tendering process was required according to the EDB’s Procurement Guidelines;

(4)     Instead, the plaintiff had obtained 2 written quotations pursuant to the said guidelines, and all related quotations had been placed before the IMC for approval before the works were carried out;

(5)     All cheques payable towards the renovation works were signed and approved by the supervisor of the School;

(6)     The cost of the materials referred to by the IMC was the total cost of materials bought for the renovation works in question, and therefore such cost should not be looked at individually as if it was a separate transaction independent from the various renovation works.

457.  I have already discussed the applicability of the Foundation’s Procurement Guidelines in section E1.1.1 of this Judgement, under which I held that the IMC had not followed them at the material time, and that therefore only the EDB’s Procurement Guidelines were applicable. 

458.  As I pointed out, the fact that the IMC was following the EDB’s Procurement Guidelines at the material time was confirmed by Mr Lee who gave evidence at the trial, during which he accepted unequivocally that only two verbal quotations were required at the material time for purchase between $5,000 and $30,000.

459.  Further, I also accept the plaintiff’s evidence that all the toilet renovation works had been done before January 2012.  Mr Chiu, in his written statement dated 3 May 2014, also confirmed that all the renovation works had been completed by late 2011.  Hence, the Foundation’s Procurement Guidelines could not be applicable to the works.

460.  In the case where no tendering process was required, paragraphs 48 and 49 of the EDB’s Procurement Guidelines provide that:

“48. 學校人員應填妥「按報價購貨表格」，連同有關建議交給校長批准。負責的人員在提交建議前，應就供應商所提供的服務 / 貨物的價錢和質素與市場的供應情況作出適當的比較，如最終未有選擇報價最低者，則必須記下原因。學校應在訂購貨物後保留「按報價購貨表格」三個曆年，以供査核。

49.      一經校長批准，學校便可訂貨。”

(emphasis added)

461.  It can be seen that the EDB’s Procurement Guidelines did not impose a requirement that the principal had to obtain the IMC’s approval first before proceeding with the procurement of service.

462.  According to paragraph 14 of the plaintiff’s supplemental witness statement, all that she was required to do was to seek endorsement from the IMC afterwards:

“[…] 其實一直以來，根據教育局的指引，除了有關項目支出超過5 萬元需要招標及獲被告人議決通過，其他少於5 萬元的採購支出均可以由校長按教育局的指引進行報價後決定，並於事後在校董會會議上再追認便可 […]”

463.  While Mr Lee had stated during re-examination that an IMC’s resolution was required if the procurement was of a value of more than $30,000, I do not accept such evidence, as the IMC’s counsel have not drawn this court’s attention to any EDB guideline, IMC resolution or any other documentary evidence which referred to such a requirement.  It seems to me that he only mentioned such a figure arbitrarily without any basis.

464.  Hence, there are two questions which the court has to consider as far as this warning is concerned:

(1)     Did the plaintiff comply with the EDB’s Procurement Guidelines in obtaining the required number of quotations or going through the tendering procedure, as the case may be?

(2)     Did the plaintiff seek the endorsement of the IMC at any time?

E11.1     Compliance with the EDB’s Procurement Guidelines

465.  There were altogether 11 places in the School which had been renovated, namely:

(1)     Female toilet on G/F;

(2)     Male toilet on G/F;

(3)     Male staff toilet on G/F;

(4)     Female staff toilet on G/F;

(5)     Female toilet on 1/F;

(6)     Male toilet on 1/F;

(7)     Female toilet on 2/F;

(8)     Male toilet on 2/F;

(9)     Male toilet on 3/F;

(10)     Female toilet on 3/F;

(11)     Dormitory toilet and kitchen.

466.  At the outset, the following parts of the EDB’s Procurement Guidelines should be reiterated:

“20. 學校每次擬購買需費超過50,000元的項目時，一般應從教育局提供的《供應商名冊》 內揀選至少五名供應商，邀請他們個別提交標書。為公平起見，校方應採用輪流方式，邀請《供應商名冊》上的供應商投標。如採購項目可經由其他供應商提供，亦可一併邀請投標。”

“23. 學校應把同類的家具及設備項目集中收錄在一份投標附表內，然後才邀請供應商投標。學校不應把所需的項目分多次購買，從而規避第20和第44段所定的金額限制。”

“44. 如學校需採購物料或僱用服務以應付即時需要，而有關總值在5,000元以下，便毋須進行公開競投，但校內適當職級的人員須證明有關採購是必需的及價格公平合理。若採購的項目總值不超逾50,000元，學校應向至少兩名供應商索取報價，從中揀選符合投標規格兼出價最低者。如採購項目的價值在30,000元以下及介乎30,000元至50,000元，學校可分別安排口頭報價及書面報價。[…]

45. 學校不應把訂單拆细，藉以避免遵守批核標書的規定或報價 / 招標程序。學校應把同類的項目集中收錄在同一份報價或投標附表內，然後才邀請供應商投標。”

467.  In a gist, as a matter of principle, the renovation works should not be split into separate items so as to circumvent the procurement requirements.

468.  In this regard, the plaintiff explained in her witness statement that:

“112. 關於學校維修廁所工程 (toilet renovation)，亦並非單一工程。

113.     首先，由於學校財政經費有限，學校一向採取的方法是：取得足夠的財政撥款或捐助之後，依據款項之數額，再決定相應的工程是否可以展開以及展開到何種階段，而當時學校贊助費有限，很多急需解決的項目，都無法進行。[…]

114. 大約2008年12月左右，李智鋒校董等來校時，多次提及要改善廁所殘舊、漏水、臭味等問題。

115. 因為教育局沒有特定撥款用作改善廁所及校舍，而可能用作支付相關費用的項目(綜合傢具津貼)經年赤字。有見及此，只能移寛就緊，透支擴大營辦津貼及尋找校外機構的贊助，以「見步行步」的政策改善廁所與校舍環境，根據學校所得到的政府撥款與贊助，量入為出，分階段去開展工程。實際上，每做完一項工程，下一項工程能否有足夠的資金去進行都是未知之數。

116. 其次，由於廁所維修工程的性質及地理位置不同，工程展開的時間亦不相同，不可能同一時間關閉所有廁所統一施工。

117. 因此，每項工程本就為不同項目，分開尋求報價，而不是本人為了避免招標的程序而故意分開進行。

(a) 2008年12月左右，在得知將會取得希伯倫的贊助的情況下，暫時透支其他賬戶，開始整修學校的廁所。本人選取了情況最惡劣的地下女廁先行動工，即便如此亦只付了24,000 元， 尚欠1,500 元。

(b) 約2010年1月，得知同年9月左右有機會將校舍空置課室租借出去，將會得到贊助，遂進行地下男廁整修工程，2010年2月開始，2010年4月完工，亦要分兩次(2010年5月及2010年10月)才能付費。

(c) 於2010年5月，開始2 樓男廁工程，至2010年6 月完結， 分別於2010年7月及9月付清費用。

(d) 至2010年9月，真正落實希伯崙堂於星期日租借校舍禮堂及課室事宜，估計有款項支持繼續廁所工程，所以展開2樓女廁工程(2010年10 月至11 月)。雖然有贊助費，但因為每個月只得7 千多元，令工程費不得不分期結帳。本人本以為可以順利完成廁所工程，但在2011年9月，希伯崙堂突然通知停租校舍，令已展開的1樓的女廁工程臨時失去預算(2011年5月至7月)，最後分別於2011年7月及12月才付清費用。

(e) 至2011年約8、9月，得悉有機構欲租用課室放置樂器與表演物品，加上承建商同情本校環境，願意延遲收費，遂於2011年9月至10月開始1樓男廁工程，也要分兩次付款(10月及11 月) 。

(f) 在這樣的資源緊張下，至今仍欠承辦商的工程費約133,990元。包括3樓男女廁(2012年3月竣工)全部費用、地下女廁與地下男教員廁所餘款及其他各大小工程餘款等等。

118.     綜合上所述，以上工程確為不同工程，理應分開計算，而每一單工程都不超過港幣5萬元，因此無需招標，只需要兩份以上的口頭 (針對3萬港幣以下的工程) 或書面報價(針對3萬至5萬港幣的工程) 即可。”

469.  If the plaintiff was truthful, then it might arguably be said that the renovation works of the individual toilets should not be treated as a single project, and therefore the individual cost of the works should be looked at separately when considering whether the EDB’s Procurement Guidelines had been complied with.

470.  On the other hand, the IMC advocated that the works should be considered together but not individually.  The IMC’s counsel had drawn this court’s attention to a one-page written quotation of 鴻達工程, under which 10 items of renovation works were included (in other words, all toilets in question were included), and submitted that this shows that even the plaintiff treated the works as a single project for she had obtained a quotation covering all toilets at the same time.  

471.  In my view, the IMC’s argument might well have over-simplified the matter.  One unusual feature of the said one-page quotation by 鴻達工程 is that the costs of the individual items were not added together.  In the space for “Total”, “XXXXXXXX” rather than the total sum of the different items of quotation was inserted.  I accept that it was more likely than not that 鴻達工程 intended to give 10 separate quotations rather than a single one and it was only out of convenience that all those quotations were put on a single sheet of paper.

472.  To decide on the crucial question as to whether the renovation works should be considered together or not, I think it is necessary to consider the timing of the various renovation works.  To test the plaintiff’s case, it would also be helpful to consider the source of funds which the plaintiff had allegedly relied on when she decided to proceed with the renovation works of a particular toilet. 

473.  Unfortunately, it seems that not all the relevant quotations and invoices in relation to the renovation works had been produced in the action herein.  Therefore, this court is unable to say confidently whether the IMC was right when it was submitted that all the renovation works of the different toilets should be treated under one single project. 

474.  Having said that, for the reasons which I will explain below, I am still able to find, by analysing the plaintiff’s own evidence, that she had not complied with the EDB’s Procurement Guidelines, at least in respect of some of the toilets.

E11.1.1     Male and Female Toilets on G/F

475.  According to the plaintiff’s witness statement[73], in around December 2008[74], she knew that she would receive sponsorship fee from 希伯倫堂.  She therefore decided to start renovating the Female Toilet on G/F.

476.  According to the plaintiff’s written explanation dated 7 March 2013 and paragraph 119 of her witness statement, the renovation works of the Female Toilet on G/F were started in January 2010.

477.  On the other hand, the plaintiff stated in paragraph 117(b) of her witness statement that, since she knew in around January 2010 that she would be able to rent out some vacant classrooms in around September 2010, she decided to start renovating the Male Toilet on G/F.

478.  It is evident that永生工程, the contractor which had been engaged to do all the renovation works in question, had issued the following invoices[75] in relation to the works undertaken at the Male Toilet on G/F:

(1)     An invoice[76] dated 3 December 2009[77], charging for workmanship costs;

(2)     An invoice[78] dated 13 December 2009[79], charging for workmanship costs;

(3)     An invoice dated 23 December 2009[80], charging for the cost of floor tiles and the installation cost thereof;

(4)     An invoice dated 28 February 2010[81], charging for workmanship costs.

479.  On the basis of the above invoices, it can be inferred that the works undertaken at the Male Toilet on G/F were started no later than December 2009.

480.  Taking into account the aforesaid, I do not accept the plaintiff’s evidence that she decided in January 2010 to start renovating the Male Toilet on G/F as alleged.  She must have made such a decision earlier than that, most likely to be in around November to December 2009. 

481.  In my view, she had given evidence that she made a decision in January 2010 only for the purpose of supporting her case that the works at the Male Toilet on G/F and the Female Toilet on G/F should be looked at separately.

482.  I summarise this court’s findings on these two toilets as follows:

	G/F Male Toilet	G/F Female Toilet
Time of decision to start renovation	Nov – Dec 2009	Dec 2008/2009
Source of fund	希伯倫堂	希伯倫堂
Period of works	From no later than Dec 2009	From Jan 2010
Invoices	3, 13, 23 Dec 2009 & 28 Feb 2010	-

483.  In fact, the School’s financial position did not change at all between December 2008 (or December 2009 if the plaintiff’s reference to “December 2008” in her witness statement was a typing mistake) and January 2010.  All the School had at the material time was a promise by 希伯倫堂 that they would pay sponsorship fee in due course, which, in the end, only materialized in September 2010.  If the plaintiff felt confident enough to start renovating the Female Toilet on the G/F in January 2010, I find that the same confidence had led to her decision to commence the renovation works for the Male Toilet on G/F as well.  In other words, it was more likely than not that she had made the decision to proceed with the renovation works of the said two toilets at the same time, even though the actual works might have been done one after another.

484.  That being the case, adopting the principle that “items of the same category should be grouped in the same quotation”[82], the plaintiff should have treated the works in those two toilets as one single project.

485.  The quotations given by 永生工程 on those two toilets were $25,500 each.  The total sum was therefore $51,000.  According to the EDB’s Procurement Guidelines, the plaintiff should have followed the tendering process which she had failed to do so.  She was therefore in breach of the said guidelines.

E11.1.2     Toilets on 1/F

486.  For the sake of clarity, I first of all set out the plaintiff’s evidence in relation to these toilets as follows:

	1/F Male Toilet[83]	1/F Female Toilet[84]
Time of decision to start renovation	Aug/Sep 2011	Not mentioned
Source of fund	HKAA	希伯崙[85]堂
Period of works	Start in Sep – Oct 2011	May – Jul 2010
Invoices	25 Feb & 1, 10, 15 & 25 Mar 2011[86]	5, 10, 13 & 25 Jan 2011[87]

487.  As far as the 1/F Male Toilet is concerned:

(1)     Given the fact that the invoices were issued in February and March 2011, I do not accept that the works were started in September to October 2011 as alleged.  The works must have been commenced in around February 2011;

(2)     Since the works had started in February 2011, the decision to proceed with the renovation works could not have been made in around August/September 2011 as alleged. 

488.  In my view, the plaintiff’s evidence that the 1/F Male Toilet works were funded by the HKAA sponsorship fee was given in an attempt to distance such works from those done at the 1/F Female Toilet.  However, I do not accept that evidence, as the works had commenced well before HKAA approached the plaintiff in August 2011 for renting the 6/F Classrooms.

489.  In relation to the 1/F Female Toilet, since the invoices were issued in January 2011, I do not accept that the works were done in May to July 2010 as alleged.  It was more likely than not that the works were undertaken by 永生工程 in January 2011 instead.  I have not lost sight of the possibility that the contractor, having finished the works in July 2010, had issued the invoices late.  However, if that was the case, there was no reason why it did not issue one single invoice covering all works that had been done at the 1/F Female Toilet at one go, but issued 4 different invoices within a period of 3 weeks.  In my view, the contractor had issued invoices once a part of the works had been done, and this therefore supports the finding that the works were in progress in the month of January 2011.

490.  Therefore, the works at the toilets on 1/F were done very close to each other in time.  Both works were funded by the sponsorship fees paid by 希伯崙堂.  I can see no reason why they should be looked at separately as two different projects.

491.  The contract prices for the works at the Male Toilet and the Female Toilet on 1/F were $23,000 and $30,500 respectively.  The total amount thereof ($53,500) exceeded $50,000, and therefore the plaintiff should have gone through the tendering process for those works, which she did not.  She had therefore breached the EDB’s Procurement Guidelines.

492.  Furthermore, since the contract price for the 1/F Female Toilet exceeded $30,000, two written quotations should have been obtained pursuant to the EDB’s Procurement Guidelines.

493.  The plaintiff’s evidence was that apart from 永生工程which eventually was given the job, she had obtained a quotation from 鴻達工程 which had given a written quotation dated 10 May 2009.  The IMC argued that since the jobs were eventually undertaken in 2011, the plaintiff was not entitled to rely on a quotation obtained 2 years ago.

494.  The plaintiff answered by saying that she in fact had asked 鴻達工程 to give her another quotation in 2011 for the 1/F Female Toilet, however, 鴻達工程replied that they would adopt the quotation which was given to the plaintiff in May 2009.

495.  If the plaintiff did in fact ask for another quotation from 鴻達工程as alleged, in my view, that demonstrates that even she accepted that there was a need to ask for an updated quotation given the lapse of time.  That must be the right thing to do, because it would be reckless if the plaintiff assumed that 鴻達工程was still willing to do the works for the School at the price which they quoted more than a year ago.  

496.  However, the problem is that if 鴻達工程answered verbally that they were to adopt the quotation which was issued in 2009, in my view, this “updated quotation” given in 2011 could only be treated as a verbal quotation, because the document issued in 2009 could only be treated as a written quotation obtained in 2009. 

497.  Hence, since the plaintiff had only obtained one written quotation for the works at 1/F Female Toilet, she was in breach of the EDB’s Procurement Guidelines.

E11.1.3     Staff Toilets on G/F

498.  The contract prices for the Male Staff Toilet and the Female Staff Toilet on G/F were $30,400 and $30,700 respectively. 

499.  The prices being more than $30,000, two written quotations should have been obtained for each of those works.  However, for reasons which I have explained above in respect of the 1/F Female Toilet, the plaintiff had failed to comply with the said requirement, and therefore she was in breach of the EDB’s Procurement Guidelines. 

E11.2      Endorsement of the IMC

500.  According to the plaintiff’s own evidence in her supplemental witness statement which I have referred to above, she had to obtain endorsement from the IMC in an IMC meeting retrospectively for the renovation works.

501.  However, there is no evidence that she had ever done so.

502.  I do not agree that the fact that certain cheques had been signed by various managers would be equivalent to getting such endorsement from the IMC.  Indeed, if that was enough, the plaintiff would not have said that she was required to seek such endorsement which would have been redundant.

E11.3     Conclusion

503.  For the above reasons, I hold that the IMC was justified in issuing Warning 11 to the plaintiff.

E12.   Warning 12 – Community Care Fund Scheme

504.  A serious warning letter dated 25 May 2013 was issued to the plaintiff for her serious financial mismanagement in failing to comply with the procurement requirements imposed by EDB and the Foundation in relation to the Community Care Fund Scheme.

505.  The complaint was pleaded in paragraph 14(1)(e) of the Re-Re-Amended Defence and Counterclaim as follows:

“14(1) Failing to carry out tender exercise and obtain quotations as required:

(e) The Community Care Fund operated by the Government granted the School a budget of HK$400,000.00 for the ‘After-School Care Pilot Scheme’ (the ‘Scheme’) of the academic year 2012/13. According to the guidelines issued by the said Community Care Fund (the ‘CCF Guidelines’), the following procedure shall be observed for procurement of materials and services of the Scheme:

(i) For transactions of value over HK$5,000.00 and less than HK$30,000.00, at least 2 oral quotations shall be obtained;

(ii) For transactions of value between HK$30,000.00 to HK$50,000.00, at least 2 written quotations shall be obtained; and

(i) For transactions of value over HK$50,000.00, at least 5 suppliers shall be invited for tender.

(f) In breach of the CCF Guidelines and/or the 31/01/2012 Letter, the Plaintiff arranged for 7 interest classes under the Scheme with contracting prices ranging from HK$35,000.00 to HK$45,000.00 each without obtaining the required number of quotations from the service providers of the interest classes and school buses, nor submitting any quotations for the Defendant’s approval.

(g)      The Plaintiff attempted to bypass the requirement of getting prior approval from the Defendant for administrative expenses by employing the strategy of breaking up large transactions into smaller ones under the threshold of HK$5,000.00, in order to avoid the quotation procedure of obtaining prior approval for renovation works in the School premises and for the Scheme supported by the Community Care Fund.”

506.  The plaintiff received a letter from the EDB dated 7 August 2012 which notified the School that its application to participate in the Community Care Fund Scheme was accepted. 

507.  Rules governing the usage of the approved fund for the Community Care Fund Scheme and certain “Points to notes” were attached to the said EDB letter as an appendix (“the Community Care Fund Scheme Rules”). Under paragraph 7 thereof (財務安排), it was provided that:

“學校/機構在推行計劃時若需要聘用員工或僱用外間服務，必須遵守有關的條例和規定。[…]

就資助、按位津貼及直接資助計劃學校，可參考以下指引：

(a) 資助學校須遵守2007年12月14日發出的教育局通告第15/2007號有關資助學校招標及採購程序 […]”

508.  Further, under paragraph 10 thereof (採購物品及服務), it was further provided that:

“a. 學校/機構在採購計劃所需的物品或服務時，應保持謹慎，並必須遵循下列採購程序：

i. 如每宗採購的總值是5,000元或以下，學校/機構如有適當的人員，證明有關採購是必須及價格公平合理，無須要求供應商報價。

ii. 如每宗採購的總值在5,000 元以上，但在30,000 元以下，須索取最少兩個供應商口頭報價。

iii. 如每宗採購的總值在30,000元至50,000元，須索取最少兩個供應商書面報價。

iv. 如每宗採購的總值在50,000元以上，須邀請最少五名供應商投標。

b. 學校/機構須選用報價最低的供應商，否則須事先徵得教育局的同意並提出充分理據。

c.   所有報價和招標文件須予保留，以供教育局査核。”

(“the CCF Procurement Guidelines”)

509.  It can be seen that the above requirement on the number of quotations to be obtained and when the tendering process should be followed are basically in line with the EDB’s Procurement Guidelines.  What is stricter under the CCF Procurement Guidelines is that the School was obliged to choose the contractor who had quoted the lowest price, and it might only depart from this requirement with EDB’s consent.   This demonstrates the Community Care Fund Scheme’s emphasis on securing the services at as low a price as possible.  It is all the more important that the required number of quotations was obtained in these circumstances.

510.  The plaintiff’s defence, as pleaded in paragraph 9(5) of the Re-Re-Amended Reply and Defence to Counterclaim was that:

“(a) The Plaintiff was informed by the Education Bureau in August 2012 that the Scheme had to start on 17^th September 2012. Since the quotations were not ready in late August, the Supervisor then instructed the Plaintiff to proceed with the Scheme pending the receipt of all quotations. Hence, upon the instruction of the Supervisor and Ms [Iu], the Secretary of the Foundation, the Plaintiff engaged various different service providers to teach the 7 interest classes under the Scheme on a monthly temporary basis pending quotations to be approved by the Defendant and the fee payable to each service provider per month was less than HK$5,000.00 On or before December 2012, when 3 written quotations for each programme were ready to be submitted to the Defendant, the Supervisor requested the Plaintiff to prepare two more written quotations. As a result, Plaintiff had to look for 2 more quotations causing further delay in submitting the quotations to the Defendant.

(b) In the first month, all cheques payable to the service providers were signed and approved by the Supervisor.

(c) In the premises, the delay in submitting the relevant quotations and contracts for the Scheme to the Defendant for approval was due to the facts that: -

(i) there was a total of 7 different interest classes involved meaning which the Plaintiff was required to provide at least 14 written quotations from the service providers as required by the CCF Guidelines. So, the Plaintiff had to search for different service providers for different interest classes for the Scheme and therefore it took longer for the relevant staff(s) to obtain the required number of quotations than what the Plaintiff initially expected;

(ii) during the period from September 2012 to December 2012, the Plaintiff and her colleagues in the School were also extremely busy dealing with the affairs of the School because of the start of new school year and in relation to the admissions of new students; and

(iii) repeated requests and demands made by the Supervisor and the Secretary from requiring for changes as to the number of quotations and the contents of contracts;

(d) Upon compliance with all the requests and/or demands from the Supervisor and/or the Secretary of the Foundation, the Plaintiff managed to prepare the relevant contracts only in or around May 2013 when the Scheme would soon be expired in June 2013.

(e) In the premises, the Plaintiff had not attempted to bypass the requirement of getting prior approval from the Defendant or to avoid the quotation procedure as alleged or at all.  At all material times, the Plaintiff and the relevant staff(s) of the School had worked diligently to comply with all relevant guidelines.”

511.  In the plaintiff’s witness statement, she stated that:

“128. 2012年8月左右，我收到教育局通知，告知本校獲批 ‘關愛基金課後託管試驗計劃’ (下稱 ‘關愛基金’) 之撥款， 而計劃須在2012年9月17日開始。

129. 相關教師的薪水支出預計不超過5 萬港幣，根據教育局採購指引，只需要兩個書面報價，不需要招標。原本我校所呈交給關愛基金的計劃書中預期相關撥款為港幣50萬，但教育局最終只批准40萬港幣撥款。由於預算有變，本人需依照最終批出的撥款調整原本的計劃，再進行報價程序。

130. 另外，原本負貴本計劃的游維源主任於2012年8月中旬辭職，8月末才請到新的主任接手跟進，因此時間非常緊迫。直至8月底，學校仍未能取得相關的報價，因此，本人曾與朱校監討論相關的事宜，並獲得朱校監口頭同意先聘請公司提供臨時教師上課(‘臨時教師’)，同時準備報價。

131. 本人跟從朱校監及姚小姐的指示，先僱用臨時服務機構提供導師上課。聘請的臨時導師共涉及七人，但他們每人都負責教不同的科目 (即七個不同的興趣班)，開始執教的日期及執教的任期長短都不同。當然，聘請臨時機構的原意是待學校聘請了正式機構提供的導師後去取代這些臨時導師。當時，本人預計學校在短期內便能聘請到正式機構提供導師。而這些臨時導師的月薪全部不超過5,000港幣，因此無需報價。

132. 事實上， 因為有關的7 個興趣班都涉及不同的科目， 根據教育局的指引，荃小需要尋找14個報價。此前，荃小並沒有尋找相關服務提供者的經驗。另外，當時正值是新學年開始的時間，學校每位工作人員都較為忙碌。這些因素都導致完成整個報價程序所需的時間比本人原先預計的較長。

133. 從2012年9月開始，朱校監一直有參與報價過程，校監及姚小姐經常在本人準備妥當報價單之後，又臨時修改增添要求，造成延誤。例如2012年12月左右，本人取得兩份報價後，姚小姐臨時代校監口頭指示要求增加到三份，而取得三份報價後，姚小組又臨時指示要求五份報價。整個過程中姚小姐和/或朱校監不斷臨時要求更改格式、修改遣詞造句的細枝末節，如：2013年1月8日臨時通過電郵指示必須有簡單合約及ID COPY;2013年1月9日又通過電郵新增吩咐需提供履歷及相關工作證明; 2013年1月29日又通過電郵增添新的合約甚至無故提出重新報價; 2013年3月13日又提出要求審閱合約草稿; 之後又分別於3月21日、25日及4月10日臨時通過電話提出要求我做出各種格式上的修改等等。”[88]

512.  In a table which was provided by the plaintiff on around 26 April 2013[89], it was stated that the monthly fees payable to each teacher were around $3,500 to $4,500.  That means the total sum of money payable to them (if they were engaged for the whole academic year of a total of 10 months) would be ranging between $35,000 to $45,000.  Assuming that those teachers were charging an average price in the market (in other words, their prices were not particularly high or particularly low), two written quotations would be required for each of the courses taught by those teachers.

513.  The plaintiff did not dispute that she as a matter of fact did not obtain any required number of quotations from the potential service providers.  She had on the other hand given a number of reasons for her failure to do so.  The reasons include:

(1)     There was not enough time to obtain the required number of quotations;

(2)     The approval of a smaller budget by the Community Care Fund Scheme had rendered it necessary to adjust the original plan;

(3)     The teacher-in-charge had resigned in mid-August 2012, and the new staff-in-charge was only employed in late August 2012;

(4)     Because of her inability to obtain quotations in time, she obtained Mr Chu’s verbal approval to engage temporary teachers to teach the interest courses first;

(5)     Because 7 interest courses were involved, a total of 14 quotations had to be obtained.  Since everyone in the School was busy, and the School did not have experience in the matters, it had taken a longer time to get the necessary quotations than expected;

(6)     Mr Chu and Ms Iu had changed their requirements for quotations from time to time.

514.  In my view, these excuses simply cannot explain away the plaintiff’s fault in the whole matter.  She could not deny the fact that the CCF Procurement Guidelines had not been complied with.

515.  In any event, the plaintiff’s aforesaid excuses must be rejected anyway.

516.  Firstly, I do not understand why the plaintiff stated that the School had to start the interest courses no later than 17 September 2012.  It can be seen in paragraph 13(a)(i) of the Community Care Fund Scheme Rules that the School was only obliged to start the activities thereunder within 2 months (counting from the date of approval (i.e. 7 August 2012), hence, the deadline should be 7 October 2012). Even in the EDB letter dated 7 August 2012 which had imposed a tighter deadline, the School was only required to start running the scheme within September 2012. 

517.  Secondly, it is noted that EDB’s letter dated 7 August 2012 had the following to say at the beginning:

“多謝學校/機構於月前向教育局提交參與「課餘託管試驗計劃」(下稱「試驗計劃」) 的「建議申請書」。關愛基金教育小組委員會下設的評審小組已完成審批所有的申請書。經審閱學校/機構的申請書內容及有關的補充資料，並考慮學校/機構如何甄選參與學生、推行計劃的模式、預期達到的成效、評估方法和指標、成本效益等因素後，評審小組決定接納學校/機構的申請。”

518.  Paragraph 13(c) and (d) of the Community Care Fund Scheme Rules further provided that:

“(c) 如部分或所有撥款的用途與「建議申請書」的內容或本準則的條款不符，教育局有權向學校/機機索回有關款項。

(d) 學校/機構如欲對計劃作出以下改變，須先徵得教育局批准：

(i) 修改目的及/或內容;

[…]”

519.  In other words, it is apparent that the School had submitted a proposal for the consideration of the Community Care Fund Scheme.  The plaintiff therefore cannot pretend as if she had all of a sudden been required to approach a large number of service providers for quotations. She should have known about the School’s proposal beforehand.  She only had herself to blame if she did not ensure that a list of service providers was drawn up in advance so that she could start approaching them for quotations right away upon the approval granted by the Community Care Fund Scheme.  It should also be noted that the CCF Procurement Guidelines were basically as same as the EDB’s Procurement Guidelines.  Hence, she was not caught by surprise.

520.  Thirdly, the plaintiff should have expected that if the School’s proposal was accepted by the Community Care Fund Scheme, the procurement procedures would have to be complied with at the beginning of the academic year.  Therefore, she should not blame the heavy workload at the material time.  She should have expected that.

521.  Fourthly, I do not accept the plaintiff’s evidence that Mr Chu had given his approval to engage temporary teachers.  In any event, even if Mr Chu did give such consent, that could not save the plaintiff’s case because:

(1)     It was still the plaintiff who did not obtain the required number of quotations in the first place;

(2)     Even in the plaintiff’s own case, the engagement of temporary teachers was only meant to be an interim measure, with the understanding that she would obtain the required number of quotations as soon as possible.  However, she did not comply the requirement before December 2012.

522.  Fifthly, the plaintiff’s attempt to shift the blame to Mr Chu and Ms Iu is totally misconceived.  Although she tried to give an impression (by virtue of paragraph 133 of her witness statement) that Mr Chu and Ms Iu had changed their requirements on quotations from time to time since September 2012, the first example which she gave was an incident which happened in December 2012.  By then it was already near the end of the first term of the 2012/2013 academic year.  No matter what they did, that would not change the fact that the plaintiff had failed to obtain the quotations on a timely basis.  For the same reason, I hold the view that what the plaintiff did in 2013 is irrelevant.

523.  Furthermore, it would be artificial to the extreme for the plaintiff to argue that there was no need to obtain any quotation because the monthly fees payable to each tutor was less than $5,000. The fact is, there is no evidence which shows that the plaintiff had done anything during the 1^st term for the purpose of getting the requisite number of quotations.

524.  I therefore hold that the IMC was justified in issuing Warning 12 to the plaintiff.

E13.   Warning 13 – Principal’s Room

525.  On 27 July 2013, a warning letter was issued for the plaintiff’s maladministration in improperly carrying out structural alterations of the Principal’s Room in the School.

526.  It is undisputed that modification works had indeed been done to the Principal’s Room.  The works involved:

(1)     Creating a Conference Room next to the Principal’s Room.  The newly-created Conference Room occupied part of the corridor which was outside the Principal’s Room;

(2)     Enclosing the newly-created Conference Room by wooden display cupboards;

(3)     Opening a hole at the wall which originally separated the Principal’s Room and the corridor and a door was installed thereat so as to connect the new Conference Room with the Principal’s Room;

(4)     Installing air-conditioning and lightings in the newly-created Conference Room;

(5)     Installing false ceilings in the newly-created Conference Room.

527.  When Mr Li SC put to the plaintiff that the newly-created Conference Room could only be entered via the Principal’s Room, the plaintiff disagreed and alleged that the cupboards could be removed without force.  This is apparently a misleading answer.  From the photographs placed before the court, it is clear that it was not intended that someone would remove the cupboards for the purpose of entering the newly-created Conference Room, because the cupboards, which were placed on a platform, were filled with trophies (on the exterior side facing the corridor) and box files (on the interior side).

528.  The IMC’s case was pleaded as follows:

“Reconstructing the principal’s room without prior knowledge, consent or authorization of the Education Bureau and the Defendant:

(a) Section 10 of the Education Regulations stipulates that except with the consent in writing of the Permanent Secretary for Education, there shall not be made: -

(i) any structural alterations to the school premises;

(ii) any alteration to the latrine accommodation or the sanitary arrangements of any school or in the ventilation or lighting of a classroom; or

(iii) any subdivision of a classroom.

(b) Per section 16.3 of the [Code of Aid for Aided Schools], changes to room use in the school may be made only when there had been no structural alterations.

(c) Clause 8.6.1 of the School Administrative Guide issued by the Education Bureau (the ‘SAG’) stipulates as follows:

(i)     Any improvement and extension to the school premises, including structural alteration and conversion, is subject to the approval of Permanent Secretary of Education. Schools should forward to the Education Bureau their proposals for change together with sketch plans drawn to scale and state the source of funds (government funds or school funds) for the proposed works.

(ii)      Schools should inform the Education Bureau upon completion of the works (including confirmation of compliance of requirements set by relevant Government departments, if any).

(d)      In breach of section 20 of the Education Ordinance and/or section 10 ofthe Education Regulations, the [Code of Aid for Aided Schools] and the SAG, the Plaintiff,without prior authorization from the Permanent Secretary of Education orthe Defendant, reconstructed the Principal’s room, which involveddemolition of the wall of the Principal’s room and constructing aconference room adjacent to the Principal’s room, installation of lightingand air-conditioning system in the conference room”[90]

529.  The plaintiff’s defence to the above allegations was pleaded in paragraph 9(19) of the Re-Re-Amended Reply and Defence to Counterclaim as follows:

“Paragraph 14(13) is denied. It is averred that the works involved were actually creating a partition next to the Principal’s room so that there was a new room to store documents because the School had insufficient space for the storage of documents. The Plaintiff had applied for prior approval to the EDB and the Housing Authority for the works. EDB acknowledged and took notice of the matter while a consultancy company acting on behalf of the Housing Authority replied that it had no objection to the works.”

530.  As I see it, the issues under this warning are:

(1)     Was the plaintiff required to obtain approval from the IMC?  If so, was any such approval granted? 

(2)     If the plaintiff had to but did not seek approval from the IMC, did Mr Chu grant her any approval instead?

(3)     Was the School required to obtain approval from EDB?  If so, was any such approval granted?

E13.1     IMC’s approval

531.  Insofar as it is alleged that the plaintiff was required to obtain the IMC’s approval before the modification works to the Principal’s Room were done by reason of the stipulation under the Foundation’s Procurement Guidelines, I reject such a submission.  As can be seen in my discussions under other warnings above, it is my finding that the IMC had not, at the material time, followed the Foundation’s Procurement Guidelines.  There is therefore no basis for the IMC to insist that the plaintiff should have obtained approval from the IMC pursuant to such guidelines.

532.  Having said that, I am of the view that it is clear that the plaintiff should have sought the IMC’s approval before the modification works were done because:

(1)     The works were by no means a small scale modification in that another room was created, and part of the corridor was occupied by such a newly created room;

(2)     The works would necessarily involve the spending of modification costs which were not of a regular nature, and therefore the IMC’s approval should be obtained before such expenses were incurred.

533.  It is undisputed that the plaintiff had not sought any IMC’s approval as such.

534.  In paragraph 43 of the plaintiff’s supplemental witness statement, she alleged that she was only obliged to seek endorsement from the IMC after the modification works had been completed.  Even if she was right:

(1)     It was not pleaded in her Re-Re-Amended Reply and Defence to Counterclaim that she had ever reported to and sought endorsement from the IMC;

(2)     According to the plaintiff’s own evidence at paragraph 140 of her witness statement, the modification works were commenced in May 2012 and took around a week to complete.  The first IMC meeting after such works was held on 20 August 2012.  However, it was not recorded in the minutes that the plaintiff had reported on the said modification works at all.

E13.2     Mr Chu’s approval

535.  The plaintiff alleged in her witness statement that she had informed Mr Chu about the modification works before such works began and Mr Chu had responded positively to what she said.  In her own words:

“開展工程前， 本人已經向房屋署及教育局通報上述事項及圖則。教育局2012年5月11日的回覆是‘已獲悉’及‘知悉是項｀新增會議室＇並不涉及任何結構性改動’，沒有提出反對，而房屋署則明確回應｀無反對(no objection)’。因此本人理解為教育局及房屋署都同意， 繼而才於5月展開工程， 一星期左右完工。動工之前， 我和校監說， 希望展開該工程， 能有多些空間擺放陳列展品，以及可以用來開會，校監當時回應說：「好呀！」，表示同意有關工程。”[91]

536.  I do not accept that the plaintiff had asked Mr Chu for approval as alleged, because when she was confronted in the IMC meeting held on 25 May 2013 by Mr Chu that the modification works had been carried out without approval, all that the plaintiff explained was that it had been the IMC’s practice to show its approval by signing cheques[92].  She did not mention Mr Chu’s approval at all.  Neither did she mention about having sought approval from Mr Chu during the IMC meeting held on 20 June 2013[93] nor in her written explanations dated 8 June 2013 and 20 June 2013 respectively.

537.  Furthermore, it does not make sense for the plaintiff to say that the IMC or Mr Chu had been giving their approval by signing the relevant cheques, because by then the expenses had already been incurred.  

E13.3     EDB’s approval

538.  It may be recalled that the IMC had pleaded 4 bases upon which it was said that EDB’s approval must be sought before the modification works were done:

(1)     Regulation 10 of the Education Regulations;

(2)     Section 16.3 of the Code of Aid for Aided Schools;

(3)     Clause 8.6.1 of the School Administrative Guide; and

(4)     Section 20 of the Education Ordinance.

539.  I will first of all set out the above provisions in full:

Regulation 10, Education Regulations

“Except with the consent in writing of the Permanent Secretary there shall not be made—

(a) any structural alterations to the school premises;

(b) any alteration to the latrine accommodation or the sanitary arrangements of any school or in the ventilation or lighting of a classroom;

(c)      any subdivision of a classroom.”

Section 16.3, Code of Aid for Aided Schools[94]

“The Incorporated Management Committee may make changes to room use without structural alterations. However, such changes of room use must not affect the effectiveness of learning and teaching, violate any legislation, nor incur any change in subsidy or provision by the Government. The Incorporated Management Committee should refer to the School Administration Guide for details when considering a change of room use to meet its operational needs.”

Clause 8.6.1 of the School Administrative Guide[95]

“8.6.1 校舍改善及擴建工程

1. 學校對校舍作出任何改善及擴建工程，包括涉及結構性的改建及改建工程，必須事先獲得教育局常任秘書長批准。學校應把改動校舍的建議書，連同合比例的草略圖遞交教育局。建議書須註明進行該工程所需經費的來源 (政府經費或學校經費)。

2. 當建議的工程在建築物條例下並非豁免工程，例如涉及校舍結構或影響逃生途徑的安排時，校董會應先取得房屋署 (屋邨學校適用)或屋宇署 (非屋邨學校適用)的批准。如有疑問，學校應向獲授權人士尋求專業意見。

3. 校董會應把竣工後的修訂圖則/記錄送交房屋署 (屋邨學校適用) 或教育局校舍保養管理組 (非屋邨學校適用)及學校所屬區域教育服務處備案。

4.      工程完竣後，學校應通知教育局 (包括確認已符合有關政府部門的規定 [如有])。教育局會向學校發出經修訂的「容額證明書」(如適用) 及/或為增設的校舍註冊，以符合 {教育條例}第19(1)條的規定，即任何學校除在其註冊證明書或臨時註冊證明書內所指明的房產營辦外，不得在其他房產內營辦。”

Section 20, Education Ordinance

“(1) The management authority of a school may apply in writing to the Permanent Secretary to amend the certificate of registration or provisional registration by—

(a) specifying in the certificate any additional or alternative premises; or

(b) deleting from the certificate reference to any premises or to any part of any premises.

[…]”

540.  I am of the view that Section 16.3 of the Code of Aid for Aided Schools is inapplicable because this section concerns “change to room use”.  In the present case, there is no change to any room use but a new room had been created.

541.  Section 20 of the Education Ordinance is not applicable herein either, because, in my view, it concerns:

(1)     Using an additional structure as the school premises;

(2)     Using another structure altogether as the school premises; and/or

(3)     Stop using the existing premises or any part of the existing premises as the school premises.

542.  In the present case, the new Conference Room was situated within the school premises, therefore, none of the above was applicable.

543.  I also take the view that regulation 10(b) and (c) of the Education Regulations are inapplicable since we are not concerned with any classroom herein.

544.  Hence, only the following provisions are left:

(1)     Regulation 10(a) of the Education Regulations; and

(2)     Clause 8.6.1 of the School Administrative Guide.  

545.  Whether regulation 10(a) of the Education Regulations is applicable herein depends on whether the modification works involved any structural alterations.

546.  The IMC argued that the modification works involved structural alterations.

547.  Firstly, the IMC relied on EDB’s letter to Mr Chu dated 28 June 2013, in which EDB took issue with the School’s failure to obtain the Permanent Secretary’s written approval for structural alterations, including the installation of air conditioning and lighting system in the new Conference Room.  This letter reads:

“[…] 本局人員於本年六月七日訪校，發現貴校的 […] 校長室旁亦新增了一間會議室，並有空調及照明系統安裝在內，而這些結構上的改動並未得到教育局常任秘書長的書面批准 […]”

548.  Secondly, the IMC relied on the fact that the Permanent Secretary had reiterated the following view in his letter to Mr Chu dated 7 August 2013 which stated, among other things, that:

“貴校曾於二零一二年三月二十一日致函本局申請於學校一樓空位新增一間會議室(附件二)，並再於二零一二年五月三日致函本局，表示決定以陳列櫃代替磚牆間造新房(附件三)，因此本局於二零一二年五月十一日回覆，表示知悉貴校在「新增會議室」並不涉及任何結構性改動 (附件四)。然而，本局其後於本年六月七日訪校時發現，該「新增會議室」為一所與校長室打通的儲物室，並有空調及照明系統安裝在內，而沒有獲得教育局常任秘書長書面批准，這與《教育規例》第10條相抵觸。請貴法團校董會就此改建，儘快補交有關資料，以便本局作出跟進。”

549.  On the other hand, the plaintiff submitted that the works did not involve structural alterations.

550.  Firstly, the plaintiff relied on a letter dated 5 March 2012 sent by Good Excel Property Consultants Limited (“Good Excel”) on behalf of the Housing Authority, in which Good Excel indicated that they had no objection to the School’s proposed works.

551.  Secondly, the plaintiff relied on EDB’s letter dated 11 May 2012 in which EDB allegedly confirmed that it had been informed of the matters mentioned in the plaintiff’s letter dated 21 March 2012, that it was aware of the new conference room and that no structural alterations were involved.

552.  I have some doubts on the effect of Good Excel’s letter dated 5 March 2012.  While Good Excel, as Housing Authority’s consultant, indicated in the said letter that they had “no objection” to the proposed works, that does not mean that there were no structural alterations involved in the works.  Indeed, the plaintiff was reminded in the said letter that “No structural modification shall be carried out without prior approval”.  I therefore accept the IMC’s argument that the Housing Authority did not, by virtue of this letter, indicate that no structural alterations were involved in the works.

553.  However, in EDB’s letter dated 11 May 2012, it was stated that:

“本局於二零一二年五月七日收到閣下的來信。本局已獲悉你在信中所述的事項，亦知悉是項「新增會議室」並不涉及任何結構性改動。” (original emphasis)

554.  This letter was replying to the plaintiff’s letter dated 7 May 2012, in which the plaintiff wrote:

“前函申請於學校1/F校長室旁空位新增會議室一間；此項新增工程經設計者建議，現決定以陳列櫃代替磚牆間造新房，以減低工程及消防規格上所造成滋擾。謹特函呈報。有勞跟進。謝謝！”

555.  I must admit that when I first read EDB’s letter, I had an impression that it was only reiterating the plaintiff’s representation that there would be no structural alteration involved in the modification works.  However, upon perusal of the plaintiff’s letter quoted above, I found that in fact the Plaintiff did not say therein whether the modification works would involve structural alteration or not.  Although Good Excel’s letter dated 5 March 2012 was attached to the plaintiff’s letter, but as the IMC pointed out (which I accepted above), Good Excel did not, by virtue of this letter, indicate that no structural alterations were involved in the works.  It therefore seems that, by its letter dated 11 May 2012, EDB was really, as submitted by the plaintiff’s counsel, indicating its view on the matter.

556.  If that is so, then regulation 10(a) of the Education Regulations would not be applicable because no structural alteration was involved.

557.  Even if I were wrong in my view on EDB’s letter dated 11 May 2012 (in other words, even if EDB had not indicated any view on the matter), that would not have any bearing on the above conclusion regarding the applicability of regulation 10(a) of the Education Regulations because:

(1)     Since it was the IMC which alleged that regulation 10(a) of the Education Regulations is applicable herein, it bears the burden to satisfy this court that the modification works involved structural alteration;

(2)     I do not accept that the content of EDB’s letter dated 28 June 2013 is adequate to prove that there was any structural alteration in the works concerned.  The mere fact that a new room with air-conditioning and lightings installed (which were the features referred to in the said letter) does not necessarily mean that there was any structural alteration.  However, EDB did not explain why it had been able to reach their conclusion in the said letter;

(3)     For the same reason, EDB’s letter dated 7 August 2013 could not assist the IMC.

558.  The IMC has therefore failed to prove that the modification works involved structural alterations.  Hence, regulation 10(a) of Education Regulation is inapplicable.  

559.  I now come to the final provision: Clause 8.6.1 of the School Administrative Guide.

560.  To recap, the 1^st paragraph under this clause provided that:

“學校對校舍作出任何改善及擴建工程，包括涉及結構性的改建及改建工程，必須事先獲得教育局常任秘書長批准 […]”

561.  In my view, this clause is wider than regulation 10(a) of the Education Regulations, because “structural alteration work” was only included as one of the covered items.  In other words, this clause includes improvement works which do not involve structural alterations. 

562.  I take the view that the creation of the Conference Room with air-conditioning and lightings installed must fall within the ambit of “improvement works”, and therefore the plaintiff should have sought the approval of the Permanent Secretary.

563.  Although the plaintiff did inform EDB about the creation of a new Conference Room by virtue of her letters dated 21 March 2012 and 7 May 2012, I do not think that would be good enough, because the information provided by the plaintiff did not mention about installation of air-conditioning and lighting.  In fact, in the “房屋署屋邨非住宅單位進行改裝增建工程申請書” which was attached to her letter to EDB dated 21 March 2012, she had failed to tick the boxes for “更改/加裝冷氣/抽氣裝置” and “更改/加裝電器裝置”.   In such circumstances, any view expressed in EDB’s reply letter dated 11 May 2012 was not an informed one.

E13.4     Conclusion

564.  I therefore conclude that the plaintiff had failed to obtain the consent of the IMC and the Permanent Secretary in relation to the modification works done.  The IMC was therefore justified in issuing Warning 13 to the plaintiff.

E14.   Warning 14 – Book lists

565.  On 27 July 2013, a warning letter was issued by the IMC to the plaintiff for maladministration in respect of her delay in distributing book lists to the students.

566.  The IMC’s case, as pleaded, was that according to EDB Notice No.42/2013, book lists shall be delivered to the students before the end ofthe 2^nd term of an academic year. While the last day of the 2^nd term ofthe academic year 2011/2012 of the School was 12^th July 2012, book lists were only distributed to the students of the School on 16 July 2012 which had resulted in significant administrative inconvenience to the teachers, students and parents.

567.  The plaintiff’s defence was pleaded in paragraph 9(18) of the Re-Re-Amended Reply and Defence to Counterclaim as follows:

“(a) In 2013, the Plaintiff had difficulty delivering booklists to students in usual timeframe because approval from the Defendant was required for deciding the supplier of exercise book.

(b) Before June 2013, the Plaintiff already prepared 5 quotations from suppliers of exercise books for the Defendant’s review and decision. However, the Defendant was not calling any meeting soon. The Plaintiff then planned to seek the Defendant’s approval by issuing questionnaires to the Supervisor and each manager of the Defendant in accordance with the usual practice. The supervisor replied in email that there was no need to issue questionnaires and that he would come to the School in person on 29^th June 2013.

(c) On 29^th June 2013, despite the Plaintiff met the Supervisor and asked him about the booklist, the Supervisor ignored the Plaintiff.

(d) There was no response from the Supervisor or the Defendant as to the booklist. Thus, on or about 12^th July 2013, the Plaintiff sent an email to the Supervisor again chasing for the decision of the Defendant. It was then on 13^th July 2013 when the Plaintiff was able to meet the Supervisor who then gathered sufficient managers to make decision on the choice of supplier.

(e) Since 13^th July 2013 was a Saturday, the School could only prepared (sic) the booklists and delivered to the students on 15^th and 16^th July 2013 the earliest.”

568.  In her witness statement, the plaintiff elaborated on what happened as follows:

“142. 關於書單的分發，早在2013年6月，我已經準備好5份供應商的薄冊報價供校董會選擇。然而當時校董會短期內並不會召集會議，因此我打算通過問卷的方法來解決這一問題，這也是朱校監一向所吩咐的應急方法：即是，如果有較緊急的事件需要校董會的決策，而短期內不會召集會議，就採用問卷的方式徵求意見。但在我向朱校監匯報我準備問卷的計劃後，姚小姐代朱校監告知我不需要準備問卷，因為朱校監將於2013年6月29日親自到訪學校，屆時可以直接問他。然而，當我於29日當面向朱校監提起書單的事情時，他沒有回應我。我轉而請書記周錦培(下稱‘周書記’) 跟進事件，但是朱校監一直沒有回應。

143. 2013年7月12日，我再次向朱校監發送一封電子郵件向其詢問書單的進展；

144. 直到2013年7月13日，當我再見到朱校監，才終於得到了其關於書本供應商的批准。由於7月13日當天是星期六，我們已盡快準備最終確認的書單，最終於2013 年7月15 (星期一) 分發給學生。

145. 被告人在警告十四中提及教育局通函第43/2013號，指其要求學校在學期結束前向家長派發下學年的書單。事實上學期結束的日期為8月31日而非7月12日，因此根據該通函，書單派發並沒有逾期。”

569.  For the sake of convenience and completeness, I will deal with the last point raised by the plaintiff first even though, quite rightly, it was not mentioned in her counsel’s written closing submissions again. 

570.  Although the plaintiff did not dispute that she had an obligation to distribute book lists before the end of the school term, she alleged that such a term did not finish until 31 August 2013, and therefore there was no delay even though the book lists were only distributed on 15 July 2013.

571.  This, in my view, is a very desperate argument, and defies common sense.  If what she said was indeed a correct interpretation of the requirement, then it would be acceptable even if the book lists were distributed on 31 August 2013, when the school term would start on 2 September 2013 (1 September 2013 was a Sunday).  That cannot be right, because parents and students would simply not have enough time to prepare for the new school term.

572.  I therefore reject such an argument without hesitation.

573.  I now proceed to consider the plaintiff’s explanation that the delay was caused by Mr Chu’s lateness in confirming his/IMC’s choice of book suppliers.

574.  It was alleged by the plaintiff that she had no chance to ascertain IMC’s decision on the choice of book suppliers upon her readiness in obtaining the required quotations in June 2013 because:

(1)     There was no IMC meeting scheduled to be held;

(2)     She was asked by Ms Iu (by email) not to use the usual way (issuing questionnaires to the managers of the School) to collect their view.

575.  Ms Iu’s email which was heavily relied on by the plaintiff was issued on 28 June 2013.  It reads:

“胡校長

由於本年度將會改選法團校董會成員，

請校長暫時不要發出任何問卷予所有校董會成員，

明天29/6校監將會到校，7 月份亦會到校多次，

而且8 月份將會召開校董會會議，如有任何問題可於會議上提出，

如遇緊急事故，可致電校監，或致電姚秘書尋求協助，

謝謝！

朱德榮校監

姚嘉慧代”

(emphasis added)

576.  The said email was issued in reply to the email sent by Mr Chow on 27 June 2013.  It reads:

“姚小姐：

附上「荃灣商會學校非教學人員超時工作補假事宜問卷」文件一份，已電郵予朱校監及全體法團校董，請予存案，謝謝。

荃小周生”

577.  Two points should be made here:

(1)     Ms Iu’s email was not sent to deal with the issue of book lists but on a totally different matter;

(2)     By the email issued by Ms Iu, although Mr Chu did direct the plaintiff not to issue any questionnaire, he had also made it clear that if there was anything urgent, the plaintiff could call up Mr Chu directly for assistance.

578.  Hence, if the plaintiff was truthful when she said that the quotations from book suppliers were ready, there was nothing which stopped her from contacting Mr Chu/Ms Iu by phone or email directly, just like what she did on 12 July 2013 when she sent an email to Ms Iu at 11:57am on that day in which she stated:

“姚小姐，有關簿冊報價與書單需趕派學生，若不能發通告問卷給校董統計意見，學生新學期所需做的行政工作將受影響。

請看附件報價表，並給予指示。胡校長”

579.  The plaintiff simply did not explain why, if the quotations were ready back in June 2013, she could not have issued this email earlier.  Given her acknowledgment that the matter was urgent, it would have been sensible for the plaintiff to contact Mr Chu much earlier, rather than leaving the whole matter to nearly noon on the last day of the school term. 

580.  The IMC’s counsel submitted that, by relying on what Mr Chow and Mr Wong Kam On explained in the IMC meeting held on 27 July 2013, the quotations from book suppliers were not ready in June 2013 as alleged by the plaintiff.  I do not think the court is required to make a finding in that regard:  Even if I accept the plaintiff’s evidence that the quotations were ready in June 2013, it would still be her fault in not chasing Mr Chu and other managers for a decision on the choice of book suppliers in early July 2013.  This would be so even if Mr Chu had allegedly not given her any reply on 29 June 2013 (which I do not accept, because there was simply no reason why Mr Chu had to ignore the plaintiff in the way the plaintiff alleged). 

581.  Furthermore, even if the plaintiff had indeed instructed Mr Chow to follow this matter up with Mr Chu, she, as the principal, must still assume prime responsibility in keeping track of the progress, so as to ensure that the book lists could be distributed before the end of the last day of the school term on 12 July 2013.

582.  Although the book lists were eventually distributed to the students on 15 July 2013 (i.e. only one working day late), the matter had caused much inconvenience to different stakeholders: the staff of the School had to call up the parents one by one, and the parents had to go back to the School for the purpose of collecting the book lists after the end of the school term.

583.  I therefore hold the view that the IMC was justified in issuing Warning 14 to the plaintiff for her failure to procure that the book lists could be distributed to the students no later than the last school day in the 2012/2013 academic year.

E15.   Warning 15 – Persistent delay in the provision of information

584.  A warning letter dated 27 July 2013 was issued by the IMC to the plaintiff for maladministration in respect of her persistent failure and delay in complying with instructions of the IMC and the supervisor of the School.

585.  The IMC’s case was that the plaintiff had consistently ignored and delayed in responding to the IMC’s request for information in seven school administrative matters. 

586.  I will consider these seven areas in turn below first, and will then decide whether the failures (if any), looked at together, would justify the issuance of a warning.

E15.1     Appraisal reports      

587.  Paragraph 14(14)(a) of the Re-Re-Amended Defence and Counterclaim reads:

“On 20^th June2013, the Defendant requested the Plaintiff to provide the appraisal report of the school staff by 5^th July 2013 in order to arrange for renewal of employment contracts; however, the Plaintiff submitted the report only in (sic) 10^th July 2013, 11^th July 2013 and 24^th July 2013 in batches […]”

588.  In support of this allegation, Mr Chu only stated in paragraph 186 of his witness statement that:

“[…] 於2013年6月20日的2012-2013年度第六次校董會會議 (續會)，校董會要求胡女士在2013年7月5日前提交所有教職員評語報告，但胡女士卻待到2013年7月10日、11日及24日才分批提交 […]”

589.  The plaintiff explained in her witness statement that:

“148. 被告人聲稱其要求本人於2013年7月5日提交教師自評報告，但最終延遲到2013年的7月10日、11 日、24日才分批提交。實際上，早在2012年9月1日即學期開始前，本人已經擬定且通知教師們應於2013年7月10日上交自評報告。但在2013年6月20日的法團會議中，朱校監毫無預兆地突然提出要提前至2013年7月5日之前提交教師自評報告。本人當場告知朱校監提前至7月5日比較困難，因為教師自評時需掌握、搜集很多資料才可進行，而且學期開始之前已經說好是7月10日提交。但是由於朱校監堅持提前至7月5日，本人只好通知各位教師，盡力協助執行。本人一得到教師準備好的評語，就立即交給校監。在本人及老師們的努力下，於2013 年6月27日已經提交一部分已經完成的評語給朱校監，而期間有部分老師因請病假、入醫院等等事項影響，最終於2013 年7月10日(20份)、11日(3 份)、24 日(7份)陸續交齊。這些報告只是學校內部收錄作為記錄，並不影響學校日常運作。”

590.  To understand the IMC’s demand (actually it was mainly Mr Chu’s demand) properly, normally it would be essential to consider the minutes of the IMC meeting held on 20 June 2013.  However, having listened to the audio recording and read the transcripts of the said IMC meeting, I take the view that the minutes of the IMC meeting placed before the court were actually quite misleading in that the content thereof did not reflect accurately what had been agreed in the meeting. 

591.  From what I gathered from the audio recording and the transcripts[96], it appears that:

(1)     In the past, teachers of the School had been required to do self-assessments at the end of the school year;

(2)     After some discussions in the said IMC meeting, in order to ensure that Mr Chu would be able to receive the teachers’ performance reports early, he decided that the teachers would not be required to do any self-assessment;

(3)     Instead, the plaintiff and the panel head of the 4 main subjects (Chinese, English, Mathematics and General Studies) were required to give their assessments on the performance of the teachers by 5 July 2013;

(4)     The intention was that, once Mr Chu had perused the appraisal reports, he would be able to decide on the sequence and timing of the meetings between the managers and the individual teachers: those who might have more problems in their performance would be met by the managers earlier (in July 2013), otherwise the meetings could take place in August 2013.

592.  The plaintiff did not submit anything by 5 July 2013.

593.  On 5 July 2013, Ms Iu (on behalf of Mr Chu) sent an email to the plaintiff, and chased her for the appraisal reports.  The plaintiff was asked to submit those reports no later than 9 July 2013.

594.  By referring to a “document receipt record”, the IMC’s counsel submitted that the plaintiff only handed in 20, 3 and 7 self-assessment forms on 10 July, 11 July and 24 July 2013 respectively.  The record stated:

10/7/2013	送交教師自評共20份
11/7/2013	教師自評報告3份
24/7/2013	教職工自評文件共7份

595.  That was not what was required by Mr Chu in the IMC meeting held on 20 June 2013, in which he had very clearly indicated that he did not need to have self-assessments of the teachers.  He wanted to have the comments of the plaintiff and the panel heads of the 4 main subjects only.

596.  Indeed, when Mr Li SC cross-examined the plaintiff, he put to her that she had failed to submit any of her assessment of the teachers but had only submitted self-assessments.

597.  That being the case, I do not understand why the IMC pleaded that “however, the Plaintiff submitted the report only in (sic) 10^th July 2013, 11^th July 2013 and 24^th July 2013 in batches”, as if the reports which were handed in by the plaintiff on those 3 days included her own comments on the performance of the teachers and staff members concerned.

598.  In the light of the instructions of Mr Chu given on 20 June 2013, the explanation given by the plaintiff in her witness statement was also totally beside the point: it was useless for the plaintiff to explain why she submitted the “自評報告” late.

599.  I am aware that the plaintiff did mention in her witness statement that : “於2013年6月27日已經提交一部分已經完成的評語給朱校監”, however, I have no idea what those “comments” are, as they have not been included in the trial bundle[97]. Even if they were the comments made by the plaintiff on some of the teachers, it is apparent that those comments did not cover all the teachers as required by Mr Chu.

600.  As the IMC is bound by its pleaded case, I would assume that the comments handed in by the plaintiff on 10 July, 11 July and 24 July 2013 respectively were her own comments on the teachers rather than those teachers’ own self-assessments.  But even in such a case, she had been late.

E15.2     Criteria of provision of redundant teachers

601.  The latter part of paragraph 14(14)(a) of the Re-Re-Amended Defence and Counterclaim reads:

“[…] On 17^th July 2013, the managers came to the school and requested the Plaintiff to submit criteria of provision of redundant teachers but failed to receive any replies even until 27^thJuly 2013”

602.  In paragraph 186 of Mr Chu’s witness statement, he stated that:

“於2013年6月20日的2012-2013年度第六次校董會會議 (續會)，校董會要求胡女士在2013年7月5日前提交所有教職員評語報告，但胡女士卻待到2013年7月10日、11日及24日才分批提交，直至27日被解僱當天還沒提交超額教師準則的証明 […]” (emphasis added)

603.  It can be seen that Mr Chu had mixed his evidence on this complaint with that on the last complaint together.  He only mentioned that the plaintiff did not provide him with the criteria by the time when she was summarily dismissed.  However, he did not tell the court the circumstances under which the request for information was made.  Neither could I find any written communication (such as email) which was dated 17 July 2013.

604.  On the other hand, the plaintiff explained in her witness statement that:

“149. 被告人聲稱2013年7月17日要求本人提交 ‘超額教師準則’ (criteria of provision of redundant teachers) 事件的說明， 卻直到2013年7月27日都沒有收到回覆。實際上，2013年6月18日，姚小姐代校監發來電郵詢問有沒有釐訂超額教師準則，本人收到即時以電話告知朱校監超額教師準則實際上已被包含在 ‘教師考績制度’中，而‘教師考績制度’早已於2010年11月5日傳送給朱校監，並於法團校董會會議記錄總冊內有記錄。該總冊於2012年12月15日被何偉明校董取走，並不在本人處，需時尋找。姚小姐亦曾告知本人謂她已影印了總

冊。稍後於2013年7月17日，姚小組口頭告知本人他們已經獲得相關資料，無需本人的協助，因此指控本人拒不回覆並無根據。”

605.  I have perused the plaintiff’s email which was sent to Mr Chu on 27 October 2010[98]. The document attached to the email had clearly set out a scoring system and criteria for identifying surplus teachers.

606.  I also note that there was no evidence produced by the IMC which shows that the plaintiff had been chased after 17 July 2013 for providing the said criteria.

607.  Neither did the IMC adduce any evidence to contradict the plaintiff’s evidence that she had been told by Ms Iu that the criteria had been found.

608.  I therefore accept the plaintiff’s evidence that she had dealt with Mr Chu’s request for information in this regard.

E15.3     Tuning fee    

609.  Paragraph 14(14)(b) of the Re-Re-Amended Defence and Counterclaim reads:

“On 29^thJune 2013, the school supervisor issued notice to the Plaintiff and related that the tuning fee of musical equipment cannot be settled because of insufficient information. The Plaintiff submitted incomplete information on 5^th July 2013 and the school supervisor requested the Plaintiff to submit supplementary information by 16^th July 2013; however, the Defendant did not receive anything further even until 27^th July 2013”

610.  Although the pleaded allegation was that the request for information on tuning fee was made on 29 June 2013, Mr Chu did not mention such a request in his witness statement.

611.  I assume that the IMC was referring to the following letter issued by the supervisor to the plaintiff on 29 June 2013 which reads:

“[…] 在20/6/2013校董會會議中，胡校長回應能夠於5/7/2013或之前提供相關資料 (包括所有 (中樂、銀樂、鋼琴) 種類及數目、調音費金額、日期、收款機構及負責人姓名等)及解決方案，敬請務必依時遞交，謝謝！”

612.  In this regard, the plaintiff explained in her witness statement that:

“150. 就調音費一事，被告人聲稱於2013年6月29日，校監通知本人因為欠缺相關信息，調音費不能支付，而本人於2013年7月5日提交的信息亦不齊全，因此校監再提出要求2013年7月16或之前提交補充資料，然而直到2013年7月27日，被告再未收到任何資料。實際上，早於2013年4月26日， 本人已經遞交調音費報表給朱校監，上面有姚小姐的日期蓋章。2013年6月29日，應朱校監要求本人再次遞交報表，當時我已和朱校監澄清，文件是齊全的。至2013年7月5日，本人第三次遞交；至2013年7月9日，對方確認已收到相關文件。”

613.  I will therefore have to examine the information which was said to have been submitted by the plaintiff on three different occasions and consider whether the details as requested by Mr Chu had been provided.

614.  In the tables submitted by the plaintiff on 26 April 2013 (with the title “關愛基金課餘託管計劃 – 活動及費用”, the following pieces of information were provided:

(1)     Name of contractor/cheque payee

(2)     Course

(3)     Month/year

(4)     Cheque number

(5)     Amount of tuning fee

(6)     Brass instruments and Chinese musical instruments would be tuned every month

(7)     Pianos would be tuned once every 3 months

615.  It was also mentioned by the plaintiff therein that:

(1)     The brass instruments and Chinese musical instruments did not belong to the School;

(2)     There were 10 pianos and 4 of which were out of order.

616.  On 29 June 2013, a table with basically the same data was presented, save that the status of the cheques included in the table referred to in the preceding paragraphs had been updated (with remarks of either “paid” or “cancelled”).

617.  On 5 July 2013, the plaintiff submitted further information which included the quantities of different musical instruments (including brass instruments and Chinese musical instruments) found in the School.

618.  On 9 July 2013, the plaintiff faxed the documents which she sent on 5 July 2013 again.

619.  In my view, despite the various submissions of information, the plaintiff had not given the full details of the information requested by Mr Chu, in particular, the amount of tuning fees in respect of each item of musical instruments, and the particulars of the tutors in charge of the matter (it was indeed the plaintiff’s evidence in court that it was the tutors who did the tuning).

620.  The IMC submitted that the information provided by the plaintiff had given rise to a big question mark on the propriety of the alleged “tuning fees” because:

(1)     It is unclear why brass instruments and Chinese musical instruments would require paid tuning services, not to mention that the fees were paid on a monthly basis;

(2)     It is also unclear why the School was incurring tuning fees for musical instruments which were already malfunctioning. 

621.  While these are valid points, I do not think I should take them into account under this warning which concerns only the question of whether the plaintiff had persistently ignored or delayed in responding to the IMC’s request for information.

E15.4     “Re-construction” of the Principal’s Room  

622.  Paragraph 14(14)(c) of the Re-Re-Amended Defence and Counterclaim reads:

“On 3^rd July 2013, the Plaintiff was instructed to provide explanation letter to the enquiries from Education Bureau in relation to reconstruction of the principal’s room by 8^th July 2013. After repeated reminder and final notice on 10^th July 2013, the Plaintiff submitted the explanation on 11^th July 2013 and 12^th July 2013 in batches”

623.  In support of this complaint, Mr Chu stated in his witness statement that:

“187. […] 於2013年7月3日，教育局來信要求在2013年7月8日就上述提及改建校長室事件作解釋，而胡女士待到2013年7月11及12日才就事件作回覆 […]”

624.  With respect to Mr Chu, his above evidence was quite misleading.

625.  Having taking the transcripts of the IMC meeting held on 20 June 2013[99] into consideration, I find that what actually happened was that:

(1)     the plaintiff was initially suggested by Ms Iu and Mr Chu in the IMC meeting held on 20 June 2013 to provide a written explanation on the modification works of the Principal’s Room by 5 July 2013;

(2)     upon the request of the plaintiff, who explained that she would be very busy around that date, the deadline was eventually fixed for 11 July 2013;

(3)     By a letter dated 28 June 2013, EDB asked the School to provide information about the modification works at the Principal’s Room by 12 July 2013;

(4)     By an email dated 3 July 2013, Ms Iu (on behalf of Mr Chu), instructed the plaintiff to provide the written explanation by noon on 8 July 2013, so as to allow Mr Chu adequate time to consider how he should reply to EDB.

626.  It therefore can be seen that the EDB did not demand a reply by 8 July 2013.

627.  It turned out that the plaintiff did not put in anything by the said deadline of 8 July 2013.  Ms Iu then informed her by email sent on 10 July 2013 that the deadline would be postponed to 12 noon on 11 July 2013:

“有關3/7/2013電郵校長，通知須於8/7/13或之前提交對教育局函件 (106)in EDB(KwT)5/11515/86及改建校長室之有關解釋，以便校董會於12/7/13前回覆該局。

[…]

至今(10/7)校監仍未收到，故現特電郵作最後通知，請校長必須於11/7/13 中午12時或以前提交上述解釋，否則法團校董會有權不接受其解釋，視作放棄解釋處理，並提案譴責校長違抗校董會指令。

請校長必須依照校監發出的所有指令，在指定日期提交相

關文件予校董會，如有違反，校董會有權提案予以譴責及

作出懲處。”

628.  The plaintiff then submitted her written explanations on 11 July 2013.  According to the handwritten notes of Ms Iu, the written explanation was handed over to her by Mr Chiu at 4:45pm.

629.  On 11 July 2013 (at 5:13pm), the plaintiff sent an email to Ms Iu and explained, among other things, that:

“1. 這幾天是升中派位時間， 學生家長排隊要求校長寫推薦函。

2. 我母親突然發病，需陪往往 (sic)醫院，所以未能及時送上要求文件。”

630.  Although it is understandable why Mr Chu wanted to have the plaintiff’s written explanation earlier, one should bear in mind that the plaintiff had indicated at the outset that it was difficult for her to comply with the deadline of 5 July 2013 and that her request to have up to 11 July 2013 to provide explanation on the modification works had been approved in the IMC meeting on 20 June 2013.  At the end of the day, she did submit her written explanation by the original deadline even though her mother was suddenly hospitalised. 

631.  Under the above circumstances, I do not think it can be said that the plaintiff had ignored or delayed in responding the IMC’s request for information.  This is so even though the plaintiff was around 5 hours late when she submitted her explanation on 11 July 2013.  On the other hand, with respect to Mr Chu, I am of the view that it was quite unreasonable for him to threaten the plaintiff in the way he did on 10 July 2013 by means of Ms Iu’s email when the plaintiff could not meet the new deadline of 8 July 2013 which was unilaterally moved forward by him.

E15.5     Letting out the School’s facilities     

632.  Paragraph 14(14)(d) of the Re-Re-Amended Defence and Counterclaim reads:

“On 4^th July 2013, the Plaintiff was instructed to reply to the Education Bureau’s enquiry on letting out school facilities by 12^th July 2013; however, the Plaintiff did not provide the replies even until 27^th July 2013”

633.  The IMC’s counsel accepted that the request for information here was made against the background of EDB’s letter dated 23 May 2013 pursuant to which EDB required the IMC to provide a response on the lease issue.  The requests were:

“根據《資助學校資助則例第1.7發行版》第14.4段訂明，在接受捐贈前，法團校董會必須確定商業機構對學校的捐贈不附帶任何特別條件。根據貴校校長與香港藝術聯會於二零一一年十二月三十日簽訂的合約中說明香港藝術聯會承諾每月贊助港幣23,000元，而荃灣商會學校則需借出學校六樓課室五間予香港藝術聯會。貴校借出課室以換取香港藝術聯會每月的贊助已明顯與這項則例相違背。就此，本局要求貴法團校董會査證上述的課室借用事宜上，是否涉及分租予私人機構作商業經營活動。此外，貴校校長與香港藝術聯會簽訂的合約中說明香港藝術聯會承諾每月的贊助以資助學校貧困家庭戶學生書簿、校服、課外活動等支出；但朱校監於本年三月二十七日的來函中也提及贊助卻用以分期支付「校長向荃灣商會教育基金暫借款以進行貴校禮堂安裝冷氣工程」。就此，本局也促請貴法團校董會清晰報告香港藝術聯會每月贊助的實際用途及有關贊助所撥入學校的帳項類別。”

(emphasis added)

634.  The plaintiff explained in her witness statement that:

“152. 被告人聲稱2013年7月5日要求本人在2013年7月12日之前提交關於教育局查詢租借學校設施的回應，而直到2013年7月27日都沒有收到。事實上，相關文件本人早已於2013年6月17日交予朱校監。”

635.  In the plaintiff’s written explanation dated 14 June 2013, she stated, among other things, that:

“1. […]

2. 贊助費$23,000.00及支出項目，存入002帳戶，見附件(一) 。

3.  […]

4. 除香港藝術聯會外，六樓課室並沒有借予任何校外機構，該機構亦沒有分租予私人機構。”

636.  It seems that Ms Iu then sent a further email to the plaintiff on 15 June 2013 (which was not included in the trial bundle) and asked a number of follow-up questions, which the plaintiff replied on 17 June 2013 as follows:

“1.	何時清場及清場情況? 合約是否取消?
	2013年4月30日清場。(14-6-2013已報告)
	合約應校監要求已通知其取消。
2.	該會租借課室作什麼用途? 是否涉及分租予私人機構作商業經營活動 (如影樓)?
	該會借用擺放樂器及有關樂器應用之活動器材。
	沒有分租給私人機構。(14-6-2013已報告)
3.	列出租借場地非牟利與牟利團體的收費及計算方法?
	已於6-2-2013呈交給校監「校外機構借用課室備忘」
	及
	7-2-2013呈交「非牟利團體(香港藝術聯會)借用課室備忘(補充資料版)」
4.	解釋該會是否非牟利團體?
	該會是「非牟利團體」，於2013年3月已呈文件給校監。
5.	請列出2012-2013年所有租借校舍記錄(包括禮堂及課室)及收費(包括分電錶，工友當值)等資料?
	已於14-6-2013 呈交校監。
6.	請解釋11/11/12, 29/11/12, 30/12/12, 14/2/13, 16/2/13, 1/1/13 借用校舍詳情，並提供相關資料文件?
	已於14-6-2013 呈交校監。
7.	收取每月贊助費的實際用途及有關贊助所撥入學校的帳項類別? (請提交銀行月結單及日記帳副本顯示每月收取贊助費的進支情況)
	已於14-6-2013呈交校監。
8.	還原課室的項目、方法及報告?
	已於30-4-2013清場後，全部課室還原。
註：	校長非「未經批准租借本校6樓601-605室共5個課室予香港藝術聯會」。”

637.  Ms Iu then asked the plaintiff a number of further follow-up questions by virtue of another email dated 4 July 2013 and required her to reply by 12 July 2013.  There were altogether 10 questions.  For our purpose, only the following ones are relevant:

“2. 沒有解釋[星亮攝影]是否香港藝術聯會分租他人經營商業活動? 為何設在廣告貼在門上，設有服裝柜及舞台等攝影設備?

5. 沒有提供2012年2月至2013年4月 (001及002戶口進支) 的銀行月結單?”

638.  I am aware that as far as the question of whether HKAA had sublet the 6/F Classrooms is concerned, the plaintiff had already answered twice on 14 June 2013 and 17 June 2013 respectively.  The IMC apparently was not satisfied with the answers given, and that was why question No.2 was raised on 4 July 2013.  While I take the view that the crux of the matter (hanging up of advertisement and storage of photography equipment) should have been raised by the IMC much earlier rather than by way of a follow-up question so that the plaintiff could give her answer at one go, the plaintiff was still obliged to give her full answer to the question raised so that the IMC could give a full response to EDB.

639.  In relation to the bank statements of the “002 account”, since “appendix 1” attached to the plaintiff’s written explanation dated 14 June 2013 was not placed before the court, I cannot verify myself whether the bank statements for “002 account” for the period between February 2012 and April 2013 were indeed missing therefrom.  However, I would accept that the plaintiff had not provided such bank statements.  This is because if she had done so, I suppose it would have been convenient for her simply to send an email to Ms Iu and ask her to refer to her previous reply.  However, the plaintiff did not reply further at all.  This is unacceptable, because if she were minded to be cooperative, she could simply instruct the responsible officer in the school office to gather the relevant bank statements, and it should not be difficult for such a staff member to retrieve those statements from the School’s record.

E15.6     Salary increment system

640.  Paragraph 14(14)(e) of the Re-Re-Amended Defence and Counterclaim pleads that:

“On 5^th July 2013, the Plaintiff was instructed to reply by 9^th July 2013 about the salary increment system in relation to the non-Chinese teaching assistant; however, the Plaintiff did not provide the replies even until 27^th July 2013”

641.  The plaintiff explained in her witness statement that:

“153. 被告人聲稱2013年7月5日要求本人在2013年7月9日之前提交關於非華裔教師助理加薪的相關文件，卻直到2013年7月27日都沒有收到。事實上，2013年7月5日，當姚小姐向本人索取相關文件時，本人已立即口頭向姚小姐解釋清楚，並不存在所謂的 ‘加薪’。事件起因是朱校監向本人指示， 沒有其簽署的所有教職工合約均必須重新簽署，因此本人安排簽署新合約取代舊合約。上述教師助理的薪水並沒有增加，因此也就並不存在所謂的‘加薪機制’。”

642.  There was indeed no evidence that Ms Iu had chased the plaintiff on 9 July 2013 or thereafter for an answer on the “salary increment system”.  I therefore accept the plaintiff’s evidence that she had replied to Ms Iu promptly on 5 July 2013 upon her receipt of Ms Iu’s enquiry.

E15.7     Cross-border project materials and resources

643.  Finally, paragraph 14(14)(f) of the Re-Re-Amended Defence and Counterclaim reads:

“On 10^th July 2013, the Plaintiff was instructed to reply by 12^th July 2013 the location of the materials and resources of the cross-border projects; however, the Plaintiff did not provide the replies even until 27^th July 2013.”

644.  The plaintiff replied to this allegation in the following way in her witness statement:

“154. 被告聲稱，2013年7月10日要求本人於2013年7月12日之前回覆關於跨境物資的所在位置，卻直到2013年7月27日都沒有收到。實際上，早於2013年2月26日朱校監電郵通知本人，校方對跨境物資 ‘不負責’，拒絕支付相關開支，朱主席之前也有類似的指示。本人遵從指示，沒有支付該些跨境物品的購買費用，因此本人沒有再跟進這批物資的去向。直到2013年6月29日，朱校監突然向我詢問跨境物資的狀態，我隨即於2013年7月8日及11日以書面形式回覆朱校監，表示已盡力聯絡當時的負責人，而該負責人之後一直沒有回覆，我也只能盡力再去聯絡。”

645.  In the plaintiff’s written explanation dated 8 July 2013, she stated that:

“2. 上述物品其中行李箱及拉箱現存於小學，其他物品因校董會在結束跨境招生計劃時未有明確指示如何處李 (sic)。

3.  已多次找物品放置點的負責人(即購買服務點的地址)，經多次致電才聯絡上，該負責人稍後問其下屬才回覆本人。”

646.  On 10 July 2013, Ms Iu, on behalf of the supervisor, chased the plaintiff by email again, and imposed a deadline of 12 July 2013 unilaterally.

647.  On 11 July 2013, the plaintiff sent an email to Ms Iu and explained that:

“跨境物件正在趕緊跟進，會盡速報告。”

648.  The IMC did not allege that the plaintiff was not truthful when she explained that she had to wait for a reply from the responsible person of the SZ Service Centre from the Mainland before she could inform the IMC about the whereabouts of the various materials and resources. 

649.  In such circumstances, the plaintiff should not be blamed for failing to give a substantive answer to the IMC on the said matter.

650.  Indeed, it can be seen that the plaintiff did, even though she could not give any substantive reply to Ms Iu’s enquiry, send her a reply on 11 July 2013.

651.  I therefore hold the view that the IMC cannot say that the plaintiff had “ignored or delayed in responding the IMC” as alleged on this matter.

E15.8     Conclusion

652.  I have found that the plaintiff:

(1)     had been late in providing her comments on teachers;

(2)     had failed to provide some of the particulars on tuning fees; and

(3)     did not reply to the IMC’s further enquiry on the usage of the 6/F Classrooms nor provide bank statements relating to the sponsorship fees received.

653.  Out of the above, I would place particular weight on items (2) and (3) because the plaintiff had failed to reply to the IMC altogether. 

654.  Although I can understand that July is normally a very busy month for a principal, and that July 2013 was particularly hectic for the plaintiff because of the unexpected hospitalisation of her mother and she had been requested by the IMC to provide information and explanation on various matters, I am of the view that she should not have simply ignored the IMC’s request for information in respect of items (2) and (3) above.  Her total disregard of those requests would justify the issuance of Warning 15 to her.

E16.  Conclusion on Reminders and Warnings

655.  To conclude, I have found that the IMC was justified in:

(1)     issuing a warning letter on 26 November 2012 to the plaintiff for her maladministration in retaining staff who had exceeded the retirement age prescribed by the Foundation’s 20/4/2009 Letter;

(2)     issuing a serious warning letter on 25 May 2013 for the plaintiff’s having entered into the HKAA Contract dated 30 December 2011 without the knowledge and/or consent of the IMC;

(3)     issuing a warning letter on 25 May 2013 for the plaintiff’s breach of the EDB’s Procurement Guidelines and failure to obtain endorsement from the IMC for the renovation works done at various toilets in the School;

(4)     issuing a serious warning letter dated 25 May 2013 for the plaintiff’s serious financial mismanagement in failing to comply with the procurement requirements under the Community Care Fund Scheme;

(5)     issuing a warning letter dated 27 July 2013 to the plaintiff for her failure to obtain the consent of the IMC and the Permanent Secretary in relation to the modification works done at the Principal’s Room;

(6)     issuing a warning letter to the plaintiff on 27 July 2013 for her failure to procure that book lists would be distributed to the students no later than the last school day in the 2012/2013 academic year; and

(7)     issuing a warning letter to the plaintiff on 27 July 2013 for her failure in complying with the instructions of the supervisor of the School to provide certain information.

656.  The next question which the court has to decide is whether the plaintiff had committed a grave breach of duty which justified her being summarily discussed pursuant to section 57(g) of the Code of Aid.

657.  I regret to conclude that the plaintiff did commit grave breach of duty and gross misconduct, and therefore the IMC had rightly summarily dismissed her.  Out of the above misconducts, some were very serious indeed:

(1)     The plaintiff had rented out the 6/F Classrooms to HKAA for 3 years without approval.  She knew that it was improper to rent out the classrooms as such for the purpose of getting rental income.  Yet, she proceeded with the arrangement.  In this regard, I totally agree with the observation of EDB expressed in its letter dated 23 May 2013:

“[…] 貴校以贊助形式透過三年期的合約借出學校六樓五間課室予香港藝術聯會使用一事，本局認為並不恰當(理由詳見下文)。[…]校長身為學校全職管理職級的僱員，與香港藝術聯會簽訂這合約時並不察悉事件嚴重，也未發覺此事存有違規情況，亦實難辭其咎。教育局對上述各項管治上的不足及缺失，表示極度關注，亦感震驚。”

(2)     The plaintiff had failed to follow the procurement requirements under the Community Care Fund Scheme in respect of which the plaintiff was supposed to take appropriate steps in getting quotations in August and September 2012.  It should be remembered that in around that time (20 August 2012), she had just received a verbal reminder concerning the proposed purchase of a laptop computer and router/printer in respect of which she was alleged to have failed to comply with the Foundation’s Procurement Guidelines.  Even though this court has now ruled that the plaintiff had done nothing wrong in not following such guidelines when she proposed to buy the aforesaid computer equipment, the point is that she must be taken to have been alerted about the importance of following the relevant procurement guidelines.  Yet, she had failed to do so when she engaged tutors under the Community Care Fund Scheme.  This is totally unacceptable.  There must also have been no doubt in her mind as to which set of procurement guidelines should be followed under the Community Care Fund Scheme. There was simply no excuse for her not to do so.

658.  Even if the above two matters, considered together, did not amount to grave breach of duty or gross misconduct, I have little doubt that the overall effect of all seven misconducts would be adequate.

F.      SECTIONS 55 – 57 OF THE EDUCATION ORDINANCE

659.  In the Contract, it was stipulated that:

“荃灣商會學校校董會擬聘請你為校長，薪級依照夾附的「服務條件」所列 […]。如你願意遵守隨附的「資助學校教師服務條件」[Conditions of Service)] 的規定接受聘任，請簽署「應聘書」及「服務條件」各兩份 […]＂

660.  The plaintiff had duly accepted the employment accordingly.  In the Conditions of Service, it was provided, among other things, that:

“離職及通知期限:

a) 由教師提出

[…]

b) 由校董會提出

校董會如認為儘管已給予適當的口頭及書面警告，有關教師的工作表現仍未令人滿意，則可循有關《資助則例》內相關附錄所載程序終止其服務。如因其他理由(包括因縮班/學校停辦而出現超額教師)終止教師的服務，則可循下述方式進行 […]”

“其他條件:

(一)     有關    台端的校長確認任命日期，須根據教育統籌局「資助則例」規定辦理。

(二)     其他條件，概依照教育統籌局的的「教育條例」及勞工處的「僱傭條例」辦理。”

661.  Sections 55 to 57 of the Education Ordinance provide that:

“55. Tenure of office of principal

The principal of a school shall hold office until –

(a) he ceases to be registered as a teacher, or to be permitted to teach as a permitted teacher in the school;

(b) he resigns;

(c) the Permanent Secretary withdraws his approval of the principal under section 56; or

(d) the Permanent Secretary approves another teacher of the school as the principal under section 57(2).

56. Grounds for withdrawal of approval of principal

(1) The Permanent Secretary may withdraw his approval of the principal of a school if it appears to the Permanent Secretary that the principal—

(a) is no longer a fit and proper person to be the principal;

(aa) in the case of a school providing nursery or kindergarten education, is not appropriately qualified to be the principal;

(b) is not performing the duties of the principal satisfactorily;

(c) has ceased to perform the duties of the principal; or

(d) is no longer acceptable as such to the majority of the managers of the school.

(2) Without prejudice to the generality of subsection (1), the Permanent Secretary shall withdraw his approval of the principal of an aided school if the principal is prohibited from continuing to be employed as the principal of the school by virtue of section 58A.

57. Approval of subsequent principals

(1) If in the case of any school—

(a) the Permanent Secretary refuses under section 54 to approve a teacher who has been recommended to be the principal;

(b) the principal ceased under section 55 to hold office;

(c) the principal ceases to perform the duties of the principal; or

(d) the principal is no longer acceptable as such to the majority of the managers of the school,

the management committee or incorporated management committee (as may be appropriate) of the school shall within 1 month recommend for the approval of the Permanent Secretary another teacher of the school to be the principal.

(2)     Subject to section 54, the Permanent Secretary shall approve as the principal of the school the teacher who is recommended under subsection (1).”

662.  The plaintiff’s argument went like this:

(1)     She was given a Notice of Summary Dismissal on 27 July 2013;

(2)     By letter dated 16 October 2013, the Permanent Secretary informed Mr Chu that she had approved Mr Wong to be appointed as Acting Principal of the School from 16 October 2013 to 27 January 2014.  Despite this appointment, section 55 of the Education Ordinance had not been triggered because:

(a)     Under section 3 of the Education Ordinance, “principal” is defined as “a teacher who is approved as the principal of a school under section 53(2) or section 57(2)”.  There is no reference therein to “acting principal”;

(b)     Mr Wong’s appointment was of a temporary nature whose principalship was yet to be confirmed;

(c)     The appointment was expressly made for administrative convenience under exceptional circumstances; 

(d)     No candidate had been recommended to be the principal of the School pursuant to section 57A of the Educational Ordinance because an open recruitment was yet to be conducted.

(3)     By another letter dated 28 January 2014, the Permanent Secretary approved Mr. Chow as Acting Principal of the School. This appointment was not made pursuant to sections 57(2) and 55(d) of the Education Ordinance either;

(4)     As Mr Chow’s appointment as the Principal of the School was only confirmed with effect from 11 November 2014, the plaintiff did not cease to hold office as principal of the School pursuant to section 55 of the Education Ordinance any time before her scheduled retirement on 31 August 2014;

(5)     By reason of the summary dismissal, the IMC had unlawfully removed the plaintiff from the office of principal of the School on 27 July 2013 when:

(a)     The IMC had not recommended for the approval of the Permanent Secretary another teacher of the School to be the principal under section 57(1) of the Education Ordinance;

(b)     The Permanent Secretary had not approved another teacher of the School as the principal of the School under sections 55(d) and 57(2) of the Education Ordinance;

(c)     The Permanent Secretary had not withdrawn her approval of the plaintiff’s appointment as the principal of the School under sections 55(c) and 56 of the Education Ordinance;

(d)     The plaintiff had not ceased to be a registered teacher of the School under section 55(a) of the Education Ordinance; and

(e)     The plaintiff had not resigned under section 55(b) of the Education Ordinance;

(6)     Therefore, even if the plaintiff’s summary dismissal was justified, the IMC was in breach of sections 55 – 57 of the Education Ordinance;

(7)     Further or alternatively, sections 55 to 57 of the Education Ordinance had been incorporated as part of the terms of the Contract by virtue of the Conditions of Service quoted above.  By reason of its breach of those statutory provisions, the IMC was in breach of the Conditions of Service and the Contract.

663.  I should point out at the outset that the above submissions were factually incorrect in one material aspect.  The nature of Mr Wong’s appointment on 16 October 2013 had been clarified by a letter issued on behalf of the Permanent Secretary dated 22 October 2013 as follows:

“With regard to your request for clarification, please note that the Permanent Secretary for Education (‘PS(Ed)’) has exercised her power under section 57(2) of the Education Ordinance (Cap. 279) in approving Mr WONG Kam-on as the principal of Tsuen Wan Trade Association Primary School in her English letter issued to Mr CHU Tak-wing, the school supervisor, on 16 October 2013. The exercise of this power triggers the application of section 55(d). Pursuant to the approval, Mr. WONG is the approved principal of Tsuen Wan Trade Association Primary School for the purposes of sections 55(d) and 57(2), notwithstanding that he is referred to as ‘acting principal’ in the correspondence.”

664.  In other words, even if the plaintiff was right that she had remained in office by virtue of section 55 of the Education Ordinance, her tenure as the principal of the School would only last until 15 October 2013, rather than 31 August 2014.

F1.    Breach of statutory duty

665.  As far as breach of statutory duty simpliciter is concerned, a crucial question which the court has to consider is whether the aforesaid statutory provisions confer any private law cause of action on the plaintiff.

666.  In the case of Ko Hon Yue v Liu Ching Leung [2008] 1 HKLRD 482, Chu J (as Chu JA then was), had to consider whether the breach of regulation 76 of the Education Regulations would give rise to an action in private law.

667.  The said regulation 76 provided that:

“Teachers’ appointment or dismissal needs approval by managers

(1) The appointment of any teacher who is to be employed in the school—

(a) to occupy a teacher post in the establishment of staff provided for in the code of aid for primary schools, code of aid for secondary schools or code of aid for special schools; or

(b) for a term for not less than 6 months,

shall be approved by the majority of the managers of the school.

(2) The dismissal of any teacher who is employed in the school—

(a) to occupy a teacher post in the establishment of staff provided for in the code of aid for primary schools, code of aid for secondary schools or code of aid for special schools; or

(b) for a term for not less than 6 months,

shall be approved by the majority of the managers of the school at a meeting of the management committee or incorporated management committee (as may be appropriate).”

668.  Her Ladyship held that:

“5. […] the intended new claim is for breach of statutory duty simpliciter. In order to maintain the claim, it has to be shown that the breach gives rise to an action in private law. The plaintiff has to show, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that the legislature has intended to confer on members of that class a private right of action for breach of the duty. As emphasised by Lord Steyn in Gorringe v. Calderdale MBC [2004] 1 WLR 1057, 1058 at para.3, the central question in a claim of breach of statutory duty is whether from the provisions and structure of the statute, an intention can be gathered to create a private law remedy, and not whether the statute excludes a private law remedy.

669.  Her Ladyship then went on to consider the history of the Education Ordinance and Education Regulations, and dealt with counsel’s argument that the said regulation 76 was a recognition of the special status of teachers in a school and therefore it was intended to give them security of tenure.  She continued as follows:

“6. The current Education Ordinance was enacted in 1971. Section 84 empowers the Governor (subsequently the Chief Executive) in Council to make regulations for the purposes stated therein. Both the Education Ordinance and the Education Regulations had undergone a number of amendments since 1971. Given that the termination of the plaintiff’s employment took place in July 2000 and/or July 2001, it is the pre-2 February 2003 version of section 84 and the pre-1 January 2005 version of Regulation 76 that the present application is concerned with.

7. Among the many purposes set out in the applicable version of section 84, counsel can only point to two subsections as being relevant to Regulation 76. The first is section 84(t), under which regulations may be enacted to provide for ‘general matters of school management’. The second is section 84(u), under which regulations may be enacted to provide for ‘the duties of supervisors and principals’.

8. The Education Regulations contain a number of parts. Under the applicable version, Regulation 76 falls within Part XII, which deals with school management committees and supervisors. Regulation 76 reads:

‘The appointment and dismissal of any member of the teaching staff of any school shall be determined by a majority vote of all the members of the management committee of that school.’

9. Regulation 101 provides that it is a criminal offence to contravene certain provisions of the Education Regulations. Regulation 76 is not among the regulations covered in Regulation 101.

10. Mr Chiu for the plaintiff argued that Regulation 76 is a recognition of the special status of teachers in a school and of the need to protect their position by ensuring that they be treated with due fairness and free from abuses. The best protection, he submitted, is to give to the teachers security of tenure. Accordingly, it is to be inferred that the legislature intended to confer on teachers a remedy in private law where the dismissal did not comply with the majority vote requirement of Regulation 76.

11. However, as a matter of statutory construction, there is nothing in the applicable version of Regulation 76 or the Education Ordinance or the Education Regulations to suggest that Regulation 76 is intended for the protection of teachers. As its long title states, the provisions in the Education Ordinance primarily deal with ‘the supervision and control of schools and the teaching therein’. As for the pre-2005 Education Regulations, the bulk of its provisions is concerned with regulating the physical and sanitary conditions of school premises, matters relating to students’ discipline and welfare, fees and holidays as well as other general matters on the operation and administration of the school. Part XII, of which Regulation 76 forms part, relates to the constitution of the school management committee and the functions and duties of the supervisor and the school management committee. In the specific case of Regulation 76, it regulates how the school management committee should discharge their duty in connection with the appointment and dismissal of teachers.

12. Upon an analysis of the provisions and structure of the Education Ordinance and the Education Regulations, it can be seen that they essentially prescribe a regulatory system for the promotion of education, which is for the benefit and protection of the public at large. In my view, there is no objective basis for inferring that the statutory duty under Regulation 76 was imposed for the protection of the teachers and that the legislature had intended to confer on the teachers a private right of action for breach of the duty. The construction advocated by the plaintiff does not accord with the overall scheme and framework of the Education Ordinance and the Education regulations. As observed in X (Minors) v. Bedfordshire County Council [1995] 2 AC 633 at 731, ‘Although regulatory or welfare legislations affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general.’

13.      Further, it is to be noted that Regulation 76 also covers appointment of teachers. In the context of appointment of teachers, it is difficult to see what protection for the teachers was intended by the legislature and how the statutory duty could secure their employment or ensure fairness in their treatment by the school management committee. There is no apparent rationale for conferring on teachers a private cause of action in the event their appointment was not pursuant to a majority vote of the school management committee.  This is particular so when the common law has provided for remedies for teachers whose appointments or dismissals have not been properly authorized by the school management committee.”

(emphasis added)

670.  In X (Minors) v. Bedfordshire County Council [1995] 2 AC 633 which was cited by Chu J, Lord Browne-Wilkinson held that:

“The principles applicable in determining whether such statutory cause of action exists are now well established, although the application of those principles in any particular case remains difficult. The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However, a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of the duty. There is no general rule by reference to which it can be decided whether a statute does create such a right of action but there are a number of indicators. If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown, that indicates that there may be a private right of action since otherwise there is no method of securing the protection the statute was intended to confer. If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action: Cutler v. Wandsworth Stadium Ltd. [1949] A.C. 398; Lonrho Ltd. v. Shell Petroleum Co. Ltd. (No.2) [1982] A.C. 173. However, the mere existence of some other statutory remedy is not necessarily decisive. It is still possible to show that on the true construction of the statute the protected class was intended by Parliament to have a private remedy […]”

671.  It can be seen that, after all, it is the construction of the statute which is of paramount importance. 

672.  Guidance on interpretation of statute has been given by Fok PJ in T v. Commissioner of Police [2014] 17 HKCFAR 593:

“194. The modern approach to statutory construction is not in issue. The proper starting point is to look at the relevant words or provisions having regard to their context and purpose: see HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at §63 and Leung Chun Ying v Ho Chun Yan Albert (2013) 16 HKCFAR 735 at §12. The context of a statutory provision should be taken in its widest sense and includes the other provisions of the statute and the existing state of the law: HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at §13. The purpose of a statutory provision may be gleaned from the provision itself or from a relevant report of the Law Reform Commission or the Explanatory Memorandum to the bill or from a statement of a responsible official to the Legislative Council in respect of the bill: ibid. at §14.

195.     Nevertheless, the object of the exercise is to ascertain the legislative intent of the language of the statute and, in this regard, a court cannot attribute to a statutory provision a meaning which the language, understood in the light of its context and statutory purpose, cannot bear: see HKSAR v Lam Kwong Wai at §63 and China Field Ltd v Appeal Tribunal (Buildings) (No.2) (2009) 12 HKCFAR 342 at §36.”

673.  In Medical Council of Hong Kong v Chow Siu Shek [2000] 3 HKCFAR 144, Bokhary PJ also had the following to say:

“[…] When the true position under a statute is to be ascertained by interpretation, it is necessary to read all of the relevant provision together and in the context of the whole statute as a purposive unity in its appropriate legal and social setting. Furthermore it is necessary to identify the interpretative considerations involved and then, if they conflict, to weigh and balance them.” (at 154B – C)

674.  Bearing the above principles in mind, I hold the view that the legislature did not intend to confer a private law cause of action by virtue of sections 55 to 57 of the Education Ordinance:

(1)     As Chu J pointed out in Ko Hon Yue (supra), the Education Ordinance and the Education Regulations essentially prescribe a regulatory system for the promotion of education, which is for the benefit and protection of the public at large.  Although we do not concern about regulation 76 or any other regulations under the Education Regulations in the present case, this would not change the fact that the purpose of the Education Ordinance is “to promote education in Hong Kong, and to consolidate and amend the law relating to the supervision and control of schools and the teaching therein, and for purposes connected therewith”.  It is not a piece of legislation enacted for the protection of school principals;

(2)     School principals are adequately protected by employment law, for example, under the Employment Ordinance.  There is no reason why the legislature would intend to give principals extra protection by way of the Education Ordinance;

(3)     If the plaintiff is right that sections 55 to 57 have provided her with a private law cause of action, it would mean that she can sue the IMC for failing to recommend for the approval of the Permanent Secretary another teacher of the school to be the new principal under section 57, which, in my view, is bizarre, because that plainly is a matter between the IMC and the Permanent Secretary;

(4)     Even if sections 55 to 57 of the Education Ordinance have given school principals security of tenure, the purpose was to protect the school and the students of the school rather than to protect the principals, and as a result, a private law cause of action was not intended.

675.  The plaintiff’s counsel cited Au-Yeung J’s Decision which was given in the present case at the interlocutory stage while it was still pending in the Court of First Instance[100] in support of their argument that the IMC does not have any independent power to remove the plaintiff from office.  The issue before her Ladyship at that time was whether the Labour Tribunal had exclusive jurisdiction over this matter.  To understand her Ladyship’s Decision properly, it is necessary to reproduce the whole Section D1 of her Decision as follows:

“D. THE JURISDICTION ISSUE

D1. Pleaded causes

24.     The writ relies on breach of employment contract (which of necessity includes breach of the Employment Ordinance and all breaches of the statutes incorporated into the Contract).

25.     However, an indispensable part of the Plaintiff’s case (which would increase the damages recoverable) turns on the applicability of sections 55-57 of the Education Ordinance.  Section 55 provides that […]

26.     Section 56 provides that […]

27.     Section 57 provides […]

28.     The effect of these sections are that as long as a principal does not lose his or her approval, he or she is entitled to hold office until the Permanent Secretary decides otherwise. The incorporated management committee of any school simply does not have the independent power to remove a principal from office. Furthermore, the Permanent Secretary can only withdraw his or her approval for the principal on the limited grounds in section 56. 

29.     These arguments are plainly open to the Plaintiff.  Her cause of action is in breach of duty under an enactment, which is a tort claim.  Applying §3 to the Schedule to the LTO, this is a mixed claim excluded from the Labour Tribunal at the time the writ was filed (and even now on the state of the latest amendments to the statement of claim).” (emphasis added)

676.  With greatest respect to the plaintiff’s counsel, their reliance on paragraph 28 of the said Decision is totally misconceived.  In my view, Au-Yeung J was only setting out the plaintiff’s pleaded case in the said paragraph 28 (which was under section D1 “pleaded causes” of her Decision), rather than holding that “The incorporated management committee of any school simply does not have the independent power to remove a principal from office”.  All that it was held (in paragraph 29) was that the arguments set out in paragraph 28 were “plainly open to the plaintiff”.

677.  Furthermore, it was not held therein (nor in an earlier Decision given by Chung J in the present case[101] in the plaintiff’s injunction application which was relied on by her counsel) that sections 55 to 57 of the Education Ordinance have created a private law cause of action.

678.  The plaintiff’s claim for breach of statutory duty simpliciter must therefore fail.

F2.    Breach of the Contract

679.  The plaintiff’s alternative argument is that since sections 55 to 57 of the Education Ordinance had been incorporated into the Contract, the IMC’s breach thereof amounted to breach of the Contract.

680.  I do not accept this argument.

681.  First of all, I do not accept that there was any contractual duty owed by the IMC to the plaintiff to comply with sections 55 to 57 of the Education Ordinance:

(1)     As aforesaid, the purpose of the Education Ordinance is “to promote education in Hong Kong, and to consolidate and amend the law relating to the supervision and control of schools and the teaching therein, and for purposes connected therewith”.  It is not a piece of legislation enacted for the protection of school principals;

(2)     Sections 55 to 57 of the Education Ordinance are of regulatory nature.  They were enacted for the purpose of governing the cessation and succession of the principal’s office, which was of vital importance to the running of the school;

(3)     In particular, I do not agree that the IMC owed any duty to the plaintiff pursuant to section 57 of the Education Ordinance. To me, the duty to recommend a new principal is owed by the IMC to the Permanent Secretary only.  It can be seen from the said section 57 that the process of recommendation would only be started after the original principal had already ceased to hold office under section 55 (s.57(1)(b)), ceased to perform the duties of the principal (s.57(1)(c)) or was no longer acceptable to act as the principal to the majority of the managers of the school (s.57(1)(d)).  To put it bluntly, the recommendation of a candidate as a new principal is none of the business of the original principal in such circumstances.

682.  What I should add is that if the plaintiff is right in that sections 55 to 57 of the Education Ordinance have given her a security of tenure until, for example, the Permanent Secretary has withdrawn her approval pursuant to section 55(c) and 56, that would be inconsistent with other provisions which have also been incorporated into the Contract.  For example:

(1)     Section 9 of the Employment Ordinance which provides for summary dismissal of an employee, and it is undeniable that the plaintiff was an employee of the IMC at the material time;

(2)     Section 57(g) of the Code of Aid which provides for summary dismissal of a teacher, and it is not disputed that the plaintiff, despite her position as the principal of the School, was subjected to this provision.  It should be noted that there is nothing therein which excludes its applicability to principals;

(3)     Section 13.5(c) of the Code of Aid for Aided Schools which provides for summary dismissal by reason of, among other things, serious misconduct.  Again, there is nothing therein which excludes its applicability to principals.

683.  The plaintiff’s assertion that a principal cannot be removed until the Permanent Secretary has withdrawn her approval would lead to unjust and undesirable consequences.  Say for example, a principal has been convicted of a criminal offence relating to children which undoubtedly would raise serious concern on the safety of the young students in the school if the principal remains in office even for one more day.  If the plaintiff is right, then the convicted principal cannot be removed until the Permanent Secretary has officially withdrawn his approval of the principal. This may take time.  In the meantime, the well-being of the school children would be at risk.  Even if the Permanent Secretary withdraws his approval on the following day, does it mean that the principal should be entitled to be paid for one more day because such a principal has held office until then?  In my view, that cannot be right.  Section 55 of the Education Ordinance should not be interpreted to mean that the right on the part of the IMC to summarily dismiss a principal is taken away.

684.  Furthermore, as the IMC’s counsel pointed out, summary dismissal arises where the employee’s conduct amounts to a repudiation of the contract of employment.  It is thus inherent in the nature of summary dismissal that the employer would be able to terminate the employment relationship immediately.  The effect of section 55 of the Education Ordinance which the plaintiff advocated would contradict such a basic principle in the employment relationship between her and the IMC.  This demonstrates the fallacy of her argument.

685.  The plaintiff had relied heavily on the case of Lau Chi Fai & Another v Secretary for Justice & Another [1999] 2 HKLRD 494.  In this case, the 1^st plaintiff was the principal of an aided secondary school. The terms and conditions on which the school received financial support from the Government were contained in the Code of Aid for Secondary Schools. Section 57 of the said Code provided that a teacher shall retire at the end of the school year in which he reached the age of 60, unless he was permitted to continue by the Director of Education (“the Director”). The 1^st plaintiff was due to reach the age of 60 before the 1998/99 school year commenced.  However, the school’s council wanted him to remain as principal in the 1998/99 school year.  A request was therefore made to the Director, who eventually agreed but made it clear at the same time that the school must appoint a new principal in the 1999/2000 academic year. The 1^st plaintiff, together with the 2^nd plaintiff who was a member of the management committee suing in a representative capacity, therefore commenced the action and sought declaratory relief that the 1^st plaintiff be allowed to continue as principal. The plaintiffs argued that section 57 of the said Code was unenforceable because it was in conflict with section 46(f) of the Education Ordinance which had the effect that unless the circumstances under section 46(a) to (e) and (g) applied (which they did not in that case), the principal of a school who was a registered teacher was entitled to hold office until he reached the age of 70[102]. 

686.  In his judgment, Keith JA (sitting as an additional judge of the Court of First Instance) first of all held that:

“Thus, in circumstances to which [section 46](a), (b), (c), (d), (e) and (g) do not apply, the principal of a school who is a registered teacher is entitled to hold office until he reaches the age of 70. Accordingly, the effect of the Ordinance is to underpin the position of school principals by imposing restrictions on the freedom of their employers, the management committees of their schools, to remove them from office.” (at 500F – G)

687.  It must be emphasized here that when Keith JA talked about “restrictions on the freedom of employers to remove principals from office”, it was said in the context of a case where section 46(a), (b), (c), (d), (e) and (g) did not apply.  In other words, the court was not concerned about the scenario where the principal was dismissed by reason of misconduct.

688.  The Director argued therein that in the light of section 57 of the said Code, the Director must be regarded as having withdrawn her approval for the principal of an aided secondary school continuing to be the principal of the school once he has reached the age of 60, pursuant to section 56(a) (“no longer a fit and proper person to be the principal”), 56(c) (“ceased to perform the duties of the principal”) and 56(d) (“is no longer acceptable as such to the majority of the management committee”) of the then Education Ordinance[103].

689.  His Lordship considered that the Director was not entitled to rely on section 56(a) or (d):

“[…] Section 56(a) focuses on the personal attributes of the principal, and section 56(d) focuses on the wishes of the majority of the management committee. In Mr. Lau's case, it is not suggested that his personal attributes are such that he should not continue as principal for that reason. Nor is a majority of the Management Committee opposed to his continuing to be the principal of the School. On the contrary : the unchallenged evidence is that he has the support of the Management Committee to continue in post. If that is the position in other aided secondary schools, the Director likewise cannot rely on sections 56(a) and 56(d) in their cases.” (at 501D – E)

690.  He then proceeded to consider section 56(c):

“The critical question, therefore, is whether the Director can justify the implementation of clause 57 of the Code on the ground that, to use the language of section 56(c), the principal ‘has ceased to perform the duties of the principal’. Mr. Ma [counsel for the Director] contended that, at the age of 60, the principal will have ceased to perform the duties of principal because that is when his contract of employment comes to an end. And why does his contract of employment come to an end at the age of 60? The answer, it is said, is that clause 57 of the Code amounts to an undertaking which the management committee of a school gives to the Director in return for financial support under the Code. That undertaking, so the argument goes, was incorporated into the principal’s contract of employment, and required the school to bring his employment to an end, unless the Director permitted an extension beyond the age of 60.

In my judgment, this argument breaks down when one attempts to analyse how the undertaking which the management committee gave to the Director actually became a binding obligation in the principal’s contract of employment. The doctrine of privity of contract suggests otherwise. Party A to a contract (i.e. the management committee of the school) is not permitted to break the obligations (i.e. the security of tenure provisions) which it owes to Party B (i.e. the principal) simply because it has agreed with Party C (i.e. the Director) to act in a way (i.e. to remove the principal from office when he reaches the age of 60) which would amount to a breach of those obligations. It would be different if Party B (i.e. the principal) had been a party to the agreement between Party A (i.e. the management committee of the school) and Party C (i.e. the Director), but Mr. Ma does not suggest that the principals of aided secondary schools were themselves parties to the agreement for aid reached between the management committees of their schools and the Director. It follows that the Director cannot justify the implementation of clause 57 of the Code on any of the grounds set out in section 56 of the Ordinance. The consequence of that is that there is a clear conflict between clause 57 of the Code and the security of tenure provisions in the Ordinance.

What is the effect of that conflict? The answer is that, to the extent that clause 57 of the Code applies to principals, it cannot be enforced by the Director because to require the management committee of the school to enforce clause 57 would be requiring it to act in breach of its obligation to honour the provisions relating to security of tenure for principals in the Ordinance. In the circumstances, it is unnecessary for me to address the question whether clause 57 of the Code applies to principals, because it is unenforceable to the extent that it does.”

(at 501F – 502C)

691.  It can therefore be seen that the Lau Chi Fai case is clearly distinguishable from the present case.  While section 57 of the said Code could not be enforced against Mr Lau for it had not been incorporated into Mr Lau’s contract of employment, it is the plaintiff’s own pleaded case in this action that the Code of Aid had been incorporated into the Contract.  There is no question of enforceability here. 

692.  Therefore, when the plaintiff was summarily dismissed by the IMC, the Permanent Secretary must be regarded as having withdrawn her approval of the plaintiff being the principal of the School on the bases that the plaintiff was no longer a fit and proper person to be the principal (section 56(1)(a) of the Education Ordinance), that she was not performing the duties of the principal satisfactorily (section 56(1)(b) of the Education Ordinance), that she had ceased to perform the duties of the principal (section 56(1)(c) of the Education Ordinance) and that she was no longer acceptable as such to the majority of the managers of the School (section 56(1)(d) of the Education Ordinance).

693.  Furthermore, the employment relationship between the plaintiff and the IMC must also be governed by section 9 of the Employment Ordinance which had been incorporated into the Contract as well.  Therefore, the plaintiff’s alleged security of tenure, if any, must be subject to the IMC’s right of summarily dismissing her.

694.  The plaintiff’s claim for breach of contract by reason of the alleged breach of sections 55 to 57 of the Education Ordinance on the part of the IMC is therefore rejected.

G.      CONCLUSION ON THE PLAINTIFF’S CLAIM

695.  For the above reasons, I dismiss the plaintiff’s claim against the IMC for:

(1)     Unlawful and wrongful dismissal;

(2)     Breach of statutory duty; and

(3)     Breach of the Contract.

H.      THE PLAINTIFF’S CLAIM – QUANTUM

696.  I now proceed to consider the quantum of the plaintiff’s claims.  This is necessary despite the conclusion above for the following reasons:

(1)     the plaintiff alleged that she would be entitled to one of the items claimed even if her summary dismissal was justified; and

(2)     for the sake of completeness and in case I am wrong in my decision on liability.

697.  To recap, the plaintiff claims herein for the following heads of damages:

(1)     The salaries payable for the period between the date of her dismissal and her original date of retirement (28 July 2013 – 31 August 2014) in the sum of $789,183.87;

(2)     Balance of provident fund to be contributed by the IMC for the plaintiff’s benefit during the aforesaid period in the sum of $118,377.58;

(3)     Balance of provident fund contributed by the IMC for the plaintiff’s benefit from the date of commencement of the plaintiff’s employment to the date of dismissal (1 September 1996 – 27 July 2013);

(4)     5% guaranteed dividend on the provident fund from the date of her dismissal to her original date of retirement in the sum of $4,066.64.

H1.     Provident fund balance prior to dismissal

698.  I would deal with the plaintiff’s claim for provident fund balance prior to her dismissal (under item 3 above) first because this is a claim which the plaintiff alleged that she would be entitled to anyway even if her summary dismissal was justified.

699.  It is her pleaded case that:

“[…] even if the Defendant is entitled to summarily dismiss the Plaintiff on 27^th July 2013, which is denied, the Plaintiff is entitled to receive the balance of the provident fund contributed by the Defendant for the benefits of the Plaintiff for the period from 1^st September 1996 to 27^th July 2013, which is still being unlawfully withheld by the Defendant.”

700.  The IMC argued that there is no such thing as “provident fund contributed by the defendant [IMC] for the benefits of the plaintiff”. This court’s attention has been drawn to rules 7 and 9 of the Subsidized Schools Provident Fund Rules (Cap.279D) which govern contributions made by the plaintiff and donation made by the Government respectively.  There is no provision stipulating that the IMC would have to contribute towards the provident fund for the benefit of the plaintiff. 

701.  It has also been provided in the Contract that:

“教師須依照補助/津貼學校公積金規則，每月撥出底薪 (包括經教育統籌局批准作該用途的任何津貼) 的百分之五作公積金供款。同時，政府亦按照該教師的供款情況撥出適當數目的款項存入該教師的公積金戶口內。”

(emphasis added)

702.  Indeed, in paragraph 47 of the plaintiff’s own supplemental witness statement, she stated that

“有關朱校監在第199段提及的公積金事宜，本人需澄清，在正常情況下，本人在退休時即可領取公積金；惟因被告人不合理解僱本人，指控本人在任期間犯下嚴重過失，教育局因此通知本人，要待本案完結後才決定是否向本人發放該款項(僱主供款部份)，金額約為一百二十萬。”

703.  It can therefore be seen that even the plaintiff admitted that it was not the IMC which was withholding her provident fund.

704.  The reply to the IMC’s aforesaid argument made by the plaintiff’s counsel was that:

“[…] by the Defendant's breach of statutory duty, breach of the Plaintiff's Contract of Employment and/or unlawful termination, the Defendant caused the Plaintiff's loss of provident fund.”[104]

705.  With respect, this is not a reply to the IMC’s argument at all. 

706.  The plaintiff’s claim in this regard must therefore be rejected, on the simple ground that the subject matter of the plaintiff’s claim was non-existent.

707.  Without disrespect to counsel, for the above reason, I would not deal with parties’ arguments on whether the IMC should be liable to the plaintiff for government donations to the provident fund.

H2.    Other claims

708.  For the sake of completeness, I would cover the following two scenarios:

(1)     Scenario 1: If the plaintiff’s summary dismissal was justified, but she had remained in office after 27 July 2013 by reason of sections 55 to 57 of the Education Ordinance;

(2)     Scenario 2: The plaintiff’s summary dismissal was not justified.

H2.1  Scenario 1

709.  In the case where the plaintiff’s summary dismissal was justified, but she had remained in office after 27 July 2013 by reason of sections 55 to 57 of the Education Ordinance, the plaintiff argued that damages should be calculated up to her scheduled retirement date (31 August 2014) because Mr Chow’s principalship was only confirmed in November 2014 pursuant to section 55 of the Education Ordinance.

710.  She alleged that she would be entitled to 4 heads of damages, namely:

(1)     Loss of income between 28 July 2013 up to 31 August 2014;

(2)     Loss of government donation to the plaintiff’s provident fund for the same period of time;

(3)     Loss of 5% guaranteed dividend on the provident fund; and

(4)     Balance of provident fund contributed by the IMC for the benefit of the plaintiff for the period from 1 September 1996 to 27 July 2013.

711.  With respect, I do not accept that the plaintiff was in office until her scheduled retirement date, for this has totally disregarded the effect of the letter dated 22 October 2013 which was issued on behalf of the Permanent Secretary.  As I pointed out earlier under section F of this Judgment, in this letter, it was already clarified that the approval of Mr Wong’s appointment as acting principal should be regarded as the exercise of the Permanent Secretary’s power pursuant to section 55(d) of the Education Ordinance.  In other words, the plaintiff’s tenure as the principal of the School would only last until 15 October 2013, rather than 31 August 2014.

712.  Furthermore, I accept the IMC’s argument that in determining when the contract would come to an end in the case of wrongful dismissal, the court would assume that the employer would have brought the contract to an end at the earliest date that he could properly do.  In Gunton v London Borough of Richmond upon Thames[1980] 3 All ER 577, Buckley LJ held at 589h – i that:

“Where a servant is wrongfully dismissed, he is entitled, subject to mitigation, to damages equivalent to the wages he would have earned under the contract from the date of dismissal to the end of the contract. The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself, that is to say, that he would have determined the contract at the earliest date at which he could properly do so: see McGregor on Damages (13^th Edn, 1972) paras 884, 886,888.”

713.  The above quotation was cited with approval by Tang ACJHC (as he then was) in Ko Hon Yue v Liu Ching Leung & Ors[2011] 1 HKLRD 733 at paragraph 48.

714.  In my view, even if the plaintiff is right that the appointment of an acting principal cannot be treated as an exercise of power pursuant to section 55(d) of the Education Ordinance, the Permanent Secretary could have withdrawn her approval for the plaintiff to be the principal on 16 October 2013 pursuant to sections 55(c) and 56(1)(d), on the ground that she was no longer acceptable as such to the majority of the managers of the School.  Indeed, the appointment of an acting principal in the place of the plaintiff is a clear indicator of the Permanent Secretary’s agreement that the plaintiff should be replaced. 

715.  Hence, under this scenario, the plaintiff’s entitlement to damages should only be calculated up to 15 October 2013. 

716.  Out of the 4 heads of claims, I have dismissed the plaintiff’s claim on balance of provident fund allegedly contributed by the IMC in the period between 1 September 1996 and 27 July 2013.

717.  The plaintiff’s claim for the balance of provident fund for the period starting from 28 July 2013 should also be dismissed for the same reason.  Although in paragraph 414 of the plaintiff’s written closing submissions, she had changed the description of this claim to “damages for loss of government donation to the plaintiff’s MPF”, this cannot salvage the claim because this is not the plaintiff’s pleaded case.

718.  The plaintiff claims for loss of income for the period after her summary dismissal.  For reasons which I have explained above, her entitlement should only be calculated up to 15 October 2013 in the total sum of $153,573.39.

719.  Lastly, the plaintiff claims for loss of 5% guaranteed dividend on the provident fund.  In the scenario where the cut-off date is 15 October 2013, the plaintiff suggests that the amount of her loss under this head would be $112.86.  The IMC has not argued otherwise.  I would have awarded the plaintiff this sum under scenario 1.

H2.2  Scenario 2

720.  If the plaintiff’s summary dismissal was not justified, then the IMC could not terminate the principalship of the plaintiff without following the procedures stipulated under Appendix 8[105] of the Code of Aid. The said Appendix 8 provides that:

Procedure to be followed in case of Dismissal

or Termination of Appointment of a Teacher

The procedure to be followed by the School Management Committee should be as follows :

(a)     The teacher concerned should be given a warning, or warnings that his work is unsatisfactory. This should be recorded in the school files.

(b)    If no improvement in the teacher’s work is noticeable after an appropriate period then a formal written warning embodying relevant criticisms should be given to the teacher, and a copy of this letter should be forwarded to the Permanent Secretary. This should be recorded in the school files.

(c)    On receipt of this letter the Permanent Secretary shall investigate the circumstances.

(d)    If the teacher after receiving the warning letter still shows no improvement after an appropriate period, normally not less than one month, and the School Management Committee intends to dismiss him or not to renew his contract after the date of expiry, the Supervisor shall so inform the Permanent Secretary.

(e)     In each case of dismissal of a teacher, a sufficient period of notice of termination of employment must be given in accordance with Section 57.”

721.  Section 57(c) of the Code of Aid provides that:

“The employment of a teacher who has satisfactorily completed a probationary period shall be terminable by the giving of three months’ notice in writing by the School Management Committee or by the teacher.”

722.  I do not think the court should assume that the plaintiff would not show any improvement after 27 July 2013 despite the warnings which she had received.  Further, the completion of the procedure under Appendix 8 of the Code of Aid would have taken time.  Hence, I am of the view that the appropriate approach for assessing the plaintiff’s loss in the event summary dismissal on 27 July 2013 was unjustified was to assume that she would stay on as the principal of the School until her scheduled retirement date (i.e. 31 August 2014).

723.  In such circumstances, I would have awarded $789,183.87 and $4,066.64 to the plaintiff as her loss of income and loss of 5% guaranteed dividend on provident fund respectively.

724.  However, I would dismiss her claim for loss of government donation to her provident fund as this claim was not properly pleaded.  

I.      THE IMC’S COUNTERCLAIM

725.  In their written closing submissions, the IMC’s counsel argued the IMC’s counterclaim in the following way:

“411. Second, if this court finds that P was guilty of the misconduct as analysed above, it cannot be disputed that she has acted in breach of her duties owed to the IMC:

411.1 The breaches involved misuse of the School’s financial resources in incurring expenses for activities which had not been duly approved by the IMC.

411.2 The breaches also involved conflict of interests, including P’s failure to disclose the existing connections between the School and the HKAA when she procured the School to engage HKAA’s associates to conduct classes under the CCF Scheme, and the connections between the School and Chan when she procured the School to employ Chan as a teacher.

411.3 The breaches would at the very least have involved P’s failure to use proper skill and care in e.g., failing to follow the procurement guidelines and other instructions of the IMC, and in failing to obtain the IMC’s approval for her actions.

412. Third, regardless of the applicable test for causation for P’s breaches of duties, it is obvious that P’s breaches of duties in failing to obtain the IMC’s due approval has caused losses in the amount of $382,599.97:

412.1 P has caused the School to incur expenses in the amount of $72,751 for cross-border recruitment, including for the operation of the SZ Service Centre […].

412.2 The School was also liable to [Ms Yiu (a teacher)] for cross-border expenses in the amount of $15,399.57.

412.3 The School contributed $7,360 towards the sponsorship fee at Ta Ku Ling School.

412.4 The School has paid $222,768.29 in respect of the employee’s contribution to MPF between 2007/08 and 2012/13 as a result of P’s unauthorised payment.

412.5 P has paid extra salary of $14,250 to the 5 staff members between 12/2012 (when P increased their salaries without authorisation)and 5/2013 (when the IMC discovered P’s unauthorised act and issued Warning 7), including: […].

412.6 As a result of P’s failure to seek the IMC’s proper approval before employing Chan, the School was required to pay Chan $50,251.11 (i.e., 3 sums of $9,100.98, $1,516.83 and $39,633.30) for his salaries.

413. Further, but for P’s breaches of duties in carrying out the administration, management and operation of the School, which resulted in inter alia the substantial losses as identified above, the School would not have turned a deficit in its General Funds Account:

413.1 During P’s tenure as the principal in which the above misconduct took place, the School’s General Funds Account had turned into a deficit. By the end of the financial year when P was dismissed (i.e., 31/8/2013), the School recorded an accumulated deficit of over $1 million in the Capital Reserve of its General Funds Account, and was required to make good the deficit.

413.2 As a result, the School was required by the EDB to cover the deficit of $1,067,801.50 by sourcing its own funding from the Foundation.

413.3 The IMC accepts that it probably would not be able to satisfy the common law test of foreseeability and remoteness in respect of these losses. As such, in the event that the Court finds that P has only failed to use reasonable care and skills in discharging her duties, it would probably not be able to pursue this head of loss against P.

413.4     However, in the event that the Court finds that P was guilty of damage to the School’s property or that infidelity or disloyalty (such as breach of duty to avoid conflict between her duty and interests or conflict of duties), i.e., the first two type of breaches by a fiduciary as identified in BNZ [D#30], the Court is entitled to find P liable for equitable compensation for the IMC’s losses as reflected from the substantial deficit incurred.”

726.  The IMC therefore asks that the plaintiff be held liable for damages to the IMC, or to indemnify the IMC, for the sum of $1,067,801.50 and/or $382,599.97.   The IMC no longer asks for any declarations as pleaded in the Re-Re-Amended Defence and Counterclaim.

I1.     The claim for deficit of $1,067,801.50

727.  According to paragraph 205 of Mr Chu’s witness statement, the sum of $1,067,801.50 was the amount of deficit in the School’s General Funds Account by the end of the financial year 2013/2014.  It was alleged by the IMC that because of the plaintiff’s misconduct, the School’s General Funds Account had been turned into a deficit in respect of which the School had been required by EDB to cover by using its own funding from the Foundation.   The plaintiff should therefore be liable to indemnify the IMC for the same.

728.  Before I further discuss this claim, it is necessary to refer to the authority of Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 which the IMC’s counsel had relied on.  It was held by Tipping J therein that:

“[…] Breaches of duty by trustees and other fiduciaries may broadly be of three different kinds. First, there are breaches leading directly to damage to or loss of the trust property; second, there are breaches involving an element of infidelity or disloyalty which engage the conscience of the fiduciary; third, there are breaches involving a lack of appropriate skill or care. It is implicit in this analysis that breaches of the second kind do not involve loss or damage to the trust property, and breaches of the third kind involve neither loss to the trust property, nor infidelity or disloyalty.

It is inherent in what I have already written that the existence of the same relationship between the parties ie trustee and beneficiary, does not mandate that the same approach to causation and remoteness should be taken in all cases irrespective of the nature of the breach. In the first kind of case the allegation is that a breach of duty by a trustee has directly caused loss of or damage to the trust property. The relief sought by the beneficiary is usually in such circumstances of a restitutionary kind. The trustee is asked to restore the trust estate, either in specie or by value. The policy of the law in these circumstances is generally to hold the trustee responsible if, but for the breach, the loss or damage would not have occurred. This approach is designed to encourage trustees to observe to the full their duties in relation to the trust property by imposing upon them a stringent concept of causation. Questions of foreseeability and remoteness do not come into such an assessment.

In the second kind of case, the trustee or other fiduciary has committed a breach of duty which involves an element of infidelity or disloyalty engaging the fiduciary's conscience – what might be called a true breach of fiduciary duty. In this situation, the law applies the approach recently outlined by this Court in Gilbert v Shanahan [1998] 3 NZLR 528. In short, in such a case once the plaintiff has shown a loss arising out of a transaction to which the breach was material, the plaintiff is entitled to recover unless the defendant fiduciary, upon whom is the onus, shows that the loss or damage would have occurred in any event, ie without any breach on the fiduciary's part. Questions of foreseeability and remoteness do not arise in this kind of case either. Policy dictates that fiduciaries be allowed only a narrow escape route from liability based on proof that the loss or damage would have occurred even if there had been no breach.

In the third kind of case, the relationship of trustee (or fiduciary) and beneficiary is, in a sense, incidental. It provides the setting in which the breach of duty occurs, and with it such tortious proximity or contractual privity as may be necessary. The duty to take care is one which arises as an incident of the relationship, but for the purpose of determining the proper approach to causation and remoteness, it is the failure to take care which is the material dimension, not the fact that the relationship also creates duties of a fiduciary kind. Those duties are not relevantly engaged.

It is unnecessary for me to cite the various authorities which support this analysis; they are identified in Gault J's judgment. The approach of the law to the linked questions of causation and remoteness is influenced by the nature of the wrong which the defendant has committed. If it is a wrong engaging the conscience of the wrongdoer, what has sometimes been called fraud in equity, a stricter approach is justified. That corresponds with the position when there is fraud in the common law sense, at least as far as some of the more recent authorities are concerned. In such cases the greater moral turpitude of the wrongdoer supports a restitutionary ‘but for’' approach, at least on a prima facie basis. But where the wrong amounts in substance to carelessness or breach of contract, the policy considerations underpinning the stricter approach are absent. Hence, whatever the classification of the relationship, the law approaches the questions of causation and remoteness on a different and generally less onerous basis; namely whether there is a sufficient causal nexus and also foreseeability or reasonable contemplation of loss or damage of the kind in suit.”[106]

729.  The Bank of New Zealand case was cited by our Court of Final Appeal with approval in the case of Libertarian Investments Ltd v Hall [2013] 16 HKCFAR 681. 

730.  In my view, the present case is clearly the third kind of case as described by Topping J.  She had, as found in the earlier parts of this Judgment, failed to seek the IMC’s or EDB’s approval (as the case may be) before she undertook certain actions, and had failed to comply with the relevant procurement guidelines in some other cases.  These only amount to failure to exercise appropriate skill.  This is not a case in which the plaintiff had committed breaches leading directly to damage or loss of trust property.  Neither could it be said that there was any conflict of interest on her part.

731.  That being so, as conceded by the IMC’s counsel (see paragraph 413.3 of their written closing submissions as quoted above), the IMC simply cannot satisfy the common law test of foreseeability and remoteness in respect of the alleged losses.

732.  As a matter of fact, as can be seen from the figures pleaded in the Re-Re-Amended Defence and Counterclaim, the School’s General Funds Account had been in deficit since the financial year ended 31 August 2008.   At that time, there was no allegation of misconduct made against the plaintiff.  This shows that a deficit balance does not necessarily relate to any misconduct.

733.  I therefore conclude that this claim is clearly unsustainable and must be rejected.

I2.     The claim of $382,599.97

734.  It can be seen from paragraphs 412.1 to 412.6 of the IMC’s written closing submissions quoted above that the sum of $382,599.97 was made up of expenses incurred for:

(1)     Cross-border recruitment;

(2)     Sponsorship fees paid to Ta Ku Ling School;

(3)     the School’s contribution to MPF of certain employees;

(4)     extra salary paid to 5 staff members; and

(5)     salary paid to Mr Chan.

735.  As pointed out by the plaintiff’s counsel, the amounts claimed are special damages which should have been specifically pleaded by the IMC in its pleadings, which it did not do.  On this ground alone, this claim should be rejected.

736.  In any event, since I have rejected the IMC’s case on each of the above 5 matters[107], the IMC’s claim must fail.

J.      ORDER

737.  By reasons of the aforesaid, I dismiss the plaintiff’s claim and the IMC’s counterclaim.

K.      COSTS

738.  I make a costs order nisi that the plaintiff shall bear 70% of the IMC’s costs of the action (including all costs reserved), with certificate for two counsel, to be taxed if not agreed.

739.  When I reached the above preliminary view on costs order, I have taken the following matters into account:

(1)     While it has been outlined at the beginning of this Judgment that this case involves 4 main issues, the main battle ground at the trial concerns the issue of whether the IMC was justified in summarily dismissing the plaintiff;

(2)     The result of the crucial question on justification of summary dismissal is dependent upon the court’s consideration of 15 warnings/reminders, out of which the IMC has successfully established 7 of them but failed in the other 8 matters;

(3)     Be that as it may, at the end of the day, the crucial question was answered in favour of the IMC, and therefore the IMC can be said to be the successful party;

(4)     The IMC has also successfully defended the plaintiff’s claims in relation to the alleged breach of sections 55 – 57 of the Education Ordinance;

(5)     That said, the IMC was not wholly successful. Apart from failing to establish its case in relation to 8 matters referred to above, the IMC’s counterclaim for damages had also been dismissed.

740.  If any party wishes to vary the costs order nisi:

a)     Such a party shall lodge and serve written submissions within 14 days hereof;

b)     The other party shall lodge and serve written submissions within 14 days thereafter;

c)     The applying party shall lodge and serve written submissions in reply within 7 days thereafter;

d)     The application shall then be disposed of on papers.

741.  The above order nisi shall become absolute in the absence of application to vary within the first 14-day period mentioned above.