TSUNG TSIN ASSOCIATION AND ANOTHER v. LAI KWOK WAI AND OTHERS

HCA 516/2021

[2022] HKCFI 843

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 516 OF 2021

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D E C I S I O N

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1.  This is the adjourned hearing of the inter partes summons dated 1 April 2021 issued by Tsung Tsin Association (“P1”) and Wong Wah On (“P2”) (collectively “the plaintiffs”) for injunctions restraining Lai Kwok Wai (“D1”), Lai Kam Man (“D2”), Cheung Yuk Leung (“D3”) and Tsung Tsin Middle School Limited (“D4”) from

(1)  interfering with the plaintiffs’ use of Government land granted to P1 (“the Lot”) on which Tsung Tsin Middle School (“the School”) is erected and/or causing nuisance to the plaintiffs in respect of its use, occupation and enjoyment of the same by any means including (but not limited to) preventing access by the P1 to the Lot and the School;

(2)  dealing with and/ or parting with all the assets, books and accounts of the School;

(3)  dealing with and/or holding out to deal with the business and/or management of the School; and

(4)  holding out as agents and/or representatives of P1 and/or the School.

2.  On 9 April 2021, Au-Yeung J granted an interim injunction (“the 2021 injunction”) pending the adjourned hearing but on the basis of various undertakings given by the parties, the effect of which may be summarised as follows:

(a)  with advance notice given no later than 11 am on the day of the School visit, the plaintiffs (limited to 5 named individuals and one legal representative for the P1) were granted access between 4 pm and 7 pm on a weekday that is not a public holiday upon undertakings not to interfere with the operations of the School;

(b)  D2 and D3 gave undertakings not to prevent the P1’s access to the School;

(c)  D1, D2 and D4 gave undertakings not to part with the assets, books and accounts of the School; and

(d)  D4 to provide copies of accounts of the School for 4 years from 29 March 2017 to 28 March 2020 within 28 days.

3.  Shortly before the hearing, on 27 January 2022, the plaintiffs discontinued their claims against D2 who, like D3, had given an undertaking not to interfere with the plaintiffs’ access to the Lot.  Accordingly, D1, D3 and D4 are hereafter collectively referred to as “the defendants”.

4.  At the conclusion of this hearing, the Decision was reserved which I now give.

I.   Background facts

5.  The facts set out in §§6-17 below are not disputed.

6.  P1 was incorporated on 2 May 1959 as a company limited by guarantee.  It was founded to promote the interest of the Hakka community in Hong Kong.

7.  On 31 August 1960, the Government granted the Lot to P1 under Conditions of Grant No 6483 (“the Grant”) on which a not-for-profit primary school was to be erected.  The School moved to the Lot in 1965.

8.  The Grant was varied on 28 July 1987 by a Deed of Variation which substituted a new covenant allowing the erection of a secondary school on the Lot.

9.  On 24 September 1992, D4 was incorporated as a company limited by guarantee.  It was registered as a charity under the Inland Revenue Ordinance on 15 February 1993 and since that date D4 has operated the School as its subsidiary and conducted its day-to-day management.

10.  The School is a “school” within §3 of the Education Ordinance, Cap.279 (“the EO”).

11.  The Education Bureau (“EDB”) formally approved P1 as the sponsoring body of the School on 15 October 2001.

12.  On 7 December 2007 D1 and D2 were appointed members of the 36^th Executive Committee (“EC”) and the Executive Standing Committee (“ESC”) of P1.

13.  At the Extraordinary General Meeting (“EGM”) held on 22 May 2018, members of the 36^th EC were replaced by members elected to the 37^th EC.

14.  Upon P2’s petition in HCMP 2056/2018, Harris J declared (on 10 January 2019) the 37^th EC duly elected to replace the 36^th EC.  P2 and D3 were respectively elected Chairman and Vice-Chairman of the 37^th EC and ESC.

15.  D1 was registered as a manager of the School on 20 February 2019 by the Permanent Secretary for Education (“PSE”).  At that time D2 was the supervisor and a manager of the School.

16.  The 36^th ESC handed over all books, records and assets of P1 to the 37^th ESC[1] on 20 January 2020.

17.  D2 resigned as supervisor and manager of the School on 9 March 2020.

II.   Brief overview of the plaintiffs’ case for an injunction

18.  The plaintiffs’ application for interim relief is based on causes of action against the defendants for trespass and nuisance although only the claim for trespass is pleaded in its statement of claim (“SOC”).  The foundation for the trespass claim is that P1 is the grantee of the Lot which it accepts is held for educational purposes.  The complaint is that the defendants have obstructed or interfered with the plaintiffs’ access to the School.

19.  The SOC contains allegations, inter alia, that D1 and D2 were in breach of their fiduciary duties as directors of P1 by causing D4 to enter into a contract with a company called Starlight 88 (“Starlight”) in March 2018 over the management of the School (“the Management Agreement”).

20.  It is the plaintiffs’ case that as a matter of tradition and practice, the supervisor and managers of the School have always been appointed by P1 who are usually members of the ESC.

III.  Governance of the School

(A)   The statutory scheme

21.  For the purposes of the EO, the School is a “school without IMC” as it does not maintain an incorporated management committee (“IMC”).

22.  The management structure for a school without IMC consists of a “management committee” made up of “managers” of the school and a supervisor[2] as the “management authority”.

23.  Managers are persons registered under section 29 of the EO.  The PSE has power to refuse to register an applicant as a manager of the school on the grounds specified in section 30 (1) and (1A) and must refuse to register an applicant as a manager if that applicant is not acceptable as a manager of the school to the majority of the managers[3].

24.  It is the management committee that is entrusted with the management of a school without IMC[4].

25.  The PSE is authorised to cancel the registration of a manager on specified grounds[5].  Cancellation of the registration of a manager is mandated[6] if it appears to the PSE that that person is no longer acceptable as a manager of the school to the majority of the managers.

26.  There are provisions for the approval of subsequent supervisors which are premised on there being a functioning management committee[7].

27.  Where the sponsoring body and the management committee have expressed different views on any matter, the sponsoring body’s views take priority when the PSE exercises his powers under 30 (2), 31 (2A), 37 (d), 38 (2) and 38A (2)[8].

(B)  P1’s Articles of Association[9] (“P1’s Articles”)

28.  Article 61 requires the EC to appoint for each school it establishes a management committee of not more than 5 members and the appointees are required to apply to the EDB for registration as managers.  There are provisions for removal of a manager and the appointment of a replacement.  Article 61 (iv) stipulates that a member of a management committee need not necessarily be a member of the EC.

29.  Article 62 makes it the special responsibility of the school management committee to conduct the School in accordance with the EO.

30.  Article 63 provides for the appointment of a supervisor subject to the approval of the Director of Education with provisions for the removal/dismissal and appointment of a replacement.

31.  Articles 61-63 all take effect subject to the provisions of the EO and, as noted in §23 above, registrations under the EO are not automatic as the PSE has a discretion to refuse to register an applicant as manager and, in prescribed circumstances, he is obliged to refuse registration. The PSE also has similar powers and duties in relation to the cancellation of a registration of a manager and/or supervisor[10]

(C)  D4’s Articles of Association (“D4’s Articles”)

32.  The governance of D4 is set out in its Memorandum and Articles of Association.  For present purposes, the salient provisions of D4’s Articles are those mentioned below:

(a)  D4 has a Board of Trustees or Board of Directors and “the Trustees” are persons for the time being performing the duties of Trustees or Directors[11].  The subscribers to its Memorandum and Articles were the first members of the Board[12] (For convenience, the term “Board” or “Trustee” used hereafter is a reference to the Board of Trustees or Board of Directors.)

(b)  Members of D4 are persons admitted to membership by the Trustees[13].  While all members of P1’s EC and Supervisory Committee (“SC”) are entitled to become members[14], the Board’s power to admit “such other persons” to membership is unrestricted.

(c)  The management and control of D4 is vested in the Board[15] whose members hold office for a term of 2 years and may stand for re-election[16]. The Board is authorised to appoint a member to fill any vacancy on the Board[17].  D4 has power in General Meeting to increase or reduce the number of Trustees[18].

(d)  Subject to the Companies Ordinance, Cap 622 and the Articles, the Board is authorised to make such arrangements and generally do all such acts as may be exercised by D4 in meetings[19].

(e)  Article 25 confers express powers on the Board who may, inter alia, “make, fulfil, rescind, modify, or vary any contract, and to do all such acts and things as they may think expedient for the purposes of [D4]”.

(f)  Articles 44-45 concern the “management committee”.  Article 44 requires the Board to nominate for each school established or carried on by D4 a management committee whose members are required to apply for registration as managers under the EO.  It also confers on the Board powers relating to the removal/replacement of a member of the management committee.  A member of the management committee may be but need not necessarily be a Trustee[20].

(g)  Article 46 requires the Trustees with the agreement of the majority of the management committee members to nominate a member of the management committee to be the supervisor of the School and requires the management committee to recommend such person for approval by the PSE.

33.  It is to be noted that the only reference to P1 to be found in D4’s Articles is Article 4 (which entitles members of P1’s EC and ESC to become members of D4). There are no provisions that expressly confer or vest any overriding powers in P1.  Prima facie, D4 is a self-contained, independent and autonomous legal entity.

IV.   Disputed matters

34.  According to the plaintiffs, at the 37^th ESC meeting held on 13 February 2020[21], the 37^th EC adopted resolutions inter alia to

(i)     dismiss D2 as Chairman of the 36^th EC from the office of supervisor of the School and appoint P2 in his place;

(ii)    remove D1 and other members of the school management committee (being members of the 36^th EC) and appoint D3, Chan Wan Yuen[22] (“WY Chan”) and 7 other members[23] nominated by the EC as managers; and

(iii)   dismiss D4’s existing directors and replace them with P1, D3, WY Chan and 7 other members nominated by the 37^th EC as directors of D4.

35.  It is also the plaintiffs’ case that

(i)     on 28 October 2020, D1 was expelled from the Association at a meeting (at which D1 was not present) held by the EC and SC;

(ii)    on 18 November 2020, EDB confirmed the registration of D3[24], Yeung Lai To (“Yeung”) and Wong Chau Chuen (“Wong”) as managers of the School[25];

(iii)   on 23 December 2020, the Association notified EDB of its resolution to terminate D1’s mandate as manager of the School;

(iv)   on 15 January 2021, D3 was removed from his office as a member of the 37^th ESC; and

(v)    P2 was informed by the PSE on 25 January 2021 that he was approved as the supervisor of the School.

36.  On 25 January 2021, EDB invited D1 to make representations on the 13 February 2020 resolution removing him from his office of a manager of the School.

37.  D1 disputes the authenticity of the 13 February 2020 resolutions[26]. D3 (a Vice-Chairman of the 37^th EC and a registered manager of the School) and WY Chan (also a Vice-Chairman of the 37^th EC) deny that any meeting of the 37^th ESC was held on 13 February 2020 or that any meeting of the 37^th ESC was ever convened for the purpose of electing and appointing managers/supervisor of the School and signed a statement to that effect dated 1 February 2021.

38.  As a result, the PSE has referred the matter to the Police who, as of late August 2021, are still investigating the matter.

39.  D3 challenges the validity of his removal from office as a member of the 37^th EC on 15 January 2021 on the basis that his removal was irregular, being non-compliant with Article 11.

40.  It is apparent that until the disputed issues are resolved, the composition of the management committee of the School cannot be ascertained.

41.  Since both P1’s Articles and D4’s Articles contain provisions for the appointment/removal of managers, the question arises as to which of P1 and D4 is the relevant entity legally entitled to appoint/remove managers of the School, subject to registration by the PSE.  That is a matter that also requires clarification and resolution.

V.   The Management Agreement

42.  D1 who served as a member of the P1’s ESC from 1975 to 1990 and from 2009 to 2020 made an affirmation dated 3 June 2021 (“D1 1^st”) attesting to the fact[27] that members of P1’s EC or its ESC do not take part in the management of the School.

43.  D1 became a Trustee of D4 in September 2015 but played no active role until late 2017 when he was asked by the then existing management of the School to join as a school manager and was registered as such by the PSE on 20 February 2019.  Upon undertaking that role, he found that the School was plagued with problems: (a) D4’s financial records were in disarray[28]; (b) only 5 students enrolled in the School in 2017; and (c) the then management had entered into an ultra vires arrangement for education.

44.  D1 procured D4 to engage accountants to regularise D4’s accounts and financial record keeping and to work with Starlight, an external education institution, to deliver proper education programs in an attempt to revive the School.

45.  On 29 March 2018, D1 and Nyaw Mee Kau on behalf of the Board (D4) entered into an agreement with Starlight for a term of 6 years commencing with the academic year 2018/2019.

46.  Under the Management Agreement, Starlight was responsible for various expenses[29] incurred by the School.  At that time, tuition fees[30] were received by Starlight directly.  That arrangement was said to be revised on an unspecified date[31] with fees paid to D4 directly.

47.  The Management Agreement provided for Starlight to make certain payments to D4 per student per academic year, guaranteeing a minimum number of students, and for Starlight to spend $20 million to renovate and repair one of the buildings in the School.  D4 also agreed with Starlight that the Board should consist of 5 members, 3 to be appointed by D4 and the remaining 2 by Starlight.

48.  D4’s collaboration with Starlight resulted in an international education program being put in place and enrolment increased from 5 in 2017 to 148 as at 31 August 2021.  The university progression rate was 100% and clean financial statements have been produced since 2018/2019[32].

49.  The plaintiffs complain that D4’s role was to manage the School and it had no right to contract out its management to Starlight.  The arrangement by private treaty for the appointment of trustees of the School was said to contravene the EO.

50.  The court was referred to the audited accounts (provided by D4 pursuant to its undertaking) which, for the year ended 31 August 2018, did not contain any disclosure of the Management Agreement.  Further, the auditors had issued a disclaimer of opinion.

51.  In that regard, the disclaimer is hardly surprising given D1’s evidence as to the chaotic state of D4’s financial records when he became involved in the late 2017 and for which D1 could not have been responsible.

52.  The audited accounts for the subsequent 2 years (years ended 31 August 2019 and 2020) contain a qualified opinion from the auditors, the qualification being solely attributable to the existence of the 2018 disclaimer.

53.  That said, the omission from the 2018, 2019 and 2020 accounts of any mention of the Management Agreement is a matter that calls for an explanation.  Further,the audited accounts produced do not appear to shed light on whether Starlight has discharged its payment and renovation obligations.  There is also the provision relating to the composition of the Board which is governed by D4’s Articles and is not a matter for private treaty.

VI.   Events precipitating the present proceedings

54.  Against the backdrop described in §§34-39 above, on 24 February 2021, P2 (amongst others) visited the School without any advance notice (“the 1^st visit”) “in order to assume control of the School” and were refused entry by Chan Ching Yuen (“CY Chan”) an employee of D4.

55.  On 30 March 2021, P2 and others paid another visit to the School (“the 2^nd visit”), having given written notice on 29 March 2021 to the former solicitors for D1 and D4 demanding that the “management of the school be handed over” and that the purpose of the intended visit was to “take over” the School.

56.  The plaintiffs were again denied entry by CY Chan.

57.  On 1 April 2021, the plaintiffs issued an inter partes summons for an injunction.  At the hearing on 9 April 2021, Au-Yeung J granted interim relief in the terms described in §2 above.

58.  On 15 April 2021, P1’s representatives visited the School (“the 3^rd visit”).  There is a dispute between the plaintiffs on the one hand, and D1 and D4 on the other, as to compliance with the 2021 injunction.

59.  The plaintiffs’ representatives paid a further visit to the School on 20 April 2021 (“the 4^th visit”) which passed without incident.

VII.   Applicable legal principles

60.  It is common ground that the applicable principles to be applied in determining the plaintiff’s summons are those set out in Hong Kong Civil Procedure 2022 at §29/1/29. The ultimate question is: what is the course to adopt that involves the least injustice in case of the grant or refusal of interlocutory relief: see Music Advance Limited v Incorporated Owners of Argyle Centre Phase 1 [2010] 2 HKLRD 1014 at §12.

61.  In deciding that question, the court has to take into account the apparent strength or weakness of the respective cases in order to decide whether the plaintiffs’ case, on the merits, is sufficiently strong to reach the threshold and this will include assessing the apparent plausibility of statements in affidavits: see the extract from Gee on Commercial Injunctions, the 5^th ed (2004), para 12.024 cited in Velatel Global Communications Inc v ChinaComm Limited, unrep., HCA 1978/2011, 8 March 2013 at §24.

62.  Where the pleaded cause of action is devoid of merits, the application for interim relief must be dismissed: the Mareva relief cannot stand on its own: see Intercontinental Housing Development Limited v Quek Teck-huat [1986] HKLR 1153 at 1163H per Fuad JA.

The plaintiffs’ application

63.  At the hearing, the plaintiffs fine-tuned the relief they now seek.  In summary, the plaintiffs are willing to give undertakings (i) not to cause any disturbance and/or interruption to classes and/or disturb any students, teachers and administrative staff during their access to the School and that any visit will be conducted in a peaceful manner; and (ii) that only 3 persons duly appointed by P1 shall visit the School at any one time.

64.  The substantive relief sought is in the terms of the 2021 injunction save that the words “and/or the School” in §1(4) is deleted and injunctive relief is also sought against D3.

65.  For their part, D1 and D4 are prepared to continue with their undertaking not to part with any of the assets, books and accounts of the School.

(A)  D1 and D4

66.  As matters stand, P2’s appointment as supervisor (and manager[33]) of the School, D1’s removal as a manager and his expulsion as a member of P1 are disputed issues that can only be resolved at trial.

67.  At the hearing, Mr Sunny Chan, counsel for the plaintiffs, acknowledged that issues concerning the identity of the current managers (and hence members of the management committee of the School) are controversial and that this hearing is not the occasion for deciding those matters.

68.  For their entitlement to enter the School premises, the plaintiffs only rely on the fact that P1 is the grantee of the Lot for educational purposes.  Specifically, the plaintiffs are not seeking an order that the defendants vacate the School (and its premises).  Rather, their case is that the defendants should not prevent the plaintiffs from entering the School.

69.  The plaintiffs submitted that entry is necessary to carry out 3 purposes: (a) to inspect the facilities and see how they have been managed by Starlight; (b) to investigate the dealings between Starlight, D1 and D4; and (c) for P2 to assume the management role as Chairman of P1 and as supervisor of the School.

70.  Mr Sunny Chan submitted that P1, as grantee of the Lot has a mandate to ensure that the Lot is used for educational purposes and in order to carry out that mandate, an investigation for the purposes set out in §69 has to be carried out and hence access is necessary.

(1)  Serious question to be tried?

71.  Pausing there, it has to be said that it is not evident how purposes (a) and (b) above of the contemplated investigation can be accomplished through gaining physical entry to the School. Further, purpose (c) would literally drive a coach and six through the plaintiffs’ avowed position[34] that the court is not being asked to adjudicate on the controversial matters mentioned in §66 above.

72.  Moreover, it does not necessarily follow from the fact that there are matters that merit investigation that the plaintiffs and/or P1 are/is entitled to conduct that investigation.

73.  Purposes (a) and (b) relate to the scope of D4’s powers under its Articles.  Prima facie, it is an internal matter to be resolved within the framework of D4’s Articles.

74.  The relevant question is whether D4 (which is acknowledged to be a separate legal entity) had power under its Articles to enter into the Management Agreement.  Clearly that is not a matter capable of being resolved by granting the plaintiffs physical access to the School.

75.  While P1 is the sponsoring body of the School, the Court of Appeal held in Ko Hon Yue v Liu Ching Leung [2011] 1 HKLRD 733 at §82 that the managers of a school are not agents of the sponsoring body although in some circumstances its views would prevail over the views of a management committee[35].  In fact, the EO does not require that there be a sponsoring body. Suffice it to say that the relevance of P1 being the sponsoring body in the present case has not been explained.

76.  In so far as P1 is grantee of the Lot, as is common ground, P1 holds it as a trustee in furtherance for the specified charitable purpose of maintaining a school on the Lot.  Unlike a private owner, P1 does not have an absolute right to enter the Lot.

77.  The evidence is that since its incorporation D4 has been entrusted with the management of the School erected on the Lot.  As at 31 December 2021, D4 is shown as a charitable institution of a public character exempt from tax under section 88 of the Inland Revenue Ordinance with the School listed as its subsidiary.  The evidence shows that, currently, there is a functioning school operating on the Lot.

78.  Incidentally, as D4’s accounts are subject to the Revenue’s scrutiny, the basis for the plaintiffs’ allegations that D1 through D4 has misappropriated funds for purposes other than for the benefit of the School is unclear.

79.  The plaintiffs’ pleaded cause of action is in trespass.  It is therefore incumbent on the plaintiffs to show that D1 and D4 are not entitled to be on the Lot.  On the facts presented, at the very least, the defendants must have a contractual license to occupy the Lot and until that license is legitimately terminated, they cannot be considered trespassers with no right to be on the Lot.

80.  That notwithstanding, the plaintiffs continue to maintain that denial of entry to P1 amounts to an act of trespass but have cited no authority in support of the proposition that a mere denial of entry to the grantee of land by someone entitled to be in possession can amount to trespass.  But as occupiers entitled to possession of the School, D1 and D4 must be entitled to refuse entry to persons who have no legitimate reason to visit the School.

81.  In fact, throughout the hearing, the plaintiffs did not once mention trespass which was indeed surprising given that it is their pleaded cause of action and the anchor for the injunctive relief that they seek.

82.  Turning to the purpose (c), despite the acknowledgement that the identity of the current members of the management committee is up in the air, counsel for the plaintiffs sought to justify P2’s involvement on the basis that P1 has a mandate that is to be carried out by P2 as its Chairman.

83.  P2 is not the grantee of the Lot and, in any event, what is stated in §§76-80 would apply.  Even if (contrary to my view) P1 has any right of access, for my part, until the doubts concerning P2’s appointment as supervisor have been removed, it would not be “just and convenient” for this court to entertain access by P2 under the guise of representing P1.

84.  That D4 is a separate and independent entity and a registered charity is clear.  There is nothing in its Articles to show that its powers of management over the School are subject to P1’s overriding control.  Rather, like P1, it is subject to the statutory scheme and the oversight powers of the PSE/EDB.

85.  The plaintiffs attach significance to recital (A) of the Management Agreement which recites that D4 “is duly authorised by [P1] the grantee under Conditions of Grant… to operate a middle School … on the Lot under a separate legal entity”.

86.  That recital is an accurate rendition of the actual state of affairs.  It is not understood how it can assist the plaintiffs’ case.

87.  The plaintiffs also seek access on the alternative ground of nuisance.  As earlier noted, that cause of action is not pleaded in the SOC.  It is essential that a viable course of action be identified and therefore pleaded.  As already noted, the Mareva relief cannot stand on its own: see per Fuad JA in Intercontinental Housing case.  See also Au-Yeung J’s observations in Pacas Worldwide Limited v China Health Group Limited, unrep., HCA 2961/2015, 3 May 2016 at §8[36]. As nuisance has not been pleaded, it is not relevant for present purposes.

88.  In my view, the plaintiffs have not shown that there is a serious issue to be tried based on trespass and/or nuisance.

(2)  Balance of convenience

89.  If I am wrong and , contrary to my view, there is a serious issue to be tried in trespass where does the balance of convenience lie, having regard to the undertakings the plaintiffs have offered[37]?

90.  The paramount consideration must be to ensure that the School should continue to function without disruption or interference. At stake is the education of its students.  The undertakings presently offered by the plaintiffs do little to assuage concerns of incidents erupting in the future as past incidents[38] bear traits of highhandedness.  Given the fraught relationship between the parties, little will be required to spark off another incident especially since the plaintiffs now[39] seek unrestricted access and without prior notice.

91.  I have no hesitation in concluding that the balance of convenience lies in refusing the injunction sought.

92.  For those reasons, bearing in mind the principles mentioned in §60-62 above, and on the basis of D1 and D4 continuing with their undertakings not to part with any of the assets, books and accounts of the School, I would discharge the 2021 injunction as against D1 and D4.

(B)  D3

93.  D3 was elected as a member and one of the Vice-Chairman of the 37^th ESC on 22 May 2018.  He was registered as a manager of the School in mid-December 2020.

94.  D3’s evidence is that on or about 23 December 2020 he refused the request of P2’s friend to sign a letter to the EDB recommending P2 to be the supervisor of the School without going through proper ESC procedures.  Then, in short order, on 15 January 2021 he was removed from office as a member of the 37^th ESC.

95.  D3 challenges his removal on 15 January 2021 on the ground that the procedures prescribed by Article 11 of P1’s Articles had not been followed.  As with the other issues mentioned in Section IV above, this disputed issue has yet to be resolved.

96.  Meanwhile, inter alia, the plaintiffs are seeking an undertaking from D3 pending trial similar to the one he had given for the 2021 injunction.  Mr Sunny Chan submitted that taking D3’s case at face value and assuming that he had done nothing to obstruct access, he asked rhetorically why D3 should not give an undertaking not to interfere with the plaintiff’s’ access since it causes D3 no prejudice.

97.  But if it is the case that D3 had done nothing to obstruct access, and absent sufficient evidence to warrant an undertaking, why should D3 provide one? It simply does not follow from the fact that D3 had provided that undertaking when the 2021 injunction was granted that he should continue to do so until the trial of this action.

98.  Mr Raymond Tsui, counsel for D3, highlighted the fact that before the plaintiff’s application for interim relief by summons dated 1 April 2021 with a return date of 9 April 2021, no pre-action letter had ever been sent to D3.  The pre-action letter dated 30 March 2021 only sent was to the former solicitors for D1 and D4 and not to D3 who was served with the summons as it were out of the blue.

99.  Mr Tsui explained that as there was insufficient time then for D3 to consider the plaintiffs’ evidence and to prepare his own by the return date, D3 agreed to give the undertaking in the interim pending a proper evaluation of the plaintiffs’ case. That undertaking cannot and should not be taken as an admission of liability.  D3 does not consider it appropriate to offer the undertaking sought.

100.  The plaintiffs’ case against D3 concerns and arises out of the 2^nd visit the background to which is set out at §55 above.  On that occasion, the plaintiffs were again denied entry by CY Chan who (as pleaded in §25 of the SOC) is alleged to have stated “that he was under express instructions from the 2^nd, 3^rd and 4^th Defendants not to let the Plaintiffs into the School”.

(1)  Serious question to be tried?

101.  However, the supporting evidence[40] is quite different. §29 of the plaintiffs’ written submissions sets out the English translation of what CY Chan said at that visit:

“My last name is Chan … I represent the School … I represent the School Manager .. Cheung Yuk Leung [D3] … Lai Kam Man [D2]. All along we, their situation, you can read the legal documents. You can check with the Education Bureau, this is not what I see.”

102.  Those remarks of CY Chan were made in an exchange with one of the persons seeking entry.  By no stretch of the imagination could they be interpreted as a statement by CY Chan that he was acting under D3’s “express instructions”. Of particular significance is the fact that D3 was not given advance notice of the 2^nd visit.

103.  The plaintiffs then zeroed in on CY Chan’s affirmation filed pursuant to a request from D3 to clarify the 2^nd visit where CY Chan did not “deny” he was acting under the instructions of D3.  Quite what point being made is unclear.  CY Chan was simply clarifying what he meant when he used the word “represent” in the passage cited in §101 above.

104.  There was also a complaint that D3 caused his solicitors to inform DBS Bank about a derivative action against P1 as a result of which the DBS Bank withheld P1’s applications for change of mandate.  What that incident[41] has to do with the trespass claim is unclear.

105.  It would appear that the plaintiffs are clutching at straws to make out their complaints against D3.  Their dogged pursuit of D3 for trespass only because D3’s name was mentioned by CY Chan during the 2^nd visit is seemingly irrational when juxtaposed against the plaintiffs’ willingness to settle with D2 when the plaintiffs’ case against both as regards the denial of entry is based on exactly the same evidence.

106.  It may well be that the joint letter D3 had written with WY Chan and/or the derivative action[42] brought by D3 that is on foot resulting in the  police being involved played a role.

107.  As D4 is in lawful occupation of the Lot and the plaintiffs are not entitled to gain access without D4’s consent, the reality is that the plaintiffs cannot gain access irrespective of any “instructions” allegedly given by D3.

108.  Based on the evidence adduced, I consider that there is no serious issue to be tried as against D3 in trespass.  For the reasons already stated in §87, the alternative claim is nuisance cannot even get off the ground.

109.  In those circumstances, it is unnecessary to consider the balance of convenience.

VIII.   Conclusion and order

110.  For all the reasons stated above, on the basis of D1 and D4 continuing with their undertakings not to part with any of the assets, books and accounts of the School until after trial of the action, the 2021 injunction is discharged against D1, D3 and D4.

111.  There is to be an order nisi of costs in favour of D1, D3 and D4 with certificate for counsel, such costs to be summarily assessed and payable forthwith.

112.  The defendants are directed to lodge their statement of costs within 7 days of this Decision, the plaintiffs to lodge their objections within 14 days thereafter and the defendants to lodge their replies (if any) within 7 days thereafter.

113.  The summary assessment of costs will be made in Chambers.