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

HCMP 1203/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1203 OF 2013

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REASONS   FOR   DECISION

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1.  The plaintiff seeks an interim injunction seeking to restrain the defendants from granting an honorary title on one Mr Tommy Lam (“Mr Lam”) as “Honorary Advisor”. I have dismissed his application. Here are my reasons.

The application by originating summons

2.  In the originating summons, the injunction sought was in the same terms.  The grounds for the injunction are:

A. That the meeting held on 31 March 2103 (“the Meeting”) was void and invalid as not being in accordance with clauses 9, 19, 20 and 42 of the 1^st defendant’s Constitution.

B. That in view of A, the prior decision on 21 January 2013 at a restaurant not to grant an honorary title to Mr Lam was final and conclusive.

Background

3.  The Plaintiff and the 2^nd Defendant (D2) were students of Mr Lam in various wine courses.  Mr Lam formed the Society of Wine Educators – Hong Kong and Macau Chapter (“SWEHM”) and was a founding member of the 1^st defendant (“the Society”).

4.  The Society was formed on 12 December 2012.  It was registered in accordance with the provisions of section 5A(1) of the Societies Ordinance.  D2 is its chairman.

5.  On 20 December 2012, D2 asked the plaintiff to nominate him as a chairman, and the plaintiff decided to vote for him.

6.  On 21 January 2013, the 5 ex-co members of the Society (including D2, and the plaintiff) held an ex-co meeting at a restaurant.  Three persons including the plaintiff and D2 allegedly agreed not to give an honorary title to Mr Lam, whilst the other 2 did not express an opinion. 

7.  The Meeting was held on 31 March 2013, which the plaintiff said he was not notified of.  D2 attended as chairman together with 6 ex-co members.  It was resolved with 6 in favour and one abstention that Mr Lam might use the title honorary advisor until the next AGM in 2015 (“the Resolution”).  The Resolution was subject to Mr Lam’s acceptance.

8.  The plaintiff challenges the validity of the Meeting.  He wants the court to find out D2’s reasons behind the screen as to why the honorary title should be given to Mr Lam.

9.  The defendants have taken out an application for striking out the originating summons on all the grounds under Order 18, rule 19.

10.  The plaintiff seeks an interim injunction pending trial.

Legal principles for grant of interim injunction

11.  The principles laid down in American Cyanamid v Ethicon Ltd [1975] AC 396 are applicable.  The applicant has to show a serious issue to be tried, that damages are not an adequate remedy and the balance of convenience is in favour of the grant of the interim injunction.

Serious issue to be tried

12.  I approach this question by considering (a) whether the Meeting was duly convened; and (b) whether the business transacted was within the powers of the ex-co.

13.  As the Meeting was an ex-co meeting, clauses 56-60 of the Society’s Constitution applied.  Clauses 57 and 58 provide as follows:

“Clause 57: Unless and until otherwise determined by the ExCo, 3 Voting Officers present in person shall be a quorum. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the chairman shall have a second or casting vote.

Clause 58: A Voting Officer may at any time, and, on the request of any Voting Officer, the Secretary or the Chairman shall call a meeting of the ExCo. Notice of meetings shall be given to all Officers and such notices shall be deemed to be duly given to an Officer if it is given to him personally or by word of mouth or sent in writing to him at his last known email or address given by the Officer to the ExCo for this purpose.”

14.  The plaintiff does not dispute that the ex-co was duly constituted with 7 voting members.  There has never been any non-voting officer.  As all the 7 ex-co members have attended the Meeting, there could not be any question of notice not validly given.

15.  Moreover, D2 pointed out in his affirmation that the plaintiff has ceased to be a member of the ex-co of the Society, although he remained a member of the Society.  The plaintiff was therefore not entitled to receive notice of the meetings of the ex-co.

16.  The plaintiff, however, relies on clauses 9, 19, 20 and 42 of the Constitution, which provide as follows:

“Clause 9: All GMs other than AGM shall be called EGM.

Clause 19: Convening of EGM shall be notified by the ExCo to all members by emails at least 10 calendar days before such meeting.

Clause 20: Every notice of meeting shall specify the place, the day and the time of the meeting and, in the case of special business, the general nature of such business.

Clause 42: Inter-Bearer Agreement: the Office-Bearers and Voting Members, after the elections at GMs, should sign some agreements, with terms agreed among themselves, to appropriately limit of distribute the liabilities among themselves.”

17.  As the Meeting was not an EGM, the clauses relied on by the plaintiff under the Constitution did not apply.

18.  The Meeting appeared to have been validly convened in my view.

19.  Conferring an honorary title on Mr Lam would appear to fall within clause 28 of the Constitution which provides that:

“An ExCo is formed and shall be entrusted with general management and carrying on of the activities and business of the SWEHK and shall have all powers, in accordance with this Constitutions and resolutions of GMs, to do all such acts and things on behalf of this SWEHK as it may consider necessary or desirable.”

20.  The proper way to challenge the Resolution is to convene an EGM pursuant to Clause 18 which provides that EGMs shall be convened by the ex-co upon the expressed requisition of at least 2 current Professional Members.  The plaintiff has not appeared to have done so.

21.  The “resolution”, if any, on 21 January 2013 was not minuted.  Even if that resolution had been passed, there was nothing to prevent the ex-co from coming to a different resolution at a subsequent ex-co meeting.  This resolution on 21 January 2013, if made, would have supported the defendants’ case that the ex-co had power to confer or not confer an honorary title.

22.  The business dealt with at the Meeting therefore appeared to have been within the powers of the ex-co.

23.  In his affirmation made on 19 July 2013, the plaintiff gave further grounds in support of his application for interim injunction and the related urgency.  He claims that the defendants wanted to announce the honorary title to Mr Lam because D2 was trying to promote his book.  He also said that the minutes of the Meeting was not sent to him until 29 April 2013.  These grounds only have to be stated to be dismissed as being irrelevant both to the claim and the basis for the interim injunction.

24.  Considering all these factors, there is serious doubt as to whether the plaintiff has a viable cause of action.  The plaintiff has failed to show a serious issue to be tried.

25.  Even if he has, insofar as the Society is concerned, it is not a legal entity who can be sued. 

Damages not an adequate remedy

26.  I have asked the plaintiff what damage he will suffer if no interim injunction is granted.  All he can say is that the reputation and integrity of the Society will be affected.  I fail to see how the reputation and integrity of the Society will be affected when it is to confer an honorary title on its founding member.  There is no personal damage to the plaintiff at all.

Balance of Convenience

27.  The grant of an injunction is a discretionary matter.  Since there is another way to resolve the matter in accordance with the Constitution – by EGM – there is no need for an injunction to be granted.

28.  Mr Lee is also unable to show me why an interim order should be made, whether due to urgency or other cause. 

29.  The balance of convenience is clearly against the granting of an interim injunction.

Conclusion

30.  The plaintiff has failed to show a serious issue to be tried and the balance of convenience is clearly against the granting of an injunction.  I dismiss the application.

Costs

31.  As this is a distinct application, costs should follow the event and be granted to the defendants. 

32.  I thank Mr Yu for his assistance.