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

CACV 282/2023, [2024] HKCA 1092

On Appeal From [2022] HKDC 308

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 282 OF 2023

(ON APPEAL FROM DCCJ NO 3296 OF 2020)

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J U D G M E N T

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Hon G Lam JA (giving the Judgment of the Court):

A. Introduction

1.  The plaintiff was the principal of Tsuen Wan Trade Association Primary School (“School”), an aided school.  The defendant was its incorporated management committee.  We shall refer to it as the “defendant” or the “IMC” as appropriate.  On 27 July 2013, the defendant gave the plaintiff notice of summary dismissal and immediately prevented her from further serving as the principal.  The plaintiff brought an action against the defendant complaining that the dismissal was unjustified and also unlawful as being in breach of sections 55-57 of the Education Ordinance (Cap 279) and in breach of contract.  In response the defendant counterclaimed for damages or an indemnity in respect of losses allegedly caused by the plaintiff’s breaches of duty.

2.  After trial, HH Judge H Au-Yeung issued his judgment on 12 April 2022 (“Judgment”),[1] dismissing both the plaintiff’s claim and the defendant’s counterclaim.  With leave given by this court,[2] the plaintiff appeals against the dismissal of her action.

B.  Background

3.  The School is a primary school on Tsing Yi Island founded in 1986.  It is an aided school, which means that it receives subsidies from the Government in accordance with the Code of Aid for Primary Schools as well as the Code of Aid for Aided Schools (which was written for aided schools that were governed by an IMC) (together, the “Codes of Aid”). Its sponsoring body is TWTA Education Foundation Ltd (“Foundation”). Like many other schools in Hong Kong, it set up an incorporated management committee, i.e. the defendant, in 2007 which became the legal entity responsible for the management of the School and the employer of its staff.

4.  The plaintiff had been a registered teacher since 1978.  In 1986 she joined the School upon its establishment as certificated mistress.  On 19 May 2007, she entered into a written contract with the defendant whereby she was employed as the principal of the School with effect from 1 September 2007, with a probation period of two years.  The contract was in the form of a letter, attaching a standard form document with the title “Conditions of Service of Teachers of Aided Schools” (資助學校教師服務條件).  At the end of that form two special clauses were added, one of which provided: “All other conditions are to be handled in accordance with the Education Ordinance of the Education and Manpower Bureau and the Employment Ordinance of the Labour Department.” (其他條件，概依照教育統籌局的「教育條例」及勞工處的「僱傭條例」辦理。)  Had she not been dismissed, the plaintiff would have been due for retirement on 31 August 2014, having attained the statutory retirement age of 60 before the next school year.

5.  From 2012 onwards, the defendant began to complain that the plaintiff had failed to handle the administrative and financial affairs of the School properly.  A total of 15 reminders or warnings, some given verbally and others in writing, were issued by the defendant to the plaintiff on four separate dates (20 August 2012, 26 November 2012, 25 May 2013, and 27 July 2013).  They accused the plaintiff, for example, of failing to follow the applicable procurement procedures, letting out classrooms without approval and failing to follow proper procedures for staff employment.  Among the 15, three were issued on the last date of 27 July 2013, followed by a letter of summary dismissal.  The letter informed the plaintiff that she was dismissed with immediate effect from that date (“即時解僱，即日27/7/2013起生效”).

6.  On 31 July 2013, the Supervisor, Mr Chu Tak Wing, reported the dismissal of the plaintiff to the Education Bureau (“EDB”).

7.  The plaintiff objected to her dismissal.  On 7 August 2013 she issued a solicitors’ letter to the defendant complaining that the dismissal was unlawful.  On 20 August 2013 she commenced an action (HCA 1523/2013) to challenge the dismissal. 

8.  On 21 August 2013, after a resolution passed by the IMC at an extraordinary meeting on that date, the Supervisor wrote to the EDB, stating that the IMC had resolved to defer the open principal recruitment procedures and to appoint a teacher, Mr Wong Kam-on (“Mr Wong”), as “acting principal” (署理校長) with a term of half a year from 28 July 2013 to 27 January 2014.  The letter pointed out that Mr Wong’s certification for principalship[3] had expired and steps were being taken for its renewal.  The EDB’s approval was sought.

9.  On 3 October 2013, after an inter partes hearing, Chung J granted an interim injunction, on the plaintiff’s application, restraining the defendant from acting on the purported dismissal of the plaintiff on 27 July 2013 from the post of principal before the Permanent Secretary for Education (“Permanent Secretary”) had withdrawn her approval or had approved another principal in accordance with sections 55-57 of the Education Ordinance.  The injunction was to last until judgment or further order of the court or until the Permanent Secretary had acted in accordance with sections 55-57.

10.  Following the injunction, on 5 October 2013, the Foundation, as the School’s sponsoring body, wrote to the EDB chasing for its approval of the appointment of Mr Wong as “acting principal”.

11.  On 16 October 2013, the Permanent Secretary sent two letters to the Supervisor:

(1)  In a letter written in English, the Permanent Secretary stated that:

“ Having considered your application, I am pleased to inform you that approval is given for [Mr Wong] to be appointed as the acting principal at SPSM rank[4] of [the School] from 16 October 2013 to 27 January 2014 inclusive for administrative convenience.

As for the period between 21 August 2013 to 15 October 2013, according to section 58AA of the Education Ordinance, it is stipulated that [the contents of that section are quoted – see §21 below].

In accordance with paragraph 8 of the Education Bureau Circular No. 10/2010 of 31 August 2010, under exceptional circumstances, the Permanent Secretary for Education may approve an incorporated management committee to appoint a principal without Certification for Principalship on an acting basis. As such, this approval is granted as an exception after we have taken into consideration the special circumstances pertaining to this case. Nonetheless, you are required to conduct an open recruitment to identify a suitable principal as soon as possible since this acting appointment for administrative convenience will expire after 27 January 2014.” (italics added)

(2) In a letter written in Chinese, the Permanent Secretary reminded the IMC of the need to comply with section 57A(2), i.e. the formation of a principal selection committee referred to in §18(2) below, in these terms (as translated):[5]

“ Regarding your school’s application for Mr Wong Kam On to take up the post of Acting Principal, a reply will be provided by the Bureau in a separate letter.  As for the appointment of the principal, we would like to remind the incorporated management committee (IMC) of your school to take note of subsection (2) of section 57A – Selection of principal of IMC school – of the Education Ordinance which reads ‘Before recommending any person under section 57, the incorporated management committee shall appoint a principal selection committee’, and that in relation to the appointment of the principal, a principal selection committee shall be appointed expeditiously in accordance with the constitution of the IMC in order to have an open recruitment conducted and to ensure that the recruitment process is open, fair and transparent.  In respect of the appointment of the principal, the IMC is required to comply with the relevant Ordinances and to refer to the Education Bureau Circulars No. 10/2010 on ‘Certification for Principalship’, No. 5/2005 on ‘Appointment of Staff in Schools’ and No. 31/2002 on ‘Continuing Professional Development of Principals’.”

12.  On the same date of 16 October 2013, Chung J handed down his Reasons for Decision for granting the interim injunction, explaining inter alia that there was a serious question to be tried as to whether the plaintiff’s appointment as principal had been validly and lawfully brought to an end.

13.  On 21 October 2013, the defendant’s solicitors wrote to the Permanent Secretary asking her to clarify whether her approval of the appointment of Mr Wong as acting principal was done in exercise of her powers under section 55(d) of the Education Ordinance and whether she differentiated between the posts of “acting principal” and “principal” for the purposes of section 55(d).

14.  On 22 October 2013, the Permanent Secretary wrote to the defendant’s solicitors in these terms:

“ With regard to your request for clarification, please note that the Permanent Secretary … has exercised her power under section 57(2)of the Education Ordinance (Cap. 279) in approving Mr WONG Kam-on as the principal of [the 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 the [School] for the purposes of sections 55(d) and 57(2), notwithstanding that he is referred to as ‘acting principal’in the correspondence.”

15.  Subsequently, another person, Mr Chow Kim-ho (“Mr Chow”), was recommended by the IMC to be the principal of the School.  On 28 January 2014, the Permanent Secretary gave her approval in these terms:

“ I am pleased to inform you that approval is given for [Mr Chow] to be appointed the principal of your school on an acting basis, at SPSM rank, with effect from 28 January 2014.

As the Certification for Principalship (CFP) of Mr CHOW expired on 9 January 2011, your attention is drawn to the Education Bureau (EDB) Circular No. 22/2008 of 30 October 2008. Upon appointment as the principal, he will serve on an acting basis. While acting, Mr CHOW must renew his CFP within two years. His principalship can be confirmed, effective from the date of the CFP renewal. Mr CHOW will have to cease acting if he is unable to renew the CFP within two years by 27 January 2016. I should therefore be grateful if you would remind Mr CHOW to renew his CFP as soon as possible.

…

As an acting principal, Mr CHOW cannot be an ex-officio manager of the incorporated management committee (IMC) of the School. However, there are a number of ways Mr CHOW may attend meetings of the IMC. For special arrangements on the acting principal serving on the IMC, please contact your Senior School Development Officer …” (italics added)

16.  Eventually Mr Chow’s appointment as principal was approved and confirmed by the Permanent Secretary on 29 December 2014 with effect from 11 November 2014, the date when Mr Chow obtained the certification for principalship.

C.  The scheme under the Education Ordinance

17.  Part IV of the Education Ordinance has the title “Teachers”.  There is within it a sub-part which governs the appointment and tenure of principals (sections 53 to 58AA).  As defined in section 3(1), “principal” means “subject to section 58AA, a teacher who was approved as the principal of a school under section 53(2) or section 57(2).”  Section 53 relates to the appointment of the first principal of a school, which is not relevant to the present case.  Sections 54 and 56 concern the refusal and withdrawal of approval of a teacher as the principal of a school.  Section 55 set out the circumstances in which the office of principal ends.  Sections 57 and 57A make provision for the approval of a subsequent principal and the procedures for recommending a principal for approval.  For ease of reference, we set out sections 54-57A here:

“ 54. Grounds for refusal to approve principal

(1) The Permanent Secretary may refuse to approve a teacher as the principal of a school if the Permanent Secretary is not satisfied that the teacher is a fit and proper person or, in the case of a school providing nursery or kindergarten education, appropriately qualified to be the principal of the school.

(2) Without prejudice to the generality of subsection (1), the Permanent Secretary shall refuse to approve a teacher as the principal of an aided school if the teacher is prohibited from being employed as the principal of the school by virtue of section 58A.

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).

57A. Selection of principal of IMC school

(1) This section applies to an IMC school.

(2) Before recommending any person under section 57, the incorporated management committee shall appoint a principal selection committee.

(3) A principal selection committee shall—

(a) be accountable to the incorporated management committee; and

(b) be composed of—

(i) representatives of the sponsoring body of the school;

(ii) managers of the school acting as representatives of the incorporated management committee; and

(iii) (where applicable) such other persons as may be provided for in the constitution of the incorporated management committee.

(4) A principal selection committee shall select in an open, fair and transparent manner a suitable person for recommendation under section 57 from candidates nominated in an open, fair and transparent manner by the sponsoring body or the incorporated management committee of the school or both as may be provided for in the constitution of the incorporated management committee.

(5) The incorporated management committee of a school shall recommend under section 57 the person selected by the principal selection committee.

(6) Subsections (2), (3), (4) and (5) do not apply if—

(a) the sponsoring body of the school makes a request of the incorporated management committee under section 40AG(1)(a)(ii); or

(b) the Permanent Secretary exempts, on an application by the sponsoring body or incorporated management committee and upon good cause being shown to his satisfaction, the committee from those subsections in respect of any principal of the school.”

18.  So far as the appointment of a subsequent principal is concerned, the procedures may be summarized as follows (where relevant):[6]

(1)  First, the question of appointment of a principal may be triggered in one of three situations set out in section 57(1)(b)-(d), namely: (b)  the principal ceased under section 55 to hold office, (c) the principal ceases to perform the duties of the principal, and (d)  the principal is no longer acceptable as such to the majority of the managers of the school.  (For how section 57(1)(a) comes into play, see §18(7) below.)

(2)  Second, the IMC shall appoint a principal selection committee, as provided in section 57A(2) before recommending any person under section 57.  There is no prohibition against forming a principal selection committee prior to the events referred to in section 57(1)(b) to (d), which may be possible where they are foreseen.  The statutory requirement is that before recommending a person for appointment as principal, the IMC must appoint a principal selection committee.

(3)  Third, the IMC or sponsoring body nominates candidates “in an open, fair and transparent manner”: section 57A(4).

(4)  Fourth, the principal selection committee shall select “in an open, fair and transparent manner” a suitable person from those candidates for recommendation under section 57 for approval: section 57A(4).

(5)  Fifth, the IMC shall recommend under section 57 to the Permanent Secretary for approval the person selected by the principal selection committee: section 57A(5).  As prescribed by section 57(1), this is to be done within 1 month of the event in Step 1 above that triggered the process. 

(6)  Sixth, the Permanent Secretary shall approve as the principal of the school the teacher recommended under section 57(1): section 57(2).  This is however subject to section 54, under which the Permanent Secretary (i) may refuse to approve if she is not satisfied that the recommended teacher is a fit and proper person, and (ii) shall refuse to approve if the recommended teacher has exceeded the relevant age.

(7)  If the Permanent Secretary does under section 54 refuse to approve a recommended teacher to be the principal, the nomination, selection and recommendation process will have to be done again: section 57(1)(a).

(8)  The provisions in section 57A(2), (3), (4) and (5) on nomination, selection and recommendation may be exempted by the Permanent Secretary on application by the sponsoring body or the IMC and upon good cause being shown: section 57A(6)(b).

19.  Once approved and appointed, a principal continues to hold office until the occurrence of any one of the four events specified in section 55(a) to (d): (a) refers to cessation of registration as a teacher or of permission to teach as a permitted teacher, which are governed by sections 47 and 52 respectively; (b) refers to the principal’s resignation; the event under (c), i.e. withdrawal of approval by the Permanent Secretary, is governed in turn by section 56; (d) refers to the Permanent Secretary’s approval of another teacher as the principal under section 57(2), the procedures for which are set out in §18 above.

20.  The phrase “acting principal” is not used in the statute but there is a provision in section 58AA that allows a recommended candidate to perform the functions of the principal pending approval by the Permanent Secretary, as follows:

“ 58AA. Performance of functions of principal by candidate

(1) A teacher who is not a principal of a school and who has been recommended under section 53(1) or 57(1) for approval to be the principal of the school may, as long as he is a registered teacher or permitted teacher, perform the functions of the principal until the recommendation—

(a) is approved under section 53(2) or 57(2), as the case may be; or

(b) is refused under section 54.

(2)  A teacher performing any function of a principal under subsection (1) shall be regarded for the purposes of this Ordinance (except sections 40AL(2)(b), 55 and 56) as the principal.”

D.  The Codes of Aid

21.  The Code of Aid for Primary Schools contained at section 57 provisions relating to the termination of the employment of a teacher (though not specifically of a principal).  Thus section 57(g) provided:

“ 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 offence or has committed a grave breach of duty.”

As the plaintiff has abandoned any reliance on Appendices 7 and 8 (which set out certain procedures to be followed in case of dismissal or termination of appointment of a teacher),[7] it is not necessary to set them out here.

22.  Similarly, the Code of Aid for Aided Schools also contained provisions relating to the dismissal of teachers generally (but not for a principal specifically), including section 13.5(c) which provided:

“ Summary dismissal is a serious disciplinary action which has to be justified on the basis of serious misconduct, gross negligence, having adverse impact on students or on their learning (for examples, criminal offence or failure to discharge their responsibility, including in-subordination and ineptness).”

E.  The proceedings below

23.  In the action below, both parties’ pleadings had undergone several amendments.  The case was transferred to the District Court in 2020.  Based on the final position at trial, the plaintiff’s case was essentially that:

(1)  The defendant acted contrary to and was therefore in breach of the statutory duty under sections 55-57 of the Education Ordinance in that it dismissed and removed the plaintiff from office on 27 July 2013 without having given notice to or obtained approval from the Permanent Secretary.

(2)  By reason of the beaches of sections 55-57 of the Education Ordinance, the defendant was also in breach of contract.

(3)  The defendant acted in breach of section 57(g) of the Code of Aid for Primary Schools and section 13.5(c) of the Code of Aid for Aided Schools and therefore in breach of contract in that the summary dismissal of the plaintiff was not justified by any grave breach of duty.  For the same reason, the defendant acted in breach of section 9 of the Employment Ordinance (Cap 57).

24.  The plaintiff claimed monetary relief in respect of, inter alia, (1) loss of salaries for the period after the date of dismissal until her original date of retirement (28 July 2013 to 31 August 2014) in the sum of $789,183.87; and (2) 5% guaranteed dividend on the provident fund relating to the same period in the sum of $4,066.64.

25.  The defendant denied it had any liability to the plaintiff.  Its case was that:

(1)  The plaintiff had acted in breach of her duties through gross misconduct which led to the 15 reminders and warnings on the basis of which the defendant was entitled summarily to dismiss her under section 9 of the Employment Ordinance and section 57(g) of the Code of Aid for Primary Schools. 

(2)  The plaintiff’s conduct entitled the Permanent Secretary to withdraw her approval of the plaintiff as the principal of the School under section 56 of the Education Ordinance. 

(3)  Even if sections 55-57 of the Education Ordinance imposed duties on the defendant, any contravention would not give rise to a private law cause of action in favour of the plaintiff.

(4)  Upon the Permanent Secretary approving Mr Wong to be the acting principal of the School by letter dated 16 October 2013, the plaintiff ceased to hold office as the principal pursuant to section 55(d) of the Education Ordinance.

(5)  Alternatively, upon the Permanent Secretary approving Mr Chow as principal of the School by letter dated 28 January 2014, the plaintiff ceased to be the principal pursuant to section 55(d) of the Education Ordinance.

26.  The defendant also brought a counterclaim for damages or indemnity in respect of the accumulated deficit in the School’s General Funds account as at 31 August 2014 or losses caused by unauthorised expenses.

27.  In the bulk of his 296-page Judgment, the judge painstakingly analysed the disputes arising from each of the 15 warnings and concluded that the defendant was justified in issuing 7 of them, which concerned (1) retaining staff who exceeded the prescribed retirement age; (2) renting out classrooms to Hong Kong Arts Association without IMC approval; (3) breach of procurement guidelines and failure to obtain IMC endorsement in relation to renovation works for toilets in the School; (4) non-compliance with procurement requirements relating to the Community Care Fund After-School Care Pilot Scheme; (5) failure to obtain approval from the IMC and the Permanent Secretary for alteration works done to the principal’s room; (6) failure to ensure booklists were distributed to students no later than the last school day in the 2012/13 academic year; and (7) failure to provide or delay in providing certain information sought by the IMC.  The judge concluded that two of these matters were very serious (namely, (2) and (4) above) and that even if they alone did not amount to a grave breach of duty by the plaintiff, the 7 instances of misconduct together sufficed to justify her summary dismissal.[8]

28.  The judge rejected the plaintiff’s claim based on breach of statutory duty on the ground that breach of sections 55-57 of the Education Ordinance did not give rise to any private law cause of action.  His Honour took the view that the Education Ordinance essentially prescribes a regulatory system for the promotion of education for the benefit and protection of the public at large, and is not enacted for the protection of school principals, who are adequately protected by employment law.  Even if sections 55-57 give school principals security of tenure, the purpose is to protect the school and students rather than the principals.[9]

29.  The judge also rejected the plaintiff’s claim based on breach of contract.  He held there was no contractual duty owed by the IMC to the plaintiff to comply with sections 55-57 of the Education Ordinance, for much the same reasons as those he gave for holding there was no cause of action for breach of statutory duty.[10] The judge also held that the plaintiff’s alleged right to security of tenure would be inconsistent with section 9 of the Employment Ordinance, section 57(g) of the Code of Aid for Primary Schools and section 13.5(c) of the Code of Aid for Aided Schools, and would also lead to unjust and undesirable consequences such as where a principal has been convicted of a criminal offence relating to children and should be removed immediately.  Section 55 of the Education Ordinance should not be interpreted in such a way as to contradict the basic principle that the employer should be able to terminate the employment relationship where the employee has by conduct repudiated the contract.[11]  When the plaintiff was summarily dismissed by the defendant, the Permanent Secretary must be regarded as having withdrawn her approval of the plaintiff to be the principal of the School.[12]  The plaintiff’s alleged security of tenure must be subject to the IMC’s right of summary dismissal under section 9 of the Employment Ordinance.[13]  Accordingly, the judge dismissed the plaintiff’s action.

30.  On the question of quantum of damages, the judge found that, if the plaintiff was correct that her principalship should have lasted until her retirement on 31 August 2014, her entitlements (being salaries and 5% guaranteed dividend on the provident fund) would have been in the total sum of $793,250.51.[14] However, the judge took the view that the Permanent Secretary had by letter of 22 October 2013 made clear that she had appointed Mr Wong as the principal on 16 October 2013, and that accordingly even if the plaintiff had by reason of section 55 remained in office beyond the purported dismissal, her tenure would only last until 15 October 2013, rather than 31 August 2014 as she claimed.[15]  Further, even if the appointment of an acting principal did not fall within section 55(d), the Permanent Secretary could have withdrawn her approval for the plaintiff to be the principal on 16 October 2013, which would bring the plaintiff’s office to an end under section 55(c).[16]  On this basis, the judge held that if the dismissal was justified by the complaints but the plaintiff remained in office by reason of sections 55-57, the plaintiff’s claim should be calculated on the basis of her entitlements up to 15 October 2013 in the total sum of $153,686.25.[17] 

F.  The plaintiff’s arguments on appeal

31.  In this appeal, the plaintiff’s argument as advanced by her counsel, Mr Eric Shum and Ms Yvonne Leung, is broadly as follows.  In contrast to teachers generally, principals have a special status under the Education Ordinance.  Sections 55-57 afford them security of tenure and empower a senior government official to act as the gatekeeper in relation to decisions affecting principals. The provisions are mandatory and applicable as a matter of law.  The intention of the legislature is that the tenure of principals should not be terminated simply by a decision of the majority of the managers, but depend on the events listed in section 55(a) to (d).  It involves a “boot-strap” reasoning for the judge to consider that the Employment Ordinance already affords “adequate protection” to principals, as it begs the question.  The pertinent question is not whether sections 55-57 of the Education Ordinance confer a private cause of action on the plaintiff, but whether by virtue of those sections the plaintiff continued to hold office after the purported summary dismissal.

32.  Alternatively, there is a private cause of action for breach of statutory duty.  Section 55 offers statutory protection to a specific class of persons and their tenure as principals.  There would be no remedy for non-compliance with that section unless a private right of action exists.

33.  The defendant’s right to terminate the contract for cause could only be exercised in compliance with sections 55-57, which were superimposed on the provisions of section 9 of the Employment Ordinance and the Codes of Aid.  The judge was wrong to find that summary dismissal applied to principals without any adjustment, ignoring the purposes of section 55 including the need to obtain approval from the Permanent Secretary in applicable cases.  There is no impracticality since the Permanent Secretary could, in an urgent case, act promptly to withdraw the approval of a principal.

34.  On the facts of this case, the event mentioned in section 55(c) of the Education Ordinance had never occurred, for there was never any withdrawal of approval of the plaintiff as principal.  The event referred to in section 55(d) did not occur until 11 November 2014.  In October 2013 Mr Wong was appointed “acting principal” for “administrative convenience” only, and he had not been recommended under section 57(1), there being no principal selection committee appointed under section 57A(2).  Mr Chow’s appointment is irrelevant as it was not relied upon by the judge and there is no respondent’s notice to rely on it.

35.  By way of relief the plaintiff seeks an award of damages in the sum of $793,250.51[18] and interest thereon.

G.  The defendant’s arguments on appeal

36.  The arguments advanced by Mr Laurence Li SC and Mr Harrison Miao on behalf of the defendant are broadly as follows.

37.  Even if sections 55-57 of the Education Ordinance did impose certain duties on the defendant which were breached, those provisions did not give the plaintiff any private law cause of action. Sections 55-57 are not enacted to protect principals.  They are part of the Education Ordinance which is enacted for the benefit and protection of the public at large: Ko Hon Yue v Chu Pik Yuk [2008] 1 HKLRD 482.  There is nothing to indicate any intention to give a private law cause of action in favour of principals for pure economic loss against school management committees.  The statutory aims of supervising and controlling schools are achieved by the Permanent Secretary exercising her oversight powers and taking suitable actions where necessary.  It is not necessary for principals to be given a private law cause of action.  A principal has remedies for wrongful dismissal under the Employment Ordinance, common law and the employment contract.  The availability of alternative remedies militate against any need to create a further right of action under the Education Ordinance.

38.  As to the plaintiff’s claim in contract, the conditions attached to the letter of employment specifically provided that the IMC may terminate the plaintiff’s employment by following the Code of Aid for Primary Schools (which expressly provided for summary dismissal of teachers for grave breach of duty).  Incorporation of a term requiring the Permanent Secretary’s approval would be inconsistent with the IMC’s right of summary dismissal.  Sections 55-57 of the Education Ordinance, which are regulatory provisions on the exercise of powers by the Permanent Secretary, are inapt to be incorporated into the contract.  The clause in the contract relied upon by the plaintiff stated that “other conditions” would be handled in accordance with the Education Ordinance, but as there were already conditions governing termination,[19] there was no other condition to incorporate.

39.  If the court finds that the plaintiff’s appointment as principal had not been validly terminated on 27 July 2013, in assessing damages the court should assume that the employer would bring the contract to an end at the earliest time he could properly do so.  Since on 16 October 2013 the Permanent Secretary approved Mr Wong to be acting principal of the School (and subsequently made clear by letter dated 22 October 2013 that she had exercised her power under section 57(2) to approve Mr Wong as principal), the plaintiff’s term came to an end on that date under section 55(d).  Although the recommendation of Mr Wong was not preceded by a selection process conducted in accordance with section 57A, he was nevertheless recommended under section 57(1).  The selection process under section 57A is not part of section 57(1) and not a condition precedent for triggering section 57(2).  In any event, it is evident that if requested, the Permanent Secretary would have withdrawn approval for the plaintiff to be principal by 16 October 2013 at the latest.

H.  Whether the plaintiff’s appointment was lawfully terminated on 27 July 2013

40.  In our view, of fundamental importance to this issue is section 55 of the Education Ordinance (quoted above).  It provides that a principal “shall hold office until” one of four events.  It is in terms mandatory and categorical.  In other words the appointment of a principal cannot be terminated unless and until one of those events has occurred.  This is a specific provision of the law in relation to principals, superimposed on the general law.  It underscores the importance of the principal in a school.  None of the four events specified is constituted simply by a decision of the IMC.  Cancellation of the registration of a teacher, referred to in section 55(a), is a matter for the Permanent Secretary: see section 47. Withdrawal of approval of the principal (section 55(c)) and approval of another teacher as the principal (section 55(d)) are likewise matters for the Permanent Secretary: see sections 56 and 57. These provisions confer on the Permanent Secretary the role of an objective arbiter in the termination of the office of the principal.  Had it been intended that the office could be terminated simply by dismissal by the IMC as employer, the statute would have so stated.[20]

41.  It is difficult to see how the defendant can claim that notwithstanding such clear provision of the law, it can nevertheless terminate the plaintiff’s appointment as principal with immediate effect simply by issuing a dismissal letter.  That would fly in the face of section 55.  Section 9 of the Employment Ordinance is an enabling provision which does not preclude additional requirements imposed by other law.  It does not in our view enable the IMC to terminate a principal’s office by summary dismissal without satisfying one of the four paragraphs of section 55.

42.  The effect of section 55 was considered by Keith JA, sitting as an additional judge of the Court of First Instance, in Lau Chi Fai v Secretary for Justice [1999] 2 HKLRD 494.  The facts of Lau Chi Fai are admittedly different from the present case.  There the school management committee wanted the principal to continue to serve, as did the principal himself.  It was the Director of Education (who then exercised the powers and functions now vested in the Permanent Secretary) who insisted that the principal should retire having reached 60 years of age.  It was therefore the principal and the management committee (represented by a member) who were the plaintiffs, seeking declaratory reliefs against the Secretary for Justice acting on behalf of the Director.  After examining the provisions of, inter alia, section 55, Keith JA put the matter succinctly by saying that “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.”[21] His Lordship referred to the statutory provisions as “security of tenure provisions”[22] and found that a principal was “entitled to hold office until” an event specified in section 55(a) to (d) had occurred.[23]  The Director did not dispute this analysis.  Her position was that the withdrawal of approval of the principal, referred to in section 55(c), had indeed occurred.  The basis for the withdrawal was said to be the ground in section 56(1)(c), namely, that the principal had ceased to perform the duties of the principal because, by reason of a clause in the then relevant Code of Aid which required a teacher to retire after reaching 60 years of age, his contract of employment came to an end.

43.  The judge below observed that Lau Chi Fai was based on different facts, and referred to a passage in Keith JA’s judgment stating that the position would be different if the principal had been a party to the agreement between the management committee of the school and the Director, i.e. the Code of Aid,[24] which, the judge noted, is the position in the present case.[25]  But in Lau Chi Fai it was the Director who was seeking to terminate the principal’s office and who contended that he could do so by withdrawing his approval of the principal pursuant to section 56 based on the provisions of the Code of Aid.  Here it is the IMC that wished to terminate the principal’s appointment.  The distinction referred to by the judge does not affect the principle stated by Keith JA that section 55 imposes restrictions on the freedom of the employer of a school principal to remove him or her from office.  Those restrictions mean that in the present case, the plaintiff could not be removed as principal unless and until the Permanent Secretary either withdrew her approval of the plaintiff pursuant to section 56 or approved another teacher as the principal under section 57(2), i.e. the events specified in section 55(c) and (d), there being no suggestion that section 55(a) and (b) are relevant. 

44.  There can be no suggestion – and as we understand their submissions the defendant’s counsel do not suggest – that either event specified in section 55(c) or (d) had occurred by 27 July 2013.  The judge however said:

“ 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).”

45.  With respect this put the matter on its head. The Permanent Secretary’s withdrawal of approval was an act of an independent third party and one of the alternative preconditions – under section 55(c) – for the termination of the plaintiff’s appointment.  It was not something that flowed from or was to be inferred from the summary dismissal by the IMC.  On the facts of the present case it never occurred.

46.  The judge was worried about possible “unjust and undesirable consequences” of a principal having security of tenure.  He gave the example of a principal being convicted of a criminal offence relating to children, giving rise to an immediate need to remove him, and said that it might take time for the Permanent Secretary to withdraw her approval of the principal.[26] With respect this affords no basis for denying effect to the clear statutory provision that the principal shall hold office until one of the specified events.  In any event, assuming there is such a principal convicted but immediately released by the court, there is no legal impediment that would prevent the Permanent Secretary from taking prompt action.

47.  Accordingly by virtue of section 55 the plaintiff could not be removed from office on 27 July 2013.  The purported dismissal with immediate effect was unlawful.  The defendant has, rightly in our view, not contended for a notional separation between the office and the contract.  It has not been argued that the plaintiff’s contract of employment could be terminated even though her office as principal could not, with the result that the plaintiff would have all the responsibilities of a principal but no right to payment of a salary.  That would make a mockery of section 55.

48.  It follows that the plaintiff is entitled to damages for breach of contract.  It is unnecessary to deal with breach of statutory duty as a separate cause of action.  We doubt that breach of statutory duty is the apposite lens through which to view the parties’ rights and liabilities in this case.  This is not the typical situation for the tort where the statute imposes a duty on the defendant which he fails to perform.  Section 55 of the Education Ordinance does not impose a duty on anyone to do anything or to bring about a certain state of affairs, but mandates that a principal shall hold office until a specified event.  As stated in this court’s judgment giving leave to appeal, the issue is whether the plaintiff’s office as principal was vacated in accordance with the statutory provisions, not whether the principal could sue the IMC for what the Permanent Secretary had or had not yet done.[27]

49.  Nor is it necessary to deal with Mr Li’s argument on behalf of the defendant that section 55 of the Education Ordinance has not been incorporated into the contract.  In our view section 55 is a law that applies generally irrespective of whether there are words in the employment agreement incorporating it as a contractual term.  In any event, we are not persuaded that the presence of an express provision on termination of teachers’ employment in a standard form relating to teachers’ conditions of service would mean that section 55 which relates specifically to principals was left out from being incorporated into the plaintiff’s contract.

I.  Quantum of damages

50.  There are two arguments raised by the defendant for contending that the damages recoverable by the plaintiff should represent her remuneration entitlements up to 16 October 2013 only, instead of 31 August 2014 which was the plaintiff’s original retirement date.

(1)  whether Plaintiff’s office was brought to an end by approval of Mr Wong as principal on 16 October 2013

51.  The first argument, accepted by the judge, is that by the Permanent Secretary’s English letter dated 16 October 2013 as explained in her letter dated 22 October 2013 (see §§11(1) and 14 above), Mr Wong was approved as the principal of the School under section 57(2).  This is an event under section 55(d) that would have brought the plaintiff’s office to an end.

52.  With respect, we consider this argument unsound.  The relevant event under section 55(d) is that “the Permanent Secretary approves another teacher of the school as the principal under section 57(2)”.  In the first place it does not appear to us that the Permanent Secretary regarded Mr Wong as “the principal”.  The Supervisor’s letter dated 21 August 2013 asked for approval for Mr Wong to be the “acting principal” (署理校長), not the principal.  The Permanent Secretary’s English letter of 16 October 2013 expressly stated that approval was given for Mr Wong to be appointed as the “acting principal”, not the principal.  An acting appointment generally refers to a provisional arrangement whereby an employee temporarily assumes the responsibilities of a higher position.  Further, it was emphasised to be a temporary arrangement “for administrative convenience”, it being expressly stated in the letter that “this acting appointment for administrative convenience will expire after 27 January 2014”. The appointee was not intended to have security of tenure.  In contrast, a principal has by law security of tenure and holds office until one of the events specified in section 55 has occurred.  It has not been explained, if Mr Wong was indeed appointed as the principal, how his appointment could in law automatically “expire” on 27 January 2014.  There is no statutory provision for the Permanent Secretary’s approval of a principal to expire by effluxion of time.  It may be refused (section 54) or, if already granted, withdrawn (section 56), in either case only on limited specified grounds.  Furthermore, a true principal is by law an ex-officio manager of the IMC: see section 40AL(2)(b); the same is provided in the constitution of the IMC (art. 6.1) approved by the Permanent Secretary.  But the Permanent Secretary’s position, as shown in her subsequent letter dated 28 January 2014 (see §15 above), is that “an acting principal … cannot be an ex-officio manager” of the IMC.

53.  In the second place, it does not appear to us that the Permanent Secretary can properly be said to have approved Mr Wong as a principal “under section 57(2)”.  Section 57(2) refers to the approval as principal of a teacher “recommended under subsection (1)”. Section 57A(2) requires that before recommending any person under section 57, the IMC shall appoint a principal selection committee.  The Permanent Secretary herself in her Chinese letter dated 16 October 2013 contrasted taking up the post of “Acting Principal” with “appointment of the principal”, and drew attention to the requirements of section 57A applicable to the latter, involving a principal selection committee.  It is common ground that no such committee had been appointed and, indeed, none of the procedures set out in section 57A(2)-(5) (see the second to fifth steps referred to in §18 above) had been followed.  As is evident from the language of the statutory provisions, they are mandatory requirements.  There is a power conferred by section 57A(6)(b) for the Permanent Secretary to grant an exemption from those steps on application and on good cause shown, but there is no suggestion that exemption had been applied for or granted in this case.  It follows that the defendant could not have lawfully recommended Mr Wong for approval to be the principal under section 57(1).

54.  The Permanent Secretary was well aware that the requisite procedures had not been gone through.  Hence in both letters of 16 October 2013 she reminded the IMC to conduct an open recruitment as soon as possible.  Nor does the defendant dispute that the statutory procedures were not followed.  The submission made on its behalf is that, granted there was a failure to follow the required steps and therefore a contravention of the law, there was nevertheless in fact a recommendation made by the IMC for Mr Wong to be appointed as the principal, and it was within the Permanent Secretary’s powers to – and she did – approve him.  This argument is in our view unattractive and in the final analysis flawed.

55.  Unless exempted, the requirements in section 57A are applicable.  They were introduced by legislative amendments in 2004,[28] for the purposes of ensuring a fair and open selection procedure.  They can be exempted for good cause shown, but if not exempted they should not be capable of being ignored with impunity.  In particular, section 57A(2) provides that before recommending any person under section 57, the IMC shall appoint a principal selection committee.  Section 57A(5) requires that the IMC shall recommend the person selected by the principal selection committee, not any person the IMC may deem fit.  Without the requisite process being completed or exempted, Mr Wong was not in our view a person recommended under section 57(1) that could have been approved by the Permanent Secretary as the principal under section 57(2).

56.  In our view the Permanent Secretary’s letter of 22 October 2013 did not salvage the position.  It bore all the hallmarks of a letter written to make retrospective assertions to meet the perceived needs of litigation.  It gave no explanation how a person expressly approved to be only the acting principal for administrative convenience who was not an ex-officio manager and who was only appointed up to a specified expiry date can be regarded as having been approved to be the principal, and how it could be lawful for the Permanent Secretary to give such approval under section 57(2) when none of the procedures required by section 57A had been complied with or exempted.

(2)  whether Permanent Secretary would have withdrawn approval for the plaintiff to be principal or granted exemption from the open recruitment procedures

57.  The second argument raised by counsel on behalf of the defendant is that in the hypothetical scenario where the plaintiff had not been unlawfully dismissed on 27 July 2013, the defendant would have taken every step it could properly take to bring the contract to an end at the earliest date, which is a proper assumption to make in assessing damages: Gunton v Richmond-upon-Thames London Borough Council [1981] Ch 448, 469C; Ko Hon Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72, §79(2).  In particular, counsel submit that the defendant would have done two things. First, it would have asked the Permanent Secretary to withdraw the approval of the plaintiff as the principal under section 56 as soon as possible.  Secondly, it would have applied to the Permanent Secretary under section 57A(6)(b) for exemption from the open recruitment procedures so that a candidate could be swiftly recommended by the IMC and approved to be the principal by the Permanent Secretary.  It is submitted that the defendant would have pressed the EDB “day and night” and that either or both of these steps would have brought the plaintiff’s employment to an end by 16 October 2013.  In this context the defendant also relies on Ma CJ’s observation in Ko Hon Yue at §79(2) that in a case of wrongful termination, “as with all such exercises, the assessment of damages must necessarily be on a somewhat speculative basis”. 

58.  It follows from our conclusions above that whilst the court presumes the defendant would have acted in a way most beneficial to itself, the termination of the plaintiff’s appointment was not wholly within its control but depended on the actions of the Permanent Secretary.  What such a third party would have done in the hypothetical situation is not a matter of presumption, but a question of fact that depends on evidence and proper inferences.  Instead of rubber-stamping the IMC’s proposal, one would have expected the Permanent Secretary to act in an even-handed manner based on the facts she could ascertain. 

59.  If such an argument was to be run for the purposes of limiting the damages recoverable by the plaintiff, what would on the defendant’s case have been done by such a third party in the hypothetical no-breach scenario was a material fact that had to be pleaded, so that the plaintiff could respond to it and the matter be investigated at trial.  The difficulty for the defendant here is that the matter was not pleaded, not investigated at trial, not the subject of relevant findings by the judge, and not raised by any respondent’s notice on appeal.

60.  As to withdrawal of approval, the defendant pleaded that the plaintiff was not a fit and proper person to be the principal, was not performing her duties satisfactorily, and was no longer acceptable as the principal to the majority of the managers of the School, thereby entitling the Permanent Secretary to withdraw her approval of the plaintiff as the principal pursuant to section 56 of the Education Ordinance.[29]  These correspond to the grounds set out in section 56(1)(a), (b) and (d).  But this only goes to the Permanent Secretary’s potential powers, not what she would have done in fact.  The judge only found, reflecting the pleading, that the Permanent Secretary “could have withdrawn her approval”.[30] 

61.  What the Permanent Secretary was entitled to do is a matter of law; what she would have done is a matter of fact.  There is also no pleading, evidence or finding that it appeared to the Permanent Secretary that the plaintiff was (a) not a fit and proper person or (b) not performing her duties satisfactorily.  The only ground for withdrawal that clearly existed was (d), as it must have appeared to the Permanent Secretary that the plaintiff was not acceptable to the majority of the managers. 

62.  The judge thought that “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.”[31]  But it is one thing for the Permanent Secretary to approve a new principal replacing the existing one; it is quite another for the Permanent Secretary to withdraw her approval for the existing principal.  Withdrawal of approval under section 56(1) which uses the word “may”[32] is a discretionary power.  Mr Li submits that the Permanent Secretary agreed with at least some of the IMC’s complaints against the plaintiff and expressed shock at one of them (namely, the renting out of classrooms[33]), and did not voice any disagreement with the course of action taken by the IMC. But there is no evidence at all on the EDB’s policies, practices and procedures that may be applicable to or the Permanent Secretary’s stance on withdrawal of approval or what representations could have been made by the plaintiff to the Permanent Secretary.  The matter was neither pleaded nor canvassed in the evidence at trial.  In these circumstances it would in our judgment be quite unfair to the plaintiff to conclude on appeal that the Permanent Secretary would have withdrawn approval with regard to her by 16 October 2013 or at all.

63.  The suggestion that the defendant would have applied for and the Permanent Secretary would have granted exemption under section 57A(6)(b) from the open recruitment procedures is even more of an afterthought.  There is no mention of any such hypothetical exemption in the pleadings, the Judgment, or even the defendant’s skeleton argument for this appeal.  There is no evidence at all as to the EDB’s policies, practices and stance on granting exemption.  As a matter of fact, a principal, in the full legal sense including being an ex-officio manager of the IMC, was not appointed for the School until 11 November 2014.  There is no basis, and it would be wholly unfair to the plaintiff, for this court to conclude that in the hypothetical no-breach scenario, the Permanent Secretary would have granted exemption and that a principal would have been approved by her under section 57(2) by 16 October 2013 or indeed any other date before 31 August 2014.

J.  Conclusion

64.  For the above reasons, the plaintiff’s appeal is allowed.  Judgment will be entered against the defendant in the sum of $793,250.51 with interest thereon at 1% per annum above the prime rate from the date of the writ to the date hereof.  Interest will accrue thereafter on the entire judgment sum at judgment rate until payment.

65.  We make an order nisi that: (1) the defendant do pay the plaintiff the costs of the appeal including the costs of the applications for leave to appeal,[34] and (2) the defendant do pay 60% of the plaintiff’s costs of the action and counterclaim below with a certificate for two counsel.[35]  Costs are to be taxed if not agreed.

[1]  [2022] HKDC 308.

[2]  [2023] HKCA 1017 (Yuen and G Lam JJA).

[3]  A qualification requirement imposed by the EDB for anyone seeking to be appointed principal in public sector or DSS schools.

[4]  Senior Primary School Master/Mistress.  It is stated in the Code of Aid for Primary Schools at Appendix 2A, Part B, that the rank of Head of a school with 1-11 classes will be SPSM; the rank of Head of a school with 12-23 classes will be Headmaster/Headmistress II (HMII); and the rank of Head of a school with 24 classes or more will be Headmaster/Headmistress I (HMI).  It is unclear how many classes there were in the School.

[5]  The Chinese original is as follows:

“  就貴校申請由黃錦安先生署任校長一事，本局將另函回覆。此外，就校長的聘任，本局提醒貴法團校董會需留意《教育條例》第57A條 <<設有法團校董會學校校長的遴選>> 第 (2) 款「在根據第57條推薦任何人之前，法團校董會須委出一個校長遴選委員會」及依據貴法團校董會章程，盡快就有關校長聘任事宜委出一個校長遴選委員會進行公開招聘，並確保招聘過程公開、公平及具透明度。就有關校長聘任事宜，貴法團校董會需根據相關條例及參閱教育局通告第10/2010號「校長資格認證」、第5/2005號「學校教職員的聘任」及第31/2002號「校長持續專業發展」。”

[6]  See also this Court’s judgment given by Yuen JA granting leave to appeal, at §7.1.

[7]  Judgment, page 11, footnote 2.

[8]  Judgment, §§655-658.

[9]  Judgment, §674.

[10]  Judgment, §681.

[11]  Judgment, §§682-684.

[12]  Judgment, §692.

[13]  Judgment, §693.

[14]  Judgment, §§722-723.

[15]  Judgment, §§663-664, 711.

[16]  Judgment, §§712-715.

[17]  Judgment, §§718-719.

[18]  i.e. the sum referred to in §30 above and §723 of the Judgment.

[19]     “  離職及通知期限

……

(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。……”

[20]  See section 28B of the previous Education Ordinance, enacted in 1952 with sections 28A and 28B added in 1958 to make provisions with regard to principals. Section 28B provided: “In the event of the Director withholding or withdrawing his approval of the principal recommended by the management committee or in the event of the principal approved by the Director ceasing to act as such by reason of resignation, dismissal, illness, absence, cancellation of his registration as a teacher or of a permit to employ him as a teacher or other cause, the management committee shall forthwith recommend for the Director’s approval another teacher to be principal.”

[21]  pp 499D-500G.

[22]  p 502B & C.

[23]  p 499G.

[24]  See Lau Chi Fai at p 501J.

[25]  Judgment, §§690-691.

[26]  Judgment, §683.

[27]  §17.

[28]  Education (Amendment) Ordinance 2004 (No. 27 of 2004).

[29]  Re-Re-Amended Defence and Counterclaim, §21.

[30]  Judgment, §714 (emphasis added).

[31]  Judgment, §714.

[32]  Contrast section 56(2) in which the word is “shall”.

[33]  Judgment, §657(1).

[34]  A certificate for two counsel is unnecessary in relation to proceedings in the Court of Appeal: Chen Hongqing v Asia Cement Corporation [2024] HKCA 463, §6.

[35]  The plaintiff requests that the certificate for two counsel applies to the period from 11 August 2021 to 15 July 2022.  The defendant disputes whether the plaintiff was throughout that period represented by two counsel.  The dispute is not a matter for this court.  Obviously a certificate for two counsel is only relevant in relation to work that in fact involved two counsel both of whom charged fees.