HCA 640/2012
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
HIGH COURT ACTION NO 640 OF 2012
___________________
BETWEEN
UNITED MUSLIM ASSOCIATION
1st Plaintiff
OF HONG KONG
SYED JAMIL RAGHBI
2nd Plaintiff
MOHAMED JAVED SHAHAB
3rd Plaintiff
MUSTAFA GHULAM
4th Plaintiff
IMTIAZ HUSSAIN
5th Plaintiff
SIDDIQUI MOHAMMAD AMIR
6th Plaintiff
KHALIQ
7th Plaintiff
and
YUSUF YU
1st Defendant
AMINA NORMAN
2nd Defendant
RAHEEL AHMED
3rd Defendant
____________________
Before: Madam Recorder Teresa Cheng SC in Court
Dates of Hearing: 18, 19 and 22‑26 September 2014
Date of Judgment: 14 May 2015
____________________
J U D G M E N T
____________________
INTRODUCTION
1. The United Muslim Association of Hong Kong (“UMAH”) was founded by the late Mr Mohammad Ali Din (there are some documents in the trial bundle where his name is spelled as "Mohammad Alli Din") as a registered society in 1992. It became a tax exempted charitable institution in 1993 with an object of safeguarding and promoting the religion, education and welfare of all Muslims in Hong Kong. UMAH operates a mosque, the UMAH International Primary School and the UMAH Elderly Home in the New Territories.
2. UMAH was incorporated in 1997. The Articles of Association provides for, inter alia , how the management of UMAH is to be conducted and the entitlement of members to vote. The Council of UMAH is the governing body of UMAH. The Chairman of UMAH has to be elected from the Council members. The membership of UMAH and the identity of the Council members at the relevant time are matters in issue here.
3. In around March 2006, Ali Din managed to procure a piece of land in Sheung Shui for a mosque to be built (“the Mosque Project”). A Memorandum of Understanding was signed between the representatives of the Saudi Finance Ministry of the Government of Saudi Arabia and UMAH on 30 September 2009. According to the Memorandum, the Saudi Government would undertake to fund the entire Mosque Project. Pursuant to the memorandum, the management will be supervised and the cultural activities will be followed up by a Board of Trustees comprised of representatives from the Kingdom of Saudi Arabia and UMAH, in which the Chairman and half of the members must be from the Saudi side.
4. Ali Din passed away on 4 December 2009. He was married to the 2nd defendant. He had five children, Ramzan (the eldest son), Jamilah (the eldest daughter), Ayub (son), Rashida (youngest daughter) and Latif (youngest son).
5. In September 2010, the Ministry of Finance of the Government of Saudi Arabia appointed Ms Anna Kwong as the Authorized Person for the Mosque Project. On 8 September 2012, the 2nd to the 7th plaintiffs, through their solicitors wrote to the Buildings Department asking the Buildings Department to ignore the submissions for the project by Ms Kwong. The plaintiffs have retained the services of Mr Jason Yuen instead.
6. As a result of the disputes involving the management of UMAH, the construction of the Mosque Project was put on hold. The land premium has to be paid and the payment has been extended three times since 31 March 2011. The Lands Department has issued demand notes for the premium and the accrued interest on diverse dates.
MEMORANDUM AND ARTICLE OF ASSOCIATION OF UMAH
7. The Articles of Association (Bundle 3, pp 932‑944) (references to trial bundles shall be [bundle number]/[page number]) contained the following terms which are relevant to the issues in this case.
“1. …
(c) ‘The Council of Management’ means the administrative body of the Association.
….
5. All applicants for membership shall be proposed and seconded by two members of the Association.
6. All applications for membership shall be considered by the Council of Management in a Council Meeting and if approved by a majority of its members present, the application shall be approved.”
…..
19. The Council of Management may whenever they think fit, convene an Extra-ordinary General Meeting. Extra-ordinary General Meetings may also be convened on the written requisition of not less than 25% of the members.
20. (a) At least twenty-one days notice (exclusive of the day on which the notice is issued and exclusive of the day for which notice is given) specifying the place, the day and the hour of Meeting and, in case of Extra-ordinary General meeting, the general nature of the special business for which the Extra-ordinary Meeting is being called, shall be given by letter and/or through notice in local newspaper(s), to such persons as are entitled to receive such notice(s) from the Association.
(b) The notice of the Meeting shall include an agenda for the Meeting and in the case of the Annual General Meeting an audited statement of the Annual Accounts of the Association. In the case of proposed amendments of the Memorandum of Association, a draft copy of the proposed amendments shall be enclosed with the notice.
(c) The accidental omission to give notice of a Meeting to or the non-receipt of notice of a Meeting by any Member shall not invalidate the proceedings at any Meeting.
….
28. Only Members of the Association are entitled to vote. Each Member is entitled to one vote but shall not vote by proxy.
….
31. (a) Nominations for all Members of the Council of Management duly proposed and seconded by Members of the Association shall be sent in writing to the Hon. Secretary so as to reach him not later than the last day of February but not earlier than the first day of January each year. Each nomination must also contain a declaration by the candidate that he will be willing to stand for the election and willing to serve if elected.
(b) The Hon. Secretary shall circulate to Members of the Association the names of all candidates with the agenda for the Annual General Meeting.
…
(d) If there are no nominations received for any position on the Council of Management, then the serving Member of the Council of Management shall be deemed to have been elected unopposed.
…
(g) Only those persons who have been Members of the Council of Management in the preceding year shall be eligible for nomination as Chairman or Honorary Secretary but this Rule shall not apply in the case of the inaugural Council of Management.
...
52. Any question of the interpretation of this Memorandum of Association shall be left to the Council of Management whose decision on any point shall be final.
53. All matters not specifically provided for in this Memorandum of Association shall be decided upon by the Council of Management whose ruling shall be final.
54. Any amendment to the Memorandum of Association shall be approved only if three-fourths of the Members present at a General Meeting vote for the approval of the amendment before it can become effective.”
MEMBERS OF COUNCIL OF MANAGEMENT
8. The Membership of the Council of Management can be seen from the annual financial statements of UMAH. The Council of Management’s Report for the year ended 31 December 2005 (5/1993), year ended 31 December 2006 (5/2012), year ended 31 December 2007 (5/2032) and year ended 31 December 2008 (5/2046) contain a list of the Council Members. The following is a summary of the records relevant to the issues here:
(1) The Chairman, prior to his death, has always been Ali Din. The Honorary Secretary has always been Rashida.
(2) The Honorary Treasurer for 2005 and 2006 was Amina Norman. The General Council Members included Latif and Ayub.
(3) In 2007, Amina Norman and Ayub were not Council Members and, Ramzan and Raheel Ahmed were introduced as new Council Members.
(4) For the year ending 2008, Ayub, Amina Norman and Jamilah became Members of the General Council.
(5) From the 2008 financial statement (5/2046), the Council members were:
“Council of Management
The Council members are listed below:-
Chairman
Mohammed Alli Din
Hon. Secretary
Rashida Wong
General Council Members
Mohammed Cassim Husssain
Mr Mohamed Ayub Din
Mohamed Islam Latif Din
Mohamed Ramzan Din
Sapto Ahmed
Jeanne Imperio (Muslim name: Jamillah)
Raheel Ahmed
Habib Zahid Mahmood
Ms Amina Norman (Treasurer)
Mrs Jamilla Hertz”
9. In the Annual Returns filed:
(1) For the year of 2007, Rashida was named as the Secretary and Ali Din and Cassim Mohammed Hussain as Directors.
(2) The 2009 Annual Return of UMAH filed with the Companies Registry on 17 August 2009 shows that the registered directors of UMAH were the late Ali Din and Mr Mohammed Cassim Hussain. The Secretary of the UMAH was Rashida.
10. After the death of Ali Din, a change of directorship (Form D2A) was filed in February 2010 whereby Amina Norman and Raheel Ahmed are registered as newly appointed directors in place of the late Ali Din and Cassim Mohammed Hussain.
11. What is immediately apparent from these company records and Council of Management's Reports is that none of the 2nd to 7th plaintiffs were members of the Council of Management nor directors of UMAH prior to the death of Ali Din.
12. The 2nd plaintiff is the father‑in‑law of the 3rd plaintiff. Save for the 4th and 5th plaintiffs, the evidence before the court shows that the other plaintiffs have applied to become members of UMAH in 2010 and/or thereafter.
THE DISPUTED MEETINGS AND THE PUBLIC NOTICE DATED 21 MARCH 2012
13. There is no dispute between the parties that no Annual General Meeting (“AGM”) of UMAH was held in 2009. There is no record of any Extra-ordinary General Meeting (“EGM”) either.
14. After the death of Ali Din, the plaintiffs contend that pursuant to the direction of Ayub, an AGM was held on 7 February 2010 (“2010 AGM”). At the 2010 AGM, Ayub, Mohamed Javed Shahab (the 3rd plaintiff) and Siddiqui Mohamad Amir (the 6th plaintiff) were, amongst other people, elected as Council members of UMAH. Ayub was also elected as Chairman. The minutes of the 2010 AGM is to be found at 3/947‑950. The 2010 AGM attendance list is at 3/1045‑1048.
15. An EGM was convened by the defendants’ camp on 28 February 2010 (“2010 EGM”) with a view to elect a new Council of Management. At the 2010 EGM, Amina Norman (the 2nd defendant), Yusuf Yu (the 1st defendant) and Raheel Ahmed (the 3rd defendant) were, amongst others, elected as Council Members. The minutes of the 2010 EGM is to be found at 3/1005‑1008 and the 2010 EGM attendance list at 3/1001‑1004.
16. Another AGM was convened by the plaintiffs’ camp on 25 March 2012 (“2012 AGM”). This was an AGM convened to pass resolutions to, inter alia , ratify a number of meetings held by the plaintiffs’ camp. The 2nd plaintiff, Syed Jamil Raghbi, was elected as Chairman.
17. Upon receipt of the Notice of the 2012 AGM dated 27 February 2012 issued by the plaintiffs’ camp, a public notice dated 21 March 2012 was issued. The plaintiffs contend that it contained defamatory words against the plaintiffs implicating that they, being strangers or non-members of UMAH, illegally hijacked the management of UMAH.
18. After the 2012 AGM, UMAH and the 2nd to 7th plaintiffs commenced this proceeding by issuing a writ on 20 April 2012 seeking:
(a) a declaration that 1st to 3rd defendants are not members or Council Members of UMAH;
(b) an injunction restraining the defendants from convening or participating in any meeting of UMAH;
(c) damages for defamation; and
(d) damages for interfering with the business of UMAH.
19. These claims were denied by the defendants and they counterclaimed for:
(a) a declaration that 1st to 3rd defendants are members and Council Members of UMAH;
(b) a declaration that 2nd to 7th plaintiffs are not members of Council Members of UMAH;
(c) an injunction restraining 2nd to 7th plaintiffs from holding out as members or Council Members of UMAH; and
(d) damages.
MEMBERS OF UMAH
20. There is a dispute as to the membership of UMAH and that relates to the issue of the quorum of the three disputed meetings and whether the 3rd and 2nd plaintiffs could have been elected as Honorary Secretary and Chairman of UMAH respectively. There is only a limited source of evidence by which the membership of UMAH is to be determined and my finding is based on such evidence as is placed before me.
Membership List and Application Forms
21. The parties have provided an agreed “Summary of Membership Application Forms of UMAH (6/2271‑2576)” for the court’s reference. There are two noteworthy matters that are relevant to my consideration regarding the weight of the evidence that relates to membership.
22. Rashida, who has been the Secretary of UMAH, said that there was a membership list in hard copy kept in the UMAH office. In the office, there was an assistant who had been helping the late Ali Din with documentations. After the death of Ali Din, she left. When she left, she gave a USB drive to Jamilah, but the USB drive does not contain a lot of information except photographs. There is no evidence, or suggestion that she took the membership list when she left.
23. It is reasonable therefore to conclude that the membership list existed and remained in the UMAH office after the death of the late Ali Din.
24. Yusuf Yu went to ask for a copy of the membership list in early 2010, Ayub refused to give him a copy. Whilst it was put to Yusuf Yu that he did not so request, Ayub did not give evidence to support that proposition. I accept the evidence of Yusuf Yu, a witness whom I find reliable.
25. The second matter that is worth noting is that the 2nd plaintiff admitted that he went to change the lock of the UMAH office. It was put to the 2nd plaintiff that when he changed the lock, he took away boxes from the UMAH office. He said that at that point in time Ayub was in jail and Rita had the key and allowed them to change the lock. He said that whilst he changed the lock, he did not take any box files from the office but that boxes were taken by the Chinese men who replaced the lock. This is very unconvincing. The Chinese men were no doubt acting on instructions from the 2nd plaintiff who instigated the change of the lock. Further, there is no reason why the lock should have been changed except to preclude access to UMAH files.
26. The evidence of the 2nd plaintiff is also contradictory to the evidence of Imam Zahid. Imam Zahid said that he was present when he saw the 2nd plaintiff changed the lock and that he saw boxes of files being taken away. Imam Zahid’s evidence is preferred. He is more reliable and he has no interest in the matter, contrary to the 2nd plaintiff.
27. From these two findings, I conclude that the membership list would have been kept in the office of UMAH but the defendants were denied access to the membership list or any application forms. No one except the plaintiffs’ camp, in particular the 2nd plaintiff, could have accessed these documents.
28. Two documents purported to be membership lists (6/2617, 6/2621) were produced by the plaintiffs to the court but their authenticity is challenged. No evidence has been adduced to explain their genesis nor who prepared them and the basis of them. What was available was information relating to the membership applications that have been translated into the agreed “Summary of Membership Application Forms of UMAH”.
29. In the “Summary of Membership Application Forms of UMAH” (“the Summary”), the following can be discerned:
Forms dated 10 January 2010
22
Forms dated on diverse dates in January 2010 other than 10 January 2010
8
Forms dated 7 February 2010
7
Forms dated after 7 February 2010
98
Undated forms
13
Forms dated in the 1990s
148
Total number of application forms
296
30. There is no dispute regarding the 1990s application forms. The dispute relates to what happened after the death of Ali Din.
31. From the Summary, as at 7 February 2010, there were 191 (= 22 + 8 + 13 + 148) application forms (including the 13 undated forms).
APPROVAL OF MEMBERSHIP APPLICATION BY COUNCIL OF MANAGEMENT
32. Under Articles 5 and 6 of the Articles of Association, application for membership has to the proposed and seconded by two other members of UMAH. Furthermore, the applications have to be approved by a majority of the members of the Council of Management.
33. This proviso for approval is important in two respects. Insofar as forms dated 7 February 2010 is concerned, these candidates could not possibly have been approved by any Council of Management so as to become members qualified or entitled to vote at the 2010 AGM. Hence seven candidates could not be considered as constituting the 2010 AGM quorum.
34. As to application forms dated 10 January 2010, there is a dispute as to whether in fact they were signed in March 2010 instead. Putting that issue aside, the application forms dated 10 January 2010 and on diverse dates in January 2010 would have had to be approved by the Council of Management in existence at the time.
35. There was no evidence that any meeting of the Council of Management was convened to approve any of these January applications before the 2010 AGM.
36. The relevant members of Council as at the date of the death of Ali Din is the one contained in the financial statement at year ended the 31 December 2008 (5/2046). In that report, it can be seen that Raheel Ahmed (3rd defendant), Amina Norman (2nd defendant) and Jamilah Din (a witness) were members of the Council of Management.
37. All three witnesses would have been able to give evidence about any approval of membership regarding the membership application forms dated January 2010. However there is no such evidence before me nor was it so put. No such meeting, I conclude, was conducted to consider the January 2010 membership application forms. The 30 (22 + 8) names in the Summary with the January 2010 forms could not have constituted the 2010 AGM quorum.
38. In the premises, and giving the benefit of doubt to the 13 undated forms (that is, assuming that they had in fact been approved by the Council of Management at some earlier time), the number of members of UMAH as at 7 February 2010 would therefore be 161 (13 + 148).
Member subscription
39. Under Article 12 of the Articles of Association, there would be no entrance fee but a subscription would have to be paid. The application forms indicate that the membership subscription is HK$120.
40. Article 13(a) provides that a member may be struck off the list if member’s subscription has not been paid and if he has been called upon in writing by the Honorary Secretary to pay in full.
41. There is no evidence before me as to the payment or non-payment of member’s subscription, nor is there any evidence about the Honorary Secretary issuing any notice in writing demanding payment in full.
42. There are some questions raised with witnesses regarding the payment of the annual subscription. However, looking at the financial statements that have been filed annually, under the item of “Donations and Membership Subscription”, a sum of $240,000 has been entered each year in the financial statements.
43. Indeed, even for the members that were “recruited”by the plaintiffs’ camp in 2010, whether at the instigation of Ayub or the 2nd plaintiff, there is no evidence of their payment of annual subscription before me.
44. I do not find that the lack of direct evidence of the payment or non-payment of the $120 annual membership subscription was a matter that should affect the number of members.
45. If contrary to the above, evidence of membership subscription would be necessary for membership to be established, then the lack of evidence before me regarding member’s subscription would mean that there would be no member in UMAH at the material time.
2010 AGM
46. Under Article 20(a) of the Articles of Association, 21 day notice is required to be given by letter or through notice in local newspapers in order for any meeting to be convened.
47. Article 22 provides that “no Business shall be transacted at any General Meeting unless a quorum of … not less than forty Members present or 25% of the Members registered — whichever is less.”
48. In ascertaining whether there was quorum for the disputed meetings, reference has to be made to the agreed Summary, and the attendance list.
49. As noted above, I find that there were 161 members as at 7 February 2010.
50. To constitute quorum for the AGM, there would have to be 40 members attending.
51. The attendance list for the meeting contained 54 typed up names and 21 (items 55 to 75) handwritten names. However:
(1) Item 9 and Item 15 of the typed up names are in fact the same name: Hussain Naveed.
(2) Item 26, Luisa Tam Castro, is the same name as that in Item 74.
In other words, the name list contains a total of 73 names, made up of 52 names (typed up) and 21 names (handwritten).
52. Twenty signatures were placed against the typed up names and 21 signatures on the handwritten names.
53. In order to look at the documentary evidence relating to the application forms and this 2010 AGM attendance list so as to ascertain whether or not there was quorum for the meeting, I have specifically looked at the following:
(1) the date of the application forms; and
(2) signatures of the application forms as compared to that on the 2010 AGM attendance list.
Date of application forms
54. As noted above, application forms dated 7 February 2010 could not have been approved by the Council of Management and these persons could not have been members of UMAH to vote at the 2010 AGM. Similarly, application forms dated 10 January 2010 and other dates in January 2010 had not been approved by any Council of Management before the 2010 AGM.
55. I accept the defendants’ submissions that a large number of the names who have apparently signed on the 2010 AGM attendance list (3/1045‑1048) were in fact not members of UMAH by reason of non‑compliance with Article 6.
56. As a result, of the signatures that have been signed and are found to be similar to that in the application forms, 13 of them are dated 10 January 2010, seven dated 7 February 2010 and the others were dated on other dates in January 2010 with the exception of Item 31, "Mohammad Ayub Din" (his name is "Mohamed Ayub Din" in his affirmation, but there is no dispute that item 31 refers to Ayub), whose application form is dated 2 February 1992.
57. There is also no dispute that candidates who have signed against Items 21, 32, 59, 61 and 62 in the 2010 AGM attendance list do not have any application form. There is no other evidence that they were members of UMAH as at 7 February 2010.
58. In the premises, on the evidence before me, only one person can be shown to be a member of UMAH at the time of the 2010 AGM.
Signatures
59. The original of attendance list for the 2010 AGM has never been produced. The authenticity of it is being challenged by the defendants in the Order 27, rule 4 Notice dated 8 July 2014 (6/2586‑2587). The defendants contend that some of the names were forged. Eight signatures on the 2010 AGM attendance list bears no similarity or resemblance to that found on the corresponding application forms. These are signatures against Items 10, 25, 30, 34, 57, 60, 65 and 73 on the attendance list.
60. Apart from Item 73, the 3rd plaintiff, who had an application form in the 1996 and one dated 10 January 2010, the other application forms were dated 10 January 2010 or 7 February 2010, and the candidates could not have been members at the time.
61. For the 3rd plaintiff, I find that he was in fact present at the 2010 AGM in the light of his oral evidence. However, he was not a member at the time. There is no dispute that he came to Hong Kong and joined UMAH in 1996 and the application form dated 1996 (6/2517) evidences that. He admitted that he left his employment and UMAH in the late 1990s. This is consistent with the evidence of Rashida. To re‑join as member he filled in an application form dated 10 January 2010 (6/2518). This has not been approved by the Council of UMAH and so he was not a member at the time of the 2010 AGM.
62. I note in passing the following:
(1) Khan Mohammad Sajawal, Item 109 in the Summary and Item 25 of the 2010 AGM attendance list (3/1045), he was seen in a photograph at 1/185 as being present.
(2) In relation to Item 24, the signatures in the application form and that on the attendance list on page 1045 are not too dissimilar. I have some doubt as to whether it was signed by the same person. Giving the benefit of doubt to the plaintiffs, I am prepared to accept that the signature on page 1045 of the 2010 AGM attendance list indicating the presence of Khan Mohammad Islam enumerated as Item 24.
(3) It is noted that for Items 55 and 56 of the 2010 AGM attendance list, the Summary indicated that there were no signatures or that the application form was unsigned. I notice that in fact a signature appears at the bottom of each of the application forms and I am prepared to give the benefit of doubt to the plaintiffs and accept that there were application forms from these two candidates.
(4) However, all these four application forms are dated 7 or 10 January 2010 and these candidates could not have been members at the time of the 2010 AGM.
Conclusion
63. As a result, by reason of this analysis, there is not enough quorum, whether by reference to a minimum of 40 members or 25% of the members of UMAH, for the 2010 AGM.
64. It is unnecessary therefore for me to consider whether in fact the application forms dated 10 January 2010 were in fact signed sometime in March on a Friday as contended by the defendants based on the evidence of Imam Zahid. If it had been necessary for this to be considered, I would have preferred the evidence of Imam Zahid because he was able to recollect the events pointing out that he himself did not sign on 10 January 2010 and that he recollected that it was a Friday gathering when forms were signed and collected, and there were distribution of certain biscuits and towels in that particular event in March at the mosque in Yau Oi Estate.
65. For these reasons, I conclude that the 2010 AGM had not been validly convened and any election of any member of the Council of Management at that meeting is improper and invalid. I further find that the election of the 3rd plaintiff as Honorary Secretary is in violation of Article 31(g) as he was not Council Member before the 2010 AGM.
POST 2010 AGM MEETINGS
66. The calling and conduct of the 2010 AGM was led by Ayub. This is clear from the evidence of the plaintiffs’ camp and is also alluded to by the defendants’ witnesses.
67. In around March 2010 there was apparently a meeting of those involved in the 2010 AGM whereby Ayub resigned. Questions were asked as to why Ayub resigned and the answers given by the plaintiffs’ witnesses were that the chairmanship was taken up by another founding member of UMAH. In fact, round about this time, Ayub was arrested for drug related offences and was later imprisoned.
68. It appears from the evidence that after Ayub was imprisoned, Rita Lama (Ayesha Din), his wife, could no longer control or manage UMAH. As set out above, the 2nd plaintiff, went to the office and changed the lock. Files were taken from the office.
69. In around 2012, the plaintiffs’ camp, now with an additional 98 application forms signed after 7 February 2010, started to arrange and issue notices for the 2012 AGM.
70. On 6 February 2012 the 3rd defendant signed as “(Director) Hon Secretary” of UMAH sent out letters described as “Notice for members to update changes in the information for UMAH record”.
71. Then on 27 February 2012, the 3rd defendant sent out the Notice of the 2012 AGM. The Agenda for the Notice of the 2012 AGM to be held on 25 March 2012 at the primary school, includes, amongst other things, “to ratify and to approve the results of the AGM held on 7 February 2010, the EGM held on 25 February 2010, the EGM held on 20 June 2010 and the AGM held on 25 March 2012”. Other matters such as receiving the chairperson’s report, balance sheet and accounts were also items on the 2012 AGM agenda.
DEFENDANTS’ 2010 EGM HELD ON 28 FEBRUARY 2010
72. The defendants rely on the EGM held on 28 February 2010 and contend that a new Council of Management has been elected.
73. The 2010 EGM minutes record that there were 109 members registered and 82 members signed up in the attendance list. The 1st defendant gave evidence that for the 109 members, there were membership application forms which have been approved. The defendants also rely on the evidence of other defendants’ witnesses who produced the membership card of UMAH to illustrate that they have been members. However, based on the evidence before the court, these application forms which the 1st defendant said existed have not been produced. The only information relating to application forms are already set out in the Summary.
74. In the premises, adopting the same analysis to verify quorums for the 2010 AGM, by counting the number of persons who have been recorded in the attendance list of the 2010 EGM, there were only seven members based on this agreed Summary. In the premises, in the light of the lack of evidence, the 2010 EGM did not have the requisite quorum and therefore any election of the new Council of Management purported to have been done at that meeting is not valid.
75. For these reasons, I reject that the defendants’ 2010 EGM was validly held.
76. In the premises, there being no election of a new Council of Management, the Council of Management recorded in the financial statements for year ended 31 December 2008, save for the late Ali Din, remains in place.
Plaintiffs’ alleged 20 June 2010 EGM
77. The plaintiffs’ case is that by the EGM held on 20 June 2010, the 2nd plaintiff was appointed as a Council member of UMAH.
78. The 2nd plaintiff admitted that he has never been a Council member before 2009. He said that he was elected a Council member in an EGM held on 20 June 2011 (he probably meant 2010), and was elected as a Chairman in 2012 AGM.
79. There is in fact no minutes of this alleged 20 June 2011 or 20 June 2010 meeting before me.
80. I am not prepared to find that any 20 June 2010 or 20 June 2011 meeting existed. The 2nd plaintiff was therefore never elected as a Council member in June 2010 or at any time before the 2012 AGM.
2012 AGM
81. As the 2010 AGM and 2010 EGM have not been validly held, the Council of Management as at the date of the death of Ali Din would be that listed in the 2008 financial statements. The Council of Management included the 2nd and 3rd defendants as well as Jamilah. There is no evidence that the Council of Management held any meeting to approve the 98 application forms that was filed after 7 February 2010.
82. As a result of Article 6, these 98 application forms could not therefore evidence membership either.
83. The situation therefore means that all the three disputed meetings before this court have not been properly convened and none of the business transacted in those meetings could be treated as valid under the Articles of Association of UMAH.
84. The plaintiffs admitted that the 2012 AGM was called on the advice of lawyers who, presumably having reviewed the documentations saw the defects in the plaintiffs’ earlier meetings and therefore seek to ratify these alleged meetings. There is no meeting of the 20 June 2010 EGM to be ratified.
85. The defendants further contend that in any event the 27 February 2012 Notice of the 2012 AGM was invalid for a number of reasons:
(1) The 2012 AGM Notice was invalid as it failed to state with sufficient particularity the resolutions to be passed or ratified.
(2) The persons calling the meetings were not members of UMAH and therefore have no entitlement to convene any such meeting.
(3) The lack of authority of the plaintiffs to convene the meeting could not be an accidental omission excused under Article 20(c) of the Articles of Association.
86. In relation to the first contention, the defendants rely on the case of Chung Cheung She & Ors v The Sze Yap SS Co Ltd [1931] HKLR 77. In that case, a notice was issued for a special meeting to be convened to, inter alia, confirm “such resolutions previously adopted”. The court held that the notice convening the confirmatory meeting was invalid because it did not state with sufficient particularity the resolutions to be submitted for confirmation. At page 93, the court held:
“On the authorities the one clear test of the sufficiency of such a notice seems to be, as submitted by Mr Sheldon: does it set out fairly and reasonably for the informatory of the shareholders the full purpose for which the meeting is called?”
87. Applying that principle to the matter here, in the light of my finding that there is no evidence of any EGM held on 20 June 2010, it is unclear what result of that meeting the members were asked “to ratify and to approve”. The same could be said with respect to the 2010 AGM, quite apart from the fact that I have already held that it was invalidly convened.
88. I accept the defendants’ contention in relation to the lack of particularity of the 2012 AGM Notice, thereby rendering it invalid.
89. As to the second point, the defendants rely on the case of Hong Kong Racing Pigeon Association Ltd & Ors v Lam Koon Nam & Ors [2002] 3 HKLRD 133. In that case the purported members and board of directors conducted themselves on the basis of some mistaken admission practice to call the meeting. The court held that the defendants were not members of the company as they had not been appointed in accordance with the Articles of Association and section 95 of the Companies Ordinance. As a result, the meeting convened by the defendant there was unlawful and the resolutions passed therein invalid.
90. As I have already held, the signatory on behalf of UMAH, namely the 3rd plaintiff, was not Council member nor the Honorary Secretary as the Notice purports to represent. The other persons identified as “Callers and Conveners of Meeting: Council of Management of UMAH and not less than 5% of the members of UMAH including Mr Sarwar Mohammed, Mr Ghulam Mustafa, Mr Muhammed Javed Shahab” is set out at the bottom of the Notice. The then existing Council of Management (ie the persons identified in the 2008 financial statement) did not call the meeting.
91. Lastly, I also accept the position established in the position of Woolf v East Niger Gold Mining Co Limited (1905) 21 TLR 660, whereby the court held:
“The notice in fact sent was not the necessary notice as prescribed in the articles, for it was sent out at a time before anybody had authority to send it, the company not being in existence. And he could not treat such a mission as ‘accidental’ within the meaning of the articles.”
92. In the premises, the Notice is invalid and the meeting could not have been called by the persons purportedly to do it.
93. The other contested matter that related to the 2012 AGM was the purported election of the 2nd plaintiff as Chairman of UMAH. As he was not a Council member for the reasons I have explained above, by reason of Article 31(g) of the Articles of Association, he could not have been elected as a Chairman in the 2012 AGM.
SHEUNG SHUI MOSQUE PROJECT AND THE 2ND PLAINTIFF
94. Issues relating to the Sheung Shui Mosque Project started to appear later in 2010. The engagement of the Authorised Person caused confusions to the Buildings Department and the Lands Department was also chasing for premium and interests to be paid. The Sheung Shui Mosque Project was at risk.
95. The 2nd plaintiff suggested that he was heavily involved in the Sheung Shui Mosque Project. I do not accept that. In the Sheung Shui Mosque Project meetings held on 18 April, 12 and 30 November 2009 (3/1039 and 3/1041), he was not present nor even recorded as somebody sending apologies. He relied on a photograph indicating him shaking hands with the late Ali Din and asserted that he was “briefed” about the Project on a graduation ceremony of the school. This does not signify involvement.
96. On the other hand, the 3rd defendant has been a Council member of UMAH and was appointed trustee for the Sheung Shui Mosque Project (3/1114).
97. The 2nd plaintiff then tried to show that he was also involved in UMAH, the school and the elderly home project. He relied on his chairmanship of a parent‑teacher association (5/1855). It was readily pointed out and he agreed that that was in fact not the primary school of UMAH. It was also put to the 2nd plaintiff and he accepted that the public work he alluded to in his witness statement and his oral evidence were not related to UMAH.
98. After a lot of cross‑examination on his lack of involvement with UMAH, he eventually agreed that his official involvement was only after 2010. Insofar as the Sheung Shui Mosque Project is concerned, he admitted he made no donation and has not contributed in other ways to further its implementation.
99. I am not impressed with the 2nd plaintiff. In pursuing an injunction against the defendants, the 2nd plaintiff gave an undertaking (2/501) in his affirmation dated 21 April 2012 whereby he stated in paragraph 30:
“I and the other individual Plaintiffs are willing to give an undertaking in the usual form in respect of the costs and damages which may be incurred by the 1st to 3rd defendants in the event that the injunction is granted. ”
During his evidence, he was questioned as to what property he owned. He referred to an apartment in Yuen Long which he was the owner at the time of the affirmation and added that it was sold shortly after 21 April 2012. He then said he owned a restaurant located at Kam Tin Road. Counsel for the plaintiffs confirmed on behalf of the 2nd plaintiff that he did not own the property where he was operating a restaurant and that he would not be recalled to give an explanation about his evidence. The fact that his flat in Yuen Long was sold in 2007 (Exhibit D6) and the fact that he, under oath, stated that he owned the property for his restaurant when this was not the case shed light on his lack of credibility and his preponderance to give evidence to suit the purpose he is pursuing.
PUBLIC NOTICE DATED 21 MARCH 2012
100. The plaintiffs complaint relates to the defamatory words pleaded as:
“We, the five members of Din family, hereby inform the general public that a few persons are trying to illegally hold a so-called AGM on 25 March 2012 despite the fact that they are not the legitimate personnel to hold any meeting or AGM of our organization. We hereby give this notice that these persons are illegally getting involved in UMAH’s affairs and we reserve every right to take legal actions against such acts.
… After his death, some opportunists tried to hijack the organization which caused a serious damage to the reputation of the organization.
…
Therefore, everyone is hereby notified that UMAH strongly denounces the interference of the outsiders in its organizational affairs and reiterates that the organization’s affairs are and will be managed by the Council of Management of which Mrs Din is the Chairperson and we the undersigned are directors/members until the next [the] AGM that is scheduled to be held on 22 April 2012.”
101. The plaintiffs complain that the defamatory words targeted the 2nd to 7th plaintiffs and that in their natural and ordinary meaning they were understood to mean that the 2nd to 7th plaintiffs are:
(1) not the legitimate personnel to hold any meeting or AGM of UMAH;
(2) are persons illegally getting involved in or interfering with UMAH’s affairs;
(3) are opportunists trying to hijack UMAH after the death of Ali Din;
(4) are outsiders and are neither members of UMAH nor members of its Council but they interfere in organisational affairs of UMAH without any lawful authority;
(5) have conducted themselves in a manner which had to be and was denounced by UMAH;
(6) have conducted themselves in a manner which caused serious damage to the reputation of UMAH; and
(7) have conducted themselves in a manner which resulted in all of them being liable to be successfully sued by members of the family of Ali Din.
102. The defendants pleaded three defences: justification, fair comment and qualified privilege, the last of which was not pursued at the trial.
103. There is no dispute about the publication of the Notice although the defendants contend that the 1st and 3rd defendants were in fact not involved in the publication of the alleged defamatory Public Notice.
Applicable principles
104. It is necessary to first distinguish fact and opinion. Opinions or comments are statements made on the basis of facts. Under the defence of justification in relation to statements of fact, the defendants must prove that they are true. As to a statement of opinion, the defence of justification would succeed if the statements of opinion are correct. Fair comment or honest comment is also a defence available to defendants in relation to statements of comment.
105. In determining the meaning of the offending words, the plaintiffs rely on the natural and ordinary meaning of the words complained of:
“Words are normally construed in their natural and ordinary meaning, i.e. in their meaning in which reasonable people of ordinary intelligence, with the ordinary person’s general knowledge and experience of worldly affairs, would be likely to understand them. The question is what would the words convey to the mind of the ordinary, reasonable, fair-minded reader? The natural and ordinary meaning may also include implications or inferences.” (Gatley on Libel and Slander , paragraph 3.17)
106. In establishing a defence of justification, only the substantial truth of the imputation needs to be proven by the defendants. In other words, the defendants have to prove that “the main charge, or gist of the libel” is true (Sutherland v Stopes [1925] AC 47 (HL)).
107. A defence of justification would still succeed even if the publication was inaccurate in some minor respects provided that it is not one of material inaccuracy. Slight inaccuracy therefore would not defeat the defendants’ reliance on the defence of truth.
108. As to the defence of fair comment, the principles have been set out by the Court of Final Appeal in Cheng & Anor v Tse Wai Chun (2000) 3 HKCFAR 339. In giving the leading judgement, Lord Nicholls of Birkenhead NPJ set out the requisites for this defence to be established at pages 347B‑348A. These objective limits are five folds:
“… First, the comment must be on a matter of public interest. Public interest is not to be confined within narrow limits today: see Lord Denning in London Artists Ltd v. Littler [1969] 2 QB 375, 391.
Second, the comment must be recognisable as comment, as distinct from an imputation of fact .… For present purposes it is sufficient to note that a statement may be one or the other, depending on the context. Ferguson J gave a simple example in the New South Wales case of Myerson v. Smith’s Weekly Publishing Co Ltd (1923) 24 SR (NSW) 20, 26:
‘To say that a man’s conduct was dishonourable is not comment, it is a statement of fact. To say that he did certain specific things and that his conduct was dishonourable is a statement of fact coupled with a comment.’
Third, the comment must be based on facts which are true or protected by privilege. …
Next, the comment must explicitly or implicitly indicate, at least in general terms, what are the facts on which the comment is being made. …
Finally, the comment must be one which could have been made by an honest person, however prejudiced he might be, and however exaggerated or obstinate his views. ...”
109. In order to determine whether the particular statement is one of comment or fact, Fletcher Moulton LJ in Hunt v Star Newspaper [1908] 2 KB 309 at 319‑320 stated:
“… In the first place, comment in order to be justifiable as fair comment must appear as comment and must not be so mixed up with the facts that the reader cannot distinguish between what is report and what is comment: ... I must express my disagreement with the view apparently taken by the Court of Queen’s Bench in Ireland in the case of Lefroy v. Burnside (4 L.R. Ir. C.L. 556), where the imputation was that the plaintiffs dishonestly and corruptly supplied to a newspaper certain information. The Court treated the qualifications ‘dishonestly’ or ‘corruptly’ as clearly comment. In my opinion they are not comment, but constitute allegations of fact. It would have startled a pleader of the old school if he had been told that, in alleging that the defendant ‘fraudulently represented’, he was indulging in comment. By the use of the word ‘fraudulently’ he was probably making the most important allegation of fact in the whole case. Any matter, therefore, which does not indicate with a reasonable clearness that it purports to be comment, and not statement of fact, cannot be protected by the plea of fair comment. In the next place, in order to give room for the plea of fair comment the facts must be truly stated. If the facts upon which the comment purports to be made do not exist the foundation of the plea fails. This has been so frequently laid down authoritatively that I do not need to dwell further upon it: see, for instance, the direction given by Kennedy J., to the jury in Joynt v Cycle Trade Publishing Co ([1904] 2 KB 292 at p. 294) which has been frequently approved of by the Courts. …”
110. As to the test in ascertaining whether the defence of fair comment is satisfied, Lord Diplock in Silkin v Beaverbrook Newspapers Ltd and Another [1958] 2 All ER 516 laid down to the test as being whether the opinion which is expressed in the comment, however exaggerated, obstinate or prejudiced it may be, was honestly held by the writer. Lord Diplock referred to a statement made by a judge at page 518, and then reviewing the facts concluded and summarised the test at 520F‑G as follows:
“Would a fair-minded man holding strong views, obstinate views, prejudiced views, have been capable of making this comment? If the answer to that is yes, then your verdict in this case should be a verdict for the defendants. Such a verdict does not mean that you agree with the comment. All it means is that you think that a man might honestly hold those views on those facts. …
If you take the view that that test is fulfilled, that this does come within the limits of fair comment, as I say, the proper verdict for you to bring in is a verdict for the defendants. If you were to take the view that it was so strong a comment that no fair-minded man could honestly have held it, then the defence fails.”
111. The defence of fair comment is, therefore, better understood as one of honest comment as observed by Lord Nicholls of Birkenhead NPJ in Cheng v Tse Wai Chun at page 347. In concluding on the position of the law of fair comment, he said at page 360:
“…To summarise, in my view, a comment which falls within the objective limits of the defence of fair comment can lose its immunity only by proof that the defendant did not genuinely hold the view he expressed. Honesty of belief is the touchstone. Actuation by spite, animosity, intent to injure, intent to arouse controversy or other motivation, whatever it may be, even if it is the dominant or sole motive, does not of itself defeat the defence. However, proof of such motivation may be evidence, sometimes compelling evidence, from which lack of genuine belief in the view expressed may be inferred. …”
112. I turn then to consider the issues between the parties in relation to the Public Notice applying the principles set out above.
Whether the 1st and/or 3rd defendant(s) published the Public Notice
113. Jamilah Din who gave evidence on behalf of the defendants lives in Canada but has been in close contact with the family, especially after father passed away. She recalled father discussing about something about asking the 3rd plaintiff to leave in around 1998 and she also gave evidence that in about 2010, Rita Lama called her and told her about the fact that the 2nd and 3rd plaintiffs had been excluding Ayub and her in relation to UMAH.
114. Jamilah said that after mother, the 2nd defendant, received the letters dated 6 and 27 February 2012, they discussed over the phone in the family. She said that since it was her father who set up UMAH she felt it was her responsibility that the Islamic community should be told what was right. As a result she drafted and sent off to other members of the family the Public Notice dated 21 March 2012 (3/976), the subject of the defamation claim. Rashida followed up in Hong Kong.
115. Rashida adamantly stated that the Public Notice came from her family and had nothing to do with the 1st and the 3rd defendants. She emphasised that this was a family matter and there was no need to consult the 1st or the 3rd defendants. The Public Notice was signed by the 2nd defendant, Rita Lama, Rashida, Jamilah and Ramzan.
116. There were also persons that were copied in on that Public Notice. This was because, Rashida said, they had been friends and supporters of UMAH and therefore she felt it right that they should be specifically notified.
117. The handwriting at the bottom of the Public Notice reads: “CONTECT PERSON: MR AHMED, RAHEEL MR YUSUF YU. ” There is however no evidence as to who wrote it. The document at 3/976 was provided or produced by the plaintiffs in the form as it is, namely a photograph. There is no evidence who took the photograph or from where it was taken.
118. Both the 1st and 3rd defendants gave evidence that they were not involved in the preparation or publication of the Public Notice.
119. I accept the evidence of the defendants’ witnesses, in particular, that of Rashida and Jamilah who were mainly responsible for putting the Public Notice together. The 1st and 3rd defendants were not involved in the publication of it.
Whether the words in the Public Notice were defamatory or otherwise true and justified, or amount to a fair comment
120. In the light of my findings regarding the 2010 AGM and the absence of the June 2010 EGM, the statements of fact in the Public Notice are substantially true notwithstanding some inaccuracies regarding the defendants’ position of the 2010 EGM which I find is not material.
121. The first paragraph stated:
“We, the five members of Din family, hereby inform the general public that a few persons are trying to illegally hold a so-called AGM on 25 March 2012 despite the fact that they are not the legitimate personnel to hold any meeting or AGM of our organization. We hereby give this notice that these persons are illegally getting involved in UMAH’s affairs and we reserve every right to take legal actions against such acts.”
122. The plaintiffs (save for the 4th and 5th plaintiffs) were not members of UMAH. None of them was member of the Council at the relevant time. The 3rd plaintiff does not have the legitimate right to call any meeting as the 2010 AGM was invalidly held and the 3rd plaintiff was not a member nor was he validly elected as a Council member let alone the Honorary Secretary. The Notice for the 2012 AGM also named Mr Sarwan Mohammed and Mr Ghulam Mustafa as caller or convenor. Whilst they were members of UMAH, they were not members of the Council and the then Council did not call such meeting. The illegality of getting involved in UMAH’s affairs is evidenced by the fact that the 2nd plaintiff caused the lock of the UMAH’s office to be changed with boxes being taken away, and the attempt to convene the 2012 AGM to “ratify” meetings and to elect the 2nd plaintiff as chairman of UMAH.
123. For the reasons set out above, the statements of fact set out in this part of the Public Notice are substantially true. As to whether words such as “illegally”, “legitimate” are statements of fact or opinion, I prefer the observations of Fletcher Moulton LJ in Hunt v Star Newspaper cited above and conclude that they are statements of fact. Given that the 2012 AGM Notice was invalid, to describe it as “trying to illegally hold” such a meeting and that such personnel are “not the legitimate personnel” are factually true. If they are to be treated as comments, they are equally accurate and correct comments. Further if these wordings are opinion and tested against the defence of fair comment, I am convinced that such comment was made in the public interest in particular that of the Islamic community, that it was based on facts that are substantially true and was honestly held by the members of the Din family who prepared and signed the Public Notice.
124. The Public Notice went on to state:
“After [Ali Din’s] death, some opportunists tried to hijack the organization which caused a serious damage to the reputation of the organization.”
125. The sentence is substantiated by the involvement of the plaintiffs, in particular, the 2nd and 3rd plaintiffs as explained above.
126. As to the wordings complained of by the plaintiffs, where the plaintiffs were described as “opportunists” who tried to “hijack” the organisation. Reading this paragraph in context, and the facts that I have found above, this statement of fact is substantially true. Whilst the word “hijack” may connote certain illegality or abusive act, the fact of the matter was that the plaintiffs, in particular the 2nd and 3rd plaintiffs, were trying to take control of UMAH without proper authority.
127. As to the consequences, namely whether it caused serious damage to the reputation of UMAH, it is a proper inference to be drawn that this would have taken place and has in fact happened. The Mosque Project was put on hold. In the premises, the fact of the damage has been established. As a comment, it is honestly held by the members of the Din family and meets the requisites for the defence of fair comment.
128. Lastly the Public Notice stated:
“Therefore, everyone is hereby notified that UMAH strongly denounces the interference of the outsiders in its organizational affairs and reiterates that the organization’s affairs are and will be managed by the Council of Management of which Mrs Din is the Chairperson and we the undersigned are directors/ members until the next the AGM that is scheduled to be held on 22 April 2012.”
129. The first sentence refers to outsiders’ interference. It does not indicate what interference the outsiders are carrying out and if it relates to the plaintiffs’ conduct, I have already held that such statements of fact are substantially true and justified. The rest of this paragraph stated matters that is not concerning the plaintiffs and there is no need to comment on the accuracy or otherwise of that. It stated the intention of how UMAH “will be managed”.
130. In the premises, the plaintiffs’ claim on defamation is dismissed.
DISPOSAL
131. The following orders are made:
(1) A declaration that the 2nd and 3rd defendants are members and Council members of UMAH.
(2) A declaration that the 2nd to 7th plaintiffs were and are not Council members of UMAH.
(3) An injunction restraining the 2nd to 7th plaintiffs from holding out as Council Members of UMAH is granted.
132. There be an order nisi that costs be to the defendants on a party and party basis, to be taxed if not agreed. If either party wishes to seek to vary the costs order nisi , the following procedures shall apply:
(i) Any application to vary the costs order nisi with full written submissions shall be made to this court within 14 days of the date of this judgment.
(ii) The responding party shall respond within 14 days of such application.
(iii) The applicant shall file its reply, if any, within seven days thereafter.
(iv) There shall be no extension of time for the filing of such submissions unless directed by this court.
(v) Any application to extend time must be made to this court at least two days before the expiry of the relevant time period.
(vi) No further submission is allowed unless otherwise directed by this court.
(vii) The application shall be disposed of by way of written submissions unless otherwise directed by this court.
133. As to whether the plaintiffs or the 1st defendant are members of UMAH, no declaration is made as it will be a matter for the Council of Management under Articles 5 and 6. My findings only relate to them not being members or Council members at the relevant times based on the evidence before me. Their membership will be subject to any decision by the existing Council of Management of UMAH.
134. There is no evidence before me as to damages and no order is made in that respect.
(Teresa Cheng SC)
Recorder of the Court of First Instance
High Court
Mr Ernest Koo, instructed by Cheung & Yeung, for the plaintiffs
Mr Hylas Chung and Mr Ubaid‑Ur Rehman (except 19, 24 and 26 September 2014), instructed by Gary Lau & Partners, for the defendants