XCHRX LAM CHI FAT v. LEUNG PUI LUN AND OTHERS

HCA 8381/2000
(Intended Action No. 79/2000)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8381 OF 2000

(INTENDED ACTION NO. 79/2000)

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R U L I N G

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1. I have before me an application made ex parte for an interlocutory injunction. It is unusual in nature in that it relates to a conflict which is presently evident in the management committee of an unincorporated association called The Hong Kong General Association of Recycling Business.

2. The Intended Plaintiffs, I am told, are members of this management committee and are founding members of the Association. The 2nd Intended Plaintiff is, in fact, the current treasurer. I am told that the Intended Defendants are also members of the management committee.

3. The allegations made are that, against the background of possible financial mismanagement, the Intended Defendants have so manoeuvred matters as to now be in a position to unfairly and unlawfully remove the Intended Plaintiffs from their management responsibilities thereby leaving the way clear for their own unchallenged management of the Association.

4. I am told that the Intended Defendants have together arranged matters so that this evening at 6.30 p.m. there will be an emergency general meeting of the Association. The purpose of this meeting is to dissolve the current management committee and to appoint a new one. If that happens, the Intended Plaintiffs will almost certainly find themselves 'out in the cold'. The papers indicate that a number of ordinary members do not intend to come to the meeting as they believe that it has not been called within the terms of the Rules of the Association. This will mean that those who do attend will be able to pass the necessary resolutions unopposed.

5. The allegation is made that the membership of the Association has risen dramatically since this dispute arose. It is suggested that the Intended Defendants have encouraged persons to either join the Association or pretend to join it or at least to present themselves at meetings alleging themselves to be members. In short, it is alleged that the Intended Defendants have been unfairly and unlawfully 'stacking' the membership to secure votes. The Rules make it clear who may or may not become a member. They must be bona fide members of the paper recycling trade. It is suggested, however, that many of these new members are not bona fide members but are the employees of the various Intended Defendants or truck drivers or persons who are, otherwise, ineligible.

6. As a consequence, I am asked for an order restraining the Defendants - or their agents - from proceeding with the emergency general meeting this evening. In addition, an order is requested restraining the Defendants from passing any resolution dissolving the management committee and electing new officers. Finally, discovery of various documents is sought.

7. I have expressed my concern to counsel that, if I order this injunction, it may somehow bring about a paralysis of the Association. I was concerned because it appears that the Government has advised the Association that it has carried out certain illegal building works and that this must be remedied. If the management committee is paralysed, how will this matter be resolved? I have been assured, however, that the injunction preventing the emergency meeting taken place will not prevent the management committee from continuing its work. Indeed, it appears to be one of the main purposes of the injunction to preserve the management committee as it is presently constituted so that any dispute may be resolved and decisions lawfully made.

8. I am concerned by what has been apparently happening in the past. The 2nd Intended Plaintiff is the treasurer and, if I accept his affirmation, it appears that there are two matters of real concern. First, he apparently paid a large sum of money to at least two of the Intended Defendants to employ the services of an architect so that building changes could be made that were in accordance with the Government consent. When allegations of illegal building alterations were made, the 2nd Intended Plaintiff, in his capacity as treasurer, queried why this should be and was told that no architect had, in fact, been retained. The question then arose as to the funds paid for that purpose. Those funds, however, are not, at least at this moment and time, clearly identifiable. There is, therefore, the suggestion of financial mismanagement, whether that be fraudulent or negligent. In addition, it appears that the 2nd Intended Plaintiff, the properly elected treasurer, has been denied access to necessary papers to enable him to carry out his duties.

9. In all the circumstances, I am satisfied that it would be proper to grant the injunction as prayed. It is necessary as a matter of some urgency to prevent the Plaintiffs being unlawfully 'railed-roaded' out of the Association and it is necessary to try to bring some order back into its management. If indeed there has been mismanagement then that needs to be identified.

10. I have also taken into account the fact that the cancelling of the emergency general meeting will, if this injunction is set aside, only delay matters by a few weeks, perhaps a month.

11. I am also satisfied that the 3rd, 4th and 5th orders that are sought cannot cause any long term damage. The 3rd and 4th requested orders do no more than place the Intended Plaintiffs in possession of relevant information which will then enable them to ensure that the Association has been and continues to be run in an legal fashion.

12. In all the circumstances, I am satisfied that the balance of convenience is in favour of the Plaintiffs. I have also taken into account the fact that the necessary undertakings as to damages have been given. Accordingly, there will be an order in terms of the draft.