LEE KWOK KEUNG v. CHICK POON LUN ANTONY AND ANOTHER

HCMP 2388/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2388 OF 2012

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J U D G M E N T

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1. This judgment deals with the trial of a preliminary issue.

Introduction

2. The main action was brought by Orginating Summons taken out by the plaintiff on 26 October 2012 whereby the plaintiff sought :-

(a) A declaration that the meeting of the 2^nd defendant held on 28 June 2011 and the resolution passed at that meeting to appoint the 1^st defendant as the Executive President of the 2^nd defendant was invalid;

(b) An injunction to restrain the 1^st defendant from dealing with moneys of the 2^nd defendant in its bank accounts;

(c) An order of account or inquiry of incomes or other sum of moneys received by the 2^nd defendant;

(d) An order for payment by the 1^st defendant to the 2^nd defendant of the 2^nd defendant’s money which the 1^st defendant has improperly used upon the taking of such accounts.

3. A summons dated 1 November 2012 was taken out by the 1^st defendant to strike out the Originating Summons and to dismiss the plaintiff’s claim on the basis that the plaintiff does not have the locus standi to commence the current proceedings and to seek the reliefs and remedies thereunder.

4. On 23 April 2013, I ordered the trial of the preliminary issue as to the locus standi of the plaintiff and gave the necessary directions thereto.

Background

5. This case revolves around the 2^nd defendant herein, the Amalgamated Union of Seafarers Hong Kong.

6. As its name suggest, the 2^nd defendant is a trade union and was registered with the Registry of Trade Unions (“RTU”) under the Trade Unions Ordinance Cap.332 (“the Ordinance”) on 9 October 1964. After its registration with the RTU, the 2^nd defendant became an affiliated member of the Hong Kong Kowloon Trade Union Council (“HKKTUC”).

7. Since the time of its registration with the RTU, the 2^nd defendant’s Executive President was a Mr. Au-yeung Sum (“Au-yeung”) who ran the 2^nd defendant single-handedly. It would appear that Au-yeung had sole control over the 2^nd defendant and whatever Au-yeung said or decided would almost invariably be implemented in the 2^nd defendant without challenge from any quarters. Although at all material times, there was provision for an Executive Committee under the Articles of the 2^nd defendant, it appeared that the members of the Executive Committee simply took orders from Au-yeung and performed their duties according to his instructions.

8. Au-yeung continued in his office of Executive President of the 2^nd defendant until his death on 3 May 2011.

9. In or around 1990, the plaintiff was recruited by Au-yeung to be a part time interpreter for the 2nd defendant and was employed in that capacity by the 2nd defendant. This was due to the fact that the plaintiff’s advantage over all the other officers of the 2nd defendant was that the plaintiff knew English but the other officers including Au-yeung did not.

10. In or around 1995, when the former General Secretary of the 2^nd defendant passed away, the plaintiff was asked by Au-yeung to take up the post of General Secretary of the 2^nd defendant which the plaintiff did. At all material times thereafter, the plaintiff took on the role of General Secretary of the 2^nd defendant and was paid a monthly salary by the 2nd defendant. At the time of Au-yeung’s death in May 2011, the plaintiff’s monthly salary from the 2^nd defendant was to $30,000.00

11. The plaintiff also became a member of the Executive Committee of the 2^nd defendant at the invitation of Au-yeung some time after he took on the post of General Secretary.

12. It is common ground between the parties that the plaintiff’s position as General Secretary and as a member of the Executive Committee came about merely at the dictate of Au-yeung and that both appointments were not in compliance with the provisions in the Articles of the 2^nd defendant.

13. For as long as Au-yeung was the Executive President of the 2^nd defendant, the plaintiff’s positions in the  2^nd defendant both as General Secretary and as a member of the Executive Committee were secured.

14. However, things began to change after the death of Au-yeung on 3 May 2011.

15. An Executive Committee Meeting of the 2^nd defendant was convened for 28 June 2011 (“the Meeting”). The Notice convening the Meeting was signed by the plaintiff (as General Secretary), one Mr. Tang (being the then Vice Executive President of the 2^nd defendant) and the 1^st defendant as Treasurer. The main purpose of the Meeting was to elect a new Executive President to take the place of the deceased Au-yeung.

16. At the Meeting, the 1^st defendant was elected to be the Executive President of the 2^nd defendant.

17. After the Meeting, the plaintiff wrote to the RTU complaining of irregularities at the Meeting such that the election was invalid. The matter was looked into by the RTU which formed the view that the Meeting failed to comply with certain rules in the Articles of the 2^nd defendant and therefore declared the Meeting and the election thereat to be invalid. This was stated in a letter dated 17 January 2012 by the RTU.

18. On 28 December 2011 the present 1^st defendant commenced proceedings in HCMP 2662 of 2011 for a declaration that the resolution passed at the Meeting was valid and binding, an order that an AGM of the 2^nd defendant may be convened by the Court and other related reliefs. However, those proceedings were discontinued and withdrawn on 21 June 2012 without any admission as to liability.

19. It was against this background that the present proceedings were started by the plaintiff by Originating Summons dated 25 October 2012.

The Preliminary Issue for determination

20. It is the stance taken by the 1^st defendant that the matters complained of by the plaintiff are not wrongs done to the plaintiff personally but to the 2^nd defendant. Likewise all the reliefs sought by the plaintiff are claimed on behalf of the 2^nd defendant. Effectively therefore, the present action is a derivative action on behalf of the 2^nd defendant. Such a derivative claim can only be brought by members of a particular organization (section 168BC of Companies Ordinance Cap 32).

21. Moreover under section 49 of the Trade Unions Ordinance, it is only the trade union, a voting member thereof or the Registrar of Trade Unions who can issue proceedings on behalf of the trade union for alleged misapplication of funds of that trade union by any of its officer.

22. It is the 1^st defendant’s case that based on the Register of Members maintained by the 2^nd defendant, the plaintiff was not and has never been a member of the 2^nd defendant. Apart from the plaintiff’s bare assertion that he has been a member of the 2^nd defendant since about 1990, the plaintiff has not a single piece of paper or any other evidence to substantiate his membership of the 2^nd defendant.

23. Accordingly, the 1^st defendant says that the plaintiff has no standing to issue the present action.

24. The 1^st defendant also points to Article 3 of the 2^nd defendant’s Constitution which governs the qualifications for membership and to the statutory provision contained in section 17 of the Trade Unions Ordinance to say that the plaintiff fails to show that:

(a) he was a member of Hong Kong-Chinese Seafarers Trade Union or Chinese Workers of Vessels and Boats Union;

(b) he had worked on board any inland or sea-going vessels and local vessels;

(c) he was ever engaged in the industry of seafaring as required by section 17 of the Ordinance;

(d) he had ever applied for membership of the 2^nd defendant; or

(e) he had ever paid any membership fee to the 2^nd defendant in accordance with the Articles.

25. The plaintiff, on the other hand, relies on the following matters to say that he has been a member of the 2^nd defendant since 1990:

(a) the plaintiff was employed as a part time interpreter by the 2^nd defendant since about 1990;

(b) the plaintiff became the General Secretary of the 2^nd defendant in about 1995;

(c) at the time when the plaintiff consented to become the General Secretary of the 2^nd defendant, the plaintiff understood that membership fees needed to be paid. Au-yeung at that time promised the plaintiff that he (Au-yeung) would be responsible for paying the plaintiff’s membership fees and to handle the relevant procedures. The plaintiff was not sure what needed to be done but trusted and relied on Au-yeung to do all that was necessary;

(d) later, the plaintiff also sat on the Executive Committee of the 2^nd defendant;

(e) the plaintiff has represented the 2^nd defendant on a number of boards, trade councils and other bodies in relation to the seafaring trade.

26. It is therefore the plaintiff’s case that in so far as eligibility is concerned, the plaintiff’s eligibility to be a member of the 2^nd defendant has its basis upon those facts relied on by the plaintiff above and which showed that the plaintiff has been a staff of a maritime-related concern, albeit that he has never been a seafarer.

27. It is also the plaintiff’s case that the records kept by the 2^nd defendant has been so loosely and poorly kept, both as to the register of members as well as the receipt of membership fees, that little or no weight could be placed on such records to show that the plaintiff was not a member of the 2^nd defendant simply because the plaintiff’s name is not found in the register of members and that there are no records of the plaintiff having paid membership fees.

28. The plaintiff also relies on estoppel.

EVIDENCE

(A)   Plaintiff’s evidence

29. The plaintiff gave evidence and called as witnesses Wong Siu Han, Kwok Kam Wah and Li Chi Wai.

30. The relevant part of the plaintiff’s evidence can be summarized as follows.

31. The plaintiff was first employed as a part-time interpreter by the 2^nd defendant from around 1990. At that time, his duties involved doing interpretation for Au-yeung as the Executive President and the then General Secretary of the 2^nd defendant when they had meetings with representative of foreign trade unions because both of them did not know English. The plaintiff also had to translate documents for them and to accompany the General Secretary to overseas meetings acting as his interpreter and assistant. The plaintiff was also responsible for liasing between the 2^nd defendant and the HKKTUC.

32. In around 1995, when the then General Secretary of the 2^nd defendant passed away, Au-yeung appointed the plaintiff to take up the post of General Secretary of the 2^nd defendant. Au-yeung further told the plaintiff that the plaintiff was a member of the 2^nd defendant and the 2^nd defendant would pay his fees. The plaintiff therefore believed that Au-yeung did enroll him as a member of the 2^nd defendant and the 2^nd defendant did pay his fees for him since Au-yeung would not have appointed him as General Secretary in 1995 if he was not qualified to be a member. Therefore the plaintiff believes that by his appointment as General Secretary which has continued at all times he must be a member of the 2^nd defendant.

33. As for his membership fees, the plaintiff was told by Au-yeung that it would be paid by the 2^nd defendant. Therefore all along it was paid by the 2^nd defendant since his appointment as General Secretary. The plaintiff has not been informed by the 2^nd defendant or any of its officers that the 2^nd defendant has stopped paying his fees for him. The plaintiff therefore believes that the 2^nd defendant should continue to pay his membership fees. However, after the death of Au-yeung, the plaintiff believes that the 1^st defendant has prevented the 2^nd defendant from paying his membership fees for him.

34. When the plaintiff took to the witness stand, he elaborated on the payment of his membership fees by saying that when he consented to take up the post of General Secretary, he understood that he had to be a member of the 2^nd defendant and to pay membership fees. At that time, Au-yeung said that he (Au-yeung) would be responsible for paying the plaintiff’s membership fees and would take care of the formalities for the plaintiff’s membership. As the plaintiff knew that Au-yeung had full powers, he did not ask Au-yeung any further. To the plaintiff’s understanding, his membership fees were to be paid from his salary since in the seafarers’ industry many employers would pay the membership fees for their employees.

35. The plaintiff also believed that the Executive President’s membership fees were also paid in this manner. The plaintiff was not given any receipt by Au-yeung for membership fees and did not ask Au-yeung for any.

36. After becoming General Secretary, the plaintiff’s workload increased substantially and he had to go on overseas business trips on behalf of the 2^nd defendant on his own. He also had to go through all the English documents and report to the Executive President. In 1996, the plaintiff represented the 2^nd defendant and sat on various boards in relation to the seafaring industry and the government, which included the Seafarer’s Advisory Board, the Merchant Services Training Board of the Vocational Training Council and the Management Committee of Sailors’ Home and Mission to Seafarers. Much of his work involved handling negotiations together with two other seafaring unions, in relation to the adjustment of salary for seafarers.

37. The plaintiff was also elected to the HKKTUC from 1996 to 2012 as a representative of the 2^nd defendant.

38. Furthermore, the plaintiff was involved in a co-ordination group under the name of the HK Seafarers Co-ordination Committee (“HSCC”) being a group convened pursuant to a Memorandum signed between the Merchant Navy Officers’ Guild (“MNOG”), the Hong Kong Seaman’s Union (HKSU”) and the 2^nd defendant (represented by the plaintiff) on 8 December 1995 (“the Memorandum”). The plaintiff had to attend monthly meetings of the HSCC to discuss about collective bargaining agreements and to attend various meetings of the International Transport Workers’ Federation.

39. Wong Siu Han is the Vice-Chairman of the HKKTUC and gave the following evidence.

40. She came to meet the plaintiff after she joined the HKKTUC in 1994. The plaintiff was introduced to her by Au-Yeung as a member of the 2^nd defendant and as being its General Secretary. At that time she was told that the plaintiff will handle the affairs of the 2^nd defendant in future. She understood from that that the plaintiff was a full-time secretary of the 2^nd defendant.

41. Wong also gave evidence as to the operation of the HKKTUC. According to the Charter of the HKKTUC, each Affiliated Member may nominate one or more members to become its representative in HKKTUC, and these nominees must have membership status of the nominating Affiliated Member. These are known as Members’ Representatives. Members need to pay monthly fees and will stop enjoying rights of the HKKTYC if such monthly fees are outstanding for 3 months.

42. Wong also gave evidence that in order to stand for election as a Members’ Representative, an individual needed to hold Nomination Letters issued by Affiliated Members in each of the election for the HKKTUC’s Executive Committee members. She was responsible for checking such Nomination Letters from Affiliated Members to ensure proper endorsement. These letters have also to bear the stamp or chop of the Affiliated Members and be signed by the Executive President or Chairman of the nominating Affiliated Members. She had been checking these letters since 2002, but were no longer needed by 2006.

43. In the case of the plaintiff, Wong had in fact checked the Nomination Letter issued by the 2^nd defendant and in every occasion it had been signed by the Executive President and bore the chop of the 2^nd defendant. Wong therefore had no reason to suspect that the plaintiff was not eligible.

44. Kwok Kam Wah, the former Chairman of the HKSU gave the following evidence.

45. In about late 1999 when Kwok Kam Wah was then the Vice Chairman of HKSU, he came to know the plaintiff who was introduced to him as the General Secretary of the 2^nd defendant by someone, but he cannot remember who the introducer was.

46. Kwok saw the plaintiff at every meeting in which the 2^nd defendant had participated, such as meetings held by the ITF, the HSCC, the Shipping Employees Union and Maritime Training Service Board. These meetings were held frequently wherein the plaintiff had made numerous decisions on behalf of the 2^nd defendant at such meetings.

47. Li Chi Wai, the current Chairman of HKSU gave the following evidence. He came to know the plaintiff in about 2000 when he was Chairman of SEU. At that time he knew the plaintiff as the General Secretary of the 2^nd defendant and he saw the plaintiff in meetings in which the 2^nd defendant had participated. The plaintiff was the only representative of the 2^nd defendant to attend such meetings and made numerous decisions on behalf of the 2^nd defendant at such meetings.

48. Li Chi Wai also gave evidence that he knew the plaintiff to be a signatory to the Memorandum on behalf of the 2^nd defendant. He had always regarded the plaintiff to be a member of the 2^nd defendant because the plaintiff’s office of General Secretary of the 2^nd defendant, having represented the 2^nd defendant at meetings and having made decisions for the 2^nd defendant in matters relating to the industry. In his view, the office of General Secretary in a trade union is an important office which would not be lightly delegated to a person not being a member of that trade union.

(B)   1^st Defendant’s evidence

49. The 1^st defendant relies on the Register of Members of the 2^nd defendant since its registration in 1964 to say that such register do not show the plaintiff to be a member of the 2^nd defendant and that there are no record by the 2^nd defendant to show that the plaintiff has ever applied for membership of the 2^nd defendant or has ever been shown to have paid any membership fees.

50. When he was in the witness box, the 1^st defendant also gave evidence as to the enrolment procedure adopted by the 2^nd defendant before the death of Au-yeung, but made clear that his knowledge was limited as he was not the person who handled the enrolment for members of the 2^nd defendant before May 2011.

51. His understanding was that the original Register of members consisted of 32 volumes which were heavy and large in size. The information in those 32 volumes consisted of members’ information such as ID and passport numbers, place of birth, full names etc.

52. That system used before the death of Au-yeung was not a good system and at times can be confusing due to the fact that:

(a) There was no differentiation between current and expired members;

(b) Also no differentiation between overseas and local members;

(c) The Register simply records names and details taken from the crew list of each vessel coming into Hong Kong which list was passed on by the shipping companies on behalf of their employees to the 2^nd defendant to register the membership of the crew on board the vessel. Thus the Register groups a number of members together pursuant to the crew list of the shipping company, such that members working in the same shipping company are grouped together with consecutive membership numbers. However, where a person who is already a member comes in from another ship, his name would again be put down in the Register pursuant to the crew list of the new ship, and he would be given a different membership number. Therefore some members may have several membership numbers under the same name in the Register.

53. The 1^st defendant’s understanding was that persons seeking to be members must first pay the membership fees to become members, otherwise they would not accept his membership. The membership cards and receipts would then be sent to the shipping companies by post, and the shipping companies would post them to the members.

54. The 1^st defendant also agreed that under Article 3(4), membership fees can be collected by deduction from salary by the employer, but he did not know whether Au-yeung adopted this practice in relation to local members. The 1^st defendant had asked his colleagues and was told that before the 1^st defendant was elected as Executive President, there was no single member whose membership fee was deducted from salary among the local members. They also told him that the plaintiff had never paid any membership fees. However, none of the colleagues were willing to come to court.

55. The 1^st defendant continued to say that when he took up office in May 2011, he wanted to reform the enrolment procedure used by the 2^nd defendant. In August 2011 the 1^st defendant asked Wong Yuen Yee to prepare a “Register of Local Members” recording all the local members of the 2^nd defendant. That Register of Local Members was a hand-written record with a red cover. The purpose of this was to differentiate between local and international members. The 1^st defendant then asked the local members, whether old or new, to fill in application forms and pay entrance fees and they would be given new membership numbers and cards. New membership numbers were assigned to members (whether old or new) for easy checking purposes. The 1^st defendant explained that since in the past, some members had several membership numbers which made it difficult to check membership. With the new system, the new membership number would be with each member for the rest of his life.

56. The 1^st defendant further gave evidence that Wong Yuen Yee was asked to input all data in relation to the existing local members into the computer and a list was drawn up to reflect the current local members of the 2^nd defendant. This list was exhibited to the Affirmation of Fung Chi Man but mistakenly referred to as “copy of Register of members of AUSHK in Hong Kong”. The 1^st defendant accepts that list to be a typed-out record compiled by Wong Yuen Yee upon his instructions for the 2^nd defendant’s internal record. He confirmed that the list can accurately reflect all members being local members of the 2^nd defendant at the time the affirmation was signed on 1^st November 2012. The plaintiff’s name was not on that list.

Findings of fact

57. Although there was not a great deal of disputed facts in the present case, the credibility of both the plaintiff and the 1^st defendant is an important factor to be considered for two main reasons.

58. Firstly, the claim of membership of the 2^nd defendant by the plaintiff comes entirely from the plaintiff’s own mouth without any concrete or documentary evidence to support it.

59. Secondly, in denying the plaintiff’s claim to membership of the 2^nd defendant, the 1^st defendant has to show something negative, albeit that there is no dispute between the parties that the onus of proof lies with the plaintiff in this case, as was stated to be the legal position in the case of Kammy Town Ltd v Super Glory Corporation Ltd (HCA 3524/2003).

60. Having heard all the evidence and cross-examination in this matter, I have come to the conclusion that the plaintiff was not a reliable witness and my reasons are as follows.

61. In his first Affirmation, the plaintiff stated in paragraph 17 thereof that he has been a member of the 2^nd defendant since about 1990 and was then appointed as the General Secretary in about 1995.

62. When the plaintiff was challenged as to his membership as well as his eligibility by the 1st defendant’s affirmation, the plaintiff changed his position to say (in paragraph 49 (ii) of his 2^nd Affirmation (sic) filed on14 December 2012) to say that he was told by Au-yeung in about 1995 that he was a member of the 2^nd defendant and that the 2^nd defendant would pay his fees for him.

63. Once again, this was challenged by the 1^st defendant in paragraph 5 of the 2^nd Affirmation of the 1^st defendant wherein the 1^st defendant stated that as far as he knew, the 2^nd defendant had never paid membership fees for any of its members since the 2^nd defendant derives its income solely from membership fees and that there are no provisions in the Articles of the 2^nd defendant empowering it to pay membership fees for its members.

64. In light of that further challenge, when the plaintiff came to the witness box, he again shifted his position to say that to his understanding, his membership fees would be paid from his salary because in the seafarer’s industry, many employers would pay membership fees for their employees.

65. If that was indeed the position, one would have expected the plaintiff to be able to point to a bank entry or a salary slip for any given month between 1995 and June 2011 (i.e. the time when this dispute arose between the plaintiff and the 1^st defendant) and say that from the actual amount of salary paid to the plaintiff, the amount of the membership fees had been deducted. No such evidence was forthcoming from the plaintiff.

66. Moreover,  I also accept the point made by counsel for the 1^st defendant that if membership fees were to be deducted from the salary in the case of the 2^nd defendant, its Articles provided for the signing of a consent form by the employee from whose salary the deduction were to be made. There is absolutely no such evidence from the plaintiff as to any such consent form signed by him giving consent for such deduction to be made from his salary by the 2^nd defendant.

67. The above leads me to the conclusion that the plaintiff was making lame excuses in an attempt to explain away the non-existence of any receipts for membership fees in the plaintiff’s name.

68. Furthermore, when the plaintiff was asked in cross examination whether he agreed that he could not find (during discovery and inspection) any receipts of membership fees in the records kept by the 2^nd defendant, containing the name of the plaintiff, the plaintiff complained that he was only shown the receipt books kept by the 2^nd defendant as from August 2011 onwards, i.e. after the death of Au-yeung. The plaintiff said he wanted to look for receipts of local members but found that the local members’ receipts only came into existence after 2011 and further said that he did not see any receipts of local members relating to before the death of Au-yeung.

69. This evidence of the plaintiff is contradicted by the fact that the plaintiff’s legal team, on Day 3 of the trial of Preliminary Issue, had confirmed in court that all the receipts of membership fees kept by the 2^nd defendant  for the past 7 years had been disclosed to the plaintiff in the form of carbon copies.

70. There was no complaint by the plaintiff’s legal team that only receipts of local members were found after August 2011. That complaint by the plaintiff was only made by the plaintiff in cross examination. No such complaint was contained in the plaintiff’s 4^th Affirmation which was filed some 8 months after the Inspection of Documents.

71. The plaintiff was also cross examined on the Register of Members kept by the 2^nd defendant. He accepted that he could not find his own name in the Register of Members but complained that he only found the overseas members’ records and that he did not find any local members in the register. Counsel for the 1^st defendant then confronted the plaintiff with the register record of the 1^st defendant and the plaintiff accepted that the 1^st defendant was a local member. When asked whether he wished to retract his earlier evidence, the plaintiff answered saying that when he said overseas members’ register, what he meant was that the majority were overseas members and it was not surprising to find one or two local members.

72. It was then pointed out to the plaintiff those members which had “Hong Kong” stated as the place of birth and there were more than one or two local members. The plaintiff made no further reply.

73. Such complaint of the plaintiff was also not contained in his 4^th Affirmation but only emerged for the first time in his cross-examination.

74. The only conclusion as to why the plaintiff made such unfounded complaint in his cross examination was that he was making up excuses for the inability to find his name in the Register of Members kept by the 2^nd defendant.

75. The plaintiff was also cross examined on an Annual Return submitted by the 2^nd defendant to the RTU and which was dated 18 March 2011 (page 1067 with Translation at p. 1068 of Core Bundle). On the face of it, that Return was signed by Au-yeung as Chairman and the plaintiff as Officer of the 2^nd defendant. That Return described the plaintiff’s position as “Secretary”. It also describes the plaintiff’s occupation as being a “Steward pending appointment” which the plaintiff accepts as being wholly untrue.

76. When asked by counsel for the 1^st defendant about this document, the plaintiff denied having signed that document and went as far as to say that what purports to be his signature on that Return was forged because he had never signed such a document.

77. I have grave misgivings as to such denial by the plaintiff for that signature of the plaintiff on the Annual Return appears similar to the plaintiff’s signatures on his Affirmations. Moreover, there could not have been any need for anyone to forge the plaintiff’s signature on such a document since all the people concerned within the 2^nd defendant including the plaintiff himself not only knew but also condoned the autocratic way in which Au-yeung ran the 2^nd defendant single-handedly. Nobody within the 2^nd defendant would have questioned what Au-yeung did in the 2^nd defendant.

78. The only reason for the plaintiff to blatantly lie and say that his signature on the Annual Return had been forged was to distance himself away from the doings of Au-yeung in pulling wool over the eyes of the RTU, well knowing that the plaintiff did not and could not qualify to be a member and therefore could not hold the position either as Secretary or Officer of the 2^nd defendant.

79. If the plaintiff’s contention in the present case is correct, and that he can qualify as a member of the 2^nd defendant by reason of his employment as General Secretary of the 2^nd defendant, there would have been no need to wrongly state in that Annual Return that the plaintiff was a ‘Steward, pending appointment’.

80. Having shown from the above that the plaintiff is not only wholly unreliable as a witness, but also capable of blatant lies when giving evidence, I have grave reservations as to his evidence about what was told to him by Au-yeung concerning his membership and the payment of membership fees. This evidence comes only from the plaintiff’s mouth and there are no other evidence to support what was said by the plaintiff.

81. If those words were actually said by Au-yeung to the plaintiff concerning the plaintiff’s membership in the 2^nd defendant and the payment of membership fees, it would mean that at the time Au-yeung offered the plaintiff to become General Secretary of the 2^nd defendant in 1995, it did cross Au-yeung’s mind that the plaintiff had to be a member of the 2^nd defendant to hold office as its General Secretary.

82. Therefore, given that Au-yeung was almost dictatorial in the running of the 2^nd defendant, it would have been the easiest thing for Au-yeung to simply ask the plaintiff to fill in a membership form and to arm the plaintiff with a membership card (whether or not any membership fees would be paid for the plaintiff or by whom). However, it is not the plaintiff’s evidence that he had filled in any membership form of the 2^nd defendant nor is it his evidence that he had been given any membership card of the 2^nd defendant.

83. The more likely scenario, once the plaintiff’s evidence of what Au-yeung said to him about membership is discounted, is that neither of them had given any thought as to membership of the 2^nd defendant when Au-yeung asked the plaintiff to take over the post of General Secretary. This fits in with the then prevailing climate in that whatever Au-yeung said would be automatically implemented. Neither would Au-yeung be concerned about following or complying with the Articles for the internal matters of the 2^nd defendant since he was in full control himself.

84. This would explain why the plaintiff did not even have a membership card with his name on it to show all and sundry that he was a member of the 2^nd defendant. A membership card would have come in handy for the plaintiff since he was going to represent the 2^nd defendant sitting on all the various boards and committees as its General Secretary.

85. On the other hand, I found the 1^st defendant to be an honest witness, doing the best he can in the difficult situation that he was put in to spearhead the 2^nd defendant after the death of Au-yeung when a great deal of the internal matters of the 2^nd defendant was in quite a mess due to the single handed running of it by Au-yeung when Au-yeung was alive.

86. I accept that membership records were kept by the 2^nd defendant when it was run by Au-yeung and that records of fees received from members were also kept. However, as explained by the 1^st defendant, that system of membership record was very poorly kept. It was a poor system because it merely recorded all the names of seamen on a crew list each time a vessel sailed into Hong Kong and the shipping company responsible for that vessel would pay the membership fees of the number of crew listed on the crew list to the 2^nd defendant.

87. In that way, there were often duplications of members names (but with different membership numbers assigned) since a seaman could, at a different or later time, work as a crew member of another ship coming into Hong Kong.

88. The system adopted by the 2^nd defendant when it was under Au-yeung merely recorded down all the names of the crew on a crew list (without regard to the possibility of duplication of one who may already have been a member of the 2^nd defendant notwithstanding that the same person is now a crew on a crew list of another ship coming into Hong Kong) and assigned different membership numbers even when there was such duplication of names.

89. After the 1^st defendant was elected as the Executive President of the 2^nd defendant at the Meeting, he attempted to re-vamp that system of membership records such that it would remove the duplication of names and membership numbers, and also to categorise and/or differentiate oversesas members from local members.

90. In doing so, the 1^st defendant undertook a monumental task, not just in overhauling the existing poor system of membership records and in implementing a new and workable system, but also to redo the historical system into one which allows for manageable record keeping.

91. Moreover, in undertaking such a task, the 1^st defendant also opened himself to criticism under cross examination that he did all that to eliminate or remove all records of the plaintiff’s membership as well as records of membership fees from the 2^nd defendant’s historical records.

92. In this respect, two very different reasons are relied on by the plaintiff. The first is that the system of membership records was so poorly kept by the 2^nd defendant historically that no record can be found of the plaintiff’s membership and his membership fees paid to the 2^nd defendant.

93. Secondly, that after Au-yeung’s death, there has been tinkering of the membership records by the 1^st defendant or at his direction to remove all traces of the plaintiff’s membership records or his fee payment.

94. In so far as the first of these two criticism goes, I do not accept that criticism at all. As already stated above, the historical system was a poor system in that there were all too often duplications in names and different membership numbers were assigned to the same member. The system was poor not because it omitted a member’s name or number but because there were duplications. There is not one single piece of evidence to show that there were omissions of members from the historical records of the 2^nd defendants, but rather all the evidence point to there being duplications.

95. As for the second criticism, I accept the evidence of the 1^st defendant that in re-vamping the historical system of membership records, his ultimate aim was to make a manageable and workable system of record keeping and to eradicate the duplications which the historical system had.

96. Indeed, if the aim of the 1^st defendant was as suggested by counsel for the plaintiff in cross examination, namely to tinker with the records to remove all traces of the plaintiff’s membership with the 2^nd defendant, he would not have to go through all the trouble of re-vamping the entire system of record keeping.

97. Not only that, all the 32 volumes of the historical records were kept and kept intact. Those 32 volumes of historical records were also made the subject of discovery and inspection and in none of them was the plaintiff’s name found.

98. I therefore do not accept that there had been any tinkering of the records by the 1^st defendant or at his direction.

99. The 1^st defendant was also cross examined on the list (wrongly referred to as a ‘copy of Register of members of AUSHK in Hong Kong’ in the Affirmation of Fung Chi Wan). When asked, the 1^st defendant immediately accepted that to be a list which he had asked Wong Yuen Yee to prepare for internal use of the 2^nd defendant. The 1^st defendant made no attempt to cover up for that error or to suggest that list was a copy of the Register of members. I therefore take the view that the error, unfortunate as it was, which crept into the Affirmation of Fung Chi Wan came about as a result of possible miscommunication and/or misunderstanding between client (including witness) and solicitors and was not a deliberate attempt to mislead the court in any way.

100. Another matter which the 1^st defendant was cross examined on by counsel for the plaintiff relates to the title given to the two new Registers with red covers. Counsel for the plaintiff challenged the 1^st defendant’s allegation that the new Registers were the new registers of members. Counsel pointed out that the new registers were entitled on the cover with the words “Members’ Representative Record of the Union” which title does not show the register to be a register of members of the 2^nd defendant. The 1^st defendant freely admitted that title on the register to be a mistake but could not give any reason as to why he wrote such a title by mistake.

101. That explanation, unsatisfactory though it may be because the 1^st defendant cannot give any reasons for the mistake, is one which I am prepared to accept.  It is the contents of the register which one looks at and not the title on the cover which dictates what the contents are. Moreover, there is no good reason why the 1^st defendant should choose such a title if he was setting out to tinkering with the records of membership. I can only view that as carelessness or momentary unthinking on the part of the 1^st defendant when he wrote down that mistaken title to the new register.

102. For the reasons given above I accept the evidence of the 1^st defendant in its entirety.

103. I therefore find the facts, in so far as they are disputed, to be as follows:

(a) The plaintiff had never made any written application, whether in 1990 or after he was made General Secretary in 1995, to be a member of the 2^nd defendant in accordance with the Articles of the 2^nd defendant;

(b) The plaintiff had never paid any membership fees to the 2^nd defendant nor had any membership fees been paid by any other person on the plaintiff’s behalf to the 2^nd defendant;

(c) Accordingly, the plaintiff never became a member of the 2^nd defendant;

(d)   Despite the fact that the plaintiff was never a member of the 2^nd defendant, the plaintiff was placed in the position of General Secretary in 1995, and thereafter as an officer of the Executive Committee of the 2^nd defendant, purely on the say-so of Au-yeung.

Decision

104. Much argument was put forward by both parties as to the issue of eligibility to be a member of the 2^nd defendant under its Articles, in particular Article 3.

105. In gist, the 1^st defendant submitted that since the plaintiff had never been a seaman or a seafarer, he was not eligible to be a member of the 2^nd defendant.

106. To this the plaintiff retorted saying that since he had been working for the 2^nd defendant for a great number of years, firstly as a part-time interpreter for some five years, and then being made its General Secretary, he thereby came within the words of Article 3(1) which states “as well as any staff working in maritime industry ….be entitled to join as a member” which would qualify him as being eligible since the 2^nd defendant must be considered as a maritime industry when its main concerns are the safety and welfare of seamen.

107. In my view, the issue of eligibility is a total red herring in the present case.

108. The main issue in this trial is the plaintiff’s membership in the 2^nd defendant.

109. There is no question that the plaintiff was properly engaged as a part-time interpreter by the 2^nd defendant between 1990 and 1995 or thereabouts. As such his work was interpretation and the plaintiff could hardly be said to be “a staff working in a maritime industry”. It is also common ground that he was not a seaman or a seafarer at that time and so his work as part time interpreter would not qualify him as being eligible to become a member of the 2^nd defendant.

110. The next question would be whether the plaintiff, being put by Au-yeung in the position of General Secretary of the 2^nd defendant, would make him eligible to become a member of the 2^nd defendant under its Articles.

111. By its Articles, one has to become a member of the 2^nd defendant before one can take on the position of General Secretary of the 2^nd defendant.

112. It can therefore be seen that the contention by the plaintiff is circular, since what the plaintiff is effectively saying is that he was made General Secretary in the 2^nd defendant which is a paid job. As such he was a staff in a maritime industry (accepting for the time being that the 2^nd defendant is a maritime industry) and therefore became eligible to become a member of the 2^nd defendant.

113. I have the greatest reservation that the plaintiff can rely on his being improperly put in the position of General Secretary by Au-yeung to say that that was the basis of his becoming eligible to become a member of the 2^nd defendant.

114. The same would also apply to his later being made an officer of the Executive Committee by Au-yeung.

115. But even if the view taken by me is the wrong view, on the facts as I have found them, even if the plaintiff could be said on his contention to be eligible to become a member of the 2^nd defendant, the plaintiff has not been properly made a member of the 2^nd defendant.

116. The fact that Au-yeung may have told the plaintiff that he would be a member does not make the plaintiff a member of the 2^nd defendant, especially when no membership fees have ever been paid by or on behalf of the plaintiff.

117. The plaintiff also relies on estoppel. In this respect the plaintiff says that the defendants are estopped from denying his membership by reason of the representation from Au-yeung that the plaintiff would be made a member of the 2^nd defendant and that his fees would be paid for him and the formalities completed. That representation was relied on by the plaintiff to his detriment, the detriment being that the plaintiff had been assuming liabilities in the capacity of an Executive Committee member of the 2^nd defendant.

118. Quite apart from the representation from Au-yeung, the plaintiff also relies on the fact that he has been put in the position of General Secretary and made an officer of the Executive Committee of the 2^nd defendant and was so held out to other individuals and organizations thereby estopping the 2^nd defendant from now disputing his membership thereto.

119. As for the representation made by Au-yeung, I cannot see how such representation from Au-yeung, albeit the then Executive President of the 2^nd defendant, can be the basis of an estoppel against the 1^st defendant.

120. There is no suggestion from the plaintiff that when that representation from Au-yeung was made that the 1^st defendant had any part to play in such representation being made. Nor is it the plaintiff’s case that the 1^st defendant had ever made any similar representation to the plaintiff either.

121. The very basic concept of estoppel was stated in Halsbury’s Laws of England (fifth ed.) Vol 47 para 301 to be:

“’Estoppel’ has been described as a principle of justice and equity which prevents a person who has led another to believe in a particular state of affairs from going back on the words or conduct which led to that belief when it would be unjust or inequitable (unconscionable) for him to do so. That person making the statement, promise or assurance is said to be stopped from denying or going back on it;”

122. For the reason given above, there can be no estoppel operating against the 1^st defendant based on the representation by Au-yeung.

123. Turning now to the 2^nd defendant, is the 2^nd defendant estopped from denying the membership of the plaintiff with the 2^nd defendant in the way contended for by the plaintiff?

124. Once again the representation relied on by the plaintiff was a representation from Au-yeung to the plaintiff. The 2^nd defendant had no part to play in the making of that representation to the plaintiff. Therefore for the same reason as in the case of the 1^st defendant, an estoppel cannot operate against the 2^nd defendant on that basis.

125. As for the holding out of the plaintiff as the General Secretary of the 2^nd defendant, again it was Au-yeung who was instrumental in putting the plaintiff in the position of General Secretary of the 2^nd defendant.

126. Evidence came from the witnesses called by the plaintiff to the effect that the plaintiff had been held out to them as the General Secretary of the 2^nd defendant. In a classic case, it would usually be the third party (the one to whom such holding out was made) who would be claiming estoppel based on such holding out, and that the estoppel would usually be against the company. However, in the present case, it is the plaintiff (the person being held out) who is claiming the estoppel against the 2^nd defendant. It is not the third party who is claiming such estoppel.

127. That cannot be right since the plaintiff, after having been put in the position of General Secretary of the 2^nd defendant by Au-yeung has in fact acted in that position for a great number of years. As such the plaintiff must have been in a good position to look into the records kept by the 2^nd defendant and to know in fact that he has never been recorded by the 2^nd defendant as a member nor would the record of the 2^nd defendant show the payment of membership fees by the plaintiff or on his behalf.

128. How then is it open to the plaintiff to claim estoppel against the 2^nd defendant. After all the very root of estoppel lies in that which is inequitable or unconscionable. Given the above scenario, there is nothing inequitable or unconscionable to say that no estoppel operate against the 2^nd defendant, and in favour of the plaintiff himself.

129. In this respect, I am grateful to counsel for the 1^st defendant in drawing my attention to the decision of Clauson J in the case of South London Greyhound Racecourses Ltd. v Wake [1931] 1 Ch 496 where a director and secretary in physical control of the register and seal of the plaintiff company signed a share certificate without proper authority of the plaintiff company. It was held that the plaintiff company was not estopped from denying title to a person who detrimentally relied on the share certificate.

130. In his judgment, Clauson J (at page 507) referred to the articles of the plaintiff company, which provided that in order that a document should be validly sealed, the seal of the company should be affixed by a resolution of the board of directors. He found that there was plainly no such authority. He concluded that the certificate was forged and a mere nullity, and that the plaintiff company was not estopped from denying title to the holder of the share certificate.

131. In like manner, the plaintiff in the present case has accepted that his appointment as General Secretary of the 2^nd defendant was unauthorized and in breach of Articles 9 and 15 of the Articles of the 2^nd defendant. His position of General Secretary of the 2^nd defendant came about only because Au-yeung was in total control of the 2^nd defendant at the time. Thus the act of Au-yeung in so appointing the plaintiff as General Secretary was unauthorized and in breach of the Articles of the 2^nd defendant, a matter which the plaintiff cannot seek reliance on either as a basis for his estoppel or to establish his membership.

132. In the case of estoppel against the 2^nd defendant I also take into consideration the fact that although the 2^nd defendant was named as a defendant, no relief is sought by the plaintiff against the 2^nd defendant and that the reliefs claimed by the plaintiff are all against the 1^st defendant only. The 2^nd defendant had to be made a defendant due to the fact that the reliefs claimed by the plaintiff are for the 2^nd defendant and not for himself personally. In those circumstances, I cannot see why estoppel should operate against the 2^nd defendant.

133. One final matter is that there can be no dispute but that the present case must be a derivative action by the plaintiff on behalf of all the members of the 2^nd defendant. In those circumstances, how is it open to the plaintiff to say that the present defendants are estopped from disputing his membership in the 2^nd defendant, and therefore from disputing his locus in bringing this action so as to allow him to carry on these proceedings on behalf of all the other members of the 2^nd defendant when the plaintiff himself is in fact not, and has never been, a member of the 2^nd defendant. In short what business is it of the plaintiff how the internal matters of the 2^nd defendant are dealt with by those who are members of the 2^nd defendant.

134. Put another way, there can be nothing inequitable or unconscionable to the plaintiff himself if this claim by the plaintiff is dismissed since he is not seeking any relief for himself but only on behalf of the 2^nd defendant.

135. For all the above reasons, I have come to the conclusion that the plaintiff has no locus standi, not ever having been a member of the 2^nd defendant, to bring the present claim and the plaintiff’s claim herein is struck out and dismissed.

Costs

136. There will be a costs order nisi that the plaintiff pays to the 1^st defendant the costs of and occasioned by the application of the 1^st defendant for striking out to be taxed if not agreed.

137. There will also be a costs order nisi that the plaintiff pays to the 1^st and 2^nd defendants their costs of this action to be taxed if not agreed.