RE HANG TAK BUDDHIST HALL ASSOCIATION LTD

HCCW 796/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 796 OF 2001

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R U L I N G

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1. On 15 May 2003, I adjourned the trial of this petition. I ordered the Secretary for Justice to be added as the 9th respondent to the proceedings and the petition be amended, as the Company is a charity and the Secretary for Justice is parens patriae and the protector of charities. I adjourned the petition for the Secretary for Justice to consider the papers as to what position should be adopted and whether any evidence should be filed.

2. The petition came back before me on 16 June 2003. At that hearing, Miss Lisa Wong, who appeared for the Secretary for Justice, indicated that the Secretary does not wish to file evidence at this stage. The Secretary seeks a split trial of (a) the issues of factual dispute; and (b) the issues going to the legal consequences and relief that should follow from the court's findings on the issues of factual dispute.

3. The reason for seeking a split hearing are that the Secretary does not think she can make an effective contribution to the resolution of the issues of factual dispute and it would save costs for the Secretary if she should be excused from taking part in the resolution of the factual disputes.

4. As it was not clear to me exactly what issues of factual dispute the court would be asked to resolve in the first part of the trial, and I was not getting any or any helpful assistance from the petitioners or the respondents in this regard, I adjourned the petition to today with directions that the Secretary for Justice is to prepare a list of issues on which it is proposed to ask the court to make findings on in the event of a split trial and to circulate the same for the comments of the petitioners and the respondents before today.

5. Miss Wong has prepared a list of such issues and incorporated most of the comments of the respondents. The petitioners did not make any or any helpful comments to the list. The list is very detailed and it will be of considerable assistance to the court at the trial.

6. As for the issues of legal consequences and relief which would be the subject matter of the second part of the hearing, they are helpfully set out in paragraph 8 of the notes of submission of Miss Wong. The Secretary for Justice would wish to address the court on the issues of legal consequences and relief at the hearing of the petition.

7. The first of such issues is whether the facts proved would establish grounds for a remedy under section 177(1)(f) of Cap. 32 or section 168A or both. It seems to me that this is a question of mixed fact and law. The second issue is in the event that the facts proved would establish grounds for a remedy under both provisions, the choice to be made between a winding-up order or remedies under section 168A. This issue would also require one to take a view on the evidence as to what is the appropriate remedy in all the circumstances. The third issue is premised on the basis that a winding-up order is made, in this situation what is or are the charitable institutions to which the surplus assets of the company should go. Evidence is required on this issue and evidence has been given on affidavit from one of the petitioners, from a witness of the petitioners and from the respondents. The Secretary for Justice may or may not find it necessary to cross-examine the deponents on this issue. If a split hearing is ordered, these witnesses would have to be called or re-called to attend for cross-examination, if not by the Secretary for Justice, at least by the opposing party. The fourth issue is premised on the basis that alternative remedy under section 168A is to be preferred, what would be the precise orders that the court should give "with a view to bringing to an end the matters complained of". On this issue, it would require one to take a view on the evidence as in the second issue.

8. Notwithstanding the detailed list of issues of factual dispute, I am not persuaded that one can conveniently split up the issues in this way. Even if I leave aside the evidence relevant to the third issue, one cannot safely say that all the factual findings for the resolution of the first, second and fourth issues would necessarily be found in the findings of the issues of factual dispute, detailed as they are. Besides, one never knows if there would be any unforeseen development of the evidence in a trial.

9. Miss Wong has summarised the respondents' case on the evidence filed by the respondents in paragraph 5 of her notes for submission why the respondents oppose a winding-up order and seek alternative remedy. Such evidence would need to be tested and a view would need to be taken on the evidence for the Secretary for Justice to make proper submissions on the second and fourth issues under the issues of legal consequences and relief.

10. For the above reasons, I decline to split up the trial into two broad categories of issues, notwithstanding the support of the petitioners and the respondents to the application for a split hearing.

11. It is a matter for the Secretary for Justice to what extent the Secretary wishes to take part in the trial of the petition and on what issues the Secretary should address the court. I do not think it would compromise the objectivity of the Secretary for Justice in any way if the trial of the issues of factual dispute is not separated from the trial of issues relating to the reliefs sought.