TANG SIU CHUNG v. THE HONG KONG SOCIETY FOR THE DEAF AND OTHERS

HCMP 1223/2021

[2023] HKCFI 2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1223 OF 2021

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J U D G M E N T

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1.  This is the trial of an Originating Summons issued on 25 August 2021 (“OS”)  by the Plaintiff (“Tang”)  by which he seeks various declaratory and consequential relief relating to the validity of the resolutions (“Resolutions”)  passed at the 51^st Annual General Meeting (“51^st AGM”)  of the 1^st Defendant (“Society”)  and of the meeting itself which took place on 11 December 2020.

2.  The Society is a Hong Kong-incorporated company limited by guarantee and is one of the leading non-profit-making organisations which aims to promote the well-being of the hearing impaired and seeks to ensure equalisation of opportunities for hearing impaired persons.

3.  Tang suffers from hearing disability since birth.  He used sign-language to give his evidence.  He has been a life member of the Society since July 2012 and has the right to vote at the Society’s general meetings.

4.  The OS concerns two aspects of the 51^st AGM :

(1)  The re-elected of the 2^nd Defendant (“Lui”)  as a Council Member.  Tang’s contention is that Lui, who had been serving as a Council Member for over 30 years in the aggregate, could not be re-elected by virtue of the “Bye-law regarding the term of office of Council Members and Specified Officers” (“Bye-law”)  passed on 14 December 2018 at the 49^th AGM of the Society, which prohibited re-election of a person who had already served as a Council Member for 30 years or more in the aggregate;

(2)  There were allegedly serious defects in the conduct of the 51^st AGM in that (i)  it did not meet the essential characteristics of a valid meeting; and (ii)  Tang’s right to meaningfully express opinions and participate in the Meeting, especially in respect of Lui’s re-election was unjustifiably and unreasonably restricted and/or denied.

5.  Tang says that these defects have rendered the 51^st AGM invalid and the Resolutions null, void and of no effect.

6.  Apart from the Society, all the other Defendants had sought and been granted leave by the court to be excused from attending this trial[1].

Issues

7.  The issues identified by counsel for Tang (Mr Lee)  and for the Society (Mr Wong)  are quite similar.  I shall adopt with modifications and rearrangement the list of the latter as follows :

(1)  Whether Lui could validly be elected as a Council Member at the 51^st AGM in view of the Bye-law;

(2)  Whether there were any defects in the conduct of the 51^st AGM which had rendered the Resolutions null and void and the Meeting invalid;

(3)  Whether the defects of the 51^st AGM, if any, were cured by the Irregularity Principle;

(4)  Whether the OS should be dismissed on the ground that the subject matter of the dispute is academic and the relief sought lacks utility.

Background

8.  The following are not in dispute[2]. The Society was founded in 1968 and incorporated as a company limited by guarantee in 1976.  The governing body of the Society is the Council.  According to the Articles of Association of the Society (“AA”)  :

(1)  A Council Member shall be deemed to be a director for the purpose of the Companies Ordinance, Cap 622;

(2)  The number of Council Members shall not be less than 10 and shall not exceed 17;

(3)  Each Council Member shall be elected for a term of 2 years and shall retire at the second AGM next after that at which he is elected, but he shall be eligible for re-election to the intent that half of all the members of the Council shall retire at every AGM.

9.  All Council Members are volunteers who receive no pecuniary or other compensation.

10.  The Society’s members are classified as honorary members, life members, full members and ordinary members.  Only life members and full members are entitled to vote at the Society’s general meetings. 

11.  Tang has been a life member since July 2012.  He is also a director (and the former chairman)  of another NGO called SILENCE   (龍耳), which shares the Society’s objective of working for the benefit of the hearing impaired.

51^st AGM

12.  On about 1 November 2020, notice of the 51^st AGM was published in the Society’s newsletter and on its website, which was accessible by all members.

13.  In the past, the AGMs of the Society were held in one room.  However, for the 51^st AGM :

(1)  Shortly before the 51^st AGM was due to take place on 11 December 2020, Hong Kong was struck by the 4^th wave of Covid-19 with almost a hundred or more cases of infection every day;

(2)  On 1 December 2020, the Government reduced the number of persons allowed in each partitioned area at an AGM or EGM from 50 to 20;

(3)  On 8 December 2020, the Government announced that Hong Kong was experiencing a peak period of the Covid pandemic, and that it would further tighten social distancing measures from 10 December 2020 for a period of 14 days;

(4)  Under those circumstances, the Society had to arrange two rooms for the 51^st AGM, namely, the Activity Room where the proceedings of the 51^st AGM would be conducted and the Small Room where participating members could watch the proceedings via live streaming. 

14.  Tang arrived for the 51^st AGM before it was due to start at 7pm.  He sat in the Small Room.  From the layout plan of the Small Room contained in the hearing bundles, it was in rectangular shape, 11 seats were provided and, apart from one lady staff who was seated, there were 2 lady staff standing in the Room.  There were also 2 Council Members present in the Small Room.

15.  Measures were put in place to facilitate the members’ participation at the 51^st AGM in light of the unexpected and stringent social gathering restrictions introduced by the Government :

(1)  Two projector screens, one measured 80” x 60” and the other 70” x 70”, were placed in the Small Room.  One showed the discussion papers of the 51^st AGM, whilst the other live-streamed the proceedings in the Activity Room;

(2)  All participants in the Activity Room wore face masks with transparent plastic panels showing their lips so that members, including those in the Small Room, who could lip-read would be able to follow the discussions in the Activity Room;

(3)  At the start of the meeting, some of the members sitting in the Small Room complained that the volume of the livestream was too low, this technical issue was later resolved;

(4)  A sign language interpreter, Ms Lai Wing Sze (“Lai”), was stationed in the Small Room.  She interpreted the proceedings in the Activity Room;

(5)  Another staff member of the Society, Ms Chan Yuk Kuen (“Chan”), took off her mask and provided oral interpretation as well as sign language simultaneously to members in the Small Room.  It is convenient to note here that Tang said that he was unable to see Chan’s sign interpretation[3] because she was sitting very close to another member.  However, he did not ask Chan to stand a little away from that member so that he could see the interpretation.  It was accepted that Tang was free to move around in the Small Room, which means that he could have improved his sight of Chan had he wanted to.  In any case, Tang said that he was relying on the live broadcasting and the sign interpretation of Lai; 

(6)  There were hearing-impaired people sitting in both the Activity Room and Small Room;

(7)  At some point during the 51^st AGM, the staff in the Small Room was made aware of Tang’s wish to say something.  It was suggested to him that he might write down his questions for the Council to respond after the meeting.  Tang declined to do so;

(8)  The practice of the Society was that questions raised by members would be gathered and dealt with at the end of meeting either by the Chairman himself or with the input of the staff.  This practice was based on the Council’s experience that questions raised or comments made by members at general meetings always concerned the Society’s services or staff-related issues, rather than the resolutions that were put to vote.  Prior to the 51^st AGM, no issue had ever been raised pertaining to procedural or constitutional matters in relation to the AGM;

(9)  The Society’s Deputy Director (Ms Chow Tsui)  offered to video-record Tang’s speech and transmit the same to the Activity Room.  That task was taken up by a friend of Tang.  Regrettably, Tang’s friend did not successfully record his speech;

(10)  There is a controversy, which will be addressed below, as to whether Tang was prevented from leaving the Small Room, or entering the Activity Room, to express his views.  However, it is not in dispute that Tang was told that no more than 20 people could be accommodated in one room, and the Society’s staff went to check the situation in the Activity Room in response to Tang’s request to speak at the Activity Room.

16.  The 2^nd to 10^th Defendants were elected as Council Members for a period of 2 years from 2020 to 2022 at the 51^st AGM by a majority of votes, 16 votes in favour and 5 votes in opposition.  Tang’s vote was counted.

Commencement of action

17.  On 12 and 14 December 2020, Tang posted his complaints regarding the conduct of the 51^st AGM on Facebook.

18.  Upon learning Tang’s complaints, the Society repeatedly and through various means, eg, WhatsApp and emails, invited Tang to meet in person with the view to having a dialogue and addressing his concerns.  Tang declined the invitations.

19.  On 25 August 2021, Tang commenced this action by way of the OS.

2021 Meetings

20.  At an EGM held on 8 November 2021 (“2021 EGM”)  :

(1)  The Society’s members by a majority (47 in favour, 2 against, 0 abstention)  resolved to appoint the 4^th to 10^th Defendants as Council members for 2020-2022; 

(2)  The 3^rd Defendant did not want to get involved and wished to be excluded from the appointment;

(3)  Tang attended the 2021 EGM.  He did not speak at the Meeting and left before the resolutions were put to a vote.

21.  Subsequent to the 2021 EGM, at a Council meeting held on the same day (8 November 2021)  (“2021 Council Meeting”)  :

(1)  The Council by a majority (6 in favour, 1 against)  resolved to repeal the Bye-law, pursuant to Article 50 of the AA;

(2)  To avoid conflict of interest, 3 Council Members who had served for more than 30 years (including Lui)  excused themselves from this meeting.

22.  On 16 December 2021, notice of the repeal of the Bye-law was given to members.

23.  At an AGM held on 28 December 2021 (“52^nd AGM”), the Society’s members by a majority (44 in favour, 11 against, 1 abstention)  resolved to appoint Lui as Council Member for 2021-2023.

24.  The above 3 Meetings are hereinafter referred to as “2021 Meetings”.

Witnesses

25.  Three witnesses were called by Tang, himself, Ms Lau Siu Cho (former Director of the Society)  (“Lau”)  and Ms Chung Wai Ling (former Head of Administration of the Society)  (“Chung”).  Save for Tang, the evidence of the 2 ladies was not really controversial. 

26.  There were 2 witnesses for the Society, Lui and Ms Amy Tso (“Tso”), who was a Council Member of the Society for 2019-2021. Their evidence was not subject to cross-examination on behalf of Tang.

Bye-law (Issue (1))

27.  The relevant part of the Bye-law was as follows :

“This Bye-law shall take effect on December 14, 2018.

(a)  In this Bye-law:

(i)  “Special Extension” means – a further period not exceeding [two (2)  years] as designated by the Nominating Committee in accordance with paragraph (b)  of this Bye-law.

…

(b)  A person shall not be re-elected as Council Member if he has served for periods totalling 20 years of service or more, in the aggregate, as Council Member and no Special Extension has been granted Provided That if a person has already served as Council Member for periods totalling 20 years of service or more in the aggregate:-

(i)  the Nominating Committee may at any time thereafter and on more than one occasion designate that, due to special circumstances, it is in the best interests of the Society that such person shall be allowed to further serve for a Special Extension; and

(ii)  such person shall not be granted any further Special Extension if he has already served for periods totalling 30 years of service or more, in the aggregate, as Council Member.

…

(d)  The following transitional provisions shall apply to a person who is Council Member at the Effective Date (“Existing Council Member”)  and a person who is Specified Officer at the Effective Date (“Existing Specified Officer”).

(1)  An Existing Council Member shall not be re-elected as Council Member if he has served for periods totalling 30 years of service or more and paragraph (b)  of this Bye-law shall not apply.

(2)  The Maximum Periods for Existing Specified Officers are as follows:-

	Specified Existing Officer	the Maximum Period
(i)	Chairman	[ten (10)] years
(ii)	Vice-Chairman	[ten (10)] years
(iii)	Hon. Secretary	[ten (10)] years
(iv)	Hon. Treasurer	[fourteen (14)] years”

28.  Tang’s case is that the Bye-law, properly construed, prohibited the re-election of a person as Council Member if he had already served as a Council Member for more than 30 years in aggregate.  As Lui had been a Council Member for more than 30 years in aggregate (not in dispute), he was not eligible to be re-elected at the 51^st AGM.

29.  The Society made two arguments of construction. First, it contends that the 30-year term limit should be counted afresh from the date of the commencement of the Bye-law in 2018.

30.  The principles for interpretation of contract (the Bye-law, as well as the AA were contracts between the members of the Society)  are trite, see Eminent Investments (Asia Pacific)  Ltd v DIO Corp (2020)  23 HKCFAR 487, [43]-[45] per Ribeiro PJ and Lord Collins NPJ.

31.  Looking at the ordinary and natural meaning of the Bye-law, I agree with Mr Lee that sub-para (b), which contained the key provisions on limitation of tenure, can be conveniently broken down into the “Rule” and the “Proviso”, and it should be read together with sub-para (d), the “Transitional Provision”.

32.  The Rule prohibited a person from being re-elected as Council Member if he had served for periods totalling 20 years or more as Council Member and no Special Extension had been granted.  The Rule was expressed in mandatory term with the use of the word “shall”.  Adding the words “in the aggregate” served to emphasize the need to combine separate periods of service and that such periods might not be continuous.  In the ordinary case, 20 years in aggregate was the limit of tenure for any Council Member, subject to the Proviso.

33.  Under the Proviso, Special Extension(s)  might be granted for a person who had served as Council Member for 20 years or more in the aggregate, but if a person had already served as Council Member for an aggregate of 30 years or more, he should not be granted any further Special Extension.  As a matter of ordinary English language, this meant that the absolute maximum term which could be served by anyone who had previously served as a Council Member was 30 years in the aggregate.

34.  The Transitional Provision under sub-para (d)  provided that an Existing Council Member should not be re-elected as Council Member if he had served for periods totalling 30 years or more and sub-para (b)  should not apply.  There is no issue that on the day the Bye-law took effect, Lui had served as Council Member for over 30 years. 

35.  In my view, the language of the Bye-law and its meaning are plain.  This is one of the vast majority of cases where the ordinary and natural meaning of the words is the ending point of the interpretation exercise (see Eminent Investments, [43]).  Limits were introduced to the tenure of any Council Member.  The suggestion that the clock would be reset for the counting of service as Council Member from the day the Bye-law took effect is contrary to the language of the Bye-law, as well as common sense.  If it was so intended, it could easily be stipulated, eg, “if he has served for periods totalling 20 years of service or more since the effective date of this Bye-law”. 

36.  The Society’s second argument is that the Bye-law was “inconsistent with” and “affects” the AA and therefore invalid and void. The argument goes as follows :

(1)  Article 50 of the AA provided that: “…no bye-law shall be inconsistent with, or shall affect or repeal anything contained in, the Memorandum or Articles of Association of the Society …”;

(2)  The only eligibility requirement for Council Members imposed by the AA was stated in Article 45(b)-(c), ie, the candidate must be properly nominated by the nomination sub-committee not less than 14 days prior to the AGM;

(3)  By imposing a maximum term limit, the Bye-law sought to add an extra eligibility requirement and was therefore inconsistent with and/or affected Article 45 of the AA.

37.  I am unable to agree with the argument.  Article 45 did not impose any restriction on the tenure of Council members.  The AA were silent on that topic.  Article 50 empowered the Council to make bye-laws “as the Council may deem necessary or expedient or convenient for the proper conduct and management of the Society”.  Limiting the tenure of Council Members concerned the proper management of the Society.  It was clearly a matter for which the Council was entitled to make bye-law.  Imposing a limit to the tenure of Council Members certainly added to Article 45, but I fail to see any inconsistency with Article 45.

38.  Although the word “affect” was of very wide remit, I agree with Mr Lee that it should not be construed in the present context to render the power to make bye-law otiose.  It ought not to be construed to mean that any attempt to make further provision by way of bye-law would “affect” something contained in the Articles.  Instead, the purpose of the provision was to prevent the Council from amending the AA through the backdoor. The word “affect” should therefore be interpreted to mean “vary” or “change”.

39.  I am unable to agree with Mr Wong that the Council’s power to make bye-law would not be rendered otiose by a wide interpretation of the word “affect” because it was free to make any bye-laws on any issue or subject not dealt with in the AA (and thus not inconsistent with or affected the provisions of the AA).  Such restriction on the bye-law would be contrary to the provisions of Article 50 (see para 37 above).  A clear example would be the management of the Society which was provided for under Article 44, and yet Article 50 specifically empowered the Council to make bye-law on management.

40.  Mr Wong relied heavily upon the case of Wong Pui Ying v Kowloon Tong Baptist Church [2020] HKCFI 518.  In that case, the plaintiff-members alleged that their right to stand for election to the council, as guaranteed by article 7 of the articles of association of the church, had been denied.  Article 7 stipulated two conditions: (a)  membership in the church for 3 years; and (b)  attainment of the age of 21.  The conditions were satisfied by the plaintiffs.  The church argued that it was entitled to impose additional criteria (such as biblical criteria)  for assessment of the candidates for election.  Such criteria were contained in a handbook, which the church argued formed part of its bye-laws.  The church disqualified the plaintiffs from standing as candidates on the basis of the additional criteria in the handbook.

41.  Madam Justice M Chan held that the handbook did not amount to bye-laws of the church and that, in any event, the 2 conditions in article 7 were exclusive, such that any attempt to impose further conditions through any regulation made by the council would be inconsistent with that article (see [42]-[45]).  Amendment of the articles would be necessary in order to include criteria other than the two article 7 conditions [49].

42.  First, where the issue is one of construction, every case must depend on the wording of the instrument in question.  Second, Wong Pui Ying can be distinguished in that, as held by the court, the members were entitled to the “privilege” of being elected at general meetings, subject to fulfilling only 2 requirements which were exclusive.  There is no parallel in the present case, there is nothing in the AA which might suggest that Council Members could serve for as long as they liked.

43.  Having rejected both arguments of the Society, it follows that until and unless the Bye-law had been validly repealed or varied, Lui could not be re-elected as a Council Member.  Issue (1)  is resolved in favour of Tang.

Irregularity of the 51^st AGM (Issue (2))

44.  There are two main complaints by Tang here, namely, (a)  the members in the Small Room could not effectively participate in the proceedings, and if established, no business could have been validly transacted at the 51^st AGM; and (b)  Tang was unable to express his opinions at the Meeting.

45.  Mr Lee had referred this court to :

(1)  Byng v London Life Association Ltd [1990] 1 Ch 170 at 183B-G, where Browne-Wilkinson VC (as he then was)  observed that “without being physically in the same room [the members] can be electronically in each other’s presence so as to hear and be heard and to see and be seen”.  Where the original venue proves inadequate to accommodate all those wishing to attend, valid general meetings can be properly held “provided, first, that all due steps are taken to direct to the overflow rooms those unable to get into the main meeting and, second, that there are adequate audio-visual links to enable those in all the rooms to see and hear what is going on in the other rooms”;

(2)  In Re Castle Trust Direct Plc [2020] EWHC 969 (Ch), a case concerned with a creditors’ scheme meeting conducted over telephone during the Covid-19 pandemic, Trower J held that what constitutes a valid meeting is “whether what is proposed enables the purpose of meeting to happen by a process which has the essential characteristics of a meeting”. Such essential characteristics were referred to by the learned Judge as “a coming together sufficient to enable a consultation to take place” [38].  However, at the sanction stage, the court “will require to be satisfied that there were no difficulties for participating creditors in their ability to hear, ask questions or express opinions at the meeting or otherwise have their ability to contribute to the business of the meeting impaired” [43].

(3)  Section 584(1)  of the Companies Ordinance, Cap 622 (it had since the issuance of the OS been amended), which provided that: “[a] company may hold a general meeting at 2 or more places using any technology that enables the members of the company who are not together at the same place to listen, speak and vote at the meeting”.

46.  Mr Lee accepted that the determination of both complaints would depend on the prevailing facts and circumstances of the 51^st AGM.  Before the court endeavours to resolve the factual disputes, the prevailing facts and circumstances not disputed by the parties were as follows :

(1)  The Covid pandemic presented an unprecedented challenge to the Society over the conduct of the 51^st AGM.  The AGM of the previous year (2019)  was held as usual.  The uncontested evidence was that when the Notice of the 51^st AGM was issued, Hong Kong was faced with the 4^th Covid-19 wave.  Shortly before the 51^st AGM was to take place on 11 December 2020, gathering restriction was introduced by Government on 1 December 2020 limiting the capacity of 1 meeting room to 20 people.  In addition, prescribed distance between seats inside the meeting rooms had to be observed;

(2)  There is no dispute over the lack of video conferencing facility connecting the Activity Room and the Small Room (one of Tang’s complaints).  I certainly accept that it was a deficiency, but that deficiency had to be assessed against the challenge which the Society had to meet and what its staff and Council Members were able to do to enable Tang or any of the participating members to express his/their views.  The court would not be blinded by the wisdom of hindsight.  Apart from Tang, no member had come before the court to make any complaint.  The court is not to adjudicate on perceived inadequacy without any complainant or anyone affected. 

47.  There was a complaint by Tang that he was excluded from the Activity Room and only hearing-impaired members were asked to sit in the Small Room.  That complaint fell away in light of the uncontested evidence of Tso who explained, inter alia, the allocation of seats in the Activity Room which had a limited capacity.  I see nothing unreasonable with the explanation and it was a matter which the Society was perfectly entitled to plan and decide in advance of the AGM.  Further, Tang resiled in cross-examination from the allegation that only hearing-impaired members were asked to sit in the Small Room.

48.  Mr Lee invited the court to make a finding that Lui had pre-determined that members could not ask questions during the 51^st AGM.  It is not really in dispute or disputable that during the preparation for the 51^st AGM, Lui had decided not to have a question and answer session at the end of the meeting, but would have the questions gathered for answering at a later stage by himself or the staff.  Lui’s unchallenged explanation of the usual practice of the Society was as follows[4] :

“It is the usual practice of [the Society] that questions raised or comments made by members will be grouped together and passed on to the Chairman who would either respond at the close of the proceedings or subsequently after soliciting information or comments from staff members. This practice is based on the Council’s experience over the years that the questions raised or comments made by members all had to do with our services or staff personnel issues and had nothing to do with the resolutions put to vote in the general meetings. Not once in the past had issues pertaining to procedural or constitutional matters been raised at an AGM.”

49.  Lui also made the point that had he knew about Tang’s challenge to his re-election to the Council, he would have dealt with it at the Meeting.  I shall have to come back to this point.

50.  It appears that Lui, who took up the chairmanship of the Council in May 2020, was quite firm on his preference not to have a question and answer session during the 51^st AGM because, according to Lau whose evidence I accept, she had repeatedly tried to persuade Lui to change his view without success.  Lau said that Lui was concerned about abiding by social distancing requirement.

51.  The view taken by Lui, whilst understandable in light of the fact that there had not previously been any question during previous AGMs over the resolutions, is unfortunate.  I would have held that not allowing any question by members during the 51^st AGM would be a defect in the conduct thereof, which would have rendered any resolution passed null and void.  However, the evidence showed that: (a)  apart from Tang, no question was raised by members; and (b)  the staff did not prohibit Tang from raising his question.  To the contrary, they tried their best to assist him to do so under restrictive circumstances.

52.  In considering Tang’s complaint that he was deprived of a reasonable opportunity to express his views and objections during the 51^st AGM the court should not ignore his acceptance in cross-examination that: (a)  he received the Notice of AGM on 27 November 2020 from which he knew that Lui should not participate in the election according to the Bye-law; (b)  he thought that it was a serious matter; (c)  he was aware of the pandemic at the time and various measures in place to prevent the spread of the virus; (d)  he was aware that the 51^st AGM would have to be conducted differently with, eg, online and physical attendance[5]; and (e)  he could have expressed his view on Lui’s eligibility for election by way of, eg, email to share it with other members prior to the AGM.

53.  It has to be said that there was no requirement for Tang to express his view by email prior to the AGM.  On the other hand, his ability to do so must be relevant to the evaluation of his complaint bearing in mind the unusual and unexpected situation presented by the pandemic.  It may also be said that Tang had been a life member of the Society for no less than 8 years at the material times.  Someone who had the interest of the Society in his heart, and wanted to work with other members to further its admirable purpose, might not have hesitated to share his view about the potential conflict with the Bye-law so that members would have ample time to consider the matter.

54.  The evidence was that when the resolution for election to Council came to be considered, Tang wanted to raise his question(s).  It is uncontroversial that he was invited to write down his question(s).  Tang gave inconsistent answers as to whether the votes were cast at that time.  I am prepared to give him the benefit of doubt that he might be confused when he said that the votes had been cast when he was asked to write down his question(s).  He subsequent said that it happened during voting.  However, taking into consideration also the uncontested evidence of Lui, who said that he halted the voting when sound of commotion emanating from the Small Room was heard[6], more likely than not, when Tang was asked to write down his question(s)  voting had either not begun or just begun.

55.  There is force in the criticism of Mr Wong that Tang’s excuse for not writing down his question(s), ie, he was concerned that by the time he had written down what he wanted to say the votes would have been cast, rings hollow since: (a)  what he wanted to say (Lui could not stand for election due to the Bye-law)  was simple and could be written down quickly; (b)  he was asked to write down his question(s)  before the resolution was voted on, and there was sufficient time to do so; and (c)  Tang could have written down his question(s)  even before being invited to do so.  It may be added that Tang could have asked for the voting to wait until he had aired his question(s). 

56.  It is also undisputed that when Tang refused to write down what he wanted to say, one of the staff offered to make a video of what Tang had to say and transmit it to the Activity Room (see para 15(9)  above).  An attempt to make the video was then made by Tang’s friend (Ms Cheng).  Unfortunately, it was not a successful exercise. 

57.  During the course of the commotion, Mr Chan Dut Yin came out of the Activity Room to check what was going on in the Small Room.  Tso’s evidence was that she saw Mr Chan and the staff shuttling between the two Rooms.  According to Lui, it was only after Mr Chan returned to the Activity Room and gave him the all-clear signal that the AGM was resumed and the election resolution was then passed.  What Tang had to say was not made known to other members, perhaps with the exception of his friend(s).

58.  The final version of Tang’s evidence was that the video-recoding was carried out almost at the end of voting.  On the totality of the evidence, it was a time of confusion due to the unexpected turn of events.  I am not convinced that with the best will in the world one can pinpoint when the video-recoding exercise took place in relation to the voting.  I note that Tang actually voted on the election resolution and his vote was counted (see para 16 above). 

59.  However, it is quite unfortunate that Tang did not see fit to indicate that he wanted to say something about the resolution that was being considered and asked for the voting to wait until he had aired what he had to say.  At the time, other members had no inkling on what Tang wanted to say. 

60.  Tang complained that he was prevented from leaving the Small Room or denied access to the Activity Room.  Such allegation is not made out from the evidence and is rejected.  First, Tang’s allegation that Tso denied his access to the Activity Room must be rejected in view of the latter’s uncontested evidence that she did not have any direct dialogue with him, did not go anywhere near him, and did not reject Ms Cheng’s suggestion of taking Tang to the Activity Room. 

61.  Second, Tso’s evidence was that when someone in the Small Room shouted that the deaf were not allowed into the Activity Room, she explained to the people there that due to social distancing restrictions no more than 20 people could be accommodated in the Activity Room and its capacity had been filled.  She suggested to the staff members to check the situation in the Activity Room.  Considered in conjunction with the evidence that the staff was shuttling between the two Rooms, more likely than not they were doing what was suggested by Tso.

62.  Third, Tang said that he was surrounded by the Society’s staff.  That was nothing surprising given the attention which Tang had drawn upon himself.  From the layout plan of the Small Room, there were 3 lady members of the staff in the Small Room (including Lai and Chan who provided sign-language interpretation)  in addition to Tso.  The staff probably did not want Tang to enter the Activity Room given the Covid restrictions which the Society had to comply with, but there is no reason to think that the 3 staff members were minded to restrain Tang, a fit young man, from leaving the Small Room.  The accusation that Tang was restricted by the staff is rejected.

63.  Mr Wong referred this court to Re Hong Kong Sailing Federation [2010] 1 HKLRD 801, [38], per Kwan JA (as she then was)  for the proposition that a member does not have an unqualified right, but a reasonable opportunity, to present his arguments for or against a resolution at a general meeting.  On the facts of that case [37], the members who requisitioned an EGM were not deprived of a reasonable opportunity to present their arguments because their views were ventilated privately and publicly for well over a year, and copies of the requisitions including their arguments were provided to all of the members in advance.  Kwan JA concluded that the council was entitled to take the position that members had heard enough debate on the issues proposed to be put to a vote without any further discussion at the EGM.

64.  On the above analysis of the evidence, subject to whether Tang’s question(s)  (had they been expressed)  would have been dealt with at the Meeting, it cannot be accepted that Tang was denied a reasonable opportunity to express his views.  Quite the contrary, regardless of any pre-Meeting preference or decision of Lui, the staff was perfectly accommodating to Tang under restrictive circumstances. 

65.  I come to the last point whether Tang’s question(s)  would have been dealt with at the Meeting, which is the only one of any force under Issue (2).  In respect of Lui’s evidence that he would have dealt with Tang’s objection to his election based on the Bye-law at the Meeting, first, Lui probably would have to let another person chair the Meeting at that point due to his conflict of interest.

66.  Second, there is considerable force in Mr Wong’s submission that had Tang’s objection been known it would be inconceivable for it to be ignored prior to voting.  It may be added that the same should apply if Tang had asked for the voting to waiting until he had his say.  On the other hand, the submission had to be balanced against: (a)  the fact that it was determined before the Meeting that there would be no question and answer session; (b)  there was no previous experience in dealing with an objection to a resolution; and (c)  Lui apparently did not agree with Tang’s understanding of the Bye-law[7].

67.  Ultimately, the point is counterfactual.  The court can only do its best on the available evidence.  On these facts, I have decided to err in favour of Tang that even if he had taken the reasonable opportunity he enjoyed to express his views about Lui’s eligibility, I am not satisfied that such views would have been dealt with in the course of the Meeting.  Given the decision on no question and answer session, there is a real possibility that even if Tang had written down what he had to say and it was passed to Lui, he might simply have maintained the position that it be dealt with later, especially when he saw no merits in the question(s).  I take into account also the importance of the right of members to express their views at AGMs, the infringement of which would not be lightly overlooked by the court.

68.  It follows that the 51^st AGM was tainted with a procedural defect, and at least the 4^th resolution by which, inter alia, Lui was elected is null and void.  I should make clear that on the evidence I see no other procedural defects apart from the one identified in the preceding paragraph.

Irregularity principle and its application in this case (Issue (3))

69.  Under the irregularity principle, the court may refuse to intervene in an internal dispute and set aside the proceeding in question as null and void merely because of an irregularity such as in the conduct of a general meeting, if the same result would have obtained had the correct procedure been followed: Re Dalny Estates Ltd [2018] HKLRD 409, [18], per G Lam J (as he then was)  sitting in the Court of Appeal.

70.  The Issue here is whether the irregularity of the 51^st AGM was cured by the subsequent 2021 Meetings.

71.  Mr Lee submitted that the authorities demonstrate, for the irregularity principle to apply, four cumulative requirements must be satisfied :

(1)  The only facts alleged to make a decision taken by a meeting of members or board unlawful is a mere informality and irregularity: Re Paul & Shark Asia Pacific Ltd [2021] 2 HKLRD 1235, [30], per DHCJ Maurellet SC; Re Dalny Estates, [18];

(2)  The irregularity was one which would have been cured by the majority in that the resolution was one that could have been lawfully passed: Re Paul & Shark, [32];

(3)  The majority would inevitably be in a position to regularise the decision if necessary: Re Paul & Shark, [33]; Re Dalny Estates, [27];

(4)  The majority must be taken to have exercised their voting power being fully aware of the nature of the irregularity and in circumstances that do not involve an oppression on the minority: Huangfu Chuangxin v Ni Yongkang [2022] HKCFI 1721, [26], per DHCJ Pow SC.

72.  In his Opening Submissions, Mr Lee argued that none of the requirements had been satisfied by the Society.  In his Closing Submissions, Mr Lee relied on two points, namely: (a)  the defect in question involved the infringement of Tang’s personal right and it was not open to the majority to forgive the wrong done to Tang; and (b)  there was no evidence to show that, for the purpose of the 2021 EGM, the majority was fully aware of the nature of the defects of the 51^st AGM.  It is unnecessary to deal with the other arguments in the Opening, which I find to have little merits.

73.  To begin with, I agree with Mr Wong that there can be no doubt that the 3^rd to 10^th Defendants would have been successfully elected even if Tang had fully expressed his views and arguments at the 51^st AGM.  On Tang’s own case, the views that he wanted to express at the Meeting was confined to the election of Lui being against the Bye-law.  It is difficult to see how such views would have altered the outcome of the election of the 3^rd to 10^th Defendants. Indeed, the 4^th to 10^th Defendants[8] were subsequently elected at the 2021 EGM by an overwhelming majority.

74.  The Notice of the 2021 EGM stated as follows :

“就2020年12月11日舉行的周年會員大會，本會收到有會員對當日會議安排及選舉2020-2022年度執行委員的表決過程表示不滿，並為此提出訴訟。本會一向宗旨為鼓勵傷健共融及致力為聽障人士提供全面及專業服務，協助他們發揮潛能、融入社會。為免虛耗資源，執行委員會經商議後決定召開特別會員大會，讓會員確認及確定隨函附上的開會通知上列明的執行委員妥為當選。”

75.  The resolutions passed at the 2021 EGM were in the following terms :

“確認及確定 [the 4^th to 10^th Defendants] 於2020年12月11日獲選為本會執行委員 (2020－2022)”

76.  There is no issue between the parties that “確認及確定” mean “to confirm and/or ratify”. 

77.  Mr Lee laid much emphasis on the use of the word “ratify” in his argument that wrong done to Tang was not open to ratification by the members of the Society.  In response, Mr Wong submitted that the criticism is misplaced.  The word “ratification” can simply mean “confirmation and acceptance of a previous act”: Black’s Law Dictionary, 11^th edn, pg 1513.  It does not entail or imply any release of liability.

78.  Apart from the force of Mr Wong’s submission, I believe that it is a matter of substance as to what the members were called upon to do at the 2021 EGM.  It is abundantly clear from the Notice of EGM and the Resolutions that the members were simply asked to confirm the election of the 4^th to 10^th Defendants.  I see no indication that the members were asked to ratify any defect occurred during the 51^st AGM in the sense of releasing or forgiving any liability to Tang.

79.  On the distinction between ratification in the sense of adopting a transaction, and ratification in the sense of relieving someone from liability for breach of duty, Mr Wong helpfully referred the court to the judgment of Harris J in Lam Kin Chung v Soka Gakkai International of Hong Kong Ltd (No 2) [2018] 2 HKLRD 769, [7] to [10].

80.  In that case, a member of a charitable company sought leave to commence statutory derivative action against certain directors, alleging that they had, inter alia, breached of their duties by procuring the company to sell a property at an undervalue and buy a property at an overvalue, [1]-[4].  The company argued that leave should not be granted since its members had by an overwhelming majority “confirmed approved and ratified” the impugned transactions at an EGM, [7] and Appendix at pg 787.

81.  Mr Justice Harris held that none of the resolutions was worded as a release of the directors’ liabilities.  Such resolutions only ratified the transactions, not any breach of duty, [9]-[10].  The learned Judge (at [8])  cited with approval the following dicta of Steven Chong J in Nordic International Ltd v Morten Innhaug [2017] 3 SLR 957, [91]-[92] :

“It is important to distinguish between ratification of the transaction which was brought about by a breach of fiduciary duty and ‘ratification’ of the director’s breach of duty. The latter instance of ‘ratification’ is more appropriately understood as a ‘release’ from liability … But just because a company ratifies or adopts the transaction in question does not mean it has released the errant director from liability for breach of duty … This is a specific application, in the context of companies and their directors, of a rule pertaining to principals and agents: a principal may choose to ratify an unauthorized transaction that the agent entered into with a third party without exonerating that agent of any breach of duty …”.

82.  Applying Lam Kin Chung, and taking into consideration the Notice of EGM and the Resolutions, there is no basis to suggest that the Resolutions sought to excuse any breach of duty.  Instead, the appointment of the 4^th to 10^th Defendants as Council members was reconsidered by members and re-approved.  Lui was not put forward as a candidate for re-consideration.  The Society and its members were entitled to “confirm and/or ratify” the election of the 4^th to 10^th Defendants.

83.  For these reasons, I disagree with Mr Lee’s first point (see para 72 above).

84.  As regards Mr Lee’s second point, there are 2 answers.  First, as submitted by Mr Wong, the proposition that members had not been told of any wrongdoing committed at the 51^st AGM is misconceived[9] because neither the Society nor its members were seeking or asked to ratify any wrongdoing (in the sense of relieving or excusing any liability)  by way of the 2021 EGM.  The submission is fortified by the fact that: (a)  the propriety of the election of the 4^th to 10^th Defendants was never in issue; and (b)  Lui did not seek to be elected.

85.  Second, the weight of the evidence is that the members must be well-informed of the controversy raised by Tang before the 2021 EGM.  Soon after the 51^st AGM, Tang made rather serious accusations on Facebook (see para 17 above)  against not just Lui but the Council of the Society, accusing them of, eg, abuse of power for their private gain and deliberate concealment of the breach of Bye-law.  Ms Chong, the corporate communication manager of the Society, swiftly responded to Tang by WhatsApp and email in reconciliatory terms and invited him to meet with, firstly Lau, and later with Lui and other Council members.  Regrettably, such invitations were declined by Tang. 

86.  On 15^th December 2020, Tang followed his Facebook complaints with an anonymous[10] complaint to the Lump Sum Grant Independent Complaints Handling Committee.

87.  On 17 December 2020, the Society published a notice on Facebook referring, inter alia, to the issue whether the election of certain member was contrary to the Bye-law and stated that legal advice had been obtained verifying the regularity of the matter.  On the same day, Tang published his disagreement on the Bye-law issue on Facebook and asked for the advice to be published.  It can be seen from the material exhibited by Tang (“TSC-11”)  that the matter had attracted the interest of a number of people on the Facebook platform.  On 22 December 2020, another notice was published by the Society referring to different view having been expressed by others.  In order to address the enquiries of members and to clarify any doubt they might have, a second legal opinion was being sought by the Council. 

88.  On 22 December 2020, 8 February 2021 and 30 March 2021, articles were published by “inmediahk.net” which, in the words of Tang[11], reported “the wrongful action of the Society and/or the Council to its hearing-impaired members” which “has also caused disrepute to the Society”.  The effect of those reports is evident from Tang’s comments.

89.  On 23 December 2020, Tang’s solicitors issued an open letter to the public setting out their understanding of the proper interpretation of the Bye-law.  On 13 January 2021, the same solicitors wrote to the Council and the members who attended the 51^st AGM.  Apart from advancing Tang’s complaints about the 51^st AGM, the letter also made accusations of harassment of disabled, indirect discrimination, disability discrimination and bringing the Society into disrepute.

90.  Given the widespread adverse publicity, it is inconceivable that the members who attended the 2021 EGM were not fully informed of the issues which led to the Meeting.  Further, Tang was at the Meeting (see para 20(3)  above).  It is highly unlikely that he would have kept quite if he had reason to believe that the members were in the dark.

91.  In the premises, I see no substance in Mr Lee’s second point.  It must follow that Tang’s challenges to the 2021 Council Meeting and the 52^nd AGM, which are based on the alleged irregularity of the 2021 EGM[12], are also rejected.

92.  For these reasons, I hold that the irregularity principle applied to this case and the irregularity of the 51^st AGM was cured by the 2021 Meetings. 

Whether dispute academic or relief sought lacks utility (Issue (4))

93.  Four relief are sought in the OS: (i)  a declaration that the 51^st AGM resolutions are null and void and of no further effect; (ii)  consequential injunctive relief against the 2^nd to 10^th Defendants to restrain them from acting as Council members; (iii)  a declaration that the 51^st AGM is invalid; and (iv)  costs. 

94.  The court was referred by the parties to the following authorities.  The general principles governing the grant of declaratory relief were set out in Koo Ming Kown v Mok Kong Ting [2018] HKCFI 967, per DHCJ To, [17]-[20] :

(1)  An applicant seeking declaratory relief must show:

(a)  he has a real interest in the subject matter of the declaration (the real issue requirement);

(b)  he has a real interest in obtaining a declaration against the adverse party (the real interest requirement); and

(c)  the adverse party is a proper contradictor (the proper contradictor requirement);

(2)  In determining the real issue requirement, the court adopts the practical utility approach by asking the question whether the court’s jurisdiction to grant declaratory relief was properly exercisable instead of applying nice tests as if it were raising a strict jurisdictional issue;

(3)  To satisfy the real interest requirement, an applicant must show that he has a real interest of a material character to be enforced or to protect a genuine and legitimate interest in obtaining a decision from the court against an adverse party.  He must have an interest in the outcome of the relief sought, as opposed to actually obtaining that relief in his favour.

95.  A well-established reason to refuse to grant declaratory relief is where the exercise does not serve any useful purpose.  It was held in Tsang Yuen Ling v Incorporated Owners of Siu Lung Court, unrep, LDBM 199/2001, 18 September 2001, [22] (quoting from Zamir & Woolf, The Declaratory Judgment)  :

“If it can be shown that a declaration would not serve any practical purpose, this will weigh heavily in the scales against the grant of declaratory relief. If, on the other hand the grant of declaratory relief will be likely to achieve a useful objective, the court will be favourably disposed to granting relief. The question of whether or not any useful purpose would be served by granting declaratory relief is therefore of prime importance in determining how discretion should be exercised”.

96.  The following precedents were referred to by Mr Wong as instructive :

(1)  In Tsang Yuen Ling, the applicant challenged the adequacy of notice in respect of a general meeting of owners, and sought a declaration that the meeting was null and void.  After seeking legal advice, the respondent convened another meeting at which the resolutions voted on at the “defective” meeting was passed.  Whilst not contesting the allegation, the respondent resisted the declaratory relief on the ground that it had no practical value or utility.  HH Judge Lam (as he then was)  agreed that the relief did not serve any useful purpose and exercised his discretion to refuse to grant any [23]-[39];

(2)  In Tam Bing Choi v Kowloon Tong Baptist Church [2021] HKCFI 3751, the plaintiffs claimed that the minutes of a council meeting did not accurately record what was actually resolved at the meeting, and sought declarations to rectify the meeting minutes and to give effect to the “true” resolutions.  The council then convened fresh meetings to re-discuss the same issue and approve the impugned meeting minutes.  Master Sabrina Ho struck out the plaintiffs’ claim, finding that the subsequent council meetings had rendered the relief sought water under the bridge with no legal or practical utility [8]-[16], [41]-[44];

(3)  In Huangfu Chuangxin v Ni Yongkang [2022] HKCFI 1721, the plaintiff sought a declaration that a resolution passed at a general meeting to remove him as a director was invalid.  He claimed that he was not given notice of the meeting, thus he did not attend it and was deprived of the right to make representations to the shareholders.  After the plaintiff commenced the action, with a view to avoiding further dispute, the company convened a fresh general meeting to reconsider the matter and again passed a resolution to remove the plaintiff as a director.  The plaintiff therefore discontinued the action, acknowledging that the subsequent resolution had rendered his claims unnecessary or academic [7] and [9(2)].

97.  On his part, Mr Lee referred the court to, firstly, Marion White Ltd v Francis [1972] 1 WLR 1423, which concerned a covenant in restraint of trade which operative period had already expired by the time the appeal was heard.  Nevertheless, taking into account the fact that the covenant was operative all through the proceedings up until the appeal was before the Court of Appeal [1426H], Buckley LJ (with whom Davies and Stephenson LJJ agreed)  held that the issue of validity of the covenant was “still alive” in that the employers still had interest in knowing whether such a covenant was enforceable and therefore granted a declaratory judgment.

98.  Secondly, Koo Ming Kown v Mok Kong Ting [2022] HKCFI 642, where Cheng J held at [15] that a declaratory judgment is a flexible and discretionary remedy.  Whether a declaration satisfies the requirement of “practical utility” in any one case will turn very much on its particular facts.  On the one hand, the court has always been reluctant to grant a declaration that would not serve any practical purpose; on the other hand, “useful purpose” has been interpreted in a broad and flexible sense.

99.  The first point for the analysis in the present case is that the election resolution passed at the 51^st AGM was for a term of 2 years from 2020 to 2022.  Whether or not the election was tainted with irregularity, the term would have expired in 2022.  There had since been two subsequent elections, the election at the 52^nd AGM (28 December 2021)  and at the 53^rd AGM which was held after the completion of the filing of evidence in this case.

100.  Second, as analysed above, the irregularity in question had been resolved under the irregularity principle and the 2021 Meetings.

101.  Mr Lee disagrees with Mr Wong’s submission that the relief sought in the OS lacks utility.  He contends that :

(1)  This case has raised substantial legal issues concerning whether and, if so, how the irregularity principle applies to decisions which are tainted by an unratifiable infringement of a personal right;

(2)  The public interest is engaged given that the Society is an NGO regulated and subsidised by the Social Welfare Department.  The court should therefore be more ready to hold the Society to account than it would in respect of small private companies;

(3)  The same points are likely to arise again.  Whilst accepting that the pandemic was exceptional, hybrid meetings are not.  Section 584 of the Companies Ordinance, Cap 622, had been amended, which mandates companies to use technology which allows members to listen, speak and vote at meetings. The Society and other companies regulated by the Ordinance will benefit from knowing where the line should be drawn going forward.

102.  In my view, as analysed above, the first point is misconceived in so far as Tang’s case is concerned.  In any event, the issue had been dealt with in Lam Kin Chung with which this court agrees. 

103.  In respect of the second point, I am unable to see why the fact that a party has a particular status impacts upon whether the relief sought against it is or is not academic or of no utility.  Should a substantial public company with more shareholders than the Society’s members be treated differently to a small private company?  I believe not. 

104.  Finally, on the third point, I am sure that valuable lesson had been and will be learned by the Society and anyone interested in reading this Judgment.  If not for the sudden imposition of restrictions shortly before the 51^st AGM, better arrangements would probably have been made for the Meeting.  In any case, the pandemic had helped to usher into our daily life the making of remote connections, often between people situated at different parts of the world.  It is now commonplace.  I see no substance in the point.

105.  In the premises, I hold that there is no practical utility or useful purpose in granting any of the relief claimed in the OS (costs will be considered below).

Disposition

106.  For the reasons aforesaid, the OS is dismissed.

Costs

107.  Although the Court has dismissed the OS, it has to be said that at the time when it was issued Tang had legitimate complaints in respect of Lui’s eligibility for election and the irregularity of the 51^st AGM, which have been upheld in this Judgment.  On the other hand, ever since the 2021 Meetings the complaints had been rendered quite academic. 

108.  If one takes a step back and examine the whole episode with objectivity, had Tang been a little more understanding of the difficulties created by the pandemic and a little less occupied with his personal rights, he might have acted differently and in a manner which took into consideration the larger interest of the Society.  Had he agreed to the invitation to write down his question(s), his complaint might have been dealt with at the Meeting, and this action would not have been brought.  Regrettably, it was not the case.  The ensuing publicity campaign by Tang had no doubt damaged the reputation of the Society whether or not it was the intended result. 

109.  There was no good reason for Tang to have persisted with this action after the 2021 Meetings.  On 26 January 2022 (shortly after the 52^nd AGM), the Society’s solicitors wrote to Tang’s solicitors pointing out the academic nature of these proceedings by reason of the 2021 Meetings, and invited Tang to withdraw this action with no order as to costs.  The invitation was apparently ignored by Tang (there is no reply letter in the correspondence before the Court). 

110.  Tang is the losing party here.  I see no good reason why he should not bear the costs of the Society.  Had Tang reacted in a more reasonable manner to the letter of the 26 January 2022, I might have deprived the Society of some of its costs by reason of the determination of this Court on Issues (1)  and (2).  In the premises, I order that Tang should bear the costs of this action in favour of the Society.  I make no costs order in respect of the other Defendants. 

111.  I am grateful to counsel for their assistance.