In Tang Fu Sun v Tang Lik Yuen ([2016] 4 HKLRD 608) the managers of two Chinese customary trusts sought declarations that the duty manager of the trusts (the same person being duty manager of both trusts) had been validly removed from office by a meeting of the general assembly of the descendants in January 2006. The defendant, the duty manager, argued that this resolution was ineffective since: (a) the proposed resolution to remove him had not appeared on the agenda for the meeting; and (b) that the customs of the trusts required resolutions of the assembly to be passed unanimously. The defendant argued that neither of these conditions for his valid removal had been satisfied. The plaintiffs were granted the declarations that they sought. Based on the law of meetings, there was no requirement to place the proposal to remove the duty manager on the agenda for the meeting since this amounted to a proposal to dismiss an employee and did not affect the interests of members as such. Nor was the defendant able to establish the existence of a custom that required decisions of the assembly to be reached unanimously.
Anthony To J. commented on the status of a duty manager. Unlike the manager, which was a requirement of section 15 of the New Territories Ordinance, there was no legal requirement to have a duty manager and the duty manager had the status of an employee. In the absence of some custom to the contrary, it was reasonable to think that the manager had the power to appoint and remove the duty manager since the manager would be legally liable for the duty manager’s actions or omissions. The managers’ evidence that the customs of the trusts gave them power to appoint and remove the duty manager as an exercise of their own authority was inherently reasonable and, for that reason, plausible. Since the duty manager was also a member of the trusts, a requirement for unanimity would amount to a requirement that he vote for his own removal; this would be an absurd requirement. Given that the assembly was at the heart of the governance of the trusts, it too had the power to remove the duty manager ([51]).
Michael Lower
