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Amadeaus Investment Ltd v Dr. Lin Kao Kun

Judgment Cited authorities 10 Cited in 1 Precedent Map Related
Vincent
Judgment Date27 March 2019
Neutral Citation[2019] HKCFI 797
Judgement NumberHCA2379/2015
Citation[2019] 2 HKLRD 647
Year2019
Subject MatterCivil Action
CourtCourt of First Instance (Hong Kong)
HCA2379A/2015 AMADEAUS INVESTMENT LTD v. Dr. LIN KAO KUN

HCA 2379/2015

[2019] HKCFI 797

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2379 OF 2015

______________

BETWEEN
AMADEAUS INVESTMENT LIMITED Plaintiff
and
Dr. LIN KAO KUN Defendant

______________

Before: Deputy High Court Judge Keith Yeung SC in Chambers
Date of Hearing: 6 March 2019
Date of Decision: 27 March 2019

______________

DECISION

______________

Introduction

1. This is the defendant’s (“D”) appeal against the Order of Master K Lo made on 15 October 2018 (the “Decision”) dismissing D’s Summons dated 9 January 2017 (the “Setting Aside Summons”) to set aside the Order of Master Chow made ex parte on 4 October 2016 (the “Extension Order”) extending the validity of the Writ herein for a period of 12 months. The main issues are whether the plaintiff (“P”) had shown good reason for the extension, and whether P had, when making the ex parte application for extension, breached its duty to make full and frank disclosure.

The material procedural background

2. The Writ herein was issued on 14 October 2015. It contains a brief Endorsement of Claim. According to paragraph (1) thereof, P’s claimagainst D is for repayment of a loan in the sum of US$2,200,000 (the “Loan”) it advanced to D pursuant to a loan agreement dated 16 January 2009 (the “Loan Agreement”).

3. P subsequently on 12 December 2016 filed its Statement of Claim. It pleads therein that the Loan was drawn down on 16 January 2009, that it was for a term of 9 months, that repayment became due on 15 October 2009, and that D has failed to repay the same.

4. According to P’s pleaded case, and applying the 6-year limitation period stipulated in section 4(1)(a) of the Limitation Ordinance (Cap 347), P’s cause of action would have been time-barred on 15 October 2015. The clock was stopped one day before that when the Writ was issued.

5. According to Order 6, rule 8(1), the Writ was valid for service within 12 months from the date of issue. That period would have expired on 13 October 2016.

6. On 27 September 2016, an ex parte application was made on P’s behalf for extending the validity of the Writ (the “Ex Parte Application”). It was a paper application. It was supported by the 1st Affidavit of Mr MichaelWithington (“Withington 1st”) sworn on that same day. Mr Withington is a solicitor with Messrs Howse Williams Bowers (“HWB”). HWB were at that time and still are the solicitors acting for P.

7. On 4 October 2016, the Extension Order was granted.

8. Pursuant to the Extension Order, the Writ was subsequently formally extended. On its face, it bears a stamp saying that “RENEWED FOR 12 MONTHS AS FROM 14 OCT 2016 PURSUANT TO ORDER DATED 4 OCT 2016 BY Master Chow”.

9. On 11 November 2016, the Writ was successfully served upon D in Hong Kong.

10. On 9 January 2017, D took out the Setting Aside Summons. He seeks thereby an Order that, inter alia, (i) both the Extension Order and the service upon D of the Writ be set aside; and (ii) the action against him be dismissed. By the Decision handed down on 15 October 2018, the Setting Aside Summons was dismissed.

The affirmatory evidence

11. As has been mentioned above, the Ex Parte Application was supported by Withington 1st. As this appeal turns on the adequacy of the reasons provided in support of the extension and whether P was guilty of material non-disclosure, it is important to set out the material contents of that affidavit (and the subsequent affirmations in support and opposition) in some details:

(a) At §4, Mr Withington gave a brief description of P’s cause of action and produced the Loan Agreement.

(b) The Loan Agreement is a nine-page document. Clauses 1.2 and 9 are relevant:

“ 1. INTEPRETATION

…

1.2 Clause and schedule headings do not affect the interpretation of this Agreement…”

“ 9. NOTICE AND SERVIVE OF PROCEEDINGS

9.1 Any notice or other communication given or made under or in connection with the matters contemplated by this Agreement shall be in writing.

9.2 Any such notice or other communication shall be addressed as provided in Clause 9.3. All such notice or other communication from the Borrower shall be irrevocable, and shall not be effective until received by the Lender. All such notice or other communication from the Lender shall be deemed to have been duly given or made as follows:

(a) if sent by personal delivery, upon delivery at the address of the relevant party;

(b) if sent by post, two Business Days after the date of posting;

(c) if sent by facsimile, when dispatched with confirmed electronic answerback.

9.3 The addressee, address and facsimile number of each of the Lender and the Borrower are: [an address in Shanghai was specified as that of the Borrower’s (the “Shanghai Address”)].”

(c) Mr Withington then deposed at §§5 – 8 that:

“ 5. Pursuant to Clause 9.3 of the Loan Agreement, the address of the Defendant is stated to be [the Shanghai Address];

6. As [P] and [D] signed the Loan Agreement in 2009 (around 7 years ago), [P] does not know whether [D] still resides at the Shanghai Address. I have been informed by [P] and verily believe that it has made enquiries about [D’s] whereabouts in Shanghai, and as a result of these enquiries, [P] is reasonably certain that [D] no longer lives at the Shanghai Address but may now be living in Shenzhen.

Attempted service in separate proceedings

7. In July this year, in separate but related arbitration proceedings involving [D] and a company related to [P] (‘RelatedCompany’), the Related Company (through HWB in Hong Kong and King & Wood Mallesons in Shanghai (‘KWM’)) attempted to serve [D] at the Shanghai Address by hand. However, when the representative from KWM attended the Shanghai Address, he was informed that the [D] was not at the Shanghai Address at the time of service.

8. Also in July this year, the Related Company (again through HWB) attempted to serve [D] at this Shanghai Address by registered post. However, the documents that HWB sent to the Shanghai Address by registered post were returned to HWB’s office.”

(d) Mr Withington set out at §9 certain information on D which P learnt about not long before the application. The information related to D’s directorship in three Hong Kong private companies (the “three HK Companies”) and one registered non–Hong Kong listed company (the “Listco”). Mr Withington then continued:

“ 9. … Accordingly, [P] believes that, by virtue of [D’s] apparent business connection with Hong Kong (of which [P] was not previously aware), it may be possible to effect service upon [D] in Hong Kong ….

10. [P] has ascertained that [D] travels to Hong Kong regularly. I believe that if [P] is able to find out when [D] is next in Hong Kong, [P] may be able to effect personal service upon [D].

11. In light of this new information (detailed in paragraphs 9 and 10 above), [P] is making further enquiries as to whether [D] can be served in Hong Kong.

Application for leave to serve [D] out of the jurisdiction

12. [P] instructed my firm to apply for leave to serve [D] out of jurisdiction.

…

Length of Extension

14. [P] requires a time extension of 12 months in which to continue to attempt to locate [D] and effect service upon him.”

12. The Setting Aside Summons was supported by the affirmation of Mr Yan Sherman Cheuk Ning (“Yan 1st”). He is a solicitor of Messrs ONC Lawyers who act for D.

13. I observe that a lot of what are in Yan 1st are in fact arguments, comments and submissions. In so far as material evidence is concerned, he said:

(a) D was served with the Writ on 11 November 2016 when he attended a board meeting of the Listco in Hong Kong;

(b) D was appointed a director of the Listco on 23 September 2013, and that was a matter of public record;

(c) During the 12 months when the Writ was originally valid for service, the Listco had published four notices of board meeting. Those notices contained dates and places of the meetings to be held. He said that “[P] had had at least four good chances of ascertaining the whereabouts of [D] and thus effecting personal service of the Writ on [D] at the said four board meetings, but it failed to do so;” (§11(2))

(d) He then said at §12 that “Most important of all, service of the current proceedings should never be an issue in the first place if [P] commenced the present action based on the terms of the Alleged Loan Agreement.” He referred to Clause 9.2 of the Loan Agreement, to which I will later return. He said at §12(3) that “there is no evidence that [P] had ever attempted to serve the Writ on [D] by post to the Shanghai Address during the original validity period of the Writ …”;

(e) He said at §13 that D had been a director with the three HK Companies since October 2013, January 2015 and March 2016;

(f) He said at §14 that “[D] wishes to point out that the Shanghai Address remains his residential address on public record.” Heproduced certain records. He then said that “It is further noted that [P] did not make any allegation nor provide any evidence that [D] had any attempt of evading service.”

14. Mr Withington filed his 3rd affidavit in reply (“Withington 3rd”). I set out his material evidence as follows:

(a) At §§4 – 5, he stated:

“ 4. … As explained below, however, [P] faced real difficulties in effecting service on [D].

5. The only information that [P] had regarded [D’s] whereaboutswas that he resided in either Taiwan or Mainland China. He was encountered by a representative of [P] at Songshan Airport in Taipei prior to the issuance of the Writ, but his movements were unknown. [D] was first introduced to [P] through a Taiwanese business associate, Mr Chen …, but Mr Chen passed away in 2014. [P] did not have any...

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