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HCA 2844/2001
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 2844 OF 2001
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BETWEEN
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BANK OF CHINA (HONG KONG) LIMITED |
Plaintiff |
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and |
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CHEN JIANREN |
Defendant |
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Before : Deputy High Court Judge Carlson in Chambers
Date of Hearing : 28 November 2007
Date of Judgment (Handed Down) : 18 December 2007
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J U D G M E N T
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Introduction
1. On 19 July this year, Master Hui made an order extending the validity of the writ in this action, which is dated 22 June 2001, for a period of three months from the date of his order so that it might be served on the Defendant. Having made that order he then went on to deem that service of the writ on the Defendant had taken place on 16 November 2006. Having made these orders, he then gave directions as to further pleadings in the action [see Bundle 6-9].
2. This is the Defendant’s appeal from that order, who has also taken out two summonses under O.12 rr.7 and 8 of the RHC which cover the same ground as the appeal itself, variously seeking orders setting aside the writ, a declaration that the writ has not been duly served on the Defendant, a discharge of the Master’s order and for a further declaration that the court has no jurisdiction over the Defendant in the circumstances of the case to which I will come shortly. These summonses are at pages 13 to 20 of the Bundle.
The Nature of the Claim
3. This is a claim by the Plaintiff bank against the Defendant, for $27,300,000 plus interest said to accrue at the daily rate of $14,584.93 as from 25 July 2000, based on two Deeds of Guarantee dated 9 June 1993 and 24 October 1994 respectively whereby he guaranteed the liabilities of the principal debtor, a company called Gain Button Development Limited, of which he was a director and shareholder. If this matter were to go to trial, the Defendant’s case will be that his signature on the guarantees has been forged. He did not sign and therefore is not liable.
Chronology
4. Mr Pow SC, for the Plaintiff, has provided a very helpful and complete chronology from which I propose to extract some important and relevant dates. The matter started on 15 August 2000 with a letter of demand from the Plaintiff to the Defendant which had the effect of engaging the “on demand” provisions in the guarantees and which also started time to run for the purposes of the limitation period — in this case, because the guarantees were under seal, of 12 years.
5. As is apparent from the Immigration Department’s records, the Defendant departed from Hong Kong on 18 June 2001, not returning until 4 August 2001. On 22 June 2001, the Plaintiff issued its writ which it purported to serve on the Defendant on 27 June 2001 pursuant to O.10 r.1(2) RHC by leaving it at four addresses of the Defendant in Hong Kong being his “usual last known address” for him here. When it did so it was not aware that he was not in Hong Kong on 27 June. On 4 August 2001, the Defendant not having entered an appearance to the writ, the Plaintiff applied for and obtained judgment in default.
6. On 10 April 2006, very nearly five years after it had apparently obtained a regular default judgment against the Defendant, the Plaintiff served a statutory demand on the Defendant, as a preliminary step to petitioning for his bankruptcy, by substituted service by advertisement in the Hong Kong Economic Times and on 29 August 2006 presented a Bankruptcy Petition which it served on him at his office in Zhongshan on 26 October 2006. In November 2006, the Defendant instructed his present solicitors to represent him who filed a Notice to Act on his behalf in the action. They proceeded to issue a summons to set aside the August 2001 default judgment which, after a certain amount of toing and froing relating to proof that the Defendant was outside Hong Kong when the writ was purportedly served on him, the Plaintiff consented to having the judgment set aside due to the Defendant’s absence from Hong Kong on the date of service of the writ. This was done on 14 February this year by virtue of an order to that effect by Master De Souza [page 32].
7. This was followed the next day [the 15th February] by a letter from the Defendant’s solicitors [page 230] to the effect that they had no instructions to accept service of the writ. On 23 February, the Plaintiff applied ex parte to renew the writ [60-1] under O.6 r.8 or O.3 r.5 RHC. On 16 March, Master Hui adjourned this application for a contested inter partes hearing. The Plaintiff also took out a summons dated 4 April this year which put this application on a formal inter partes basis by asking for a variety of orders [see 25(1-4)] including an extension of the validity of the writ and a dispensation from serving the writ because the writ had already come into the possession of the Defendant’s solicitors. Alternatively, it sought leave to serve the Defendant out of the jurisdiction and additionally the summons suggested three methods of service on the Defendant, being on his solicitors in Hong Kong, advertisement in the Wen Wai Po, which freely circulates in Hong Kong and on the Mainland and, by registered post at the Defendant’s address in Zhongshan, or by such other means as the court might order. This was heard on 19 July when leave to renew the writ was given from which there is this appeal.
8. As I have already observed Master Hui deemed service to already have been effected on the Defendant by virtue of service of the writ on his solicitors on 16 November 2006 as appears in his Order of 19 July 2007 [6-9 supra.].
The Argument
9. Mr Kenneth Chow, who appears for the Defendant, frankly admits and indeed asserts that the Defendant is entitled and intends to take every point available to him to defeat this claim both on the basis of technicality as to service and jurisdiction and, failing which, on the merits if the Plaintiff succeeds in bringing him to trial, when he will say that his signature on the guarantees had been forged. It is for this reason that the Defendant’s solicitors, who have been on the record and representing him since November last year, have written to the Plaintiff’s solicitors to say that they have no instructions to accept service of the writ, even if they fail to have the Master’s Order extending the validity of the writ discharged. Nevertheless, for that stance to have any effect they will also need to disturb the Master’s Order as to deemed service.
10. The principal source of the court’s jurisdiction for the renewal of writ is O.6 r.8 RHC. As will become apparent in a moment the facts of this matter remove this application for a renewal from the scope of an order under O.6 r.8. This being so Mr Pow has to rely on O.2 r.1 and O.3 r.5 to which I will presently need to refer.
11. It is helpful to start with the note at 6/8/1 [page 67 of the current practice] which sets out the primary position. It is in the following terms and unsurprisingly, Mr Chow places strong reliance on what is said there:
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Effect of rule— A writ is valid in the first instance for 12 months, and the court has power to extend the validity of a writ for up to 12 months. |
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This rule provides a comprehensive code for the renewal of a writ, and therefore an irregularity in procedure caused by failure to renew a writ under the rule is such a |
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