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HCCL 12/2004
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
COMMERCIAL ACTION NO.12 OF 2004
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BETWEEN
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TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY (Hong Kong Branch) |
Plaintiff |
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and |
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KING SOUND INDUSTRY CO. LTD. |
1st Defendant |
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HUANG, FANG HSIANG |
2nd Defendant |
Before : Hon Stone J in Chambers
Date of Hearing : 13 December 2004
Date of Judgment : 23 December 2004
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J U D G M E N T
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The application
1. This is the defendants’ application, by summons filed on 24 September 2004 pursuant to Order 12 rule 8 RHC, to set aside the ex parte order of this court, dated 9 June 2004, granting leave to issue and serve a concurrent writ of summons out of the jurisdiction, and further to set aside the purported service of such process upon the defendants. A declaration is also sought that in the circumstances of the case that this court has no jurisdiction over the defendants in respect of the subject-matter of the claim or the relief or remedy sought in the action.
2. This case has some history — in particular there is within this dispute an element of competing jurisdictions — and before turning to the application in hand it may be worth sketching in a little of the background.
Background facts
3. This is a dispute between the plaintiff life insurance company (‘Transamerica’) and the beneficiaries thereunder, the defendants herein, arising out of three life insurance policies which were issued by the company in April and May 2001 on the life of the assured, a Taiwanese national named Sun Chieh Chen.
4. The assured met his death in China — it is said that he was murdered or committed suicide on 15 June 2002 — and the 1st defendant (‘King Sound’), the beneficiary under the 1st policy issued in the sum of US$8.35 million, and the 2nd defendant (‘Madam Huang’), the beneficiary under the 2nd and 3rd policies issued in the aggregate of US$6 million, now seek payment under those policies.
5. King Sound was the employer of the assured, Mr Sun, and Madam Huang was his wife.
6. Consequent upon Mr Sun’s demise, Transamerica exercised its contractual right to investigate and to challenge the claim made on the policies within the first two years of issuance. It is alleged that there is ample material available to demonstrate the insurance company’s entitlement to avoid the policies for material and false non-disclosure on the applications for the insurance, particulars of which are set out in the Points of Claim filed on 29 July 2004.
7. By the proceedings commenced in this jurisdiction, Transamerica seeks declarations that the policies are void, alternatively that it is entitled to avoid liability under the policies, and accordingly that it is not liable to the beneficiaries, the defendants in these proceedings.
8. The writ in this case was issued on 26 March 2004, and leave to serve out of the jurisdiction upon the defendants was granted by this court on 9 June 2004. It is this grant of leave which is subject to the present attack.
9. However, whilst Transamerica had elected Hong Kong as the forum to decide this case, the defendants herein, in their capacity asbeneficiaries under the three policies, had concluded that the United States District Court for the Central District of California constituted the appropriate venue for the resolution of this dispute.
10. Accordingly, at the time of obtaining from this court the order dated 9 June 2004 permitting leave to serve the writ out of the jurisdiction, Transamerica also applied at the same ex parte hearing for an anti-suit injunction restraining the defendants from proceeding in California. In the circumstances, this application struck this court as ambitious to say the least, and after hearing argument from counsel on behalf of Transamerica, leave was granted to withdraw this injunction application.
11. The Californian proceedings were commenced by the beneficiaries shortly after the institution of the Hong Kong proceedings by Transamerica, on 27 April 2004 Madam Huang and King Sound filing their own Complaint in the Californian court seeking, inter alia, recovery under the three insurance policies in question.
12. The learned judge in charge of the docket in which this case is listed in the Californian court, Judge Pregerson, has been dealing with a number of interlocutory applications with those Californian proceedings, and I have asked for and have been supplied with an agreed chronology intituled ‘Notable Events’ within the course of these proceedings.
13. For present purposes, suffice it to say that the beneficiaries, that is, the plaintiffs in California, on 31 July 2004 themselves took out an application for an anti-suit injunction seeking an order that Transamerica cease its own litigation in Hong Kong. For its part, on 16 August 2004 Transamerica, the plaintiff in Hong Kong, took out a cross-motion to stay the Californian proceedings on the grounds of forum non conveniens.
14. By his order dated 17 September 2004 both applications were denied by Judge Pregerson, and the Californian litigation is thus continuing in normal course. In this context I understand that a Scheduling Order dated 20 August 2004 has been made which lays down cut-off dates for the further interlocutory steps in the Californian action, culminating in a 10 day jury trial which presently is set down to commence on 14 June 2005.
15. As to the current state of play in the Hong Kong action between these parties, the procedural position is that in substantive terms this action has not progressed beyond the filing of the Points of Claim on 29 July 2004.
16. The solicitors for the defendants herein, Messrs Barlow, Lyde & Gilbert, came onto the record on 6 August 2004, and in face of the plaintiff’s Summons for Directions dated 27 August 2004, the defendants took out a time summons requesting an extension of time in which to file and serve the Points of Defence to the claim. However, the issue of pleading to the claim was overtaken when, on 24 September 2004, the present Order 12, rule 8 application was filed wherein the defendants challenge the jurisdiction of this court to hear and determine the case as brought in Hong Kong by Transamerica.
17. It is to this challenge that I now turn.
Order 12, rule 8 : ambit of the argument
18. The bases invoked by the defendants in this application are two: first, that the case does not fall within the rules relating to service out of the jurisdiction; and second, that there has not been due service effected upon the defendants.
19. The provisions of Order 11 rule 1(1) RHC which were relied upon by the plaintiff at the ex parte stage are that encompassed by the first three heads of subrule (d), which read :
“…service out of the jurisdiction is permissible with the leave of the court if …
(d) the claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of a breach of a contract, being (in either case) a contract which –
| (i) |
was made within the jurisdiction, or |
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| (ii) |
was made by or through an agent trading or residing within the jurisdiction on behalf of a principal trading or residing out of the jurisdiction, or |
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| (iii) |
is by its terms or implication governed by Hong Kong law …” |
20. Mr Hart for the defendants has argued that on the basis of the evidence before the court in this case that none of these requirements are satisfied. To the contrary, Mr Coleman for the plaintiff asserts that the requirements of each of these subhead clearly are...
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