HARTANTO HADY v. RADNAABAZAR BAZAR

HCA 89/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 89 OF 2008

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BETWEEN

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D E C I S I O N

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1.  This is an application by the defendant to set aside the service of a concurrent writ of summons purportedly served on the defendant at an address in Ulaanbaator, the capital of Mongolia. The defendant has initially advanced a number of grounds but at the hearing only relied on the ground of invalid service of the concurrent writ.

Order for service on the defendant outside jurisdiction

2.  The plaintiff issued the writ of summons on 15 January 2008.  He filed an affirmation on the same day seeking leave pursuant to Order 11 rule 1(i)(d)(iii) and (iv) of the Rules of the High Court to serve the writ on the defendant out of the jurisdiction of this court in Mongolia.  He affirmed that the defendant’s address was at Apartment No. 35, Block 17, 16th Khoroo, Bayansukh District, Ulaanbaatar, Mongolia (“the residential address”).  He filed a second affirmation on 13 February 2008 to further deal with the question of forum conveniens.  Master Ho granted him leave on 14 March 2008 to issue a concurrent writ and to serve a copy of it on the defendant out of jurisdiction at the residential address or elsewhere in Mongolia.  The plaintiff then instructed Messrs Anand & Batzaya Advocates, a professional law firm in Mongolia, to effect service of the copy concurrent writ. 

Affirmation of service

3.  An attorney of the law firm then made an affirmation on 2 April 2009 for the plaintiff.  He said that he had served the copy concurrent writ on 12 January 2009 by registered post, not at the residential address, but at an address in Tengeriin Tsag Building, Olympic Street, 1st Sub-district, Sukhbaatar District, Ulaanbaatar (“the Olympic address”).  He said this was the last known business address of the defendant pursuant to Article 77.2 of the Civil Code.  He further said that he had on 13 January 2009 personally attended the Olympic address to serve the copy concurrent writ on the defendant personally, but the defendant was not there.  He then gave the copy concurrent writ to a lady who admitted to be the defendant’s secretary and the lady signed a notice of acceptance for him. 

4.  Also on 13 January 2009, he served a copy of the concurrent writ on the defendant by sending it to a fax number being the last known fax number of the defendant.  This number was indeed given by the defendant in a letter dated 11 November 2008 addressed to the plaintiff, where the defendant said documents could be sent to him at the said fax number.

5.  The copy concurrent writ that the attorney gave to the lady at the Olympic address was returned to the law firm on 16 January 2009, but the attorney said that once the copy concurrent writ had been accepted by an adult for and on behalf of the defendant, it was deemed good service and the defendant could not deny the service by returning the document to him.

The defendant’s denial

6.  The defendant has on affirmation denied that the Olympic address was his business address.  He said he was a director and president of the company which operated from this address until February 2008. He was also a shareholder of the company until March 2008.  Since then, he had no contractual relationship with that company and held no position therein since February 2008.  He only gave some informal business and financial advice to the company upon request and without payment.  He would make irregular visits to the company to give the advice.  He also denied that he knew the lady who had received the document from the plaintiff’s attorney or that the lady had his authority to receive documents on his behalf.  He also had not been notified that the court document had been sent to him at the Olympic address or that it had been returned to the plaintiff’s attorney.

Law on service of writ out of jurisdiction

7.  There is no dispute between the parties that service of writ out of jurisdiction is governed by the law of Hong Kong as the lex fori, but it must be made clear that it is the law of Hong Kong that governs service of writ out of jurisdiction that matters, not the law that governs service of writ within Hong Kong.

8.  If the mode of service is in accordance with the law of the country or place in which service is effected, then the service is regarded as proper and effective (see Order 11 rule 5(3) of the RHC).  If the service should be by the modes stipulated in Order 10 rules 1(1), (4), (5) and (6) and Order 65 rule 4, then so long as the mode is not contrary to the law of the country or place where service is to be effected, the service will be regarded as proper and effective.

Mongolian law on service of writ

9.  The defendant has produced a Mongolian legal opinion on the modes of service of court documents according to Mongolian law. The opinion has not been challenged.

10.  In gist, the opinion says that Article 77.2 of the Civil Procedure Code requires court documents to be served by a Mongolian Court either by certified post or by a court officer personally. Alternatively, it may be by a person authorised by a Mongolian Court.  The address for service should either be the residential address of the person to be served or the place of his permanent employment as may be proved by a contract of employment. 

11.  That mode was not followed in the present case as the attorney who effected service at the Olympic address was not a court officer or anyone authorised by a Mongolian Court to effect service of that document.  The Olympic address was also not the residential address of the defendant.  The plaintiff also provided no proof that that address was the defendant’s place of work at the time of service.

12.  For service by fax, it can only be resorted to in case of need.  That applies to a case where it is impractical to serve by the usual methods because of geographical constraints or where there are a number of defendants.  That does not apply here as the defendant’s residential address was in the heart of Ulaanbaatar.

13.  In any case, the plaintiff is not saying that his writ was served in accordance with Mongolian law.  His counsel further submits that Article 77.2 of the Civil Procedure Code only applies to documents of the Mongolian Courts, not the concurrent writ in question.

Modes of service outside jurisdiction as stipulated in RHC

14.  Then I would have to consider the modes of service stipulated in Order 10 rule 1(1), (4), (5) and (6) and Order 65(4).

15.  Order 10 rule 1(1) is for the writ to be served personally on the defendant.  That does not apply here. 

16.  Order 10 rule 1(4) says that where a defendant’s solicitor endorses on the writ an acceptance of service on behalf of the defendant, then the writ will be deemed to have been duly served and to have been served on the date of the endorsement.  This also does not apply to the present case.

17.  Order 10 rule 1(5) says that when a writ is not served on a defendant but the defendant acknowledges service of it, the writ shall then be deemed, unless the contrary is shown, to have been duly served on the defendant and to have been so served on the day on which the defendant so acknowledged.  That again does not apply here.

18.  Order 10 rule 1(6) is on the sealing of a writ for service and the form of acknowledgment of service to be provided to the defendant.  It does not provide how the writ should be served.

19.  Order 65(4) governs substituted service.  That also does not apply here.

Decision

20.  The mode of service adopted by the plaintiff therefore did not fit into any of these modes as prescribed in our law for service outside Hong Kong’s jurisdiction. 

21.  The mode of service adopted may fit into the mode stipulated in Order 10 rule 1(2), which allows the sending of a copy of the writ by registered post to the defendant at his usual or last-known address, or if there is a letterbox for that address, by inserting through the letterbox a copy of the writ enclosed in a sealed envelope addressed to the defendant.  But that mode of service is only for service to be effected within Hong Kong.  Hence, the plaintiff cannot rely on this mode. 

22.  In any case, for service effected under Order 10 rule 1(2) to be effective, the affidavit of service must contain a statement to the effect that in the opinion of the deponent a copy of the writ, if sent to the address in question, will have come to the knowledge of the defendant within seven days thereafter, and in the case of service by post, the copy of writ has not been returned to the plaintiff through the post undelivered to the addressee.

23.  The affidavit of service filed by the plaintiff has not complied with this requirement.  The mode of service of the writ purportedly effected by the plaintiff’s attorney on the defendant at the Olympic address by registered post, by leaving a copy of the concurrent writ with a lady there, or by the fax machine to the fax number deposed in the affirmation, are all invalid and ineffective.

24.  I therefore set aside the default judgment.

Costs order nisi

25.  I further make a costs order nisi that the plaintiff do pay the defendant the costs of the application, to be taxed.

26.  At the end of the last hearing I told the parties that I would apply gross assessment of the costs payable, but in the light of the very substantial bill of the defendant which comes up to over $700,000, I do not think gross sum assessment is appropriate for this taxation, so I order the costs to be taxed in the usual course.