LAM YUK CHEUNG t/a CORBIERES WINE COMPANY v. MAISON RIVIERE FILS

DCCJ 1364/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1364 OF 2012

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REASONS FOR DECISION

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1. This is the defendant’s application for an order to stay all proceedings in this action on the ground of forum conveniens in favour of the court of France under Order 12 rule 8 and the inherent jurisdiction of the court.

2. The plaintiff opposed the application.

Background

3. The plaintiff carries on wine selling business in Hong Kong.  It placed orders from time to time for the purchase of wine with the defendant, a company registered in France and a manufacturer and supplier of wine.

4. It is the plaintiff’s case that upon a quotation/offer made by the defendant on or about 14 October 2011 pursuant to which he duly made payments totalling €37,519.20, the defendant had failed to make delivery of the wine he ordered.  The plaintiff claims in this action specific performance of delivery of the wine ordered, alternatively the sum of money paid, damages to be assessed and other relief.

5. A Writ of Summons was issued on 24 April 2012.  A concurrent writ was issued on 11 January 2013, which was served on the defendant in France on 17 May 2013.

6. The defendant filed an Acknowledgement of Service on 29 May 2013, and later a Defence and Counterclaim on 18 July 2013.

7. He attended court on 24 September 2013, 29 October 2013 and 13 February 2014 upon the plaintiff’s summonses for Further and Better Particulars and later filed his answers to those requests upon order.

8. There was discovery by both parties.

9. On 19 February 2014 the defendant filed a Timetabling Questionnaire After Close of Pleadings proposing various directions in proceeding the action. 

10. He amended and further amended the Defence and Counterclaim on 4October 2013 and 4 June 2014.

11. No challenge of jurisdiction of the Hong Kong court has ever been made by the defendant.

12. Not until early this year did the defendant inform his solicitors of the existence of an exclusive jurisdiction clause in favour of the court of France in respect of all litigation or disputes that may arise out of the sale.  The clause was allegedly stipulated under the General Conditions of Sale printed on the back of the defendant’s invoices issued to the plaintiff.

13. This was denied by the plaintiff.

14. On 28 March 2014 the defendant issued a summons under the inherent jurisdiction of the court for an order to stay all proceedings in this action in favour of the jurisdiction of the court of France.  The summons was pursuant to the master’s order dated 14 April 2014 amended on 16 April 2014, ie the subject of this hearing, by adding references to Order 12 rule 8 and forum conveniens in the summons.  This was the defendant’s challenge for the first time the jurisdiction of the Hong Kong court.  The master also made the following order:-

“1. Leave to the Defendant to take out the application by summons dated 28 March 2014 out of time;”

The issues

15. The plaintiff’s counsel Miss Lam submitted that the issues of this hearing are:-

(1) Whether the participation of and steps taken by the defendant in these proceedings amount to a voluntary submission to the jurisdiction of the Hong Kong court, the effect was such that the defendant is now precluded from challenging the jurisdiction of this court in respect of this action;

(2) Whether the alleged clause on the exclusive jurisdiction of the court of France printed on the invoice (or every invoice) issued by the defendant to the plaintiff was ever brought to the knowledge of the plaintiff and formed part of the contract for the sale and purchase of wine; and

(3) Whether balancing all factors, it is in the interest of justice and to do all fairness to the parties to the proceedings that the plaintiff’s claim should proceed in this jurisdiction but not in the court of France (forum non conveniens).

16. The defendant’s solicitor Mr Kam accepted that there has been voluntary submission by the defendant to the jurisdiction of the Hong Kong court, but argued that the defendant was still entitled to raise the jurisdictional challenge in accordance with Order 12 rule 8(2)(b) and rule 2A(a) and (b).  He further argued that by consenting to the defendant taking out this stay summons dated 28 March 2014 out of time (per paragraph 1 of the master’s order dated 14 April 2014), the plaintiff had waived his right and would be estopped from challenging that the defendant was barred from making a stay application under the relevant rules.

17. This was strongly opposed by Miss Lam who argued that the plaintiff’s consent went no further than allowing the defendant to take out this summons. The plaintiff’s stance of opposition against the defendant’s late jurisdictional challenge was clear, as stated in his 2^nd affirmation dated 5 May 2014 in opposition of the defendant’s stay summons under paragraph 22:-

“…the Defendant instructed Messrs. Kam & Fan to defend the case and counterclaim against me. The Defendant also amended its pleadings in the proceedings. If it is the Defendant’s intention under the contract to resolve contractual disputes in the jurisdiction of France, which is denied, the Defendant should have made this application upon receipt of service of the writ.”

Miss Lam further argued that the plaintiff’s consent for the defendant to take out the summons for argument could not be construed to be a waiver on the part of the plaintiff to take issue on or oppose the defendant’s application.

The law

18. Order 12 rule 8(2) of the Rules of the District Court (Cap 336 sub leg) provides that a defendant who wishes to argue that the court should not exercise its jurisdiction in the proceedings on one or more of the grounds specified in paragraph (2A) shall also give ‘notice of intention’ to defend the proceedings and shall, within the time limited for service of a defence, apply to the court for:-

(a)  ……

(b)  an order staying the proceedings, or

(c)   ……

19. Amongst the grounds specified in paragraph (2A) is the following provision in (a) considering the best interests and convenience of the parties to the proceedings and the witnesses in the proceedings, and (b) where there was an agreement between the parties to exclude the jurisdiction of the court, the proceedings should be conducted in another court.  Paragraph (2A)(a) is the statutory recognition of the forum non-conveniens challenge.

20. In considering issue (1) whether there has been a submission to the jurisdiction of this court by the defendant and the legal effect thereof, the proper test is set out in the judgment in Global Multimedia International Ltd v Ara Media Services and another (Abu-Aljadail and others, Part 20 defendants) [2007] 1 All ER (Comm) 1160, at paragraphs 27 and 28:-

“[27] The test to be applied in determining whether any particular conduct amounts to a submission to the jurisdiction was considered by Colman J in Spargos Mining NL v Atlantic Capital Corp reported only in (1995) Times, 11 December, but quoted in full by Patten J in SMAY Investments Ltd v Sachdev [2003] EWHC 474 (Ch) at [41], [2003] 1 WLR 1973 at [41]. I reproduce the whole of the quote as set out in that para [41] from the judgment of Patten J:-

‘In approaching the question of submission, I have in mind the following authorities. In Astro Exito Navagacion SA v WT Hsu, otherwise know, more pronounceably, as The Messiniaki Tolmi [1984] 1 Lloyds Reports, 266, Goff LJ said at p 270, “Now a person voluntarily submits to the jurisdiction of the court if he voluntarily recognises, or has voluntarily recognised, that the court has jurisdiction to hear and determine the claim which is the subject matter of the relevant proceedings. In particular, he makes a voluntary submission to the jurisdiction if he takes a step in the proceedings which in all the circumstances amounts to a recognition of the court’s jurisdiction in respect of the claim which is the subject matter of those proceedings. The effect of a party’s submission to the jurisdiction is that he is precluded thereafter from objecting to the court exercising its jurisdiction in respect of such claim. Whether any particular matter, for example an application to the court, amounts to a voluntary submission to the jurisdiction must depend upon the circumstances of the particular case.” In [Sage v Double A Hydraulics Ltd [1992] The Times, 2 April 1992, TLR 165], Farquharson LJ said (and this is a report of the judgment which is not reported in oratio recta): “A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge”. In arriving at the view to be imputed to the disinterested bystander, it seems to me that one has to bear in mind that there will be an effective waiver, or a submission to the jurisdiction, only where the step relied upon as a waiver, or a submission to the jurisdiction, cannot be explained, except on the assumption that the party in question accepts that the court should be given jurisdiction. If the step relied upon, although consistent with the acceptance of jurisdiction, is a step which can be explained also because it was necessary or useful for some purpose other than acceptance of the jurisdiction, there will, on the authorities, be no submission ... If the well-informed bystander had been left in doubt because what the defendants had done was equivocal, in the sense that it was explicable on other grounds in addition to agreement to accept the jurisdiction of the court, then the conclusion must be, on the authorities, that there would have been no submission to the jurisdiction. The representation derived from the conduct of the party said to have submitted must be capable of only one meaning.’

[28] Thus the test to be applied is an objective one and what must be determined is whether the only possible explanation for the conduct relied on is an intention on the part of the defendant to have the case tried in England.”

21. The same test was applied by the Court of Appeal in Miruvor Ltd v Panama-Globe Steamer Lines SA [2007] 1 HKLDR 804 where it was held that there was no submission to the jurisdiction of the court by the third defendant. In that case the defendant made plain in the defences which commenced with a first paragraph which read:-

“For the avoidance of doubt, this defence is made strictly without prejudice to be third defendant’s applications (i) to have the writ served against it set aside; and/or (ii) to have the plaintiff’s claim dismissed for want of prosecution.”

After citing the relevant authorities, Rogers VP said at page 809:-

  The question which appears to me to be relevant, therefore, is whether looked at fairly and sensibly has what the defendant has done constituted a submission to jurisdiction.  In my view, when the defences are considered it is abundantly clear from the first paragraph that the third defendant intended to challenge the jurisdiction and was to make an application to that effect.”

22. It was held by Sakhrani J in ABN Amro Bank NV v Fortgang [2008] 2 HKLRD 349 that if a step, although consistent with the acceptance of jurisdiction, could also be explained as necessary or useful for some purpose other than acceptance of jurisdiction, then there would not be an effective waiver or a submission to the jurisdiction.  In that case, the defendant’s service of the unqualified defence was held to be an unequivocal act of his submission to the jurisdiction of the Hong Kong court.  The step of service of the unqualified defence could not be explained as necessary or useful or for some purpose other than acceptance of the jurisdiction.  Contrary to the defendant’s submission, there was no evidence that the defence was filed and served purely as a precaution to protect its rights, but with no intention to submit to the jurisdiction.

23. On the same principles, it was held by the Court of Appeal in SJH v RJH (CACV 280/2011) that the husband’s stay summons on the grounds of, inter alia, forum non-conveniens was justifiably refused in the court below for reasons that he had filed an answer to the petition and an answer (by way of Form E) to the ancillary relief application. The Court of Appeal found that the husband having filed his answer, was clearly too late to challenge the jurisdiction of the Hong Kong court. The time limitation provision in respect of jurisdictional challenge provided under Order 12 rule 8(2) alone clearly justified dismissal of his stay summons without the need to deal with the submission to jurisdiction point raised by the wife, though the filing of the answer must be construed as a submission to jurisdiction.

Discussion

24. Admittedly Mr Kam did not have any authority in support of his argument that he had got around the time limitation hurdle provided under Order 12 rule 8(2) by the master’s order granting leave for him to take out this summons out of time. He likewise had no answer to my question whether the parties could by consent negate the legal effect of a voluntary submission to the Hong Kong court already made by the defendant by operation of Order 12 rule 8(2).  

25. This argument is misconceived and a non-starter.  There was no unequivocal consent or waiver of time limitation by the plaintiff, whose stance was clearly the opposite.

26. There was no dispute that the defendant had taken steps to file an unqualified defence and counterclaim on 15 August 2013, which was amended and further amended on 4October 2013 and 4 June 2014, without reservation or any intention to challenge the jurisdiction. 

27. As for the submission to jurisdiction, applying the objective test: a disinterested bystander with knowledge of the case would not be left in doubt but would have regarded the act of the defendant as inconsistent with the making of his challenge of the jurisdiction of this court.

28. The further steps of the defendant in progress of the defence including filing the answers to the plaintiff’s Requests for Further and Better Particulars, appearing in court without making any jurisdictional challenge, discovery, etc. would reinforce the bystander’s view that he has made a voluntary submission to the jurisdiction of this court.

29. There is no evidence that such steps taken in defence of the plaintiff’s claim in these proceedings could be explained as necessary or useful for some purposes other than acceptance of jurisdiction.

30. Following the judgment of the Court of Appeal in SJH v RJH, the defendant’s summons must be dismissed in view of the time limitation provision under Order 12 rule 8(2) in respect of jurisdictional challenge. The judgment goes further to demonstrate that in considering whether the husband in that case was within time in issuing the stay summons, reference should be made to the act of filing of the answer, which also amounted to submission to jurisdiction.  The factors of time limitation and act of the defendant go hand in hand.

31. Applying the principles in SJH v RJH, the defendant, having submitted to the jurisdiction of the Hong Kong court by filing the defence and counterclaim, has submitted to the jurisdiction of this court and is hopelessly out of time in its proposed application under Order 12 rule 8.  It is wrong to argue that it had got around the time limitation provision by the master’s order for it to take out the stay summons out of time.

32. I found in the circumstances that there is an effective waiver on the part of the defendant or a voluntary submission to the jurisdiction of this court.  It is precluded from challenging the jurisdiction of this court in respect of this action.

33. My decision on Issue (1) alone is sufficient to dispose of the matter.  Issues (2) and (3) do not arise.

34. For the reasons given I refused to grant a stay and dismissed the defendant’s summons.

Costs

35. Costs should follow the event.  I made an order that the defendant shall pay the plaintiff’s costs of this application, with certificate for counsel, to be taxed if not agreed.