CAN-ASIA CAPITAL CO LTD v. KWOK YEE, WILLAIM AND OTHERS

[If a defendant is shown to be avoiding service, and that his address is unknown, these are good reasons for extending the validity of the writ after time for serving it has expired.]

1988, No. A3022

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is an appeal from a decision of Master O'Donnell on 4th August 1989 refusing to extend the validity of the writ in this action, which was issued on 25th April 1988.

2. The events which give rise to the action occurred in 1985 and were discovered in 1986. They consist, according to the plaintiff, of mis-appropriations by a solicitor, the first defendant in the action, of sums of money held to the credit of the plaintiff in the client's account of the firm of solicitors in which the first defendant was a partner.

3. Since the writ was issued on 25th April 1988, it ought to have been served on the first defendant not later than 24th April 1989. However, there was a delay of some 8 months before any attempt was made by the plaintiff to serve the writ on the first defendant. This was, apparently, due to negotiations which had taken place between the plaintiff and the professional insurers of the solicitors. But those negotiations broke down. At that stage, it appears that the first defendant was still within the jurisdiction, although, as will be seen shortly, he is no longer so.

4. The plaintiff attempted to serve the writ, both by post and personally, but these attempts were unsuccessful. The plaintiff appears to have discovered, in or about February 1989, that the first defendant was no longer within the jurisdiction, but had absconded to Taiwan. There was still time to obtain from the Court an order for leave to serve the first defendant with the writ out of the jurisdiction, under the provisions of Order 11 of the Rules of the Supreme Court; and for an order for substituted service, if his address in Taiwan was uncertain (as was the case), under order 65 of the Rules of the Supreme Court.

5. However, what the plaintiff did was to lodge in the Registry a defective form of application for an order for substituted service which, because of its deficiencies, was rejected by the office. By now, the 12 months period for the service of the original writ had expired. In order to try and recover the position, the plaintiff took out a summons ex parte (as is the appropriate course) before the Master on 25th July 1989, asking for an order "that the service of writ of summons of this action on the first named defendant be dispensed with or any other directions as to the mode of service by way of substituted service on the first named defendant as this Honourable Court thinks fit". This was not a summons for leave to serve the writ out of the jurisdiction; it was a summons asking for some form of substituted service on the first defendant.

6. On 4th August 1989, the Master declined to make the order for which he had been asked. He noted that there was before him an oral application to extend the validity of the writ, which in fact had expired on 24th April 1989. He noted that the application was to effect service on the first defendant; and that he refused it. He noted that the plaintiff had not shown good reason for its failure to apply for a renewal of this writ before it expired.

7. It is from this order of the Master that the plaintiff now appeals. The plaintiff says that no prejudice will be caused to the first defendant if the validity of the writ is extended; if the writ is served on the first defendant out of the jurisdiction; and served, if necessary, by way of substituted service. The plaintiff points out that there is no limitation point involved in the case, because (as I have said) the events in question occurred in 1985 and no relevant period of limitation has yet expired. The plaintiff says that the first defendant is seeking to evade service and avoid liability altogether; and that that is the sort of reason which justifies an extension of the validity of the writ.

8. The plaintiff's trouble has been brought upon him by the failure of his solicitors adequately to protect his interests, but, on the whole matter, I do think it right to extend the validity of the writ here. In Battersby v. Anglo-American Oil Co. Ltd [1945] K.B. 23, Lord Goddard pointed out (at p.32) in connection with good reasons for renewing a writ that :-

"the best reason of course would be that the defendant has been avoiding service, or that his address is unknown; there may well be others."

9. In the Supreme Court Practice 1988, at 6/8/5, it is said by the editors that it is also a good reason for renewing the writ that the defendant cannot be traced so as to be served, especially if he is out of the jurisdiction or is elusive.

10. This therefore seems to me to be a suitable case for the order for which the plaintiff has asked. I do understand the Master's reluctance to make it, but I will allow the appeal; give leave to the plaintiff to serve the writ, the validity of which will be extended for 12 months, on the first defendant in Taiwan; and direct that substituted service may be effected upon him by : (1) a letter addressed to his last known address in Taiwan (which I understand to be a YMCA Hostel somewhere); and (2) by advertisements in two newspapers in the Chinese language circulating in Taiwan.

11. I will expect the plaintiff's solicitors to draw up an order to give effect to this judgment; and to lodge it in my Chambers for my consideration and approval. It may be that they will wish to take the advice of counsel in connection with the preparation of the draft order, so that further difficulties may, in that way, be avoided.