YAU NGAI AND OTHERS v. YAU TAK AND OTHERS

HCA 1309/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1309 OF 2007

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D E C I S I O N

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1.  On 15 October 2008, I ordered the joinder of various defendants to this action and further ordered the issue and service of concurrent writs on those of them which are residents outside this jurisdiction.  The 11th, 13th, 14th, 24th, 25th, 26th, 27th, 28th, 29th, 30th, 31st and 34th defendants have applied to set aside those orders.  The 11th, 13th, 14th and 24th to 30th defendants are corporate defendants and the 31st and 34th defendants are individuals.

2.  This application was supposed to be heard at 9.30 am on 13 January 2009.  It has now been brought forward to today upon the plaintiff’s application which is not being opposed by these defendants.  The parties agree that this matter can be disposed of today.

3.  The defendants have raised three grounds in the application.  First, the validity of the original writ had expired as at 28 October 2008 when the concurrent writ was issued.  Hence, the concurrent writ was issued invalidly.  Counsel acknowledges that the first ground is not his best ground.  Second, the plaintiffs had not filed any affidavit in support of the application for service out of jurisdiction as required by Order 11, Rule 4 of the Rules of the High Court.  Third, the plaintiffs’ claim in this action as against these defendants do not fall within Order 11, Rule 1.  This last ground is only relevant to the corporate defendants and not the 31st and 34th defendants.

4.  For the first ground, Order 6, Rule 6(1) and 8(1) of the Rules of the High Court provide that:

“6(1)  One or more concurrent writs may, at the request of the plaintiff, be issued at the time when the original writ is issued or at any time thereafter before the original writ ceases to be valid.

8(1)  For the purpose of service, a writ (other than a concurrent writ) is valid in the first instance for twelve months beginning with the date of its issue and a concurrent writ is valid in the first instance for the period of validity of the original writ which is unexpired at the date of issue of the concurrent writ.”

5.  The original writ was issued on 21 June 2007.  The defendants argue that when the concurrent writ was issued on 28 October 2008, the original writ had already expired.  They further refer to the form of the writ which states:

“Notes: This re-amended writ may not be served later than 12 calendar months beginning with that day (the date of the original issue on 21 June 2007) unless renewed by order of the court.”

6.  Leading counsel for the plaintiffs referred to paragraph 6/8/2 of the Hong Kong Civil Procedure 2009 and submitted that the rule cannot apply without adjustment in respect of a defendant who is not named in the writ as originally issued but who is added by way of amendment.  In respect of such a defendant, the rule must be construed as requiring service on that defendant within the appropriate period from the date of the amendment by which he is added.

7.  Counsel further referred to Jones v Jones [1970] 2 QB 576 and Payabi v Armstel Shipping [1992] QB 907.  Counsel also pointed out that the defendants’ construction of the rule would require extension of the validity of the writ when a defendant is added after 12 months from the issuance of the writ, and that is unreasonable.

8.  I think the plaintiffs’ construction is reasonable and correct.  I do not accept this ground of the defendant.  Nevertheless, even if the writ should have expired by 28 October 2008 when the concurrent writ was issued, I would have no hesitation to renew it as these defendants were only joined on 15 October 2008.

9.  Regarding the second ground, there were in fact sufficient materials in the affidavits before me on 15 October 2008 to comply with Order 11, Rule 4.  They are contained in paragraphs 7 and 8 of the third affirmation of Yau Siu-chan filed on 26 May 2008 and paragraphs 5 to 15 of the 10th affirmation of Yau Ngai filed on 3 October 2008.  These affidavits were used mainly for the purpose of joinder.  However, there was also reference to Order 11, Rule 1.  Furthermore, relief 4E and 4F in the draft re-amended writ also clearly show the declarative and injunctive relief as sought against the 31st and 34th defendants. 

10.  The plaintiffs also rely on Inverness Corporation & Others v Magic Dreams Cosmetica Infantil, S. L. & Others [1997] HKLRD 1377.  I need only refer to paragraphs 5 and 6 of the summary of the decision in the headnote:

“5.  Prima facie, P’s claims for an injunction against Ds based on infringement of copyright, passing off and contract made in Hong Kong or governed by Hong Kong law, fell within O.11 r.1(b) and/or (d) and/or (e) and the writ could be properly ordered to be served out of the jurisdiction.  It would have been better if the supporting affidavit had expressly mentioned the nature of the claims by P2 and P3 and that such claims fell within the terms of O.11 r.1(1)(d) but the failure to do so was not fatal.  (See pp.1383J, 1384E.)

6.  In deciding whether an order to serve out of the jurisdiction should have been made, the court had to refer to the statement of claim to decide the nature of the claim.  The affidavit in support of the application should make reference to the nature of the plaintiff’s claim but to insist that the affidavit should include details of matters already set out in the statement of claim might not be necessary.  That, however, should not be taken to mean that the requirement under O.11 r.4 need not be complied with.  What was required to comply with the rule was not some ritual incantation of the wording of O.11 r.4(1)(b).  The court must decide the application on the basis of the cause or causes of action expressly mentioned in the writ or statement of claim and not just on matters referred to in the supporting affidavit (Century Yachts Ltd v Xiamen Celestial Yacht Ltd [1994] 1 HKC 331 (see [1993] HKLY 853) followed).  (See p.1384F - H.)”

11.  In the premises, I reject the second ground of objection raised by the defendants. 

12.  Regarding the third ground, the corporate defendants seem to be on firm grounds.  One of the claims in the action as made by the 1st and 2nd plaintiffs is for specific performance of certain agreements made between them and the 1st to 5th defendants.  This is the relevant claim for the purpose of this application.  These agreements relate to the ownership of certain companies and the restructuring of these companies.  The restructuring was agreed to be by way of transfer of the shares of these companies and their assets to a newly company to be set up pursuant to the agreements.  However, none of these corporate defendants are parties to these agreements and they are not bound by these agreements.  They are merely companies the ownership of which are subject to the agreements.  The 1st and 2nd plaintiffs are not seeking any order as against them. 

13.  As the corporate defendants are not parties to the agreements, the plaintiffs’ claims for transfer of their shares and for account and transfer of their assets are only directed to the individual defendants and not to these corporate defendants.  In the words of their counsel, the 1st and 2nd plaintiffs in this action have no cause of action against them and does not claim any issue or relief against them.

14.  In the premises, I cannot see any need whatsoever for them to be joined in this action.  I do not think they are proper parties herein.  I thus accept their application to set aside my previous orders and make an order in terms of their summons dated 5 December 2008 with costs to be paid to them by the 1st and 2nd plaintiffs.  However, in relation to the application as made by the 31st and 34th defendants, that is dismissed with costs to the 1st and 2nd plaintiffs.  I also vacate the hearing fixed for this summons at 9.30 am on 13 January 2009.