BESTSHOP TECHNOLOGY (HONG KONG) COMPANY LTD v. LI QINSHUN AND ANOTHER

DCCJ 5316/2023

[2026] HKDC 362

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5316 OF 2023

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DECISION

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A.  Introduction

1.  This is the 1^st Defendant’s application by summons to set aside the default judgment (“Default Judgment”) entered against him on 13 May 2024 (“Application”).  

2.  The writ of summons was issued on 29 November 2023 (the “Writ”). The Plaintiff’s pleaded case is that it is and was the registered owner of the relevant vehicle (“the Vehicle”) at all material times. However, a Mr Hung Chi Kwan (the “2^nd Defendant”), a purported director of the Plaintiff, sold the Vehicle to the 1^st Defendant without the consent and knowledge of Mr Wong Siu Kwan, the Plaintiff’s director.

3.  The Plaintiff served the Writ endorsed with the statement of claim to the 1^st Defendant by inserting the Writ to the mailbox of Room 3, 4/F, 61 Granville Road, Tsim Sha Tsui, Kowloon, Hong Kong (“the Address”), pursuant to O 10, r 1(2) of the Rules of the District Court (Cap 336H). The Address was the address as appeared on the particulars of registration in relation to the Vehicle kept by the Transport Department.

4.  The Application was opposed by the Plaintiff, and the first substantive hearing came before Deputy District Judge Walker Sham on 1 April 2025, who adjourned the hearing to 22 October 2025 and directed the 1^st Defendant to file a further affirmation in support of the 1^st Defendant’s contention that he was outside Hong Kong at the material time of service of the Writ. On 20 October 2025, the Plaintiff’s then solicitors informed the 1^st Defendant’s legal representative that they had ceased to act for the Plaintiff. In the adjourned hearing on 22 October 2025 before Deputy District Judge Anthony Chow, the Application was further adjourned to today so that the Plaintiff could be personally served with the notice of adjourned hearing and the skeleton submissions of the 1^st Defendant.

5.  The Plaintiff did not appear in today’s hearing. Service of the 1^st Defendant’s skeleton submissions as well as notice of today’s hearing was effected on the Plaintiff at its registered office address, as deposed to in the 2^nd Affirmation of Kwok Ka Kin filed on 10 February 2026. In the circumstances, I consider that it is appropriate to proceed to hear the Application in the absence of the Plaintiff under O 32, r 5(1) of the Rules of the District Court.

6.  In support of the Application, the 1^st Defendant contends that:-

(1)  At all material times, the Address is and was not his registered address in Hong Kong.

(2)  He predominantly resides in Mainland China.

(3)  He was not within Hong Kong at the time when the Writ was served by inserting the same into the letter box of the Address and had never been to Hong Kong from the alleged date of service of the Writ to the date of the Default Judgment.

(4)  He never had knowledge of the service of the Writ.

(5)  On 12 August 2024, the 1^st Defendant received a call from the 2^nd Defendant, notifying him that two sets of documents regarding the Vehicle would be sent to the 1^st Defendant.

(6)  He was only aware of these proceedings when he subsequently received those documents sent to him by the 2^nd Defendant at his address in Chinese Mainland.

B.  The 1^st Defendant’s submissions

7.  Mr Chan, counsel for the 1^st Defendant, essentially raised two points in support of the Application:

(1)  There was no proper service of the Writ and therefore the irregular Default Judgment should be set aside as of right.

(2)  Further or alternatively, if the Default Judgment is found to be regular, the merits of the 1^st Defendant’s defence would persuade the court to set aside the Default Judgment by its discretion.

8.  Regarding the first point, the 1^st Defendant claims that he was in Mainland China from the time the Writ was allegedly served to the Address to the date of the Default Judgment. The travel records of the 1^st Defendant were adduced as exhibits in support of the 1^st Defendant’s claim.

9.  Regarding the second point, the 1^st Defendant claims to be a bona fide purchaser of the Vehicle, without knowledge of the Plaintiff’s interests and the 2^nd Defendant’s lack of authority to sell the Vehicle.

10.  At the hearing, Mr Chan submitted that it would be unnecessary to deal with the second point if the Court finds that the Default Judgment was obtained irregularly.

C.  Analysis

11.  In Goldteam Group Ltd v Qin Hui [2021] 5 HKC 708, Linda Chan J summarised 4 possible scenarios which fall for consideration in relation to an application to set aside a default judgment on the ground of irregular service:-

“37. As I see it, there are 4 possible scenarios which fall for consideration, depending on whether the defendant came within the jurisdiction after the writ was served up to the end of the relevant period (“Relevant Period”) and whether the defendant acquired knowledge of the writ during that period:

(1) The defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode and never came within the jurisdiction during the Relevant Period and had no knowledge of the writ (Scenario 1).

(2) The defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode and never came within the jurisdiction during the Relevant Period, but had knowledge of the writ whilst outside the jurisdiction (Scenario 2).

(3) The defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode but came within the jurisdiction during the Relevant Period, and had no knowledge of the writ during the Relevant Period (Scenario 3).

(4) The defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode but came within the jurisdiction during the Relevant Period, and had knowledge of the writ during the Relevant Period (Scenario 4).

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39. Under Scenario 1 and 2, service would be invalid, even if the plaintiff can show that the defendant acquired knowledge of the writ …

40. Under Scenario 3 and 4, service would be valid if, and only if, the plaintiff can show that the defendant came within the jurisdiction and had knowledge of the writ during the Relevant Period. No reliance can be placed on the deemed date of service under Order 10 rule 1(3)(a), and the plaintiff has to prove that the defendant had knowledge of the writ during the Relevant Period …

…

42. In Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905, the Court of Appeal held that:

(1) If a defendant was not within the jurisdiction at the time of service and never came within the jurisdiction before the default judgment was entered, the plaintiff would not be able to establish valid service merely by showing that the defendant had acquired knowledge of the writ whilst he was outside the jurisdiction (§11);

(2) Penrose Industries Ltd v Tam Yan Lung, HCA 5783/2000, 10 May 2001 where Yeung J (as he then was)  held that “irrespective of where the defendant was at the time of the service, if he had actually acquired knowledge of the proceedings he should not be allowed to complain about the service not being irregular and effective” was wrongly decided (§§14-15, 38); and

(3) If a writ was not properly served in the first place but subsequently came to the defendant’s notice, such notice did not make the service proper (§22).

43. In my view, what the Court of Appeal decided in Deng Minghui was that there would be no valid service if the defendant never came within the jurisdiction, irrespective of whether the defendant had knowledge of the writ. This is a case where the Court of Appeal applied Lord Brightman’s holdings on Scenario 1 and 2. The question whether there was valid service under Scenario 3 and 4 did not arise for consideration, and the Court of Appeal did not decide the point.

…

51. … there can be valid service under Order 10 rule 1(2) if the defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode but he subsequently came within the jurisdiction and had knowledge of the writ during the Relevant Period. Service would be effected at the time when the defendant’s presence within the jurisdiction and his knowledge of the writ coincide.”

12.  Irregular judgments are to be set aside as of right, although the court does retain a residual discretion to have regard to the conduct of the parties in determining what order to make and whether to impose terms upon setting aside of the judgment. See Hugo Boss Trademark v Britain Boss International Co Ltd [2015] 3 HKLRD 4 at paragraph 31, per Zervos J (as he then was).

13.  According to the travel record of the 1^st Defendant kept by the Immigration Department, the 1^st Defendant was outside of Hong Kong during the Relevant Period from 14 December 2023 (service of the Writ through letter box) to 13 May 2024 (date of Default Judgment).

14.  The objective evidence therefore establish that this is a Scenario 1 or Scenario 2 case, and the Default Judgment is accordingly an irregular judgment.

15.  While I am aware of the fact that the Address was the address as stated on the Vehicle’s particulars of registration and the Plaintiff cannot be faulted for having served the Writ at the Address, it remains a fact that the 1^st Defendant was not within Hong Kong during the Relevant Period.

D. Disposition

16.  Having considered all the circumstances of the case, I have decided to set aside the Default Judgment without imposing any terms.

17.  I shall therefore make the following orders:-

(a)  The Default Judgment be set aside.

(b)  Costs order nisi that the Plaintiff shall bear its own costs in relation to the Default Judgment application as well as the 1^st Defendant’s costs of the Application, to be taxed if not agreed, with certificate for counsel.

(c)  The costs order nisi shall become absolute in the absence of an application to vary the same within 14 days.