MR. ILAN, ROLAND R. t/a MAKRO DESIGNS HK v. MRS. CORAZON BELMONTE-JOVER AND OTHERS

DCCJ 1866/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1866 of 2005

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REASONS FOR DECISION

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1. There are two applications before me:

i)  the Defendants’ application by summons dated 23^rd May 2005 (“1^st summons”) to set aside or stuck out or permanently stay the writ of summons and statement of claim and the service thereof under Order 12 Rule 8(1) of the Rules of District Court on the ground of consular immunity; and

ii) the Defendants’ application by summons dated 18^th January 2006 (“2^nd summons”) to adduce the affidavit of the 2^nd Defendant dated 16^th January 2006 as evidence for the hearing of the 1^st summons.

2. The said affidavit of the 2^nd Defendant basically exhibits four certificates issued by the Chief Secretary for Administration Mr. Donald Tsang (as he then was) certifying the 1^st to 3^rd Defendants being consular officers and the 4^th Defendant a consular employee of the Philippines in the HKSAR pursuant to section 7(1) of the Consular Relations Ordinance, Cap 557 (“CRO”), together with a covering letter dated 24^th May 2005 from the Government of the HKSAR.

3. After hearing the parties, I rejected the Plaintiff’s oral application to adjourn the hearing and for further time to file his affidavit in opposition. I also made an order in terms of the 2^nd summons with no order as to costs. In respect of the 1^st summons, I ordered that the amended writ and the service of the same be set aside with no order as to costs. I have indicated reasons to be handed down later.  I now give my reasons for my decisions.

Background

4. By a writ issued on 22^nd and amended the next day, the Plaintiff claims against the four Defendants for a total sum of HK$479,313.00 for breach of contract. It is the Plaintiff’s case that his design company signed a renovation contract with the Defendants relating to a premises at Villa Veneto, Kotewall Road (“the said premises”) and the contract together with a subsequent compromise agreement was unreasonably terminated by the “Property Committee” and by the 1^st Defendant.

5. The Defendants claim that at all material times, the 1^st and 2^nd Defendants were respectively the Consul General and Vice Consul of the Republic of the Philippines to the Hong Kong Special Administrative Region, while the 3^rd Defendant the Attaché and Finance Officer and the 4^th Defendant Consular Assistant and Property Officer of the Consulate General. They claim to be the consular officials and/or consular employee under section 7 of the CRO and therefore are entitled to immunity from the jurisdiction of the courts of the HKSAR under Article 43 of the Vienna Convention on Consular Relation. Such Article has the force of law in Hong Kong by virtue of the CRO. They claim that the contract between the Plaintiff and the 1^st Defendant was signed by the 1^st Defendant in her official capacity and was for the purpose of maintaining the official residence of the Consulate General. It was a function entrusted to the head of post and was essential to the smooth running of all the consular functions of the Consulate General.

Application to adjourn and for time extension

6. Basically the Plaintiff’s grounds for adjournment and time extension to file evidence are that he has not received all the documents and bundles served on him at the address for service. He also said that he no longer could afford a lawyer and he knew nothing about the law. Further, the correspondence exchanged between the parties and contained in the relevant bundle placed before the Court were incomplete. He asked for 2 weeks time to prepare his affidavit. He also wanted to look for another lawyer. Further he would also like to amend his case by including the husband of the 1^st Defendant as a further defendant.

7. Although the Plaintiff was unrepresented at the commencement of the present action and at the present hearing, he has in fact once been represented by a firm of solicitors from 26^th May to 7^th November 2005. After instructing a firm of solicitors, he immediately applied for legal aid the next day. His application was later refused in mid-July 2005. It is also noted that at the call-over hearing of the 1^st summons before Master Poon on 22^nd August 2005, the Plaintiff was represented by counsel Mr. Tibbo. According to the court’s record, Mr. Tibbo had then indicated to the learned Master an intention to amend the writ and asked for 2 weeks adjournment for further advising his client on the matter. The learned Master refused the adjournment but allowed the Plaintiff 28 days to file and serve an affidavit in opposition. So I do not think the Plaintiff’s complaint is directed to the failure on the part of the Defendants to serve the 1^st summons and the supporting affidavit on him. It can safely be assumed that the Plaintiff had got the 1^st summons and the supporting affidavit, at least when the matter was first heard before Master Poon in August 2005.

8. No affidavit as directed was filed and served as at the date of the hearing. The Plaintiff explained that his lawyer was out of town soon after the hearing before the Master. When he returned, the time for so doing had expired. He also admitted having been informed by his lawyers the scheduled hearing of 25^th January 2006. However when asked what he had done in preparing for the hearing and his affidavit, he remained silence and gave no explanation.

9. So the complaint is mainly on his failure to receive the 2^nd summons and the hearing bundles. However, the Defendants has filed an affirmation of service confirming, inter alia, that the said covering letter of the Government of the HKSAR and the four certificates were served on the Plaintiff by inserting the same into a letterbox of the address for service on 13^th January 2006 under a cover letter of the Defendants’ solicitors of the same date. The address for service is the same as that stated in the Notice to Act in Person filed by the Plaintiff on 8^th November 2005. It is a shop at Ming Fai Building in North Point. According to the said affirmation of service, the affidavit of the 2^nd Defendant, the 2^nd summons and the bundles were served on the Plaintiff on 16^th, 18^th and 19^th January respectively. All were done by insertion into the letterbox of the address for service because the process server found the shop at that address closed. It is deposed to the fact that as at 19^th January 2006 when the bundles were served, all documents previously inserted were still there.

10. The Plaintiff confirmed that the address for service remained good. It is a shop premises jointly rented by him and his wife. At the hearing, he showed to the Court the letter of the Defendants’ solicitors dated 13^th January 2006 with the certificates and covering letter attached. But he alleged that he did not receive the other documents.

11. Counsel for the Defendants Mr. Acton-Bond objected the Plaintiff’s application. Counsel submitted that it was beyond belief that the Plaintiff did not obtain the documents nor had he not got the opportunity to prepare for his case. He also submitted that any adjournment would cause prejudice to the Defendants which could not be compensated by costs. It was because the contention now raised was that the court did not have jurisdiction on the matter on the ground of consular immunity. In order not to give rise to any argument of waiver of such immunity the Defendants would not be asking for costs in the proceedings even if they succeeded. So any costs thrown away as a result of the adjournment, even though it was caused by the Plaintiff, would be solely shouldered by the Defendants.

12. After hearing the parties and having considered all the circumstances, I refused the application for the adjournment for filing of affidavit. It is obvious that the Plaintiff realizes the importance of the Defendants’ application. Counsel was instructed even at the first call-over. He is fully aware of the time limit for filing the evidence. He knew from his lawyers that the Defendants’ summons would be contested on the 24^th January 2006. A reasonable litigant should have taken steps to prepare for it. However he said nothing about what he had done after he realized the time limit had expired. More than four months has elapsed from the deadline and yet the Plaintiff cannot explain what course of action he has taken in preparing for the hearing. The delay is unexplained. The Plaintiff said he did not know about the law and might wish to instruct another lawyer. It is unacceptable to the Court for a litigant to say that he would like to instruct lawyers and therefore and can sit back doing nothing until one is engaged, but well knowing that he may not have any means to engage one.

13. On the other hand, I do not believe that the documents have not been served on him. The Plaintiff had confirmed the address of service being correct. He attended the hearing with the letter of 13^th January 2006 together with the certificates attached. Even assuming the Plaintiff had not received the 2^nd Defendant’s affidavit and summons, he has not been prejudiced in anyway. He has already got the certificates, though not in the form of exhibits of an affidavit. The other bundles are only compilations of court documents already filed and served and correspondence previously exchanged.

14. I also accept the Defendants’ submission about prejudice. If an adjournment was to be granted there was no reason why the Plaintiff would not be liable for all costs thrown away. However, even the Defendants are awarded costs they cannot enforce the same without exposing themselves to an argument of waiver. I accept that it is a risk they could not afford to take because it may defeat the very purpose of the substantive application.

2^nd Summons

15. The affidavit of the 2^nd Defendant serves to exhibit the four certificates and covering letters. I do not think they raise new matters as it has been stated in the affidavit of the 1^st Defendant that the Defendants are awaiting the certificates from the HKSAR and the same will be produced in due course. In the interest of justice and for fairly disposal of the dispute, I grant an order in terms of the 2^nd summons with no order as to costs.

1^st Summons

16. As a matter of law, foreign consuls and members of their staffs are entitled to immunity from suit at common law in respect of their official acts, but not in respect of their private acts. The relevant provisions in Hong Kong are contained in the CRO. Under the CRO which enacts as part of the law of Hong Kong the Vienna Convention on Consular Relations, consular officials and consular employees are not amenable to the jurisdiction of the Hong Kong courts in respect of acts performed in exercise of consular functions, except in civil actions arising out of a contract made by them in which they do not expressly or impliedly act as an agent of the sending state or by a third party for damage arising from an accident caused by a vehicle, vessel or aircraft.

17. Section 3 of the CRO provides that subject to section 4(2) and (3), the provision set out in the Schedule (being Articles or parts of the Vienna Convention on Consular Relations done at Vienna on 24 April 1963) shall have the force of law in Hong Kong. Section 4(2) and (3) provide for additional or reduced immunities in gazette. No relevant gazetted additions/reductions are applicable to the present proceedings.

18. It is perhaps useful to set out some of the relevant provisions of the Schedule here.

“Article 1(1): For the purpose of the present Convention, the following expressions shall have the meanings hereunder assigned to them:

(a)    “consular post” means any consulate-general, consulate, vice-consulate or consular agency;

…

(d)   “consular officer” means any person, including the head of a consular post, entrusted in that capacity with the exercise of consular functions;

(e)    “consular employee” means any person employed in the administrative or technical service of a consular post;

…

Article 5: Consular functions consist in:

(a)    …

(m) performing any other functions entrusted to a consular post by the sending State which are not prohibited by the laws and regulations of the receiving State or to which no objection is taken by the receiving State or which are referred to in the international agreements in force between the sending State and the receiving State.

Article 32 (1) : Consular premises and the residence of the career head of consular post of which the sending State or any person acting on its behalf is the owner or lessee shall be exempt from all national, regional or municipal dues and taxes whatsoever, other than such as represent payment for specific services rendered.

Article 43(1): Consular officers and consular employees shall not be amenable to the jurisdiction of the judicial or administrative authorities of the receiving State in respect of acts performed in the exercise of consular functions.

Article 43(2): The provisions of paragraph 1 of this Article shall not, however, apply in respect of a civil action either:

(a) arising out of a contract concluded by a consular officer or consular employee in which he did not contract expressly or impliedly as an agent of the sanding State; or…”

Section 7 of the Ordinance stipulates that:

 “(1) Where a question arises as to whether or not a person is entitled to a privilege or immunity conferred by or under this Ordinance, a certificate issued by the Chief Secretary for Administration stating a fact relevant to that question is, subject to subsection (2), conclusive evidence of that fact.”

19. By the 4 certificates issued by the Chief Secretary for Administration in respect of the four Defendants, it has been certified therein by the Chief Secretary for Administration that the 1^st, 2^nd, 3^rd and 4^th Defendants were received as Consul-General, Vice Consul, Attaché (Finance Officer) and Consular Assistant at the Consulate General of the Philippines in Hong Kong on respectively 10 December 2003, 25 October 2004, 25 June 2004 and 24 June 2002. Since the relevant dates the first 3 Defendants have been consular officers and the 4^th Defendant a consular employee of the Philippines in Hong Kong. By virtue of section 7 of the Ordinance, I accept that the following facts, namely 1^st, 2^nd and 3^rd Defendants being consular officers and 4^th Defendant being a consular employee within the meaning of the Ordinance, have conclusively been proved. I also accepted the 1^st Defendant’s affidavit evidence that the 1^st to the 4^th Defendants are career, and not honorary consular officers.

20. The next question is whether Article 43(2)(a) of the Schedule is applicable, thus rendering the consular immunity afforded under Article 43(1) inapplicable.

21. The Plaintiff claims under a contract “… signed last 04 July 2004 for fit out work & furnishing” (paragraph 1 of the statement of claim) and also a compromised agreement “… set by the Foreign Affairs Department Manila which signed by both parties last 03 March 2005 in Consulate General of the Philippines Hong Kong SAR due to unreasonable termination of the contract & by the Property Committee” (paragraph 2). The property in question is located at “ …Villa Veneto, 3 Kotewall Road ” (“paragraph 3”).

22. According to affidavit filed by the 1^st Defendant on behalf of all the four Defendants, the registered owner of the said premises, which was maintained as the official residence of the Consul General, has since mid 1982 been “ Republic of the Philippines (Philippine Consulate General) represented by the Consul General for the Philippine in Hong Kong”.  A land register maintained by the Land Registrar has been exhibited. Since the said premises was in need of renovation and refurbishment, the 1^st Defendant, as agent for the Republic of the Philippines, entered into a contract with the Plaintiff for fitting out and furnishing works. The contract signed between the 1^st Defendant and the Plaintiff should be dated 24 June 2004 instead of 4 July 2004. The said contract was also exhibited. There was no contract between them dated 4 July 2004 as alleged. It is noted that the 2^nd and 4^th Defendants did not sign this contract at all and the 3^rd Defendant only signed it as a witness.

23. According to the 1^st Defendant, since the contracted work could not be completed within time, after some negotiations, another agreement, known as a compromise agreement dated 3 March 2005 was signed. This time, all the four Defendants had signed the compromise agreement.

24. I am satisfied that the four Defendants did not sign the contract or the compromise agreement in their personal capacity. Each signed as an agent for the Republic of the Philippines. It is because firstly, the said premises is owned by the Republic of the Philippines, she therefore cannot sign in her personal capacity. In fact the 1^st Defendant signed in the contract as Consul General Corazon Belmonte-Jover.  In the contract she signed as the “employer” which is defined to mean “the Philippine Consulate General Hong Kong SAR” in the Definitions section of the contract. So obviously she signed in her official rather than personal capacity. In the Memorandum of Agreement attached to the contract, it has been described that the same is entered between “ the Consulate General of the Republic of the Philippines” and the Plaintiff.  Again, this is an office and not a personal capacity.

25. Secondly, in each and every page of the contract document, there is a header stating that it is a contract document “ for ResidentialFitting Out And Furnishing Works For Philippine Consulate General office …”. So the work was done for the Consulate General rather than for the Defendants on their respective individual capacity. It is noted that the contract document is engrossed on stationery of the Plaintiff. It can reasonably be inferred that it is the Plaintiff who prepares the contract. He knew the work was done for the Consulate General and not for the Defendants individually.

26. Thirdly, in the preamble of the compromise agreement, it had been stated that the terms therein contained were for “…the completion of the renovation works at the Official Residence of the Consul General in Hong Kong PCG”, and the agreement was signed by all the four Defendants “ for the Department of Foreign Affairs ”. The compromise agreement set out a timetable for completion of the works referred to in the contract and how payments were to be released. It is therefore crystal clear that the 1^st Defendant signed both documents in her official capacity as agent for the Republic of the Philippines. The signing capacity of the other Defendants are also apparent from the compromise agreement. They are for the Department of Foreign Affairs of the Republic of the Philippines.

27. Fourthly, from the correspondence exchanged after the signing of the first contract, it can be seen that the Plaintiff always addressed his letters to the Consulate General Of the Philippines. On many occasions he drew his letters to the attention of various parties, including the 1^st Defendant as Consul General. Further, on at least one occasion (his letter dated 13 October 2004) he simply reported the progress of his work to the Consulate General of the Philippines and copied the letter to parties other than the Defendants. When he asked for payment (his letter dated 21 October 2004), he stated “ …if your good office could released [sic] the 15% payment of the total contract to us …” So the Plaintiff knew perfectly well that he had made a contract with the Philippines Consulate General instead with individuals.   

28. The last question to ask is whether in contracting with the Plaintiff for maintenance and refurbishment of the official residence of the Consul General of the Republic of the Philippines, the Defendants are performing consular functions whereby they can acquire consular immunity under Article 43(1). In this respect I have no hesitation to accept Mr. Acton-Bond’s submission that there is a need for maintaining an official residence for the Consul General to serve the needs of the significant Philippine community in Hong Kong as well as the interest of the Republic itself. I also accept the Defendants’ affidavit evidence that the establishment, maintenance, renovation and refurbishment of the official residence are functions entrusted by the Republic of the Philippines to the to the 1^st Defendant as head of the post in Hong Kong and other consular officials. They are for the smooth functioning of all other consular functions of the Consulate General. These entrusted functions are within the ambit of consular functions under Article 5(m).

29. By reasons of the above, I therefore ruled the immunity under Article 43 applicable. Mr. Acton-Bond submitted that in order to avoid any argument of waiver against the Defendants, the Defendants did not ask for costs of the application. I accepted his submission and accordingly made the following orders:

i)   the writ issued on 22^nd April 2005 and amended on 23^rd April 2005 and the service thereof be set aside; and

ii)  there is no order as to costs of the application between the parties.