GRAND PACIFIC EQUITY LTD (Formerly known as EAST ASIA AMERICAS CAPITAL LTD) v. R.S.H. SPORTS (HK) LTD AND OTHERS

FAMV No. 22 of 2007

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION 

MISCELLANEOUS PROCEEDINGS NO. 22 OF 2007 (Civil)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

CACV No. 99 of 2006)

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D E T E R M I N A T I O N

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Mr Justice Ribeiro PJ:

1.  On 27 December 2003, the plaintiff issued a writ against the applicant, a Singapore resident, naming him as 3^rd defendant.  He was sued as a guarantor of a Hong Kong company against whom a default judgment was eventually obtained.  Payment under the guarantee had been demanded from the applicant on 8 April 1999, so that the claim would be barred by limitation on 8 April 2005.

2.  The plaintiff sought leave to serve the applicant out of the jurisdiction on 7 June 2004 and, after some delay, applied on 19 November 2004 to extend the writ’s validity since it was due to expire on 27 December 2004.

3.  On 24 November 2004, Master Kwan extended the writ’s validity for six months and also granted leave to serve the applicant out of the jurisdiction.  Then between 17 and 23 December 2004 the plaintiff made four unsuccessful attempts at serving him in Singapore.   Eventually, when steps were being taken to effect substituted service, Hong Kong solicitors instructed by the applicant agreed to accept service of the writ on his behalf on 3 February 2005. 

4.  About a month later, the applicant sought to set aside Master Kwan’s ex parte order granting the extension.  Master Lung dismissed that application but Yam J allowed the appeal, holding that no good reason had been shown for the extension.[1]  He was reversed by the Court of Appeal[2] which held that the writ’s validity had been properly extended.

5.  Yuen JA (with whom Sakhrani J agreed) held that the Judge had wrongly failed to take into account the unsuccessful efforts to serve the applicant in Singapore at a time when the original writ would still have been valid for service and the limitation period had not yet expired.  Her Ladyship held that those efforts would have supplied a good reason for granting an extension if one had been applied for after those efforts had failed, and the court would not shut its eyes to that fact even if this involved taking into account matters occurring after Master Kwan’s decision.

6.  The applicant contends that this gives rise to a point of law of great general or public importance, namely, as to whether, in reversing Yam J and upholding Master Kwan’s ex parte order, the Court of Appeal was entitled to have regard to matters occurring after the challenged decision to grant an extension was made. 

7.  We do not consider this a case that merits reference to the Court for decision.  The Court of Appeal was bound to take into account all matters relevant to the exercise of its discretion.  The unsuccessful attempts to serve the applicant were highly relevant.  Although those efforts were made after the challenged decision, they were made at a time when the applicant had no accrued limitation right and within the period of validity of the original writ, so that the plaintiff would have been able to issue a fresh writ or to apply for an extension as an immediate response to its lack of success in effecting service.[3]  That neither of those courses had to be taken was due to the fact that the writ had already been extended.  But since those courses of action would have availed the plaintiff to secure an extension if no prior extension had already been obtained, their availability is highly relevant to deciding whether the extension granted should subsequently be set aside, particularly if at the subsequent stage a limitation defence, not previously available, would have arisen.[4] 

8.  Taking such matters into account the Court of Appeal was plainly entitled to substitute its exercise of discretion for that of the Judge and to hold that there was ample “good reason” for upholding the grant of the extension and for refusing to set aside Master Kwan’s order.  There are no reasonable prospects of overturning the Court of Appeal’s decision and the application for leave to appeal must be dismissed with costs.

[1]     HCA 4713/2003; 20 February 2006.

[2]    [2006] 4 HKLRD 617.

[3]    See Kleinwort Benson Limited v. Barbrak Limited [1987] 1 AC 597 at 615-616, this being a case within Lord Brandon’s Category (1).

[4]    As was the case on 20 February 2006, the date of Yam J’s decision.