CONTINENTAL MARK LTD. v. VERKEHRS-CLUB de SCHWEIZ

CACV 3628/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 3628 OF2001

(ON APPEAL FROM HCA NO. 7999 OF 2000)

____________________

____________________

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Rogers VP:

1. This is an appeal from a judgment of Deputy High Court Judge McCoy SC given on 31 October 2001. By the judgment and order the judge set aside the writ of summons and the concurrent writ of summons, discharged the order of the Master giving leave to serve the writ of summons, alternatively the concurrent writ of summons, outside the jurisdiction, made a declaration that in the circumstances of the case the court had no jurisdiction over the defendant in respect of the subject matter of the claim or the relief or remedy sought in the action and dismissed the plaintiff's summons seeking leave to amend the writ of summons. At the hearing, this court dismissed the appeal with costs and said it would give its reasons in writing, which we now do.

2. The facts and background of the case are fully set out in the judgment of the Deputy High Court Judge. In those circumstances it is unnecessary to set them out again. It is sufficient to say that the plaintiff commenced proceedings against VCS Boutique, which is the commercial department of the present defendant, which is the Swiss Automobile Association. The action was based upon a contract alleged to have been entered into between VCS and the plaintiff for the sale of 4,000 aluminium scooters for a sum of US$172,000. The claim is in respect of wrongful refusal to take delivery.

3. It is sufficient for the purposes of this case to refer to the alleged contractual document. That is dated 9 May 2000. It is headed "Order confirmation". It recites the article no. as NP154, the description of the article as CityBlitz and it gives the quantity as 4,000 and the price as US$43. There is no dispute that this document was signed in the offices of VCS in Switzerland. At the foot of the document, under remarks, there is stated "Legal domicile in Hong Kong". Importantly for the purposes of this case, in the middle of that document there is written, in large handwriting, "AIRFREIGHT" and underneath that "ORDER FROM VCS FOLLOWS". Two matters may thus be observed. The reference to legal domicile must be a reference to the legal domicile of the plaintiff which was correctly stated as being Hong Kong. The statement "ORDER FROM VCS FOLLOWS" clearly shows that the document was not a confirmation of an order but was at most what is sometimes referred to as a "pro-forma invoice" or letter of intent.

4. The original application was supported by an affirmation of a Ms Lai. The Deputy High Court Judge correctly pointed out that that affirmation was inadmissible because it did not set out the sources of knowledge and belief in respect of what was critically important evidence on the application to serve the writ outside the jurisdiction.

5. Equally importantly, as the Deputy High Court Judge pointed out, was the allegation in the affirmation that the plaintiff's export conditions had been provided to the defendant before the date of the alleged contract. This was particularly important because it contained the clause giving Hong Kong exclusive jurisdiction. This statement was found to be incorrect. The only evidence was that the export conditions were faxed to the defendant the day following the signing of the alleged contract.

6. In my view, the Deputy High Court Judge was absolutely correct in treating this as an incorrect statement of fact in relation to a matter which was highly material to the application. He was likewise correct in holding that the application for service out of the jurisdiction should, on that ground alone, have been set aside and, indeed, no further order should, in my view, have been allowed to be sought on that application.

7. In any event, in relation to the application to serve the proceedings outside the jurisdiction the judge came to the conclusion that on the face of the document alleged to be the contract it could not be said that by its terms or by implication it was governed by Hong Kong law. The contract was made in Switzerland between parties in Switzerland and all the relevant circumstances pointed to Europe and not Asia. In my view, the Deputy High Court Judge was correct. This was not a case for service outside the jurisdiction under the terms of Order 11 rule 1(1)(d)(iii).

8. As the Deputy High Court Judge also pointed out, in order to obtain an order for leave to serve proceedings outside the jurisdiction it was necessary for the plaintiff to establish that it had a good cause of action: see Order 11 rule 4(1)(b). Because of the facts referred to in paragraph 3 above, this case did not fall in that category.

9. In the light of those reasons it was inevitable that this appeal fell to be dismissed with costs.

Hon Le Pichon JA:

10. I agree.