DEUTSCHE BANK AG, HONG KONG BRANCH v. ZHANG HONG LI (otherwise known as LEE ZHANG)

CACV 277/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 277 OF 2015

(ON APPEAL FROM HCCL NO. 19 OF 2014)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the Court):

1. This is an application of the defendant by an Amended Notice of Motion filed on 3 August 2016 for leave to appeal to the Court of Final Appeal against the judgment of the Court of Appeal (Lam VP and Kwan JA) (“the CA Judgment”) on 19 May 2016. The parties agreed to dispose of the application without an oral hearing.

2. In the CA Judgment, the court dismissed the interlocutory appeal of the defendant against the decision of M Chan J on 27 November 2015 whereby it was ordered that the service of the concurrent writ of summons on Messrs Reed Smith Richards Butler (“RB”) in Hong Kong pursuant to the order of the judge dated 3 June 2015 do stand as good and effective service on the defendant, who is a PRC national residing in the Mainland at the material time.

3. In accordance with the directions given by the Registrar of Civil Appeals on 29 June 2016, which are in line with a number of decisions of the Court of Appeal[1], the parties have been asked not to re-argue points which had already been canvassed in the Court of Appeal but to focus on how it is contended that leave should or should not be granted in accordance with the criteria in the Hong Kong Court of Final Appeal Ordinance, Cap 484.

4. Five questions were formulated in the Amended Notice of Motion as questions of great general or public importance which ought to be submitted to the Court of Final Appeal for determination.  We do not propose to set out the questions verbatim.  Suffice it to say that the first four sought to raise questions of construction concerning these provisions in the Rules of the High Court: Order 11 rule 5A, Order 11 rules 5(1) and (2), and Order 65 rule 4.  The fifth question sought to raise a constitutional issue that the order for substituted service made against a PRC national residing in the Mainland would be ultra vires the Basic Law and incompatible with the principle of “One country, two systems”.

5. The above questions have been fully considered in the CA Judgment.

6. The primary position taken on behalf of the defendant is that Order 11 rule 5A is an exclusive, mandatory and complete code governing service of process on PRC nationals residing in the Mainland.  Any other mode of service ordered pursuant to Order 11 rule 5(1) and Order 65 rule 4 must be regarded as bypassing the exclusive, mandatory and complete code in Order 11 rule 5A.

7. For the reasons given in the CA Judgment, that position was rejected, see §§50 to 55.  We do not think the defendant’s position reasonably arguable.  The crucial question in the appeal is the place where substituted service was to be effected.  Nor do we think there is any question of the Hong Kong court interfering with the sovereignty of the Mainland authority.  See §§2 to 4, 58, 71 to 77 of the CA Judgment.

8. The defendant acknowledged that the formulated questions arose out of an interlocutory appeal on substituted service and that interlocutory appeals to the final court on procedural issues are rare and exceptional, such that leave to appeal will generally be refused unless it can be clearly seen that (1) the proposed appeal genuinely raises a question of law of great general or public importance; (2) the result of the appeal would indeed turn on how that question is answered; and (3) such result is likely to make a significant contribution to the just disposal of the litigation (CSAV Group (Hong Kong) Ltd v Jamshed Safdar (2007) 10 HKCFAR 629, §1).

9. It was submitted on behalf of the defendant that the construction contended for would affect many litigants and touch upon the application of the Basic Law and issues of PRC sovereignty, and so the questions formulated are of great general or public importance.

10. We think it is necessary to have regard to the context which gave rise to the challenge to jurisdiction in this case.  The plaintiff had sought to effect service of the concurrent writ on the defendant in the Mainland, pursuant to Order 11 rule 5A.  The attempts at personal service through the judicial authorities of the PRC failed.  But there was no reason to think that the defendant did not receive the messages left for him by the representatives of the Higher People’s Court.  The plaintiff did not seek to uphold the modes of substituted service ordered by the Hong Kong court to be effected in the Mainland (in most instances, the method of substituted service on a Mainland resident would involve service in the Mainland), it only sought to uphold the mode of substituted service by serving the process on the office of RB in Hong Kong.  The judge saw fit to order this mode of substituted service notwithstanding RB had not been authorised to accept service in the action because RB remained the solicitors on record for the defendant in another action in which he sued as a plaintiff and judgment was pending, so there was reason to think that service on the office of RB would have come to the notice of the defendant in all probability.

11. Given this factual context, we do not think the questions as formulated would affect many litigants as claimed by the defendant.  Nor do we think the facts specific to this case are of a fairly common nature.  The questions cannot be regarded as of general or public importance.

12. For the above reasons, we decline to exercise our discretion to grant leave to appeal.  The Amended Notice of Motion is dismissed with costs to the plaintiff, to be taxed if not agreed.