FONG CHAK KWAN v. ASCENTIC LTD AND OTHERS

HCPI 242/2016

[2020] HKCFI 679

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 242 OF 2016

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JUDGMENT

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I.  BACKGROUND

1.  The plaintiff (“P”), a Hong Kong permanent resident, claimed he was employed by the 1^st defendant (“D1”) and/or the 2^nd defendant (“D2”) as a site service specialist pursuant to an “Employment Contract” signed by P, D1 and D2 on various dates in February 2014 (“Employment Contract”). Relevant clauses of the Employment Contract are set out in the schedule to this Judgment (“Schedule”). For convenience, I adopt the abbreviations in the Schedule. D1 by its Amended Defence filed on 9 June 2017 (“Amended Defence”) admitted P was employed by D2 as a site service specialist, but denied P was ever an employee of D1 at any material time.

2.  P worked at a sewage treatment factory (“Factory”) in Ningbo City, Mainland China (“Ningbo”).[1] P claimed that on 10 October 2014:

(a)	D1 and/or D2, their servants and/or agents assigned him to perform check on the civil works of a primary sedimentation tank at the Factory and to inspect the excavator to be installed on the site;
(b)	after inspection of the excavator he walked onto a metal plank covering a trench of a DSR aeration tank with depth of more than 4m (“Accident Area”);
(c)	the plank collapsed thereby causing him to fall into the trench (“Accident”);
(d)	he suffered serious injuries to his left shoulder, left leg and head (which caused defect in eye vision) as a result of the Accident.

3.  On 7 March 2016, P commenced the present action against D1 and D2 (collectively, “Ds”) for damages for personal injury, loss and damage that P sustained in the Accident allegedly caused by D1 and/or D2 and their servants and/or agents (with interest and costs) on the basis of (a) negligence, (b) breach of occupiers’ liability, (c) breach of implied terms of the employment contract, and (d) breach of statutory duty[2]. On the same day, P filed his Statement of Claim (“SoC”) and Statement of Damages (“SoD”).

4.  According to the joint expert neurology report dated 23 March 2016 (“Jt Neuro Report”), Dr Brian Choa (P’s expert) and Dr Yu Yuk Ling (D1’s expert) opined that P sustained a mild to moderate brain injury and a mild post-concussion syndrome as a result of the Accident. In the joint orthopaedic expert report dated 12 April 2016 (“Jt Ortho Report”), Dr Kong Kam Fu James (P’s expert) and Dr Cheng Hung Fai David (D1’s expert) were of the view that the Accident was the sole cause of P’s various orthopaedic injuries,[3] and there was no relevant pre-existing pathology of P’s injured parts.

5.  By its Defence filed on 12 October 2016 and its Amended Defence filed on 9 June 2017, D1 disputed liability and averred inter alia that (a) D2 and not D1 was P’s employer, (b) in respect of the Factory, D1 was not an occupier, a contractor responsible for the construction site or a proprietor of the industrial undertaking, (c) D1 never assigned P to work at the Factory, (d) D1 did not owe P any statutory duty and/or any duty under any employment contract, and (e) D1 was not negligent and the Accident was wholly/substantially caused by P’s own contributory negligence.

6.  By his Reply filed on 25 October 2016 and his Amended Reply filed on 3 August 2017, P averred both Ds were parties to the Employment Contract and his de facto employers, and denied he was contributorily negligent.[4]

7.  On 29 June and 26 September 2016, P filed (a) 2 ex parte summonses for leave to serve a concurrent writ of summons on D2 out of jurisdiction (“P’s Summonses”), and (b) his 1^st and 2^nd affirmations in support of P’s Summonses (“P 1^st and 2^nd Affs”). On 12 October 2016, P filed the affirmation of his solicitor Kenneth Lam (“Lam”) (“Lam 1^st Aff”) to seek leave to withdraw Ps’ Summonses with no order as to costs on the basis that such summonses were unnecessary for P’s ex parte application for leave to issue a concurrent writ of summons and to serve it out of jurisdiction. By an order dated 17 October 2016 (“Yu Order”), Master Roy Yu (i) granted leave for P to withdraw P’s Summonses with no order as to costs, to issue a concurrent writ of summons, and to serve it on D2 “at its USA address at 500 Spring Ridge Drive, Reading, PA19610, United States [“US Address”] or elsewhere in USA”, and (ii) directed D2 to acknowledge service within 28 days from such service.

8.  On 7 November 2016, P issued the Concurrent Writ of Summons (“CWoS”). On 16 June 2017, P filed Lam’s 2^nd affirmation (“Lam 2^nd Aff”) to the effect that the Chief Secretary for Administration by letter dated 2 May 2017 confirmed the CWoS and other documents had been served on D2 on 1 March 2017 by an agent of the central authority of the United States. D2 did not file any acknowledgment of service and/or appear in the present action. On 4 July 2017, interlocutory judgment was entered in P’s favour against D2 for damages to be assessed and costs to be taxed (“D2 Judgment”).

9.  On 14 August 2017, P filed the Revised Statement of Damages (“RSOD”). On 11 October 2017, D1 filed its Answer thereto (“Answer”).

10.  On 9 January 2018, P filed (a) an ex parte summons inter alia for leave to serve the D2 Judgment on D2 at the US Address or elsewhere in the United States, and (b) P’s 3^rd affirmation in support of such summons (“P 3^rd Aff”). On 16 January 2018, Master Roy Yu granted an order in terms of (a) above.

11.  On 31 January 2018, P filed his 4^th affirmation to support his ex parte application for leave to serve various orders made by Master Roy Yu between 11 January and 18 December 2017 (“1^st Documents”) on D2 out of jurisdiction (“P 4^th Aff”). On 9 February 2018, Master Roy Yu granted an order in terms.

12.  P and D1 eventually agreed to settle P’s claim against D1 in the present action (“Settlement”). On 18 May 2018, Master Roy Yu granted an order by consent as between P and D1 inter alia as follows:

(a)	on an entirely without admission of liability basis and without prejudice to P’s right to proceed with his claim against D2, D1 shall pay P an ex-gratia payment of $325,000 (inclusive of interest but net of any advance payments already received by P as a result of the Accident) (“Settlement Sum”) in full and final settlement of all his claims against D1 in the present action;
(b)	on an entirely without admission of liability basis, D1 do pay P through the Director of Legal Aid an ex-gratia payment of $250,000 (inclusive of interest) (“D1’s Costs”) in full and final settlement of all costs and disbursements between P and D1 in the present action;
(c)	D1 do pay the mediator’s fee of $15,000 (“Mediator Fee”);
(d)	upon payment of the Settlement Sum, D1’s Costs and Mediator Fee, P shall release/discharge D1 and its insurer (if any) from all liabilities, actions, claims, proceedings, losses, damages, costs and expenses in respect of all P’s claims in the present action, and P shall not bring any further claim (statutory or common law) or any legal action/ proceedings against D1 and its insurer (if any) either in Hong Kong or elsewhere in respect of the Accident and the loss, damage and injuries P might have sustained (if any) in consequence thereof.

13.  By letter dated 11 June 2018, the Chief Secretary for Administration confirmed to P’s solicitors that on 3 May 2018 the 1^st Documents and the D2 Judgment had been served on D2 by an agent of the central authority of the United States.

14.  On 20 July 2018, P filed his 5^th affirmation in support of his ex parte application for leave to serve various orders made by Master Roy Yu between 5 March and 12 June 2018 and P’s summons filed 10 July 2018 (“2^nd Documents”) on D2 out of jurisdiction (“P 5^th Aff”). It was unclear from the hearing bundle what was the outcome of this ex parte application.

15.  On 23 July 2018, the Employees Compensation Fund Board (“Board”) filed a summons for leave to intervene in the present action (“Board Summons”), and the affirmation in support (“Li 1^st Aff”) by its solicitor Li Ding (“Li”).

16.  On 26 July 2018, Master Roy Yu (a) granted leave for the Board to join the present action as the 3^rd defendant (“D3”) pursuant to section 25A(a) of the Employees Compensation Assistance Ordinance Cap 365, (b) granted consequential case management directions, and (c) directed D3 to take out applications to set aside the Yu Order and the D2 Judgment (if so advised by counsel) within 56 days thereof. On 7 August 2018, P filed the Amended Writ of Summons (“AWoS”) by adding the Board as D3.

17.  On 1 November 2018, D3 filed a summons for the following reliefs (“Summons”):

(a)	the Yu Order that granted leave for P to issue/serve the CWoS be set aside or discharged as the case may be;
(b)	the CWoS issued by P in the present action and the service thereof on D2 pursuant to the Yu Order be set aside;
(c)	a declaration that in the circumstances of the case the court had no jurisdiction over D2 in respect of the subject-matter of P’s claim;
(d)	the D2 Judgment against D2 be set aside;
(e)	alternatively, without prejudice to (a)-(c) above and D3’s position that this court had no jurisdiction, should this court regard itself as having jurisdiction, a declaration that in the circumstances of the case the court should not exercise any jurisdiction it might have on the ground that considering the best interests and convenience of the parties to the proceedings and the witnesses in the action, the action should be conducted in either the District People’s Court of Zhenhai District, Ningbo Municipal or the Intermediate People’s Court of Ningbo Municipal (collectively, “PRC Courts”);
(f)	all further proceedings in the Writ of Summons (“WoS”) (now AWoS) herein be permanently stayed forthwith on the ground of forum non conveniens in favour of either of the PRC Courts;
(g)	D3’s costs in the present action including costs of the Summons be paid by P to be taxed if not agreed.

For convenience, the applications in (a), (b) and (d) above are collectively referred to as the “Setting Aside Application”, and the application in (f) above is referred to as the “Stay Application”.

18.  On 1 November 2018 and 29 April 2019, D3 filed Li’s 2^nd and 3^rd affirmations in support of the Summons (“Li 2^nd and 3^rd Affs”). On 26 March 2019, P filed his 6^th affirmation to oppose the Summons (“P 6^th Aff”).

19.  P was previously legally aided. On 30 April 2019, P’s legal aid certificate was discharged. On 10 May 2019, P’s solicitors filed Notice to Act. The Summons came before me for substantive hearing on 21 October 2019 (“Hearing”).

II.  P 1^ST TO 5^TH AFFS

(a)  P 1^st Aff

20.  The P 1^st Aff set out P’s case on the Accident in paragraph 2 above, and alleged it was caused by default on the part of D1 and/or D2 as set out in paragraphs 3 and 7 above.

21.  P explained that in his work he was instructed/supervised by both Ds who were parties to the Employment Contract being a tripartite contract among P, D1 and D2, so he claimed to have reasonable grounds for believing D1/D2 was/were his employer(s) who owed him a duty of care under the Employment Contract to provide a safe working environment.

22.  P relied on the gateways under Order 11 rules 1(1)(c) and 1(1)(d) of the Rules of the High Court (“RHC”) (“Gateways C and D”) for service of the CWoS on D2 out of jurisdiction:

(a)

Gateway C – D1 was a Hong Kong company, and D2 was a United States company with its charter location in Pennsylvania, United States and its last known address as of 17 July 2015 was at the US Address. Since P’s claim was brought against both Ds, it was necessary to serve the CWoS on D2 out of jurisdiction.

(b)

Gateway D – On 17 February 2014, P received the Employment Contract from D1’s managing director Lee Shin Chung (“Lee”) and signed the same. The Employment Contract was then endorsed by Lee on 21 February 2014 and by D2’s director of operations Michael W Walker (“Walker”) on 25 February 2014. P believed the Employment Contract was made within the jurisdiction, or by/ through an agent (ie D1) trading/residing in Hong Kong on behalf of a principal (ie D2) trading/residing outside Hong Kong under Order 11 rule 1(1)(d)(i)-(ii) of the RHC. P also believed the Accident was caused by breach of implied terms of the employment contract between P and D1 and/or between P and D2.

23.  P claimed his solicitors wrote to D2 on 30 April and 19 May 2016 to enquire whether it had any authorised representative in Hong Kong pursuant to section 776(4)(c) of the Companies Ordinance Cap 662, any address for service in Hong Kong and/or any authorised person / legal representative in Hong Kong to accept service of process, but there was no reply.

(b)  P 2^nd Aff

24.  P reiterated the circumstances of the Accident set out in paragraph 2 above, alleged the Accident was caused by the default of D1 and/or D2 set out in paragraphs 3 and 7 above, and gave particulars of their default. P claimed D2 failed to take any or any sufficient steps to ensure his safety, and was liable for the Accident and its consequences.

25.  P claimed D1 was a Hong Kong company with registered office in Hong Kong, and D2 was a company incorporated in and had its office at the United States.[5] D2’s last known address was the US Address. P claimed he was employed by Ds on a fixed term written contract (ie the Employment Contract) for the period from 1 January to 31 December 2014 as a site service specialist whose job duties “included performing equipment installation inspection, supervision of testing of service works and other projects which may require services as instructed by [D2] together with such additional responsibilities as were required by [D2] on a temporary basis”.

26.  P claimed that since D2 did not have any office in Hong Kong, D1 acted for D2 in Hong Kong / Mainland China, and its employee Billy Suen (also known as Suen Yik Luen, “Suen”) would translate D2’s English written instructions into Chinese and pass them to P. P believed D2 was a proper/necessary party to the present action as it was (a) the first-named party in the Employment Contract and (b) the one who gave the original work instructions that Suen passed to P in the manner explained above.

27.  P relied on Gateways C and D and the gateway in Order 11 rule 1(1)(f) of the RHC (“Gateway F”) (collectively, “Gateways”) as well as Order 6 rule 6 of the RHC for service of the CWoS on D2 out of jurisdiction:

(a)	Gateway C – P claimed at all material times both Ds were his employers, and his causes of action against them (and the factual/ legal issues in such claims) were identical and arose out of the very same Accident (see paragraph 3 above), so the court’s adjudication of the present action would conclude all relevant issues. On 9 August 2016, P served the WoS on D1 in Hong Kong. P believed D2 was a proper/ necessary party to the present action, and it would be unreasonable to require P to litigate identical issues in another action against D2 in another jurisdiction. P claimed it would be in the interest of justice for him to proceed with the present action against both Ds in Hong Kong. It was said that D2 could have been properly joined in the present action either by P or D1 had it been within this jurisdiction. P further claimed that as D1 might seek contribution/ indemnity against D2, it would be appropriate for the present action to proceed against both Ds.
(b)	Gateway D – P claimed that Lee at D1’s office at Morrison Hill Road, Hong Kong (“D1 HK Office”) offered him employment, and on 17 February 2014 he signed the Employment Contract and “thereby accepted the [Ds’] offer of employment in Hong Kong”. On 21 February 2014, Lee on behalf of D1 endorsed the Employment Contract, which contract was then sent to D2 at the US Address. On 25 February 2014, Walker on behalf of D2 endorsed the Employment Contract. P believed that on 17 February 2014 (but in any event no later than 25 February 2014) “the contractual employment relationship between [Ds] and [P] commenced in Hong Kong, and the Employment Contract was validly made in Hong Kong with its effect backdated to 1st January 2014”. P stated he was frequently assigned to work in various cities in Mainland China, but he always “returned” to Hong Kong to collect his monthly salary payments at the D1 HK Office, and he understood D1 would send copies of his salary receipts to D2. Further, P in the course of his employment would take instructions through D1’s Suen who would translate the English instructions into Chinese for P’s better understanding, and P would report work progress to D1’s Suen who would translate/pass such information for D2 in the United States, so P believed D1 served as D2’s agent during the entire employment relationship.
(c)	Gateway F – P explained his claim against Ds was founded on tort, and his “personal injury resulted from an act committed within the jurisdiction, namely the negligence of [Ds] ...... But for [their] negligence committed in Hong Kong, the Accident would not have occurred and [P] would not have suffered from injuries as a result”. P said his employment commenced in Hong Kong, and at the time of the Accident “[he] was instructed to work at the Factory temporarily by [Suen] and Ms Ivy Yang [also known as Yang Xia, “Yang”] of [D1], who took instructions from the representative(s) of [D2]. Such assignment was therefore part and parcel of [P’s] employment in Hong Kong. As such, [P] verily believe that [Ds’] negligence arose in substance in Hong Kong and was committed in Hong Kong”.

28.  P claimed he had a good cause of action against Ds, there was a real/serious question to be tried between them, and Hong Kong was the natural/appropriate forum with closest substantial connection to the present action as (a) D1 and D2 and/or its agent in Hong Kong offered P employment, (b) the Employment Contract was shown to and signed by P in Hong Kong, (c) the governing law of the Employment Contract implied from the parties’ conduct was Hong Kong law, (d) P in the ordinary course of employment was required to report to staff at the D1 HK Office, (e) at all material times D1 as agent of D2 in Hong Kong supervised and instructed P in his work, and (f) P’s temporary assignment to work at the Factory was part and parcel of his employment with Ds in Hong Kong.

(c)  P 3^rd Aff

29.  The P 3^rd Aff was filed for seeking leave to serve inter alia the D2 Judgment on D2 out of jurisdiction pursuant to the Gateways and Order 11 rule 9(4) and 9(5) of the RHC. P repeated what had been said in the P 2^nd Aff, and added the CWoS and other documents had been served on D2 out of jurisdiction, but D2 did not file any acknowledgment of service, so on 4 July 2017 P obtained the D2 Judgment.

(d)  P 4^th Aff

30.  The P 4^th Aff was filed for seeking leave to serve the 1^st Documents on D2 out of jurisdiction pursuant to the Gateways and Order 11 rule 9(4)-(5) of the RHC. P repeated what had been said in the P 2^nd/3^rd Affs, and added the 1^st Documents were court orders “significant to the proceedings and relevant to adducing expert medical evidence, the progress of the claim, the dates of the next hearing and the costs directions of which [D2] shall be notified and has the right to be informed”.

(e)  P 5^th Aff

31.  The P 5^th Aff was filed for seeking leave to serve the 2^nd Documents on D2 out of jurisdiction pursuant to the Gateways and Order 11 rule 9(4)-(5) of the RHC. P repeated what had been said in the P 2^nd/3^rd/4^th Affs, and added the 2^nd Documents were (a) court orders that “were significant to the proceedings, the progress of the claim, and the costs directions of which [D2] shall be notified and has the right to be informed”, and (b) P’s summons filed on 10 July 2018 that sought “the Court’s leave to set the case [down] ...... for assessment of damages” was equally important as D2 should be notified of such application.

III.  LI 1^ST AFF

32.  The Li 1^st Aff referred to P’s claim against Ds in the present action:

(a)

Claim against D1 – During its investigation, the Board was advised by P’s solicitors that D1 had an employees’ compensation (“EC”) policy with Zurich Insurance Company Ltd (“EC Policy”), so the Board took the view that if P managed to prove an employment relationship with D1 the EC Policy would be on risk. Indeed, until late May 2018 D1 was legally represented and contested both issues of liability (eg denying it was P’s employer) and quantum by witness statements (“WSs”), documentary evidence and expert medical evidence.

(b)

Claim against D2 – D2 was not insured under the EC Policy, and there was no information known to the Board that D2 had any EC insurance policy issued under the Employees’ Compensation Ordinance Cap 282 (“ECO”). But available evidence showed there might be a worker’s compensation policy issued in relation to P possibly in the United States or Mainland China, but details thereof were unknown to the Board. The Board assumed leave to serve the CWoS on D2 outside jurisdiction was granted pursuant to the later of the 2 ex parte Ps’ Summonses based on the Gateways. On 4 July 2017, the D2 Judgment was entered against D2 who did not acknowledge service of the CWoS. Nevertheless, there were certain pre-action correspondence in which D2 denied it was P’s employer and alleged D1 was P’s employer.

33.  Up until July 2019 the Board held the provisional view that its intervention in the present action was unnecessary, so it did not examine in detail P’s/D1’s evidence/materials. But it did remind P’s solicitors to give reasonable advance notice of any intention by P to discontinue his claim against either D1 or D2 and to advise the Board the reason therefor so that the Board could consider its position. But on 25 May 2018 and without prior notice, the Board was informed that P and D1 had reached mediated global settlement on 18 April 2018, which settlement had been formalised by a Consent Summons filed on 8 May 2018 in the present action and in the related EC proceedings DCEC970/2015 (“EC Action”). The Settlement meant D1 would drop out of the present action, leaving P’s remaining claim (which P would continue to pursue as confirmed by his solicitors’ letter dated 9 July 2018) uncontested by D2.

34.  Li claimed such developments changed the Board’s position because (a) the EC Policy had become irrelevant, (b) there was no other insurance policy known to be in force in relation to P/Accident insofar as section 25A of the ECO was concerned, and (c) there was no longer any “employer” to properly contest P’s claim on both issues of liability and quantum, so the Board’s contingent interest in the outcome of the present action became more acute. Indeed, the following issues would affect the Board’s interests: (i) whether there was proper basis for P’s application to serve the CWoS on D2 out of jurisdiction, and (b) whether Hong Kong was the proper forum for bringing P’s claim against D2.

35.  Li also claimed (a) there were substantial issues to be tried as to P’s case against D2, ie (i) whether there was any breach of duty on the part of D2, (ii) whether there was any contributory negligence on the part of P, (iii) what was the quantum of P’s claim, and (iv) whether Hong Kong law or PRC law was applicable for determination of P’s claim and the above issues, and (b) the resolution of P’s claim against D1 in May 2018 meant P’s present claim against D2 (ie claim by P, who at the material time habitually resided/ worked in Mainland China, against D2 being an United States employer in respect of the Accident that occurred in Mainland China) had even weaker connection with Hong Kong than before.

36.  Li suggested that in view of the Board’s potential liability under the ECO and the legal issues pertaining to P’s claim against D2 following disposal of P’s claim against D1, it would be appropriate for the Board to intervene in the present action.

IV.  SUMMARY OF D3’s GROUNDS FOR SUMMONS

37.  For the Setting Aside Application, D3 argued as follows:

(a)	the Yu Order and the D2 Judgment were obtained by material non-disclosure on the part of P and ought to be set aside;
(b)	there was no basis for the court to exercise its long-arm jurisdiction (ie there was no applicable jurisdictional gateway) to grant leave for P to issue/serve the CWoS on D2;
(c)	Hong Kong was not the appropriate forum for P’s claim against D2.

But P argued (i) there was no material non-disclosure on his part, (ii) his claim against D2 fell within the Gateway(s), and (iii) Hong Kong was the appropriate forumfor P’s claim against D2, but should this court find there was material non-disclosure, P urged this court to exercise its discretion to continue or re-grant leave for P to serve the CWoS on D2 out of jurisdiction on the basis that (1) there was no deliberate intention to deceive, and (2) any re-grant application was bound to succeed (ie the result with disclosure would have been the same).

38.  For the Stay Application, D3 argued that the PRC Courts were clearly the more appropriate forum, and Hong Kong was not the appropriate forum for P’s claim against D2. But P contended Hong Kong was clearly the forum conveniens.

V.  MISCELLANEOUS MATTERS

39.  Mr Wong, counsel for P, submitted it was inappropriate for D3 to have its solicitor Li make the Li 2^nd/3^rd Affs to support the Summons as their contents were highly controversial.[6] I disagree. Given the Board’s role/ function, it would not have personal knowledge of the employment/work relationship between P and D1/D2 and the circumstances of the Accident. Any such information would have come from P and/or D1, so D3’s analysis would have been the result of review/ investigation by its solicitors. In such circumstances, it was not inappropriate for Li rather than D3’s officer to make the supporting affirmations for the Summons.

40.  Mr Wong and Mr Wang, counsel for D3, agreed the relevant affirmation evidence for D3’s contention in paragraph 37(a) above would be limited to (a) the P 1^st/2^nd Affs that led to the ex parte Yu Order, and (b) matters in other affirmations and WSs adduced by P/D1 that were or should have been within P’s knowledge before/at the time of the Yu Order. But had there been any material non-disclosure, counsel agreed this court could refer to all available evidence in order to exercise the discretion whether to continue the Yu Order, and if not, whether to re-grant leave for P to issue/serve the CWoS on D2 out of jurisdiction. But counsel’s written submissions did not carefully adhere to such demarcation of evidence along this evidential watershed, but the ensuing confusion was somewhat mitigated by counsel’s clarification in the course of their oral submissions at the Hearing.

VI.  LEGAL PRINCIPLES

(a)  Service out of jurisdiction

41.  To invoke the long-arm jurisdiction at the ex parte stage for leave to serve originating process on a defendant out of jurisdiction under Order 11 of the RHC, the applicant has to sufficiently establish (a) as a matter going to jurisdiction there is a good arguable case that the claim falls under a gateway under Order 11 rule 1(1) of the RHC, (b) there is a serious question to be tried as to the merits of the claim on a substantial question of fact or law, and (c) as a matter going to discretion to be exercised Hong Kong is the appropriate forum under the principles of forum conveniens for trial of the action.[7] Order 11 rule 4(2) of the RHC provides that no leave to serve out shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of jurisdiction under such order.[8] The onus is on the applicant to establish the above elements.[9]

42.  It is useful to start with the cautionary words of Ribeiro PJ in Kayden Ltd v Securities and Futures Commission that emphasised the need for a strict approach to be adopted:[10]

“36.     The need for a strict approach is dictated by at least three related considerations.  First, it is grounded on recognition of the need for special care given the extraordinary nature of the long-arm jurisdiction asserted under O.11.  As Lord Mustill pointed out, it involves seeking to compel a foreign defendant to submit to adjudication by the court or suffer judgment and execution in default.

37.      Secondly, as indicated in the passage from Parker v Schuller cited above, the court acts on the faith of the plaintiff’s representations made to it ex parte when granting leave for service of process abroad.  Given the extraordinary nature of the jurisdiction which the court would thereby be asserting, it insists on special care on the plaintiff’s part and full disclosure of the basis upon which that jurisdiction is invoked.

38.     Thirdly, as Neill LJ pointed out in Excess Insurance Co Ltd v Astra SA Insurance and Reinsurance Co:

... it is not only the court which must be apprised of the cause of action alleged. The defendant must know the basis of the claim which he has to meet so that, if so advised, he can challenge the order which asserts the court’s jurisdiction over him.” (my emphasis)

(b)  Matter of jurisdiction/gateways

43.  To establish the jurisdictional gateways, as explained by DHCJ To in GDH Ltd v Creditor Co Ltd, “an arguable case is not sufficient ...... Though the court will not require proof to its satisfaction, it will require something better than a mere prima facie case. This is a high threshold. The court has no discretion to exercise any jurisdiction if this threshold is not achieved. Where questions of fact are concerned, the court looks primarily at the plaintiff’s case and relies on the plaintiff’s duty of full and complete disclosure at the ex parte stage”.[11] Bharwaney J in Chan Hon, the administrator of the estate of Poon Lai Ming v Bayer Healthcare Limited & ors[12] cited with approval Recorder Edward Chan SC’s observation in Queenston LLC v Serlen Limited & ors[13] that “[this] standard of proof [for a “good arguable case”] would require the Plaintiff to show something better than a mere prima facie case, and it had been suggested that this would mean that at least the Plaintiff must show a strong argument or a strong case for argument that the claim was within one of those sub-paragraphs (see Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869 at 883, 885 & 890)”.

44.  Lord Collins in Nilon v Ltd v Royal Westminster Investments SA said “[in] this context “good arguable case” connotes that one side has a much better argument than the other.[14] The minority judgment of Lord Sumption JSC in Brownlie v Four Seasons Holdings Inc (“Brownlie (SC)”) elucidated further as follows:[15]

“7. ...... In my opinion, it [‘good arguable case’] is a serviceabale test, provided that it is correctly understood. The reference to ‘a much better argument on the material available’ is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the materials available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word ‘much’, which suggests a superior standard of conviction that is both uncertain and unwarranted in this context.”

Baroness Hale of Richmond PSC in her majority judgment at page 210 in Brownlie (SC) agreed “the correct test is “a good arguable case” and glosses should be avoided; I do not read Lord Sumption JSC’s explanation in para 7 as glossing the test .......”

45.  It is also useful to refer to DHCJ McCoy SC’s observations in Continental Mark Limited v Verkehrs-Club de Schweiz (which echoed the approach adopted in Brownlie (SC)):[16]

“The question whether or not the case meets the conditions prescribed for service out of the jurisdiction under O 11 r 1 does not involve an exercise of discretion, but a judgment of fact. The court must conclude that the plaintiff has a good arguable case, not just a case that could be argued. It need not be shown that the plaintiff is right beyond all reasonable doubt. The Court does not try the case upon the affidavits, but must necessarily reach a provisional or tentative conclusion that the plaintiff is probably right, before allowing service outside the jurisdiction to stand ......

A good arguable case is one with a good prospect of success: Deak v Deak Perera Far East Ltd [1991] 1 HKLR 551 (CA); and see per Godfrey J in United Links International Ltd v The Price Co [1994] 2 HKC 617 at 620F. ...... In showing a good arguable case the plaintiff is not required to meet the standard of proof applicable at trial:[17] disputed facts are not to be tried on affidavit, and the question whether the plaintiff has shown a good arguable case (something better than a prima facie case) is to be decided primarily with reference to the plaintiff's evidence ...... Clough JA at 196B emphasised that the jurisdiction of the court under O 11 r 1 (to allow service out of the jurisdiction) is however, not to be lightly exercised. The plaintiff must satisfy the court that it has a good arguable case, not merely a case that can be argued. In essence the court must reach a provisional conclusion that the plaintiff is probably right: Yee Sang Metal and Building Supplies Co Ltd v Taiyo Maritime SA [1991] 2 HKC 291 (CA). There will be issues that the Court cannot obviously or properly resolve on the papers before it. But the court must reach a provisional conclusion which necessarily involves some analysis of the weight of the evidence based on the inherent probabilities of the claim, the detail and precision of the claim, the consistency of the claim and the evidence in relation to it and whether it is a bare claim or one plainly supported by independent evidence. The court must take into account all the circumstances, all the realities and all the commercial instincts.” (my emphasis)

46.  A point to note is DHCJ Anita Yip SC’s view in Tremendous Success Holdings Limited & anor v Sinosoft Technology Group Limited & ors that “[in] order to establish a “good arguable case”, it is sufficient for the plaintiff to show a “strong case for argument”, and it is not necessary for the Court to be able to reach even a tentative conclusion that the plaintiff is “probably right”: Graeme Johnston: The Conflict of Laws in Hong Kong, §3.057 ......”[18] But this does not sit with the guidance by the Court of Appeal (“CA”) in Yee Sang Metal and Building Supplies Co Ltd v Taiyo Maritime SA in which Cons VP said as follows:[19]

“Both counsel are content to adopt as the true test that which was set out by Staughton LJ in Attock Cement Co Ltd v Romanian Bank for Foreign Trade [1989] 1 WLR 1147, 1155:

Nevertheless, I conclude that where there is a disputed question of fact which is essential to the application of the RSC O 11 r 1, the judge must reach a provisional or tentative conclusion that the plaintiffs are probably right upon it before he allows service to stand. One nettle must be grasped, and that is what I take to be meant by a good arguable case.

That is the approach I take to have been adopted by this court in Shailain Hirachand Jhaveri v Rajendra Jhaveri & Ors (CA 9/90, 1 May 1990, unreported), and to be appropriate in the present instance.”

Such guidance has been followed by DHCJ McCoy SC in Continental Mark Limited (see paragraph 45 above) and by Sakhrani J in Magenta & Co Ltd v Koo Yung Shou,[20] and is consistent with the approach in Brownlie (SC) (see paragraph 44 above). Insofar as Tremendous Success Holdings Limited & anor suggests otherwise, I must be loyal to the guidance by the CA.

47.  In Altimo Holdings and Investment Ltd & ors v Kyrgyz Mobil Tel Ltd & ors (which was cited by Lord Sumption at page 527 in Nilon Ltd),[21] Lord Collins said the approach on a question of law as distinct from a question of fact on the jurisdictional gateways is as follows:

“81. A question of law can arise on an application in connection with service out of the jurisdiction, and, if the question of law goes to the existence of jurisdiction, the court will normally decide it, rather than treating it as a question of whether there is a good arguable case: E F Hutton & Co (London) Ltd v Mofarrij [1989] 1 WLR 488, 495; Chellaram v Chellaram (No 2) [2002] 3 All ER 17, para 136.”

(c)  Serious question to be tried on the merits

48.  As explained by DHCJ To at page 906 in GDH Ltd, “a serious question to be tried ...... as to merits (if not decided under the first stage) ...... is the lower degree of proof required to enable it to exercise its discretion to grant leave: see Seaconsar Far East Ltd and Bank Markazi Jomhouri Islam Iran [1994] 1 AC 438” (my emphasis). In Seaconsar, Lord Goff at page 452 explained the test of a serious question to be tried as follows:

“...... if in support of the plaintiff’s ex parte application an affidavit is sworn in proper form deposing to facts which, if proved, provide a sufficient foundation for the alleged cause of action, that should generally be enough for present purposes. This is no doubt what a number of judges have referred to when they have used the expression ‘prima facie case’ in this context. The problem arises from the fact that the court will consider, on an application to set aside leave so given, affidavit evidence on the part of the defendant, and will take such evidence into account when deciding whether or not to exercise its discretion in favour of the plaintiff. But the court cannot resolve disputed questions of fact on affidavit evidence; and it is consistent with the statement of the law by Lord Davey that if, at the end of the day, there remains a substantial question of fact or law or both, arising on the facts disclosed by the affidavits, which the plaintiff bona fide desires to try, the court should, as a rule, allow the service of the writ. If this approach is correct, the standard of proof in respect of the cause of action can broadly be stated to be whether, on the affidavit evidence before the court, there is a serious question to be tried.” (my emphasis)

49.  Where there are disputes of law, only where the dispute is a succinct one of law would it be appropriate to resolve the same at the Order 11 stage. Where complex issues of law are involved, it may not be appropriate to deal with them at the Order 11 stage.[22] In Altimo Holdings and Investment Ltd & ors, Lord Collins at pages 1825-1826 said as follows:

“83. What is the position if the viability of the claims depends on a substantial issue of law? Is the court bound to decide it at the stage of the application to set aside service out of the jurisdiction?

84. The general rule is that it is not normally appropriate in a summary procedure (such as an application to strike out or for summary judgment) to decide a controversial question of law in a developing area, particularly because it is desirable that the facts should be found so that any further development of the law should be in the basis of actual and not hypothetical facts ......

......

86. There is no reason why the same principle should not apply to the question whether, in a service out of jurisdiction case on the ‘necessary or property party’ head, a claim is ‘bound to fail’ as well as to the question whether there is a ‘serious question to be tried in the claim against D2. ......’”

50.  Fok J (as he then was) in Dong Shing F&T Co Ltd v Hanmec Co Ltd[23] reminded it is important to focus on the particular cause of action and the particular gateway of Order 11 rule 1(1) of the RHC relied upon in support of the application for leave to serve out of jurisdiction when considering the question of whether a plaintiff has shown a serious question to be tried. Likewise, Bharwaney J at paragraph 12 in Chan Hon, the administrator of the estate of Poon Lai Ming, deceased reminded that “(1) the court must decide the application to discharge a service out order on the basis of the cause of action pleaded in the writ or statement of claim available when ex parte leave was sought; (2) the function of the affidavit is merely to explain the grounds on which the application for leave had been made ......”

(d)  Overlap of matters

51.  As alluded to in paragraph 48 above, it is quite possible that some matters may go to the gateways as well as to the merits. Recorder Lisa Wong SC (as she then was) in Deyi Investment Limited v Macjin Info-com Tek, Limited & anor explained that in such circumstances,[24]

“...... in view of the nature of the specific Order 11, rule 1(1) gateways prayed in aid by [the plaintiff] and of the challenge thereto mounted by [the 2^nd defendant], these 2 requirements actually converge into a single burden on [the plaintiff] to show, on the higher ‘good arguable case’ threshold, that [the 1^st defendant] did make the Contract as agent for and on behalf of [the 2^nd defendant], which would be the case only if [the 1^st defendant] did have authority from [the 2^nd defendant] to do so”.

The decision of the learned Recorder (as she then was) was affirmed on appeal.[25] The CA held that on the jurisdictional aspect the good arguable case test was correctly applied to the issue of whether the plaintiff had sufficiently proved the existence of the contract with the 2^nd defendant on agency principles to bring its claim within Order 11 rule 1(1)(d)(iii)-(iv) of the RHC when the contract was ostensibly only with the 1^st defendant, but even if the question of agency / apparent authority of the 1^st defendant were aspects of the merits of the plaintiff’s case (and not matters of jurisdiction under Order 11 rule 1(1) of the RHC), the approach adopted had not gone beyond the threshold of a serious question to be tried.

(e)  Setting aside leave to serve out

52.  At the ex parte stage, the plaintiff has to demonstrate a good arguable case as part and parcel of demonstrating the applicability of the grounds for service out under a gateway of Order 11 rule 1(1) of the RHC as explained above. The party who wishes to dispute the jurisdiction of the court must apply by summons stating the grounds of the application supported by an affidavit verifying the facts on which the application is based, and such application will be heard inter partes by a judge. This is referred to as the inter partes stage.[26] DHCJ To at pages 906-907 in GDH Ltd explained that to resist such application,

“18. ...... the plaintiff has to show a good arguable case that his case falls within one of the subparagraphs of O.11 r.1(1) and that there is a serious issue to be tried. But he is not required to discharge the same high standard of proof as applicable at trial or at the ex parte stage. The court will not resolve disputes of facts on affidavit. The question whether the plaintiff has shown a good arguable case is to be decided primarily by reference to the plaintiff’s evidence ...... The court will weigh the arguments on both sides. A ‘good arguable case’ reflects that one side has a much better argument on the material available. It is the concept of the court being satisfied, or as satisfied as it can be having regard to the limitations which an interlocutory process imposes, that factors exist which allow it to take jurisdiction ......

19. If the plaintiff succeeds in proving a serious issue to be tried, the defendant who seeks to set aside the service has to assume the more onerous burden of showing that the plaintiff’s claim is liable to be struck out. A similar approach was adopted by Recorder Yu in Ren Yun Liang & Others v China Merchants Bank Co Ltd & Others (unrep., HCA 1456/2005, [2007] HKEC 159).[27] The court at an interlocutory hearing will not enter summary judgment nor dismiss or strike out a claim if there is an arguable case on the facts or in law. The court will not resolve disputed questions of fact on affidavit. Thus, the court will be extremely cautious before striking out a claim if it does not have all the relevant facts or if the issues of fact may be interwoven with legal issues, or is in any way fact sensitive, or if the case raises an arguable point of law or if the principles of law are not fully settled: see Allen and Gulf Oil Refining Ltd [1981] AC 1001. In this sense, a serious issue to be tried imposes a higher threshold on the defendant to prove the lack of one than on the plaintiff to prove there is one.

20. If, on balance, the court is not satisfied that the plaintiff has shown a good arguable case that his case falls within one of the subparagraphs of O.11 r.1(1) and a serious issue to be tried or if the court is satisfied that the plaintiff’s case is bound to fail on the merits, the leave granted at the ex parte stage will be set aside.” 

(f)  Forum conveniens

53.  Lord Collins NPJ in SPH v SA gave the following guidance for stay of Hong Kong proceedings brought as of right by reason of forum non-conveniens:[28]

“1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

2. In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4. If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.”

54.  In Dynasty Line Ltd v Sukamto Sia, Cheung JA explained the relevant approach/considerations in the context of an application to set aside service out:[29]

“The approach

56. When this topic is considered in the context of service out of jurisdiction under Order 11, it is important to bear in mind three matters which are distinct from an application to stay Hong Kong proceedings based on forum non conveniens.

1) The burden in Order 11 cases is on the plaintiff, whereas in cases in respect of stay of proceedings the burden is on the defendant.

2) In Order 11 cases the plaintiff is seeking to persuade the Court to exercise its discretionary power to permit service on the defendant outside the jurisdiction. Order 11, rule 4(2) expressly provides that the Court will only do so if the case is ‘a proper one’ for service outside jurisdiction.

3) The jurisdiction exercised under Order 11 may be ‘exorbitant’ in the sense that the jurisdiction is extraordinary in that under conflict of law rules, a Hong Kong Court will not recognize that a similar power is possessed by a foreign court over a Hong Kong litigant in the absence of some treaty providing for such recognition. The effect is not merely that the burden of proof rests on the plaintiff to persuade the Court that Hong Kong is the appropriate forum for the trial of the action, but that he has to show that this is clearly so. In other words the burden is the opposite of that applicable where a stay is sought of proceedings started in Hong Kong as of right, see : Spiliada at 480-481 per Lord Goff.

Real and substantial connection

57. The issue is whether the plaintiff has raised a serious question that Hong Kong is not only the appropriate forum to try the case but that this is clearly so. The burden is on the plaintiff.

58. The ‘appropriate’ or ‘natural’ forum is one ‘with which the action had the most real and substantial connection’. This includes not only factors affecting convenience and expense (such as availability of witness) but also other factors such as the law governing the relevant transaction and the place where the parties respectively reside and carried on business, Spiliada at page 478.

59. In my view, the ‘real and substantial connection’ requirement needs to be emphasised.  Modern commercial transactions usually entail multiple jurisdictional aspects.  Like the present case, they may involve, for example, the use of a company incorporated in a foreign country with tax benefits; the acquisition or disposition of assets in different locations; employment of lawyers and accountants in these locations to facilitate the transactions.  Inevitably a case may contain various jurisdictional aspects.  However, some of these aspects may feature only as the backdrop to the case.  They may have little, if any, substantial relevance to the issues that may be required to be canvassed at the trial.  Ultimately one has to consider the forum where the action could most suitably be tried for the interests of all the parties and for the ends of justice.  Comments of a similar nature although differently put have been made by the Courts in the past : the Court is not simply to load up factors which point to any particular jurisdiction but to focus on the appropriateness of a forum from the point of view of the trial of the action, see : Rambas Marketing Co. LLC v. Chow Kam Fai David [2001] 3 HKC 250 per Recorder Ma (now Ma CJHC) at 255.”

55.  Thus, where a plaintiff institutes proceedings in Hong Kong not as of right but has to seek leave to serve the defendant out of the jurisdiction under Order 11 of the RHC, the legal burden is on the plaintiff to demonstrate Hong Kong is clearly the appropriate forum for the trial of the action. The burden is the obverse of that applicable where a stay is sought of proceedings brought in Hong Kong as of right. So unless the plaintiff satisfies the court Hong Kong is clearly the more appropriate forum for the trial of the action than any available alternatives suggested by the defendant, the court’s jurisdiction under Order 11 of the RHC will not be exercised.[30]

56.  D3 contended the PRC Courts (which like the Hong Kong courts are also foreign courts outside D2’s home jurisdiction) would be the appropriate forum, so query was raised at the Hearing as to whether D2’s willingness to submit to the jurisdiction of the PRC Courts would be a relevant criterion. Mr Wang and Mr Wong were unable to find any definitive guidance in Johnston, The Conflict of Laws in Hong Kong[31] and/or in Hong Kong Civil Procedure 2020,[32] but upon careful consideration I have come to the view that D2’s willingness to submit to the alternative forum (ie the PRC Courts) is not a requisite criterion for establishing the availability of such alternative forum:

(a)

(i) To stay proceedings on the ground of forum non conveniens with the defendant having onus to show the alternative forum has jurisdiction, “[having] jurisdiction [in this context] means: (a) the plaintiff is free to bring a case there if it chooses to do so, (b) the court will assume subject matter jurisdiction, and (c) the court will assume jurisdiction over the defendant ...... Jurisdiction may be shown e.g. by undertaking to submit, by proof of an applicable jurisdictional rule of the alternative forum ......” (my emphasis).[33] (ii) Dicey, Morris and Collins on The Conflict of Laws also explained that “...... a foreign court will be considered to be “available” to a claimant if by the time of the application for a stay, it would be open to him to institute proceedings against the defendant before that court. If this has come about only as a result of the defendant’s voluntary submission to the jurisdiction of the foreign court, this fact does not prevent the court being seen as available to the claimant. It follows that an undertaking by the defendant to submit to the jurisdiction of a foreign court can make the foreign court available even though it would not have been so without his undertaking ......” (my emphasis)[34] (iii) In my view, the above suggests the defendant’s submission to the alternative forum will render such foreign court “available”, but the obverse (ie the defendant does not submit to such foreign court) does not necessarily make the alternative forum unavailable (see criteria for having jurisdiction in (i) above).

(b)

Given the burden in Order 11 cases is on the plaintiff to establish that Hong Kong is clearly the appropriate or natural forum (whereas in cases for stay of proceedings the burden is on the defendant), the plaintiff being the opposing party cannot really be expected to be in a position to demonstrate unwillingness or otherwise on the part of a defendant to submit to the alternative forum.

57.  The relevant factors when considering whether a forum is one with which the action has the most real and substantial connection would include (a) the convenience and expense (such as availability of witnesses and/or documents), (b) the law governing the transaction, (c) the place where the parties reside or carry on business, (d) the nature of the case and the dispute, (e) the legal and practical issues involved, eg questions of local knowledge, special expertise/experience of a particular forum in dealing with complex disputes etc, and (f) place of commission of the tort.[35]

58.  As regards the factor in (f) above, “[the] “starting point” in tort cases is that the place where the tort was committed is the natural forum, The Albaforth [1984] 1 Lloyd’s Rep. 91. ...... However, the Albaforth principle is only a starting point and the place of commission cannot be said to be determinative, Esquel Enterprises Ltd v. TAL Apparel Ltd [2006] 2 H.K.L.R.D. 363, and the court must go on in the usual way to focus on the appropriateness of that forum for trial, The Peng Yan [2008] 5 H.K.L.R.D. 418 affirmed [2009] 1 H.K.R.R.D. 144 following Esquel. In some cases, the place of the commission of the tort may be decisive, in others not weighty at all. The underlying principle is the basic test in The Spiliada and The Albaforth. ......”[36] Lord Mance JSC in VTB Capital plc v Nutritek International Corpn & ors said as follows:[37]

“51. The place of commission is a relevant starting point when considering the appropriate forum for a tort claim. References to a presumption are in my view unhelpful. The preferable analysis is that, viewed by itself and in isolation, the place of commission will normally establish a prima facie basis for treating that place as the appropriate jurisdiction. But, especially in the context of an international transaction like the present, it is likely to be over-simplistic to view the place of commission in isolation or by itself, when considering where the appropriate forum for the resolution of any dispute is. The significance attaching to the place of commission may be dwarfed by other countervailing factors.”

(g)  Material non-disclosure

59.  Since the application for leave to serve out of jurisdiction under Order 11 rule 1(1) of the RHC is made ex parte, it is incumbent on the applicant to comply with the duty to make full and frank disclosure of all material matters which may have a bearing on the court’s decision whether to grant leave.[38] Such duty is said to be one of the utmost or highest good faith,[39] and it is no answer to a complaint of non-disclosure that if the relevant matters had been placed before the court, the decision would have been the same.[40]

60.  This principle derives from the recognition that the relief is sought in the absence of representations from the affected party, the potential consequences of the relief, and the need to discourage unmeritorious applications.[41] As Mr Recorder G Ma SC (as he then was) explained in Yau Chi Wah v Gold Chief Investment Limited,[42]

“...... No one needs reminding that ex parte applications are very much against the normal way in which courts operate. The vigilance that needs to be displayed both by the court and the applicant seeking ex parte relief is multiplied many times over precisely because the party against whom an order is to be made is not present.”

Woolf LJ in Behbehani & ors v Salem & ors said it is necessary to take into account the public interest which exists in protecting the administration of justice from the harm that will be caused “if applicants ....... do not on an ex parte application, make disclosure of all the material facts, whether or not the non-disclosure is innocent”.[43]

61.  The test as to materiality is an objective one, and materiality is for the court and not for the applicant or his legal advisers.[44] The facts that the applicant must disclose are those which the court should have in the weighing scales, ie those facts “relevant to the weighing operation which the court has to make in deciding whether or not to grant the order”.[45] As Kwan J (as she then was) in Securities and Futures Commission v “A” reminded, non-disclosure only concerned matters which are relevant to the ex parte judge’s weighing operation otherwise “an impossible burden would be placed on applicants and their advisers and the court may get itself in a position of what might be called ‘counter-abuse’ ......”[46]

62.  The duty of disclosure applies not only to facts known to the applicant but also to any additional facts which he would have known if he has made proper inquiries before making the ex parte application.[47] Ralph Gibson LJ in Brink’s Mat Ltd v Elcombe & ors said as follows:[48]

“......

(3) The applicant must make proper inquiries before making the application ...... The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.

(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant ......; and (c) the degree of legitimate urgency and the time available for the making of inquiries.

......”

63.  Under general principles, the duty of disclosure upon an ex parte application encompasses “significant factual, legal and procedural aspects of the case”,[49] which includes disclosure of matters that are or may be adverse to the applicant, and the applicant should fairly state the points made against him by the defendant.[50] Gee, Commercial Injunctions, explained that:[51]

“It applies not just to disclosure of facts but to absolutely anything which the judge should consider. It is part of the duty of an applicant for without notice relief to present the application fairly. Incorrect submissions or arguments, including erroneous legal submissions, will not amount to non-disclosure or material misrepresentation provided that such errors do not deprive the court of knowledge of any material circumstances. This is on the basis that the applicant has acted fairly and is entitled to advance his arguments as he wishes provided that the court receives a fair presentation of the case.” (my emphasis)

There is no need to disclose law or legal arguments per se, but if there are significant legal aspects of the case that go to the weighing operation in that, say, they provide a defence which can reasonably be expected to be raised in due course by the defendant, then it should come under the duty of disclosure.[52] These principles are generally applicable for ex parte applications.

64.  But DHCJ Peter Ng SC (as he then was) in Hady v Bazar helpfully explained that even though the principle of requiring full and frank disclosure is the same, the context/focus of the inquiry in an application for leave to serve a writ out of jurisdiction are different from that in an application for grant of an injunction:[53]

“103. In an application for leave to serve a writ outside jurisdiction, the Court is concerned with whether it should assume jurisdiction – it is not concerned with the merits of the case, save that it has to be satisfied that there are serious issues to be tried: Ren Yun Liang v China Merchants Bank Co Ltd (unrep., HCA1456/2005, [2007] HKEC 159) paras.26-27 (Recorder Benjamin Yu SC); Hong Jing Co Ltd v Zhuhai Kwok Yuen Company Ltd (unrep., HCA156/2006, [2006] HKEC 1731) para.17 (Deputy High Court Judge Saunders).[54] In general, a failure to refer to arguments on the merits which the defendant may seek to raise in answer to the plaintiff’s claim would not amount to material non-disclosure, unless they are of such weight that their omission may mislead the Court in exercising its jurisdiction under the rule and its discretion whether or not to grant leave: BP Exploration Co (Libya) v Hunt [1976] 3 All ER 879, 893h-j.”

65.  In Tremendous Success Holdings Limited & anor, DHCJ Anita Yip SC was concerned with inter alia applications to set aside the ex parte leave to serve originating process out of jurisdiction. The defendants alleged the plaintiffs made no disclosure of matters relevant to the court’s consideration as to (a) whether or not there are serious issues to be tried and (b) the question of forum non conveniens (paragraph 176), eg that the subject agreement was governed by PRC law when “[the] applicable law is undoubtedly a significant legal aspect of the case which affects leave to serve out” and question of forum non-conveniens (paragraphs 177-188). The learned judge held that the observations by DHCJ Saunders in Hong Jing Co Ltd (see footnote 54 above) would not aid the plaintiff in the case before her, and concluded there was material non-disclosure:

“191. Obviously, it is the applicant’s duty under an Order 11 application to show serious issue to be tried. A defence which is or may be fatal to the applicant’s case or which may go to demolish the applicant’s cause of action and hence no serious issue to be tried, is almost certainly material matter which influences the court’s discretion on granting or refusing leave, and therefore must be disclosed and drawn to the court’s attention. The Court of Final Appeal in Kayden has said that the court and the defendant must be appraised of the cause of action alleged.

192. I think Hong Jing’s case is not expressing a different view from that of Kayden. If the defence shows the claim to be groundless, it follows that there is no serious issue to be tried. The Order 11 applicant must disclose the defence.

......

195. ...... In the context of anticipating a defence which may affect the question of serious issue to be tried, it is not necessary, indeed inappropriate, for the applicant to come to his own conclusion on the merits of the defence. The test is if on a fair assessment of the case, the defence is very likely to affect the claim to the extent that there may be no serious issue to be tried, he should make the disclosure.” (my emphasis)

66.  Mr Wang assured this court D3 would not say P’s claim against D2 was not triable, but he submitted P must fully/frankly disclose material matters that went to the matter of jurisdiction (ie to bring his claim within the Gateways) even though such matters might also go to the question of whether there was a serious question to be tried in respect of P’s substantive claim. Mr Wong had no quarrel with such approach.

67.  Further, “[it] will usually not be a sufficient answer to an allegation of non-disclosure for an applicant to say that the relevant information ...... was contained in an exhibit, though not referred to in the body of the affidavit ...... Exhibits to such affidavits are often voluminous. ...... the applicant has the responsibility of ensuring that all relevant points are presented clearly and distinctly. ...... It may not be sufficient to expect the judge to read the entirety of a document referred to at a hearing, or understand its implications and materiality, without specifically drawing the material aspects to his attention, and explaining them and their relevance. Any contractual provision ...... which is relevant to the court’s consideration of the application should be referred to and preferably set out in the body of the affidavit. It will not usually be sufficient simply to exhibit the entire contract. ......”[55] Indeed, Stock JA (as he then was) in Nicekind Holdings Limited v Yim Wai Ning & anor said as follows:[56]

“...... If an affirmation creates a false picture, it is no answer to say that, taken literally, this assertion or that was, strictly speaking, accurate, or that the misleading picture would have been corrected if only the judge, even though uninvited, had uncovered one amongst a host of exhibits. As we all know, the truth is not necessarily the whole truth.”

68.  From the above, it is clear the duty of full and frank disclosure is not to be applied artificially, and the obligation is to be entirely open, especially about those factors known to influence the court in its decision.[57]

69.  If there is material non-disclosure at the ex parte stage, it may but need not lead to the order granting leave be set aside. Essentially it is a matter of degree.[58] In my view, whether the fact not disclosed is of such sufficient materiality to justify/require immediate discharge of the ex parte order depends on the importance of the facts to the issues which are to be decided by the ex parte judge on the application.

70.  In Galsworthy  Limited v Liu Por appointed to represent the estate of Liu Cheng Chan, deceased and ors, I have summarised the general principles for the exercise of discretion to discharge an ex parte injunction for material non-disclosure and/or to re-grant an ex parte injunction as follows:[59]

“246. Kwan JA in Excel Courage Holdings Ltd v Wong Sin Lai[60] cited the ‘useful summary of the main principles’ by Deputy Judge Alan Boyle QC in The Arena Corporation Ltd v Schroeder[61] that gave guidance as to the exercise of the court’s discretion, which has been neatly summarised by Au-Yeung J in China Medical Technologies Inc (in liquidation) v Bank of China (Hong Kong) Limited as follows:[62]

‘111. If the Court finds that there has been material non-disclosure, the general rule is that it should discharge the order and refuse to renew it. Nevertheless, the Court has jurisdiction to continue or re-grant the order. The relevant factors can be found in Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642 at §56 (Kwan JA):

(a) That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

(b) The Court should assess, among other things, the degree and extent of the culpability with regard to the non-disclosure, and the degree of importance of the undisclosed matters to the application (although the fact that the judge might have made the order anyway is of little significance).[63]

(c) The application of the general principle that an order should be discharged upon material non-disclosure being established should not be carried to extreme lengths or be allowed to become the instrument of injustice.

(d) There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the court should take into account all relevant circumstances.’”

71.  In applying these principles to ex parte leave to serve out where material non-disclosure has been established, it has been said that cases where the court can exercise the discretion to simply overlook serious or material non-disclosure must be approached with “great caution” and are “very rare”,[64] and the court should take into account the need to protect the administration of justice and to uphold the public interest in requiring full and fair disclosure. DHCJ Coleman SC (as he then was)in Pacific Aerosupplies Ltd v Dakota Air Parts International Inc said as follows:[65]

“16. ...... [Material non-disclosure] might, but need not, result in the setting aside of the order made; essentially it is a matter of degree. If there is deliberate concealment, that might be punished by discharge of the order even if the undisclosed information was not central to the decision. But even inadvertent non-disclosure of information which may be central to the decision might lead to the discharge of the order, notwithstanding the lack of personal misconduct by the party or the solicitor concerned.”

72.  But whilst “it is no excuse for the applicant subsequently to say that he was genuinely unaware, or did not believe, that the facts were relevant or important”,[66] Kwan J (as she then was) in SFC v A explained as follows:[67]

“41. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or its relevance was not perceived, is an important consideration whether the ex parte order should be discharged, although it is not decisive[68] ...... In the majority of cases, the matter has to be approached on the basis of considering the quality of the material which was not disclosed without making any final decision whether or not there has been bad faith in the failure to disclose ......”

73.  In Brink’s Mat Ltd, there had been innocent but material non-disclosure of fact in the information that the plaintiffs had put before ex parte judge, but it was held on the evidence before the judge hearing the inter partes application to discharge the ex parte injunction that it would have been right for him to continue the injunction, and so it was a proper case for maintaining the injunction. As Ralph Gibson LJ put it at page 1357, “...... I have no doubt whatever that on the facts of this case, if the additional information had been before [the ex parte judge], the order would still have been made by him at once and on the same terms”. Similarly, in the context of whether an order to serve out ought to be maintained or discharged, DHCJ Coleman SC (as he then was)in Pacific Aerosupplies Ltd said as follows:

“80. I think the overall degree of materiality of the non-disclosure is serious and it would entitle me in the exercise of my discretion to set aside the order granting leave to serve out of the jurisdiction.

81. Nevertheless, it seems to me that before making that decision, I can consider the practical benefits of setting aside the ex parte order in the light of the other challenge made by reference to forum conveniens generally. If I do not think this is a suitable case for service out, that is probably the end of the matter. If I do think this is a suitable case for service out, the matters of non-disclosure might probably best sound in costs.” (my emphasis)

In summary, as Kwan J (as she then was) said at paragraph 42 in SFC v A, “[the] court must assess the degree and extent of the culpability, the importance and significance of the outcome of the application of the matters which were not disclosed, and whether the punishment of discharging the ex parte order would be out of proportion to the failure of the applicant to make full and frank disclosure ......”

74.  As seen above, even if an ex parte order for leave to serve out is set aside on the basis of a finding of material non-disclosure, it remains open to the court to make a similar order at the inter partes stage if the making of such order seems just and appropriate in the circumstances. In Pacific Electric Wire & Cable Co Ltd v Texan Management Ltd & ors, Rogers VP was concerned with the question whether the applicant for ex parte leave to serve out (in contra-distinction to, say, ex parte injunctive relief) should be prevented from ever again pursuing/prosecuting his claim against a defendant outside jurisdiction:[69]

“16. ...... it seems to me that there is certainly no absolute bar to a renewed application for service of a writ outside the jurisdiction in cases where there has been non-disclosure of a material fact. The court must protect its own process by preventing a party that has been at fault from obtaining an advantage. It is clear that in cases of Mareva for injunctions and Anton Pillar orders that consideration may entail the court refusing to reimpose an injunction. The reason for that is that if an injunction is discharged but immediately reimposed, the advantage obtained when the original injunction was imposed, will be retained. The rule has never been extended, however, as far as I am aware, to, for example, a court refusing to grant a final injunction even if an interlocutory injunction has been discharged.

17. To punish a party by preventing it from ever obtaining an order for service outside the jurisdiction on the basis that there has been a non-disclosure of a material fact on the first application for service outside the jurisdiction, would be a punishment and not a matter of protection of the court’s own process. This case might be considered an extreme example of why it would wrong to adopt such a rule. A litigant might be deprived of the opportunity of recovery in a case where it is said that it has been defrauded of US$450,754,409 and HK$1,801,508,060. On any footing that would be a punishment which even Draco might have considered excessive for a transgression of the requirement to make full disclosure. It is not for the court to deprive parties of their property and mete out such punishments. If the court were to proceed on the footing that it was imposing a punishment, questions would arise as to the scale of punishments and as to who should benefit from them.

......

19. Whilst, therefore, the original orders fall to be set aside and the plaintiff would have to bear the costs of the application to set them aside and all the costs thrown away, the question which the court must consider is whether, on all the facts now known, it is appropriate that the proceedings are served outside the jurisdiction.” (my emphasis)

75.  This is also neatly summarised in Hong Kong Civil Procedure 2020 as follows:[70]

“Non-disclosure might be (a) inadvertent, (b) deliberate but a matter of poor judgment or (c) deliberate and in bad faith for purposes of concealment.

Where there is no intention to deceive and any re-application would be bound to succeed (i.e. the result with disclosure would have been the same), the court will not discharge the leave ...... Non-disclosure having been established, the court may wish to consider the forum non conveniens/proper case considerations before considering regrant. If the case is not a proper one for service out anyway, there is no need how to exercise the regrant discretion, Pacific Aerosupplies Ltd, above. Where material non disclosure has been established and the case is otherwise a proper one for service out, the court will now need to apply the principle of proportionality in weighing the gravity of the omission against the proposed impact on the proceedings in terms of discharge or costs ......”

VII.  GAETWAYS UNDER ORDER 11 OF RHC

76.  In the P 1^st/2^nd Affs, P specifically relied on the 3 Gateways that are to be read disjunctively:

“(c) the claim is brought against a person duly served within or out of the jurisdiction and a person out of the jurisdiction is a necessary or proper party thereto;

(d) the claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which –

(i) was made within the jurisdiction, or

(ii) was made by or through an agent trading or residing within the jurisdiction on behalf of a principal trading or residing out of jurisdiction, or

(iii) is by its terms, or by implication, governed by Hong Kong law, or

......

(f) the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction.”

(a)  Gateway C

77.  Legal principles Order 11 rule 4(1)(d) of the RHC requires that an application for grant of leave under Order 11 rule 1(1) of the RHC to be supported by an affidavit stating “where the application is made under rule 1(1)(c), the grounds for the deponent’s belief that there is between the plaintiff and the person on whom a writ has been served a real issue which the plaintiff may reasonably ask the Court to try”.

78.  For the purpose of Gateway C, there is a 3-stage test as to whether leave should be granted, ie (a) establishing that genuine proceedings are properly commenced within the jurisdiction and have been served on an “anchor” defendant, (b) determining whether the proposed foreign defendant is a “necessary” or “proper” party thereto, and (c) determining whether it is appropriate to permit the claim against the proposed foreign defendant to proceed in Hong Kong in terms of forum non-conveniens but bearing in mind the lis pendens here.[71]

79.  As to the relevant principles applicable to the “necessary” or “proper” party head of jurisdiction, Lord Sumption at page 527 in Nilon Ltd referred to AK Investment CJSC v Kyrgyz Mobil Tel Ltd that emphasised the following points:[72]

“(1) The necessary or proper party head of jurisdiction was anomalous, in that, by contrast with the other heads, it was not founded upon any territorial connection between the claim, the subject matter of the relevant action and the jurisdiction of the English courts.

(2) Caution must always be exercised in bringing foreign defendants within the jurisdiction under that head, and in particular it should never become the practice to bring in foreign defendants as a matter of course, on the ground that the only alternative requires more than one suit in more than one different jurisdiction.

(3) The fact that the defendant within the jurisdiction (D1 or the ‘anchor defendant’) is sued only for the purpose of bringing in the party outside the jurisdiction (D2) is not fatal to the application for permission to serve D2 out of the jurisdiction, but it is a factor in the exercise of the discretion.

(4) The action is not properly brought against D1 if it is bound to fail.

(5) If a question of law arises on the application which goes to the existence of jurisdiction, the court will normally decide it, rather than treating it as a question of whether there is a good arguable case.

(6) The question of the merits of the claim is relevant to the question of whether the claim against D1 is ‘bound to fail’ and to the question whether there is a ‘serious issue to be tried’ in relation to the claim against D2; and there is no practical difference between the two tests, and they in turn are the same as the test for summary judgment.

(7) In considering the merits of the claim, whether the claim against D1 is bound to fail on a question of law should be decided on the application for permission to serve D2 (or to discharge the order), but it would not normally be appropriate to decide a controversial question of law in a developing area, particularly because it is desirable that the facts should be found so that any further development of the law should be on the basis of actual and not hypothetical facts.

(8) The question whether D2 is a proper party is answered by asking:

‘supposing both parties had been within the jurisdiction would they both have been proper parties to the action?’”

80.  Undisputed facts  On 9 August 2016 (or at least by the time of the application for leave to serve out), the WoS had been duly served on D1 (whom P relied on as the “anchor” defendant) being a Hong Kong company with its registered office within the jurisdiction.

81.  P’s case  P claimed (a) D1 was one of P’s employers (as evident from the Employment Contract signed by P, D1 and D2 in February 2014) and the injury/damage P sustained as a result of the Accident was due to D1’s negligence and breach of implied terms of the employment contract, and (b) D2 was a “necessary” or “proper” party to the claim against D1 because both Ds were parties to the Employment Contract under which various obligations concerned D2, so D2 (as well as D1) might well be liable to P for negligence and breach of implied terms of the employment contract. On such basis, Mr Wong contended P’s claims against Ds involved common questions of fact and law, so P would be disadvantaged if he were to pursue them in separate jurisdictions. As Mr Wong frankly accepted, P’s reliance on Gateway C essentially rested on the vitality of his assertions as to the alleged employment relationship between D1/D2 and P.

82.  Discussion  For Gateway C, P had to demonstrate a good arguable case that his claim against D1 (“anchor” defendant) was properly brought and D2 (“foreign” defendant) was a “necessary” or “proper” party. Turning first to the issue of D1 as the “anchor” defendant, P had to show there was a serious question to be tried in respect of P’s claim against D1 or, to put it in another way, such claim could pass the test for summary judgment. The key debate was whether D1 was P’s employer. Mr Wang submitted P would have grave difficulties in establishing such employment relationship on the aforesaid test, and absent such relationship no contractual/tortious/statutory duty would arise for establishing D1’s liability to P over the Accident. But Mr Wong argued there was sufficient evidence to show a serious question to be tried over whether or not D1 was P’s employer.

83.  Although D3 contended the governing law of the Employment Contract was PRC law (see Part VII(e) below), Mr Wang turned to Hong Kong law for the legal principles to find an employment relationship, which local legal principles were not disputed.

84.  Section 2(1) of the Employment Ordinance Cap 57 (“EO”) defines “employee” and “employer” as follows:

“employee means an employee to whom, by virtue of section 4, this Ordinance applies;

employer means any person who has entered into a contract of employment to employ any other person as an employee and the duly authorized agent, manager or factor of such first mentioned person;”

Section 4(1) of the EO provides that “[subject] to subsection (2) and section 69, this Ordinance applies to very employee engaged under a contract of employment, to an employer of such employee and to a contract of employment between such employer and employee”.

85.  Section 2(1) of the ECO provides that “unless the context otherwise requires, the expression employee, subject to section 4 and the proviso to this subsection, means any person who has, ...... entered into or works under a contract of service ...... with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is express or implied, is oral or in writing ......”

86.  In Poon Chau Nam v Yim Siu Cheung,[73] Ribeiro PJ at page 959 cited Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance[74] where MacKenna J identified 3 conditions for the existence of a contract of employment as follows: “(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.” But Poon Chau Nam at pages 959-960 said the courts have increasingly turned to the economic or commercial aspects of the relationship as more suitable guides.

87.  Ribiero PJ next cited the well-known test by Cooke J in Market Investigations Limited v Minister of Social Security:[75]

“...... the fundamental test to be applied is this: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’ If the answer to that question is ‘yes’, then the contract is a contract for services. If the answer is ‘no,’ then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

88.  The Court of Final Appeal (“CFA”) at page 961 in Poon Chau Nam held that the modern approach to the question of whether one person was another’s employee is to examine all the features of their relationship against the background of the indicia developed in the case law with a view to deciding whether, as a matter of overall impression, the relationship was one of employment, bearing in mind the purpose for which the question was asked.  It involves a nuanced and not a mechanical approach [76] as Mummery J emphasised in Hall v Lorimer[77] (in a passage approved by the English Court of Appeal[78]):

“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.” (my emphasis)

89.  Poon Chau Nam and Chitty on Contracts[79] highlighted some indicia/factors to be considered, which Mr Wang’s written submissions helpfully summarised as follows:

“(1) the degree of control exercised by the employer;

(2) whether the person performing the services provided his own equipment;

(3) whether he hired his own helpers;

(4) what degree of financial risk he took;

(5) what degree of responsibility for investment and management he had;

(6) whether and how far he had an opportunity of profiting from sound management in the performance of his task;

(7) whether the worker was properly regarded as part of the employer’s organization;

(8) tax and national insurance;

(9) parties’ own view;

(10) the structure of the trade or profession concerned and the arrangement within it.”

90.  Although there was no quarrel over the above principles, it is important to highlight a few matters in view of Mr Wang’s approach in his submissions discussed below:

(a)	Poon Chau Nam at page 962 clearly stated that whether a person is an employee (or an employer) is “a question of fact to be determined by the trial court”. The “modern approach” referred to in paragraph 88 above is a holistic one that examines all facts/features of the parties’ relationship against the factors/indica in paragraph 89 above to determine by overall impression what the true relationship is. The written employment contract is part of the evidence on which a decision will be taken, but the court has to look at the business/ commercial reality of the arrangements among the parties and the relevant aspects of the work activities in a particular case to see whether there is an employer-employee relationship. In my view, such nuanced approach is essentially a fact-finding exercise that takes into consideration all relevant circumstances and evaluates myriad facts / witnesses’ credibility before concluding whether a party is an employer (or employee). Different facets of the work relationship/activities have to be assessed against the expressed intentions of the parties, tested against the veracity of the witnesses and given appropriate weight (which may vary in importance from one situation to another) for proper evaluation of the effect of the details to form an overall impression. In my view, this is usually a matter for trial unless it is so clear/obvious from the facts/evidence put forward there is no serious or material factual dispute. After all, the court should not at an interlocutory stage embark on mini-trial on affidavits and/or WSs.
(b)	Mr Wang’s submissions sought to discredit P’s case on the basis of P’s failure to challenge various aspects of the WSs filed by D1. But I bear in mind it is not the function of P’s WS or supplemental WS (“SWS”) to argue P’s case or to argue with D1’s witness(es). Hong Kong Civil Procedure 2020 stated “[the] written statement of a witness should not seek to anticipate the evidence of a witness of the opposite party and to contradict it or otherwise to deal with it. It is not the function of the written statement of a witness to answer questions that may be put in cross-examination, but only to answer such questions as would be asked in his examination in chief. ......”[80] So even if P’s WS/SWS and/or the P 6th Aff did not directly rebut certain aspects of the WSs filed by D1, it would not necessarily follow that assertions made by D1’s witnesses must be right or credible, and/or that the assessment of the factors/indicia under the Poon Chau Nam approach would become redundant (see (a) above).
(c)	As seen below, Mr Wang highlighted various factors/indicia to suggest P’s employer was D2. But if this is the extent of such evidence without going on to demonstrate D1 was not P’s employer, such evidence would not necessarily discredit P’s case that also asserted D2 was his co-employer. After all, Mr Wang’s written submissions acknowledged that the existence of an employment relationship between P and D2 would not necessarily preclude P from being an employee of D1 as well. So the key question must be whether there was a serious question to be tried in respect of P’s case that both Ds were his employers, or to put it in another way, it was so obviously clear D2 was P’s only employer such that P’s claim against D1 was bound to fail.

91.  On the above note, I turn first to the Employment Contract made among P, D1 and D2. Mr Wang submitted D1’s obligations/powers under the Employment Contract was very limited, ie (a) it was responsible for actual payment of various monies under C/4 and C/10, but had no control over the same and acted more like a conduit through whom D2 paid P, and (b) the Employment Contract did not give D1 any control or responsibility over P’s work/employment, and D2 effectively took full control over every aspect of the same from the work to be done by P to P’s holiday/vacation arrangements and to payment of P’s expenses and allowances etc.

92.  As seen from the Schedule, the Employment Contract provided for D2’s various rights/obligations (which Mr Wang marshalled to assert that D2 had control over P’s work/employment), but in my view there were other pointers too:

(a)	The Employment Contract, a detailed written contract of about 4 pages, specifically referred to “employment” (C/4) and “employee” (C/5) to make clear P was the employee. But as for the “employer”, it consciously included both Ds as named/signing parties but excluded labelling either one as “employer”, which prima facie (albeit not definitively) suggested both Ds were his employers, especially when the nature of such contract was an employment contract. Ultimately, the employer-employee relationship would have to be elicited via cross-examination of the relevant witnesses as to the expressed intentions in the context of the business purpose/reality of having both Ds make/sign such contract, which might well turn on the particular factual matrix and witnesses’ credibility in the present case.
(b)	C/2 provided P was employed as a site service specialist with job duties described as “equipment installation inspection, supervision of testing & commissioning of service works as stated above for warranty service and other projects which may require services as per written instruction by [D2]”. Mr Wong suggested C/2 did not confine P’s job duties to work for D2 as it went to provide in wide terms that “[this] description is not intended to define all possible requirements of the position”, and “[additional] responsibilities may at times be required on a temporary basis”, which arguably envisaged the possibility of D1 (being a contracting party of the Employment Contract) assigning tasks to P. At this interlocutory stage, I cannot say such contention was obviously untenable when P had experience of D1 assigning work to him both before and after entering into the Employment Contract. In this respect, I refer to the discussion in paragraphs 113-116 below. Whether it was such pre-contract work assigned by D1 that led to the provision in C/2, whether such post-contract work assigned by D1 came under the umbrella of the provision in C/2, or whether such work assigned by D1 fell outside the Employment Contract (as suggested by D1’s witnesses) would require findings of fact to be made upon assessment of factual evidence and witnesses’ veracity.
(c)	C/4 and C/10 of the Employment Contract suggested the primary contractual obligation to pay P’s remuneration fell on D2, eg C/4 provided wages shall be paid monthly by D1, and D1 shall be “reimbursed” by [D2] “within 30 days of receipt of an invoice”. P confirmed that all along it was D1 and not D2 who paid his salary. In my view, there was good arguable basis on the face of C/4 to say P could only look to D1 for his remuneration while Ds had separate contractual arrangements whereby D1 had to invoice D2 before the latter would reimburse the former (presumably for “services as per written instructions by [D2]” under C/2). So on one view of C/4 P was not concerned over whether or not D2 eventually reimbursed D1 for salary D1 paid to P,[81] and this, in my view, would be a relevant factor that might point towards D1 being also P’s employer, which factor would have to be weighed/assessed against other indicia. Mr Wang suggested such arrangements were mere practical convenience for D1 to act as conduit to channel payments from D2 (party ultimately liable to pay) to P. But in my view, which contention (neither of which was untenable) is the correct one at the end of the day must be a matter for trial on overall assessment of the evidence. But Mr Wang referred me to Dacas v Brook Street Bureau (UK) Ltd,[82] and submitted that the present facts spoke more strongly than those in Dacas towards the conclusion that only D2 and not D1 was P’s employer. For reasons explained in paragraphs 93-100 below, I am not persuaded (at least for this stage) such extrapolated conclusion could be drawn by comparing the different factual matrices in the present case and in Dacas.
(d)	C/11 provides that upon termination of employment P had to immediately return “all [D2] owned, leased or rented or property in an approved condition and have no claims thereof”, but should P default on such condition “[D1] shall take full responsibility for all items not returned in a usable condition”. Mr Wong suggested this supported P’s case, but Mr Wang did not address this in his submissions. D3 argued D1 was no more than a conduit for payments and a channel for instructions/reports with translations (see paragraph 97 below), so only D2 was P’s employer. But if that were so, no commercial justification was offered on the available materials for D1 (who on D3’s contention was a stranger to any employment relationship between P and D2) to be responsible for returning “[D2] owned, leased or rented property” should P (who on D3’s contention was not D1’s employee) fail to return the same upon termination of employment. In my view, this must be a factor that should go to the weighing exercise explained in Poon Chau Nam.

93.  Dacas concerned a tripartite situation. In that case, Mrs Dacas (D) was a cleaner with an employment agency Brook Street Bureau (UK) Ltd (BS). D entered into a written “temporary worker agreement” with BS which provided that BS was under no obligation to offer work opportunities to D who was also under no obligation to accept any offer. The agreement provided BS would pay D a minimum hourly rate on a per assignment basis for each hour worked to be paid weekly in arrear (ie BS was to set D’s rate of pay). BS was also responsible for deducting PAYE and national insurance contributions, issuing pay slips and performing statutory obligations in relation to holiday/sick pay, and D also booked her holidays and notified any sickness absence through BS.

94.  BS then entered into a contract with its client Wandsworth Borough Council (WBC) for provision of agency workers, and the contract provided for WBC to pay BS on being given invoices calculated from time sheets that the workers gave to WBC. D was assigned by BS to work as a cleaner at a hostel run by WBC who exercised day-to-day control over D and supplied her with cleaning materials, equipment and overalls. WBC paid BS for D’s services. D remained registered with BS under the “temporary worker agreement” that made clear its provisions did not give rise to a contract of employment with either BS or WBC. D worked exclusively for WBC as a cleaner for 4 years until WBC asked that her assignment be terminated. D sued BS and WBC for unfair dismissal.

95.  The Employment Tribunal held D was not an employee of either BS or WBC. D did not appeal against the decision that she was not an employee of WBC. The Employment Appeal Tribunal allowed D’s appeal to the effect that the tribunal below should have found D was employed by BS.

96.  The English Court of Appeal unanimously held that D was not an employee of BS because of lack of sufficient control and presence of express terms negativing mutuality of obligations between them to provide work and to perform it, but found that had WBC been a respondent in the appeal they would remitted that part of the case back for the tribunal to consider whether an implied contract of service had arisen between D and WBC (page 359). But their Lordships indicated obiter they would have reached different conclusions had they been asked to decide whether D had been an employee of WBC. On the one hand, Mummery and Slade LLJ suggested that on the facts they would have found D to be employed by WBC under an implied contract (which arose from the conduct of the parties and the work done) given the mutuality of obligation that D had to attend work at the workplace (ie the hostel) punctually and to do work as she was told while WBC had to pay for her work through BS.[83] On the other hand, Munby LJ disagreed there was any mutuality since WBC had no obligation to pay D and did not set her rate of pay, and BS’ obligation to pay D arose independently of whether or not WBC paid BS.[84]

97.  From the above (see also Dacas at page 361), it was no wonder that even Mr Wang accepted tripartite arrangements were fraught with difficulties. But Mr Wang argued it was even more strongly shown here that D1 (as compared with BS in Dacas) was not an employer because (a) it was mere practical convenience to use D1 as conduit to channel payment from D2 to P whereas BS in Dacas was a principal who was obliged to pay P and to be responsible for insurance, tax arrangements, holiday pay and sick pay etc, and (b) there was no need to resort to an implied contract (as in the case for WBC in Dacas) to find D2 to be an employer. Mr Wang suggested the control feature in the present case was with D2 and with not D1.

98.  But I note the “temporary worker agreement” between BS and D in Dacas expressly made clear such agreement “shall not give rise to a contract of employment between [BS] and the temporary worker, or the temporary worker and the client” (which factor contributed to the English Court of Appeal’s conclusion that BS was not an employer – see paragraph 96 above), and BS had separate contracts with D and with WBC which underlined such express provision. More importantly, under the “temporary worker agreement”, BS was under no obligation to provide D with work, and D was under no obligation to accept any work offered by BS (page 363), which was quite different from the present situation in which P, D1 and D2 entered into a single tripartite employment contract which set out the obligations to provide P with work and the obligations by P to work, and in paragraph 92(b)-(c) above I have found that, at least at this stage, D1 was arguably a contracting party who could also assign work to P and whom P looked to for payment of his salary. In paragraph 92(c) above I have also dealt with D3’s suggestion of D1 being a convenient conduit for payments from D2 to P, which argument was not, in my view, definitive.

99.  In Dacas, by reason of (i) the 2 separate contracts between D and BS and between BS and WBC and (ii) the reality that BS (vis-à-vis WBC) only performed work as staff supplier and administrator of staff services, control was said to be exercised by WBC and not BS. Mr Wang suggested that paragraphs 17-28 of P’s WS (3 March 2017) (1) admitted most communications between P and D2 went through D1 which effectively provided translation services for both sides, but (2) never suggested D1’s staff had had any control over P or acted in any capacity other than as conduit of communications/translations. But in my view, a careful study of P’s case showed D1’s work was not as drily administrative/facilitative as Mr Wang would have me accept:

(a)	Even on the limited basis put forward by Mr Wang, under the tripartite Employment Contract among P, D1 and D2, D1 (unlike BS in Dacas which had no role to play at all in relation to D’s work at the hostel run by WBC) actually had some role to play in relation to work instructions concerning P’s work done under the Employment Contract.
(b)	According to paragraphs 18-22 of P’s WS (3 March 2017), (i) D1 would pass installation instructions from the buyer/end-user to Suen of the D1 HK Office, (ii) Suen would translate such buyer’s/end-user’s installation instructions and forward them for D2 to acknowledge the purchase order, (iii) Suen would forward D2’s acknowledgment to the buyer/end-user, (iv) D2 would then send English work instructions to the D1 HK Office and to D1’s office in Shanghai (“D1 SHG Office”), and Suen would translate them into Chinese for P to carry out work as instructed, (v) if D2’s instructions were simple, P would reply to D2 directly, (vi) if D2 did not agree with the buyer’s/end-user’s installation instructions, “[Suen]會再與[D2]方面就時間和工作地點商量” (my emphasis), and (v) when P completed his work, he “需向[D1 HK Office]的[Suen]及[D1 SHG Office]的中國區負責人[Yang] ...... 匯報工作項目及出差費用”, and (vi) Suen would translate P’s report into English and forward it to D2. The above showed that on P’s case, in addition to translating and communicating instructions/report between P and D2, D1 and D2 would discuss and work out disagreements between D1 and the buyer/end-user over installation instructions, which presumably would inform D2’s work instructions to P. This would entail D1 liaising with D2 and the buyer/end-user and resolving such disagreements to enable crafting of work instructions to P, which task involved work-related matters in contra-distinction to mere translation service due to P’s/D2’s language issue.
(c)	Mr Wang reminded that D1 filed WSs and adduced contemporaneous emails/documents to show its staff Suen, Yang and/or others did not exercise control over P when conveying D2’s instructions,[85] which matters “were never seriously disputed by [P]”. I reiterate my observations in paragraph 90(b) above as to P’s alleged lack of challenge against WSs filed by D1, and say that it would not be appropriate at this stage to resolve factual disputes on affidavit evidence.

100.  In my view, taking into account the triable debate on matters discussed above and the reality of D1’s business and/or commercial interest/relationship with D2,[86] the factual findings based on the particular circumstances of Dacas were not so compellingly relevant that I could comfortably conclude that P’s contention (ie D1 was also an employer of P) did not pose serious question to be tried. P’s contention of there being 2 employers entailed possible sharing of involvement in P’s work, the degree of which might not necessarily be equal, and the true situation must turn on the particular factual circumstances and business reality. Ultimately, it would be a matter of cogency/weight of all relevant countervailing evidence, which would be a matter for trial rather than interlocutory determination.

101.  Mr Wang then submitted there were other aspects of P’s case which would show D1 was not P’s employer. First, Mr Wang referred to the record of interview on 14 October 2014 (ie 4 days after the Accident) in which P described D2 as his employer without any mention of D1 (“Record of Interview”):

(a)	P in paragraphs 64-67 of his WS (3 March 2017) explained that on 14 October 2014 whilst he was hospitalised in Ningbo and just before he left for Hong Kong by air ambulance, D1’s Lee and Song Honyan (“Song”), D1 SHG Office’s 李曉球and 3-4 public security officers (公安) pressed P to complete the Record of Interview with Lee telling P that if he did not complete the Record of Interview, he would not be able to board the air ambulance for return to Hong Kong. But P’s memory was impaired/ blurred after the Accident, so he was unable to complete the Record of Interview. P claimed he could not have recollected all the details now seen in the Record of Interview, which “其實是由其他在現場的人代[P]回答” and P signed the same. P agreed he did tell the public security officers (公安) D2 was his employer, but he claimed that did not mean D1 was not his employer. P said he did not mention to the public security officers (公安) D1 was also his employer because “[Lee]指示[P]只可向公安表示[D2]為[P]的僱主, 又指示[P]必須簽署公安交給[P]的口供, 否則[P]不會獲准離開。由於[Lee]為[D1]之負責人, 而[P]又受僱於[D1], 因此[P]便跟從[Lee]的指示, 只向公安表示[D2]為[P]的僱主, 及於公安預備的口供上簽署。此舉並不代表[P]認同只有[D2]是[P]的僱主”. P added Lee also asked him to hide the true circumstances of the Accident, “並要求[P]指出[Accident]是在路邊跌倒”. P’s wife objected, but in the end the Record of Interview “其實是由其他在現場的人代[P]回答, 所以[P]並不認同該份筆錄稱內容”.
(b)	Lee in paragraphs 77-85 of his WS (24 April 2017) denied P’s account, and referred to contemporaneous correspondence between D1 and SOS showing that by the morning of 14 October 2014 (ie before the public security officers (公安) went to the hospital at about 4pm that day to take the Record of Interview) Lee had already arranged/confirmed the SOS air ambulance for P’s return from Mainland China to Hong Kong.[87] Lee added he never instructed P to give a false account of how the Accident happened, and even if he did (which he denied), it had no effect as P told the public security officers (公安) he had fallen into the trench.
(c)	Song in paragraph 11 of her WS (21 April 2017) confirmed Lee visited P at the hospital in Ningbo and suggested P to make report to the public security (公安), so on 14 October 2014 3 public security officers (公安) visited P at the hospital to take the Record of Interview. Song claimed that during such interview she and Lee were at the corridor outside P’s hospital room and not at his bedside, and they never disturbed/ interfered with the public security officers (公安) in taking the Record of Interview. Song said she never heard Lee suggesting to P how to answer or give statement to the public security officers (公安).

102.  Mr Wang submitted the Record of Interview concerned an interview by public security officers (公安), so “it is hardly believable, without any additional evidence, that Lee would be able to exert such power over [P] to force him to commit perjury against his will when the police was right there investigating the matter” (my emphasis). It was also said P being a senior engineer with a successful career would hardly be likely “to succumb to the pressure of another when his wife was with him”. Mr Wang reminded there was not much incentive for Lee/D1 to commit such “criminal act” when D1 was “covered by insurance policy”.[88] Mr Wang also submitted that if P could resist pressure from Lee who asked him to hide the true circumstances of Accident and to say he fell down by the roadside, “why could he not resist the pressure to write down the actual employer?  It would also be very odd for Lee to attempt to coerce [P] to distort the truth in such a manner as such change of story about how the Accident occurred does not help [D1’s] position at all and more importantly, such fake story could be easily exposed by other witnesses who took [P] out of the trench”.

103.  I am afraid Mr Wang fell into the fallacy of asking this court to try the case and to assess witnesses’ credibility on affidavits, which is an impossible task at this preliminary stage. Bearing in mind that P’s bodily injuries from the Accident could not be said to be minor, that it was just 4 days after the Accident, that he was still hospitalised and in need of an operation (which was done very shortly after his return to Hong Kong) and that his air ambulance evacuation must have been on his mind the very day the Record of Interview was made, I am quite unable to say P’s account was obviously “weak” or “hardly believable” even when his wife was with him. Whether P was speaking the truth or whether Lee had any motive to “coerce” him (and I note P was not listed as an employee under D1’s EC Policy) must be a matter for trial. And in fairness, P did not in his WS (3 March 2017) concede he was able to resist pressure from Lee to hide the true circumstances of the Accident; he just said in the end that he was not the one who gave the Record of Interview and “其實是由其他在現場的人代[P]回答”. P’s and D1’s diametrically different factual accounts could not be resolved by mini-trial at this stage.

104.  Secondly, Mr Wang referred to an application form dated 10 November 2014 by which P applied for reimbursement of medical expenses from his insurer FWD Life Insurance Company (Bermuda) Limited (“FWD Life”), and it appeared that in the box for “Occupation” P described himself as “自僱合約工程師”:

(a)

P in paragraph 68 of his WS (3 March 2017) stated that whilst he was hospitalised in Hong Kong, Lee handed to him “一份不知名申索表格 ...... 並要求[P]簽署 ...... 當時[P]雖然看到表格上內容是空白的, 但由於視力、精神及健康所限, [P]未能詳細問及申請表資料, [Lee]亦沒有告訴[P]此申請表之內容及用途, 只著[P]盡快簽署。當時[P’s]太太極力反對[P]簽署, 但由於[Lee]在旁要求[P]一定簽署, [P]只能服從其指示”. P said the handwriting on the form was not his, “而是[P]簽署後由他人代[P]填寫的”.

(b)

Lee in paragraphs 78-82 of his SWS (31 August 2017) alleged the form was in fact filled in by P’s insurance agent Victor Tang (“Tang”) after obtaining information directly from P at the Prince of Wales Hospital (“PWH”), and Tang told Lee that (i) when P signed the form only Tang and P’s wife were present in the hospital room, (ii) Tang filled in the form with information obtained from P, and (iii) Tang then read the contents of the form to P who confirmed the contents before Tang asked P to sign the form. Lee claimed the exercise had nothing to do with D1 at all, and P’s allegations were untenable lies that cast doubt on P’s credibility.

105.  Mr Wang submitted P’s story was hardly credible when the occasion occurred more than 1 month after the Accident, so P was not at a vulnerable stage and his wife was with him at the time. Mr Wang further suggested it would be rather odd for Lee to insert the description of self-employed engineer on the form if he had previously pressed P to admit he was employed by D2.

106.  By virtue of such submissions, Mr Wang was clearly asking this court to assess the credibility of differing factual evidence from P and Lee, which I decline to do as it was not obviously clear P’s assertions were not credible at all:

(a)	Lee’s account relied heavily on what Tang told him, but there was no witness or affirmation evidence from Tang.
(b)	As Mr Wang accepted, it was common ground between P and D1 that P was an employee (irrespective of who was his employer), so there was at least legitimate query as to why his occupation was stated on the application form as “自僱合約工程師”, which query was not inconsistent with P’s case that he was asked to (and did) sign a blank form which was then filled in by someone else.
(c)	As the P 6th Aff pointed out, D1 HK Office was given in the box for “Name of Employer and Address” and in the box for “Mailing Address” in the application form, and D1’s new email address ASCENTIC@NETVIGATOR.COM was given in the box for “Email Address” in the application form. D3 suggested D1 HK Office was just a convenient address as D1 was not named in the box for “Name of Employer and Address”. But if that were so, it would arguably be sufficient to fill in the box for “Mailing Address”. In my view, this raised query as to why D1’s physical/email addresses were used in P’s application form for reimbursement of medical expenses from his insurer in respect of his work-related Accident if D1 was not his employer, which query could only be resolved on testing the evidence at trial.
(d)	D3 suggested P’s account was not credible as he should not be vulnerable by that time the application form was completed. But I note P was hospitalised at PWH on 15 October 2014 immediately upon return to Hong Kong by air ambulance. On 17 October 2014, P had an operation for his left hip fracture (reduction and fixation by gamma nail).[89] On 24 October 2014 P was transferred to Tai Po Hospital, and on 30 October 2014 he was transferred to Baptist Hospital which was a private hospital. An MRI scan on 3 November 2014 revealed “massive fall thickness rotator cuff tear ......”, and arthroscopy repair and tenodesis of biceps tendon were scheduled to be done on 12 November 2014.[90] P signed the application form to seek reimbursement of medical expenses on 10 November 2014, ie shortly after the disappointing discovery of his shoulder problem and just 2 days before the requisite surgery. Looking at the application form for reimbursement of private hospital medical expenses in such circumstances, I cannot say there was no serious question to be tried in respect of P’s vulnerability at that time.

107.  Thirdly, Mr Wang referred to P’s resignation letter (辭職通知書) dated 23 January 2014 (“Resignation Letter”) addressed exclusively to D2 without mention of D1 as his employer, and argued it was in line with C/11 of the Employment Contract that provided for termination by D2 (not D1) and termination by P. But the P 6^th Aff pointed out that P clearly referred to the D1 SHG Office (ie “上海宜高公司”) in the last paragraph of the Resignation Letter. The Li 3^rd Aff then countered by saying the Resignation Letter should be viewed together with P’s cover email dated 23 January 2014 at 17:53 to a Frances Yip (“Resignation Email”) which would obviously show the Resignation Letter was intended for D2 and not D1. Li pointed out that P by the Resignation Email asked Ms Yip “to deliver [the Resignation Letter] to [D2]” (請交美國寶利金公司), and the Resignation Letter was addressed to “Mike” who should be the same “Mike Walker” referred to in the Resignation Email (and probably also the same Walker who signed the Employment Contract on behalf of D2 on 25 February 2014). Li suggested P deliberately mentioned D1 (by way of the D1 SHG Office) only as delivery agent and not as employer.

108.  I am not quite sure how the Resignation Letter/Email would aid D3’s case at this stage. The starting point must be that both documents were dated 23 January 2014, which pre-dated the Employment Contract which on its face was signed in February 2014 by P, D1 and D2. According to paragraphs 8-9 of Lee’s WS (24 April 2017), it was said D2 started to employ P to work as site service specialist for sewage treatment works in Mainland China under a fixed term contract, and such employment relationship between P and D2 was governed by a predecessor written employment contract, but by the time of the Accident (ie 10 October 2014) the governing employment contract was the Employment Contract. So even on D1’s case, P by the Resignation Letter/Email would have resigned under the predecessor employment contract before the Employment Contract was made or signed (although the term of employment thereunder was backdated to 1 January 2014). P by paragraph 9 of his WS (3 March 2017) said he only went to the D1 HK Office about the Employment Contract on 17 February 20014 (ie about 3 weeks after the Resignation Letter/Email), and he was the 1^st contracting party to sign the Employment Contract. Indeed, it would fly against common logic for P to have resigned under the Employment Contract even before it was made/signed.

109.  That being the case, I find it quite arguable that the Resignation Letter/Email would not directly inform P’s employment relationship at the time of the Accident, but if it had any relevance, then P’s predecessor employment contract, the identity of his then employer(s), the reason he resigned thereunder, the reason why P and Ds entered into the Employment Contract so shortly thereafter, whether the parties envisaged continuation of the pre-existing employment relationship or any change by the Employment Contract would have to be explored for proper understanding of the contextual commercial/business reality that went to the formulation of the Employment Contract. In my view, there must be a serious question to be tried which could not be resolved at the interlocutory stage on affidavits and WSs.

110.  Fourthly, Mr Wang referred to a letter dated 6 June 2016 from SUMEC Complete Equip & Engine Co Ltd (ie the end-user of the excavator to be installed at the time of the Accident, “SUMEC”) to the effect that SUMEC used excavators manufactured by D2 in various projects, and all along P handled the supervision/testing of such excavators. The letter stated “根據[P]提供的名片以及自我介紹, [SUMEC]一直被告知[P]是美國[D2]的僱員, 而不是[D1]僱員”. But this letter was made 3 months after P commenced the present action on 7 March 2016. Taking into account the pre-action protocol under Practice Direction 18.1, SUMEC’s letter must have been made when/after D1 already smelled the whiff of litigation or intended litigation. In my view, taking into account all other matters, the veracity of such post-claim letter (unsupported by any formal WS or affirmation) in face of countervailing evidence by P could only be assessed at trial and not on affidavit.

111.  Fifthly, Li claimed that a review of the WSs/SWSs of Suen (21 April 2017), Yang (21 April 2017), Song (21 April 2017), Lee (24 April and 31 August 2017), Lau Yuk Keung (“Lau”) (5 August 2017) and Ng Chi Man (“Ng”) (29 January 2018) [91] showed P’s evidence in the present action against D1 had no merits, and P’s claim was not properly brought within the Hong Kong jurisdiction. Mr Wang submitted it was compellingly evident from such WSs/SWSs that D1 never considered P to be part of the company, so it never (a) listed P as an employee in its EC Policy, (b) reported him in the employer’s return of remuneration and pensions as an employee, and/or (c) filed tax return or paid any MPF contribution for P. Li also added that D1 never arranged any employee’s social benefits in Hong Kong and Mainland China for P, or reported P as its employee when it filed reporting forms to the authorities in Hong Kong and Mainland China.

112.  In my view, whilst these contentions might be usefully presented/argued at trial (albeit not necessarily binding on the trial court) to assist in considering/assessing countervailing evidence as to the relevant factors/indicia, it is inappropriate for this court at this interlocutory stage to attach varying degrees of weight to such pieces of evidence. As explained in Poon Chau Nam, the court has to adopt a nuanced approach by having an overall impression after weighing/ assessing the accumulated detail of the case, which could not be usefully done when the factual matrix was not so clear and obvious from the differing accounts in the WSs/SWSs and affidavits.

113.  Mr Wang then went on to dispute some evidence that P relied on to support his case, which Mr Wang argued were “all weak or false”. First, P in paragraphs 13-15 of his WS (3 March 2017) stated he worked on some projects for D1:

“13. [D1]與多家外國機械廠合作, 包括Ovio, Savi及Haywood Gordon等。這些廠商於國內未有分公司, 因此依賴[D1]作為中介公司把這些外國廠商生產稱機品售至香港及中國內地。[D1]亦曾為香港及內地買家提供這些產品之售後服務, 包括介紹、安裝、指導使用以及維修保養等。

14. 自2008年起, [P]主要為[D1]及與其合作之外國廠商的買家(包括上述提及之Ovio、Savi及Hayward Gordon) 提供有關之售後股務。附件「FCK-04」為[P]於2011年代表[D1]於獵德污水處理廠為客人維修Ovio生產的機器向[D1’s Lee]、[Suen]及上海區負責人[Yang]匯報之電郵副本。附件「FCK-05」為[P]於2013年代表[D1]於為客人安裝Ovio生產的機器後向[D1]之上海區員工沈薇匯報之電郵複本, 此電郵亦有抄送[Lee]及Samuel Poon ([D1]之員工) 。

15. 2014年簽署[Employment Contract]後, [P]仍有代表[D1]向[D2]以外之廠方提供之服務。2014年5月, [P]代表[D1]於上海白龍港為客人提供Savi生產的洗砂機以及Ovio生產的抓斗機售後服務。附件「FCK-06」為[P]完成工作後向[D1’s Lee] 、Samual Poon及[Lau]匯報之電郵複本。另外, [P]於2014年6月代表[D1]為客人於深圳光明污水處理廠檢查Hayward Gordon生產的砂泵。附件「FCK-07」為[P] 向[D1]之[Lau]匯報檢查結果之電郵複本以及[D1] 發予客人之收據。”

114.  I note P’s contentions were disputed in paragraphs 6-7 of Lau’s WS (5 August 2017) and paragraphs 17-34 of Lee’s SWS (31 August 2017). I have carefully read these paragraphs, but do not propose to recite their detailed contents here. In essence, Lee/Lau alleged the odd jobs P referred to were independent projects relating to products of companies other than D2 that P as an independent contractor occasionally undertook for D1 and for which P was paid on a job by job basis, so such odd jobs fell outside the arrangements under the Employment Contract or under the predecessor employment contract.

115.  But in my view, P’s WS (3 March 2017) arguably dovetailed with paragraph 92(b) above as it raised query (a) whether in light of such work D1 assigned to him prior to the Employment Contract the parties contemplated such work would come within “additional responsibilities” that “at times be required on a temporary basis” and hence made provision for the same in C/2 of the Employment Contract (as bolstered by continuance of such work after the Employment Contract was made), or (b) whether such work D1 assigned to him prior to the Employment Contract was likewise captured under the predecessor employment contract, or (c) whether C/2 of the Employment Contract reflected any change from the arrangements under the predecessor employment contract. All these were plainly fact-sensitive matters that would go to the commercial/business reality to form the background matrix necessary for proper understanding of the Employment Contract, especially in view of Lee’s/Lau’s countervailing evidence that disagreed with P’s case.

116.  Mr Wang tried to shy away from the need to resolve disputes of facts on affidavit by suggesting Lee’s/Lau’s evidence was not challenged. But in my view, this was not a sufficient answer:

(a)	For a fact-finding exercise with countervailing evidence, the totality of the evidence had to be weighed/considered. A suggestion that one piece of evidence is not disputed would not necessary mean it was credible and/or proved when considered against the entire factual matrix.
(b)	Obviously P and D1 took different views as to how P’s work for D1 in relation to non-D2 products and machineries would inform P’s employment, ie P saw it as part of his employment work that would bolster his case that D1 was also his employer, and D1 saw it as outside P’s employment work that would negative any employment relationship with D1.
(c)	As explained in paragraph 90(b) above, it was not for P in his WS/SWS to argue with D1’s witnesses or for him in the P 6th Aff to engage in factual debate when discharging his duty to demonstrate a serious question to be tried over whether D1 was also his employer.

117.  Secondly, P referred to his name card (which he said was printed for him by D1) that described him as staff of Ascentic Engineering Ltd. P relied on this name card because it carried the “Ascentic” brand name which he claimed would not have found its way onto his name card if D2 (by the “Brentwood” or “Polychem” brand) were his sole employer. Mr Wang submitted such name card would not have aided P’s case because (a) paragraphs 56-63 of Lee’s SWS (31 August 2017) explained Ascentic Engineering Ltd (which was not D1 even though they appeared to be related) was a dormant company without any business activities, and (b) paragraphs 18-25 of Lau’s WS (5 August 2017) explained this was a one-off practical solution to enable P to have access to a particular worksite. Mr Wang submitted that P did not dispute D1’s explanations, and on this I refer to my observations in paragraph 90(b) above. In my view, whether P’s contention was persuasive or whether Lee’s/Lau’s explanation was convincing would turn on assessment of witnesses’ credibility and differing evidence which could not be determined on affidavits.

118.  Mr Wang suggested the relevant factors/indicia discussed in Poon Chau Nam in the context of the present case pointed strongly to the absence of any employment relationship between P and D1:

(a)	Control – Mr Wang argued D2 had ultimate control over P’s job responsibilities, and D1’s role was a purely administrative one to translate instructions and report to/from D2 and P without exercising any power of control. But I have explained why there were factual disputes that would require a nuanced assessment in light of business reality.
(b)	Equipment – Mr Wang submitted that the Employment Contract clearly showed equipment was supposed to be provided by D2, and that there was nothing to suggest otherwise. But C/11 showed D1 took up responsibility for returning D2’s property (which presumably included equipment if any) if P failed to do so on termination of employment. D1 did not address the commercial considerations that led to this arrangement if D1 was not an employer and/or was not an involved party in P’s employment.
(c)	Financial risk and personal helpers – Mr Wang agreed these factors were irrelevant as P was obviously an employee who received monthly salary, allowances and reimbursements from his employer with no financial risk or profit of his own.
(d)	Organisation of D1 – Whilst Mr Wang tried to discredit the relevance of P’s name card, and relied on various WSs/SWSs, tax returns and MPF arrangements that, he submitted, tended to show P was not part of D1’s organisation, I have explained above why this would be a factual issue that could not be tested/determined on affidavits and WSs/SWSs.
(e)	Tax and insurance arrangements – Mr Wang noted such arrangements showed D1 did not regard P as its employee, and P was reticent about how his personal tax was handled. I agree these matters should be taken into account together with other countervailing evidence in the overall assessment. But when Mr Wang referred to the Employment Contract providing that insurance was D2’s responsibility, and to a form of Workers’ Compensation – First Report of Injury or Illness dated 23 October 2014 suggesting D2 had arranged an insurance scheme in relation to P, such matters would not necessarily be sinister as it was P’s case that D2 was also his employer.
(f)	P’s and D1’s views – Mr Wang submitted P and D1 both regarded D2 as P’s employer, and P’s allegation otherwise in his WS “is not particularly credible, especially when weighed against the various forms declared by him and his resignation letter”. In my view, such submissions highlighted the concern I have raised, ie it would be quite inappropriate for this court at this stage to weigh countervailing evidence and assess witnesses’ credibility. Although D1 alleged D2 was P’s sole employer, I note D2 in its letter dated 10 February 2015 to D1 alleged it “intended [P] to be, and was under the belief that [P] was, at all times an employee of [D1] and that [D2] was independently contracting [its] services through [D1]”. Whether any aspect of P’s, D1’s and/or D2’s views were self-serving or reflected the true position would be a matter for debate at trial.
(g)	Right of termination – Mr Wang argued there was differential treatment between D1 and D2 over such right in the Employment Contract that reflected their different status. I agree the matter of termination of employment should be taken into account, but so would the provision in C/11 for return of D2’s property by P upon termination, failing which D1 had the obligation to do so.
(h)	Payment of wages – I have dealt with this in paragraph 92(c) above.

119.  Mr Wang suggested that “beyond doubt” the overall picture (without making a minute examination of each and every indicia) was one of sole employment relationship between P and D2 to the exclusion of D1, and that D1 only functioned as a conduit to channel instructions/ payments between P and D2. But the above discussions belied Mr Wang’s suggestion of taking a step back and not looking at the minutiae. Actually, Mr Wang left very little factors/evidence unturned in urging this court to consider the evidence from D1 that was “voluminous, comprehensive, consistent and corroborated by documents”. In the end, having considered Mr Wang’s arguments and taking stock of the overall picture in light of the nature of the application before me, I am quite satisfied P had established a serious question to be tried that D1 was also his employer, and a viable claim against D1 for negligence and breach of implied terms of the employment contract that was worthy to be tried. I cannot say P’s claim against D1 was bound to fail, and as Mr Wong submitted, whether or not P would succeed in proving his employment relationship with D1 at the end of the day was not the relevant question now, and this court could not resolve disputes of facts on affidavit.

120.  Since there was a serious question to be tried in respect of P’s claim brought against D1 who had been served within the jurisdiction, I find that on P’s case (ie both Ds were his employers) D2 being a “person out of jurisdiction” was also a “necessary or proper party thereto”. On this, the question to ask would be: supposing both Ds had been within the jurisdiction, would they have been proper parties? In light of the above analysis, there was a good arguable case that the claims against D1 and D2 were closely bound and involved one investigation that had a common thread. In my view, P successfully established Gateway C, and as the Order 11 jurisdictional gateways are disjunctive, there is no need for me to consider the applicability of Gateways D and/or F, but I do so for the sake of completeness.

(b)  Gateway D

121.  P relied on sub-grounds (i)-(iii) of Gateway D (“Sub-grounds 1-3”), but D3 claimed the applicability of such gateway was not supported by the available evidence. Before I deal with Sub-grounds 1-3, I note that at the Hearing Mr Wong confirmed that for the purpose of establishing a good arguable case for Gateway D, P would proceed on the basis that the Employment Contract was a written contract, and P would only rely on the further matters in the P 6^th Aff as to how his contract of employment came into existence should the Yu Order be set aside for material non-disclosure with need to consider whether to exercise the discretion to maintain the Yu Order, or if not, to re-grant leave for service out.

(c)  Gateway D – Sub-ground 1

122.  P 6^th Aff  P claimed he had a good arguable case that his claim fell within Sub-ground 1. By the P 6^th Aff, P claimed that according to paragraphs 14-23 of the P 2^nd Aff, D1 (in its own capacity and on behalf of D2) made an offer on 17 September 2014 at the D1 HK Office to P who accepted such offer and concluded his contract of employment with D1 and D2 at that point in time by signing the Employment Contract. So even though the Employment Contract was circulated for signature/ endorsement by D1 and D2 in Hong Kong and United States, the place of formation of the contract of employment was in Hong Kong and not the place of final signature. But I pause to note that careful reading of the P 2^nd Aff showed no express mention in the P 2^nd Aff of Lee (D1’s managing director) making an offer of employment on behalf of D2 although such affirmation asserted P signed the Employment Contract to accept “the 1^st and 2^nd Defendants’ offer of employment in Hong Kong” and “the Employment Contract was validly made in Hong Kong ......” (see paragraph 27(b) above).

123.  Li 2^nd/3^rd Affs  Li noted the P 2^nd Aff did not say how after signing the Employment Contract D2 notified P of its acceptance and/or returned the signed Employment Contract to P, so it was doubtful whether the Employment Contract was made in Hong Kong. Li suggested it was possible the Employment Contract was posted by D2 from the United States to P’s address in Shanghai or Shenzhen in Mainland China.

124.  Discussion  Given Mr Wong’s concession that I should for the present purpose proceed on the basis that the Employment Contract among P, D1 and D2 was a written one, I leave other matters raised in the P 6^th Aff (see paragraph 122 above) for later consideration.

125.  According to the P 2^nd Aff, D1 via Lee made an offer of employment, and then P, D1 and D2 respectively signed the Employment Contract on different days on 17, 21 and 25 February 2014. On such basis, I find P would have real difficulty to show a good arguable case that the Employment Contract was concluded in Hong Kong.

126.  According to the P 2^nd Aff, D1 made an offer to P who accepted such offer by signing the Employment Contract, but such tripartite written contract would not be concluded until D2 signed the same and communicated its acceptance to P. P claimed the suggestion that he and D1 jointly offered the Employment Contract to D2 for acceptance was too awkward and unconvincing. But the dating of P’s, D1’s and D2’s signatures on the Employment Contract as explained in the P 2^nd Aff during the ex parte stage suggested this must have been the chronological /logical sequence of offer and acceptance pursuant to P’s case in the P 2^nd Aff at the ex parte stage. Nevertheless, even up till to the Hearing, P did not clarify how (a) the Employment Contract was returned to P and/or (b) D2 notified P about its acceptance of such written contract.

127.  As a matter of general principle, a contract is made at the place where the acceptance is complete, ie “when the acceptance of an offer is communicated by the offeree to the offeror. And if it is necessary to determine where a contract is formed ...... it appears logical that this should be at the place where acceptance is communicated to the offeror”.[92] “In the case of instantaneous communication, the contract is complete when the acceptance is received by the offerer; in other words, the contract is made at the place where the acceptance is received ......”[93] “Then there is the case – very common – of communication at a distance, to meet which the so-called “postal rule” has developed ...... it seems logical to say that the place, as well as the time, of acceptance should be where (as when) the acceptance is put into the charge of the post office”.[94]

128.  According to P, D2 was the final party to put its signature and to affix its company chop on the Employment Contract. In the absence of information in the P 1^st/2^nd Affs on how D2’s acceptance of the Employment Contract was notified to and how such signed written contract were returned to P, there was no basis for adopting the rule for instantaneous communication, so the postal rule suggested the place of contract (on the basis of the written Employment Contract) was the United States where D2 would have posted the Employment Contract to P.

129.  Mr Wang asked me to draw adverse inference against P to the effect that P must have received the fully signed Employment Contract in Mainland China (either at Shanghai where he worked and habitually resided, or at Shenzhen where his family lived and he visited once a month).[95] But there was no evidence before me that the signed Employment Contract was posted to P’s address either at Shanghai or Shenzhen, and the address P gave in the Employment Contract was a residential address in Lam Tin, Hong Kong. At this interlocutory stage, I see no justification for drawing adverse inference against P. In my view, Gateway D on Sub-ground 1 was not open to P.

(d)  Gateway D – Sub-ground 2

130.  P 6^th Aff  By the P 6^th Aff, P reiterated his case that “there was an offer from [D1] on 17^th September 2014 on behalf of itself and [D2]. [P] accepted the offer by signing onto the Employment Contract. The signatures of [D1] and [D2] were for endorsement purposes, and it is natural for them to sign on their own behalf” (my emphasis). Further, P believed “agent” for the purpose of this gateway covered an “agent” in “a more informal sense” or “a loose sense”,[96] ie D2 had no office in Hong Kong but gave instructions to P through D1 who through Suen communicated such instructions to P,[97] so D1 was at least an agent of D2 in such sense.

131.  In my view, this could be dealt with fairly shortly, and I find this jurisdictional gateway was not open to P:

(a)	At the Hearing, Mr Wong conceded that save for the exercise of discretion (if required) whether to maintain the Yu Order or to re-grant leave for service out should the court find there had been material non-disclosure in obtaining the Yu Order, the court was to regard the Employment Contract as a written contract and not any partly oral and partly written contract as alleged in the P 6th Aff.
(b)	No agency was mentioned in the Li 1st/2nd Affs as to the making of the Employment Contract, which on its face did not refer to any agency other than P’s bare assertion that he “accepted the 1st and 2nd defendants’ offer of employment in Hong Kong (see paragraph 27(b) above). After all, as the P 2nd Aff admitted, it appeared on the face of the Employment Contract that Walker signed on behalf D2 and Lee signed on behalf of D1.
(c)	For the purpose of this gateway, it was quite irrelevant whether D1 acted as agent for D2 in performing, carrying out and/or implementing the Employment Contract (eg, that D1 conveyed D2’s work instructions to P). The relevant criterion was whether the Employment Contract was made by/through an agent on behalf of D2, and Mr Wong had no answer on this point.

(e)  Gateway D – Sub-ground 3

132.  P 6^th Aff  The P 6^th Aff again alleged the Employment Contract was concluded in Hong Kong upon his signature thereon on 17 February 2014, and such contract was circulated to each of Ds for endorsement rather than acceptance. P noted there was no specific provision in the Employment Contract that limited his workplace to Mainland China. He claimed that (a) in/about 2013/2014 D1 occasionally assigned him to work on some projects in Shatin, Hong Kong and reimbursed his expenses in HK$ (“D1 Projects”), and (b) “...... in September 2014, [P] was originally assigned by [D2] to work in Tsuen Wan, Hong Kong to supervise Biwater Man Lee Limited [“Biwater”] [“D2 Project”]. However, due to the [Accident] on 10 October 2004, [P] was unable to fulfill [his] commitment”, and he exhibited a letter from D2 to Biwater dated 19 September 2014 (“D2/Biwater Letter”). Further, paragraph 21 of the P 2^nd Aff confirmed P always returned to Hong Kong to collect his salary payments (which D1 directly paid to P) at the D1 HK Office. P further reminded that D1’s Suen would translate D2’s English work instructions for him, and would liaise with him during his employment due to his weak command of the English language. So P believed the Employment Contract had close connection with Hong Kong, and there was a good arguable case that by implication the governing law was Hong Kong, which would open Sub-ground 3 of Gateway D for P.

133.  Li 2^nd/3^rd Affs  There was no express choice of law clause in the Employment Contract, but Li suggested the circumstances showed (especially on evidence adduced by D1) such contract had closer connection with Mainland China than Hong Kong, so the governing law should be PRC law:

(a)	D2 had no presence in Hong Kong but had an office in Shanghai (“D2 SHG Office”) and various projects in Mainland China as evidenced by, say, (i) the agreement entitled “Agreement for Polychem China Service Center” and dated 12 December 2008 between D2 and D1 for the former to rent office space at the D1 SHG Office from the latter for setting up the D2 SHG Office, and (ii) P’s name card with D2’s name and address in Shanghai[98];
(b)	D1 had offices in Hong Kong (ie the D1 HK Office) and Mainland China (ie the D1 SHG Office);
(c)	all P’s duties (including site services) were to be performed in Mainland China, and P actually carried out his job duties exclusively in Mainland China;
(d)	all compensation to P, including salaries, bonuses, allowances and expenses, were paid in RMB;
(e)	P was only entitled to Mainland Chinese public holidays;
(f)	P was mostly stationed in Shanghai, and under the Employment Contract he received (i) rental subsidies and (ii) special travel subsidies for monthly trips to Shenzhen where his home was located;
(g)	P was provided with a car to perform his duties in Mainland China for which he received fuel and maintenance subsidies.

134.  Li claimed the reference to the D2 Project “assigned by [D2]” in the P 6^th Aff meant that the D1 Projects “assigned by [D1]” (mentioned for the 1^st time in the P 6^th Aff) must have been unrelated to D2. D3 suggested P’s new allegations about the D1/D2 Projects were not credible or supportive of P’s case at all:

(a)

D1 Projects – P was economical with particulars/details of “some projects” assigned by D1 in Hong Kong in 2013/2014 (ie the D1 Projects). This must be contrasted to P’s attempt to show D1 was also his employer, ie paragraphs 12-16 of P’s WS (3 March 2017) mentioned that in 2008-2014 P worked for D1 on various projects in Mainland China concerning machineries manufactured by, say, Ovivo, Savi and Hayward Gordon (which had nothing to do with D2)[99] with detailed particulars and documents. Such difference in the level of details for these 2 allegations cast doubt on the alleged D1 Projects: (i) D1 Projects were not mentioned in P’s WS (3 March 2017) even though P devoted part of such WS on describing similar projects that went to the issue of who was P’s employer, (ii) the D1 Projects were not particularised as to time, manufacturer, machinery, customer or P’s services, and (iii) the D1 Projects were not supported by any document.

(b)

D2 Project – There was no mention of the D2 Project before the P 6th Aff, but P did provide particulars and produced the D2/Biwater Letter in support. But D3 questioned the D2/Biwater Letter as follows: (i) such letter appeared to be also relevant to P’s application for leave to serve out but P did not disclose the same at the ex parte stage and gave no explanation for such failure, (ii) such letter suggested that in bidding for the D2 Project in Hong Kong D2 gave the potential customer P’s resume, but such resume only highlighted P’s past experience/ involvement in projects in Mainland China and described P as D2’s “stationed site service representative in Shanghai Bailonggang W WTP since 2008”, which suggested P did not work for D2 in Hong Kong, and (iii) there was no evidence to show D1’s attempt to bid for the D2 Project was eventually successful or P provided services for such project in the course of employment. So Li claimed the D2/Biwater Letter merely confirmed that since 2008 (at the latest) P was stationed in Shanghai and worked in Mainland China, but he never served on D2’s projects (if any) in Hong Kong.

135.  Discussion  There was little dispute over the relevant principles. The governing law of a contract (eg the written Employment Contract in the present case) is determined by a 3-stage test: (a) whether the parties have expressly agreed upon the law to govern their contract and if so this will generally be respected, (b) in the absence of an express choice, whether there is factual basis for inferring an agreement on the governing law, and (c) failing (a)-(b) above, a residual rule (ie a system of law by reference to which the contract was made or that with which the transaction has the closest and most real connexion) applies.[100] Johnston, The Conflict of Law in Hong Kong helpfully summarises a non-exhaustive list of relevant factors, including (i) the location of the subject matter of the contract, (ii) the location of intended performance, (iii) the place of making or negotiating the contract, (iv) the domicile or the residence of parties, (v) the adoption of particular legal terminology, (vi) the language, (vii) the express choice of dispute resolution, (viii) the exemption clauses, (ix) the currency, and (x) the related transactions.[101] For (ii) above, Johnston, The Conflict of Law in Hong Kong added that “[notwithstanding] the abandonment of the old lex loci solutionis principle, the place of intended performance is still generally viewed as a very important factor in determining the system with which the contract has the closest and most real connection”.[102]

136.  Mr Wong argued that at the time of contract (rather than at the time of obtaining ex parte leave to serve out), the Employment Contract had close connection with Hong Kong, particularly when taking into account the following factors, so there was a good arguable case that the governing law of the Employment Contract was Hong Kong law, thereby satisfying Sub-ground 3 of Gateway D:

(a)	the Employment Contract was drafted in English and not in Chinese;
(b)	as regards the parties to the Employment Contract, P was domiciled in Hong Kong, D1 was incorporated in Hong Kong, and D2 was not a PRC company or had no corporate residence in the PRC;
(c)	the P 6th Aff claimed the Employment Contract was concluded at the D1 HK Office upon P’s acceptance of Lee’s offer made on behalf of D1 and D2;
(d)	contrary to Li’s bare assertions in the Li 2nd Aff, the Employment Contract did not expressly limit P’s duties to be performed in Mainland China or exclusively in Mainland China, which was supported by the D2/Biwater Letter dated 19 September 2014 that showed P was to be assigned to work on the D2 Project in Tsuen Wan, Hong Kong in September 2014 but for his injuries as a result of the Accident;
(e)	the place of performance of the Employment Contract was not confined to Mainland China (and (d) above highlighted the possibility P might have to carry out his work duties in Hong Kong), and some obligations under the Employment Contract (eg payment of salary and translation of work instructions for P) invariably took place in Hong Kong;
(f)	some Mainland Chinese elements in the Employment Contract were not generally determinative factors, eg there were clearly limits to the relevance of currency.[103]

137.  I reiterate that at the Hearing Mr Wong confirmed P was content to proceed on the basis that the Employment Contract was a written contract save for the purpose of exercising the discretion (if required) to consider whether to maintain the Yu Order or to re-grant leave to serve out if it were shown P obtained the Yu Order upon material non-disclosure. So for the purpose of determining the applicability of Gateway D under Sub-ground 3, I put aside P’s allegation in paragraph 136(c) above.

138.  In suggesting that the relevant factors overwhelmingly pointed to PRC law rather than to Hong Kong law, Mr Wang relied heavily on the assertion that P’s job duties under the Employment Contract were to be performed exclusively or almost exclusively in Mainland China. Mr Wang suggested P’s claim that he occasionally worked or intended to work in Hong Kong on the D1/D2 Projects only served to highlight the reality that the Employment Contract was predominantly connected with Mainland China.

139.  For the D2 Project, Mr Wang noted P could only point to this 1 occasion that D2 intended to assign him to work on a project in Hong Kong, which project, Mr Wang claimed, did not eventually materialise, and which echoed the Mainland Chinese elements in P’s resume set out in the D2/Biwater Letter:

“[P] started his site service supervision for installation & commissioning of Polychem’s collectors since 2003 in Zhu Yuan No. 1 WWTP, Shanghai. Afterwards, he had completed numbers of field service jobs for Polychem collectors and he was appointed as our stationed site service representative in Shanghai Bailonggang W WTP since 2008. In 2007, [P] completed the advanced training course in USA by us. After 2007, [P] also completed many site service supervision for installation & commissioning of Polychem’s collectors in China including Chengdu WWTW and Shanghai Bailonggang WWTP phase 2.”

But I note the D2/Biwater Letter went to summarise P’s qualifications inter alia as follows: (a) being fluent in Cantonese, (b) having passed the safety training course for construction workers in Hong Kong, (c) having passed the safety training course for competent persons of confined spaces operation in Hong Kong, and (d) having passed Grade B Electrical Worker Course in Hong Kong, all which showed D2’s reliance on P’s Hong Kong qualifications and his fluency in Cantonese in its bid for the D2 Project in Hong Kong. In my view, the very existence of the D2/Biwater Letter arguably reflected D2’s/P’s understanding that P’s job duties under the Employment Contract were not geographically limited to Mainland China, otherwise D2 would not have even tried to secure the D2 Project by the D2/Biwater Letter by putting P forward as a suitable installation supervision specialist whom D2 intended to assign to carry out works for such project. The fact the D2 Project did not materialise because P became unavailable as a result of the Accident was arguably neither here nor there.

140.  For the occasional D1 Projects that D1 assigned P to work on in Shatin, Hong Kong, Mr Wang submitted the D1 Projects (if they did exist) were outside the Employment Contract. But as discussed in paragraphs 92(b) and 113-116 above, I have found there was arguable basis to say P’s scope of work/duties under C/2 of the Employment Contract would not be limited to assignments by D2 and might encompass assignments by D1.

141.  Mr Wang criticised P for not providing particulars/documents concerning the D1 Projects, and suggested P’s recent allegations about the D1 Projects were inconsistent with his WS (3 March 2017) “where he tried to account for all the projects that he worked for [D1] relating to manufacturers other than [D2] but never mentioned these newly raised projects”. I do not read paragraphs 13-15 of P’s WS (3 March 2017) (see paragraph 113 above) as P’s attempt to “account for all the projects that he worked for [D1]” (my emphasis). Rather, it appeared P was explaining why he had an employment relationship with D1 (as well as one with D2) by giving examples of projects in Mainland China assigned to him by D2 that involved products/machineries of other manufacturers (not D2), but there was no suggestion this was an exhaustive list of such projects. Indeed, paragraph 13 of P’s WS (3 March 2017) stated “[D1]與多家外國機械廠合作, 包括Ovio, Savi及Haywood Gordon等。這些廠商於國內未有分公司, 因此依賴[D1]作為中介公司把這些外國廠商生產稱機品售至香港及中國內地。[D1]亦曾為香港及內地買家提供這些產品之售後服務, 包括介紹、安裝、指導使用以及維修保養等” (my emphasis). The use of the characters “包括” meant such examples were not exhaustive, and P further indicated D1 did provide after-sale services (including installation services) in Hong Kong to Hong Kong buyers of such products/machineries of other manufacturers (not D1) sold through D1 as intermediary. Although P did not give detailed particulars/documents of the D1 Projects or the aforesaid after-sale services in Hong Kong, it is not correct to say such projects were only first mentioned in the P 6^th Aff.

142.  Mr Wang noted P worked according to the Mainland Chinese calendar, P was only entitled to Mainland Chinese public holidays (C/3-4) and P’s remuneration (including salary, allowances, expenses etc) were paid in RMB (C/3-4, C/6-8 and C/10), but Mr Wong noted P always came to the D1 HK Office to collect his remuneration from D1 who on the face of the Employment Contract was the party obliged to pay him. I have found in paragraph 128 above that (assuming the Employment Contract was a written contract) the place of contract was in the United States, and I bear in mind the Employment Contract was made in English on D2’s letterhead and signed by P and D1 in Hong Kong.

143.  Mr Wang next suggested the locus of the relevant parties showed P (who habitually resided/worked in Shanghai with rent and vehicle expenses paid by D2) and D2 (who had no presence in Hong Kong but had the D2 SHG Office called Polychem China Services Centre[104] since 2008) had much closer connection with Mainland China than with Hong Kong whilst D1’s position (with offices in both Hong Kong and Shanghai) was neutral. But in my view, query must be raised as to why the Employment Contract was made on D2’s letterhead and signed by P and D1 in Hong Kong when both Ds had offices in Shanghai and P was said to live/work there. I also note with interest P gave his Hong Kong address and not his Shanghai/ Shenzhen addresses in the Employment Contract, which again raised query as to whether it was the parties’ conscious choice to tie the Employment Contract to Hong Kong.

144.  Mr Wang (a) disagreed with P’s contention that liaison by Suen of the D1 HK Office with P and D2 over P’s work instructions was a further connecting factor, (b) argued this was just performance of the Employment Contract that was predominantly connected with Mainland China, and (c) added that staff at the D1 SHG Office (eg Yang and one Shen Wei) were also involved in communications in relation to work instructions between P and D2.[105] But I have found there was triable/ arguable case in respect of P’s contentions that (i) D1’s role was not restricted to mere channel/conduit for payment/instructions between P and D2 and might include other work including liaison with D2 and end-users to iron out their disagreements over installation instructions to inform proper work instructions for P, and (ii) P’s work under the Employment Contract might include after-sale services (including installation instructions) to buyers/end-users of products/ machineries of other manufacturers in Hong Kong and Mainland China and/or in principle might include work on D2’s projects in Hong Kong (if any).

145.  In all the circumstances, I am unable to accept Mr Wang’s contention that there were such “overwhelming connections with the PRC law, especially almost exclusive performance of the Employment Contract to render after sale services as a Site Service Specialist in mainland PRC”, so “there should be no doubt that ...... the governing law should be the PRC law”. Rather I find there was a good arguable case that the relevant law of the Employment Contract was Hong Kong law, and I am satisfied P had established Gateway D under Sub-ground 3.

(f)  Gateway F

146.  P claimed there was a good arguable case that his claim against Ds fell within Gateway F, but the Li 2^nd/3^rd Affs asserted this gateway was not available since P’s pleadings as to the Accident (see paragraph 2 above) made clear the alleged tort/injuries were exclusively committed/inflicted in Mainland China.

147.  Gateway F has 2 alternative limbs for a claim founded in tort: (a) “damage was ...... resulted from an act committed, within the jurisdiction” (“1^st Limb”) and (b) “the damage was sustained ...... within the jurisdiction” (“2^nd Limb”). There was no dispute that P’s claim was founded partly on tort (ie negligence), so the question became whether P could establish a good arguable case on either the 1^st Limb or the 2^nd Limb in respect of P’s tort claim.

(g)  Gateway F – 1^st Limb

148.  Although the P 2^nd Aff asserted (see paragraph 27(c) above) and the P 6^th Aff reiterated the pleaded tort was committed in Hong Kong, at the Hearing Mr Wong conceded it was a foreign tort, so the 1^st Limb was not applicable. After all, (a) the Accident happened in Ningbo, (a) the pleaded particulars of negligence referred to acts/omissions concerning the situation of the Factory in Ningbo, and (c) at the material time P was stationed at and working in Shanghai under the Employment Contract.

149.  Further, DHCJ To at page 911 in GDH Ltd held that “[where] the tort involved international elements, the double actionability rule applies ...... To obtain leave for service out of jurisdiction under [Gateway F], the plaintiff must show that the tort complained of was of such a character that it would have been actionable if committed within the jurisdiction and the act must not have been justifiable by the law of the place where it was done”. I will deal with the double actionability rule in greater detail below, but suffice to say here that the fact the P 6^th Aff claimed and Mr Wong submitted the double actionability rule was satisfied (as bolstered by the PRC Opinion referred to in paragraph 156 below) showed P’s recognition that the pleaded tort was a foreign tort.

(h)  Gateway F – 2^nd Limb

150.  The P 6^th Aff contended P’s claim fell within the 2^nd Limb since he sustained and continued to sustain “damage” within the jurisdiction. The RSoD set out inter alia (a) injuries/disabilities P sustained as a result of Ds’ allegedly negligent acts, (b) the pain, suffering and loss of amenities (“PSLA”) he suffered, and (c) the medical treatment/expenses he incurred in Hong Kong. P’s WS (3 March 2017) also particularised his injuries and their impact on his work/living in Hong Kong with breakdown of his medical and other expenses incurred in Hong Kong. P claimed that (i) as at the date of the P 6^th Aff he was still receiving treatment in Hong Kong in the psychiatry, general medicine, orthopaedic and ophthalmologic disciplines for injuries/ disabilities he sustained as a result of Ds’ negligence, and (ii) his condition had worsened with back pain upon change in weather in Hong Kong.

151.  D3 had 2 answers to P’s contentions. First, Mr Wang submitted (and in my view he was correct to so say) that P did not rely on the 2^nd Limb at the ex parte stage. The P 1^st Aff did not even refer to Gateway F at all, and the P 2^nd Aff only referred to the 1^st Limb and not the 2^nd Limb. In my view, since the courts act on the faith of claimants’ representations made ex parte when granting leave for service of process abroad, P could not say he had by the P 1^st/2^nd Affs called upon Master Roy Yu to consider the applicability of the 2^nd Limb. In my view, the ex parte Yu Order could not be supported by the 2^nd Limb. But whether in light of the 2^nd Limb this court should exercise discretion not to set aside the Yu Order or (if this court should set aside the Yu Order) to re-grant leave to serve out via Gateway F will be considered below.

152.  Thus, it is unnecessary at this stage to consider D3’s 2^nd answer that at the time of the Accident P suffered “damage” (ie immediate bodily injuries) at the Factory in Ningbo and not in Hong Kong. The Li 3^rd Aff asserted that P’s other allegations of loss/ damage in the P 6^th Aff (see paragraph 150 above) were not “damage” within the meaning of the 2^nd Limb, but were just means to quantify the monetary compensation for P’s bodily injuries sustained as a result of the Accident or, to put in other words, they were evidence of the financial value of that “damage”. These matters would be considered in Part VIII below.

(i)  Summary

153.  In the premises, P had shown a good arguable case that Gateway C and Gateway D under Sub-ground 3 were available to him, but he failed in respect of Gateway D under Sub-grounds 1-2 and Gateway F. But since these jurisdictional gateways are disjunctive, P successfully established the 1^st element of the criteria for serving the CWoS on D2 out of jurisdiction.

(j)  Serious question to be tried

154.  D3 fairly/correctly did not suggest there was no serious question to be tried as against D2. Indeed, Mr Wang in his oral submissions acknowledged P’s pleadings demonstrated a good or plausibly arguable case.

(k)  Forum conveniens

155.  This was the last element for considering whether the Yu Order was properly granted for issuance and service of the CWoS on D2 out of the jurisdiction. The burden was on P to satisfy the court that Hong Kong was clearly and distinctly the more appropriate forum for the trial of P’s claim against D2.

156.  D3 adduced PRC legal opinion by PRC lawyer 諸驥平of Allbright Law Offices dated 26 August 2018 (“PRC Opinion”) giving the opinion that “根據《民事訴訟法》第二十八條規定: “因侵權行為提起的訴訟, 由侵權行為地或者被告住所地人民法院管轄。” 本案[P]受傷的地點在浙江省寧波市鎮海區, 即為侵權行為地; 而[D2]因在中國內地無住所, 故本案無法選擇被告住所地人民法院管轄; 因此, 本案可由寧波市鎮海區有管轄權的人民法院管轄”, so the PRC Courts would have jurisdiction to hear P’s claim against D2. P did not adduce any countervailing PRC legal opinion to dispute the jurisdiction of the PRC Courts. The PRC Opinion went on to say a judgment awarded in Hong Kong against D2 for damages for personal injuries sustained by reason of the Accident could not be enforced against D2 in Mainland China.

157.  Turning now to whether prima facie Hong Kong is clearly and distinctly a more appropriate forum than the PRC Courts, Mr Wang submitted that the available evidence showed the only connecting factors with Hong Kong were (a) the current place of residence of P who held a Hong Kong identity card, (b) P’s medical records kept in Hong Kong, and (c) D1’s Suen who facilitated communications between P and D2 being located in Hong Kong, but he argued that such feeble connectors were overwhelmingly outweighed by other strong factors pointing towards Ningbo, eg (i) the governing law of the Employment Contract, (ii) the place where the tort (ie the Accident) was committed, (iii) the focus of the factual disputes being how the Accident occurred and whether negligence was involved, (iv) the evidence and witnesses available in Ningbo concerning the key disputes, and (v) the total lack of connection with Hong Kong on the part of D2. On such basis, D3 argued P failed to discharge his burden to show Hong Kong was clearly and distinctly the more appropriate forum.

158.  I note the Accident (ie the tort) happened in Ningbo. Mr Wang suggested this established a prima facie basis for the PRC Courts to have jurisdiction, but I am mindful this would not be determinative. Rather, it had been described as a convenient starting point (see paragraph 58 above). Here, P being the protagonist in the present action and a key factual witness on both issues of liability and quantum was a Hong Kong permanent resident, and ever since his return to Hong Kong on 15 October 2014 he resided in Hong Kong with his wife and son (both of whom settled in Hong Kong after they were granted “one-way” permits). Indeed, P’s wife was working in Hong Kong, and P’s son was studying here.

159.  Next, I turn to the matter of choice of law in contract and tort for determining the appropriate forum under forum non conveniens principles. In this interlocutory context, I could not come to any final determination but would have to assess such issue practically in terms of the rubric of a “good arguable case”.[106] For the claim in contract, notwithstanding Mr Wang’s submissions otherwise, I have found there was a good arguable case that the governing law of the Employment Contract was Hong Kong law. For P’s claim in tort, Mr Wang submitted the choice of law was the lex loci delicti (ie PRC law) as the Accident happened in Ningbo, but Mr Wong submitted it should be the lex fori (ie Hong Kong law).

160.  There was no dispute that for a tort committed in another jurisdiction to be actionable in Hong Kong, the double actionability rule applies. The general rule was formulated by Willes J in Phillips v Eyre:[107]

“As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be such of a character that it would have been actionable if committed in England ...... Secondly, the act must not have been justifiable by the law of the place where it was done.”

This formulation, particularly in relation to the 1^st aspect, is regarded as a true choice of law rule, and I will consider each aspect in turn.

161.  The source of the 1^st aspect of the rule in Phillips (ie the wrong must be of such a character that it would have been actionable if committed in England), is the decision of Privy Council in The Halley[108] as approved obiter in Boys v Chaplin.[109] In The Halley, the shipowner would be vicariously liable under Belgian law for a collision caused in Belgian waters by the negligence of a compulsory pilot, but it was not so liable under English law at the time, so no action would lay in England. Thus, an action in England on a foreign tort would be determined according to English domestic law. This was the generally accepted view in respect of the 1^st aspect of the rule in Phillips, and was confirmed by Lord Wilberforce and Lord Pearson in Boys at pages 384-387 and 395-398 and also in subsequent cases such as Coupland v Arabian Gulf Oil Co[110] cited by Mr Wong.

162.  The plaintiff in Coupland was working in Libya for the defendant when he had an accident resulting in below knee amputation. The plaintiff claimed damages against the defendant for breach of contract and negligence in causing the accident. Hodgson J held that Libyan law was the proper law of the contract, but (a) since the plaintiff’s claim in tort was actionable both under English law and under the law of the country where the tort was committed (ie Libya), it was governed by English law (pages 1149-1151), and (b) insofar as the tort claim was not excluded/restricted under the terms of the contract, it could proceed as a separate action on the basis of ordinary common law principles of negligence. On appeal, the English Court of Appeal confirmed that the contract was only relevant to the tort claim if, on its true construction in accordance with proper law, it had the effect of excluding/restricting the tort claim (page 1153). Robert Goff LJ at pages 1153-1154 held as follows:

“...... At all events, so far as I can see on the case as pleaded, there is no term of the contract which, whether the contract be governed by Libyan law or by English law, purports to have the effect of either excluding or restricting the claim in tort. I find myself therefore in entire agreement with the judge that even if the contract, as he held, is governed by Libyan law, then that contract has no impact on the claim in tort.

That being so, we are left with the simple situation that the judge has held, applying the principles in Boys v Chaplin [1971] AC 356, that the claim in tort must proceed on the basis that the claim must be actionable by the lex loci and also actionable by the lex delicti. He has said, having heard the evidenced, that it is actionable under the lex delicti, and so that requirement has been fulfilled. It follows, in my judgment, that, for the claim in tort, Libyan law falls out of the picture as being irrelevant, and so for that purpose the trial can proceed on the basis of the ordinary principles of common law negligence.” (my emphasis)

163.  Thus, as a matter of private international law,[111] any action in England on a foreign tort will be decided according to English domestic/ internal law.[112] So the 1^st aspect of the rule in Phillips can be summarised as follows: (a) no action will lie in England for any tort unknown to English law, (b) the plaintiff cannot recover in England for a head of damage unknown to English law, and (c) the defendant may make use of a defence available under English law (provided such defence is not confined to events that occur in England) even if it is not available under the lex loci delicti.

164.  Turning to the 2^nd aspect of the rule in Phillips (ie the act must have been justifiable by the law of the place where it was done), if the tort took place abroad, it is permissible to show the defendant’s acts are “justified” according to the law of that place. So in Phillips no action would lay for things done in Jamaica that were lawful under Jamaican law even if they would have been tortious in England.[113] In Boys, the House of Lords reviewed the rules relating to choice of law in tort, and the 2^nd aspect was interpreted as a requirement that the defendant’s conduct must in the actual circumstances of the case give rise to civil liability as between the same parties under the lex loci delicti,[114] (a) which makes available to the defendant in the action in England any substantive defences that exist under the lex loci delicti in addition to his defences under English law, and (b) which means if the event does not give rise to civil liability as between the same parties under the lex loci delicti, the fact it constitutes a tort under English law will not help the plaintiff.

165.  In summary, the general rule in Phillips as clarified in Boys means that (a) the rights/liabilities of the parties to an English action on a foreign tort are determined by the lex fori, ie the English domestic/ internal law, and (b) the application of English law is subject to the qualification that the plaintiff’s action in England will succeed only to the extent that civil liability also exists as between the same parties under the lex loci delicti.

166.  In the present action, D3 claimed P’s pleaded tort is a foreign tort (which Mr Wong did not disagree despite some contrary assertions in the P 1^st/2^nd Affs). After all, the Accident occurred in Ningbo and P’s immediate bodily injuries that completed the cause of action in negligence were also suffered in Ningbo. In my view, it could not be credibly argued that the different elements of the pleaded tort[115] occurred in different jurisdictions. Further, the PRC Opinion was of the view that P’s tort claim was actionable in the PRC Courts without suggestion that any pleaded head of claim would not be recoverable under PRC law. Indeed, Mr Wang submitted P would not suffer any juridical/personal disadvantage even if his claim were to be tried in the PRC Courts.

167.  On this note, it is perhaps unnecessary to consider the exception to the general rule discussed in Boys and in Red Sea Insurance Co Ltd v Bouygues SA,[116] but I do so for completeness. In Boys, the plaintiff and the defendant were both English nationals involved in a road accident in Malta. By Maltese law the claimant could recover only pecuniary loss and not compensation for PSLA as under English law, but the House of Lords eventually applied English law.[117] Their Lordships re-affirmed the general double-actionability rule in Phillips,[118] but at page 391 said such general rule must be made flexible enough to take account of varying interests and considerations of policy that may arise when one or more foreign elements are present, but no clear majority view has emerged on this. But it was clear that if the plaintiff in that case was to recover general damages, he would have to escape from the 2^nd aspect of the rule in Phillips. In holding that in such circumstances the plaintiff should be permitted to recover damages not confined to those available under the lex loci delicti, Lord Hodson and Lord Wilberforce at pages 378-380 and 391-392 (a) relied on the language of the American Restatement, (b) emphasised that both parties were English and were only temporarily present in Malta where the accident happened, and (c) held that English law was more closely connected with the relationship between the parties.[119] So even though the precise nature/extent of the new element of flexibility remains uncertain, Clerk & Lindsell on Torts helpfully summarises such exception as follows:[120]

“...... As such, the general rule that the wrong be doubly actionable, both in England and where the tort was committed, can be displaced on evidence that in all the circumstances English law has the most significant relationship with the occurrence and the parties.”

168.  In Red Sea Insurance Co Ltd, the Privy Council on appeal from Hong Kong held that the 1^st aspect of the rule in Phillips does not impinge on the question of jurisdiction,[121] and that the exception in Boys can equally be invoked to disapply the lex fori and to secure the sole application of the lex loci delicti commissi[122] where the latter is more significantly related to the case as a whole or to a particular issue therein than the lex fori. In that case, the plaintiffs sued in Hong Kong the defendant insurer (incorporated in Hong Kong with head office in Saudi Arabia) for indemnity under an insurance policy issued by the defendant for loss/expense in relation to a building project in Saudi Arabia, and the defendant counterclaimed against a consortium of 10 plaintiffs for supplying faulty building materials in breach of the duty of care to the other plaintiffs, hence the defendant claimed to be subrogated to the other plaintiffs’ rights against the consortium. When the consortium applied to strike out the defendant’s counterclaim, the defendant asserted it was entitled under Saudi Arabian law to sue the consortium directly in negligence for damage caused to the other plaintiffs, which cause of action was not available under the Hong Kong law (ie the defendant would have failed under the double actionability rule). The Privy Council held that the exception in Boys could be invoked to displace Hong Kong law and to apply Saudi Arabian law because of overwhelming connection between the claim and that country.[123]

169.  Neither Mr Wong nor Mr Wang invoked the exception in Boys and Red Sea Insurance Co Ltd, which was understandable as they both accepted P’s tort claim was actionable in Hong Kong and the PRC Opinion suggested that such claim was also actionable in Mainland China, ie the double actionability rule was applicable, and there was no suggestion that either the 1^st or 2^nd aspect of such rule could not be satisfied and had to be displaced. Thus, in the present context, the parties would be concerned with the general rule of and not the exceptions to the double actionability rule.

170.  Turning to local case law, The Owners of Cargo lately laden on board the Ship or Vessel “Adhiguna Meranti” v The Owners of the Ships or Vessels “Adhinguna Harapan” & ors[124] concerned the grounding of an Indonesian-owned vessel in Taiwan and an application for a stay of the Hong Kong proceedings on the ground that the Indonesian courts were the natural and convenient forum. For the stay application, Hunter JA (giving the judgment of the CA) discussed the issue of choice of law by tracing the developments of the double actionability rule in Phillips and Boys, and said at page 914 as follows:

“Upon our reading of the speeches in Boys v. Chaplin therefore in a claim in Hong Kong based upon a tort committed abroad:

(1) the governing law is that of Hong Kong; and

(2) the law of the lex loci delicti is relevant only to see whether civil liability for such tort there exists and has not been excluded.

This conclusion, we think, has the support of Goff, L.J. giving the judgment of the Court of Appeal in England in Coupland v. Arabian Gulf Petroleum Co ...... The case concerned personal injury to the English plaintiff in Libya whilst in the defendant’s employ. Goff, L.J. pointed out that the trial judge had held the claim to be ‘actionable under the lex loci delicti’. He went on:

‘It follows in my judgment that for the claim in tort, Libyan law falls out of the picture as being irrelevant, so for that purpose the trial can proceed on the basis of the ordinary principles of common law negligence’ (p. 229. (Emphasis added.)” (my emphasis)

171.  As further explained in Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc & anor,[125] Slade LJ in giving the judgment of the English Court of Appeal at pages 437-440 also traced the legal developments from Phillips to Boys (referring to the rule in Phillips as revised by Boys as “the rule in Boys v. Chaplin” – page 438), and said at page 440 as follows:

“The application of the rule should give rise to no problems in cases where all the relevant events, apart from the institution of proceedings, have taken place in one country. No problems arose in Phillips v. Eyre ...... where the plaintiff was complaining of false imprisonment and other injuries inflicted upon him in Jamaica by the defendant, who was Governor of the island. Nor did they arise in Boys v. Chaplin ...... itself where the respondent sustained injuries in a road accident in Malta caused by the appellant’s negligence. ......”

The facts in Metall und Rohstoff AG showed it was not a foreign tort but a “double locality” case, ie many of the relevant events occurred in New York and many others occurred in England and Wales, which gave rise to separate problems discussed below.

172.  The double actionability rule in Phillips as revised by Boys was endorsed by DHCJ Poon (as he then was) in Shanghai Reeferco Container Co Ltd v Waggonbau Elze GmbH & Co Besitz KG as follows:[126]

“28. The double actionability rule states, as a general rule, that an act done in Country A is a tort and actionable as such in Country B (lex fori), only if it is both (a) actionable as a tort according to the law of Country B, or in other words is an act which, if done in Country B, would be a tort; and (b) actionable according to the law of Country A where it was done (lex loci delicti). See generally Boys v Chaplin [1971] AC 356 at p.374. ......”

But that case essentially concerned jurisdiction rather than choice of law since the act complained of was not justifiable in Country B (page 721).

173.  Shanghai Reefero Container Co Ltd[127] also discussed the exception in Red Sea Insurance Co Ltd at page 726:

“47. ...... In Red Sea Insurance Co Ltd v Bouygues SA & Others [1995] 1 AC 190, the central issue arising on the appeal was whether the defendant could rely on Saudi Arabian law (lex loci delicti), to establish direct liability in tort when Hong Kong law (lex fori) does not recognise such liability. In summary, the Privy Council addressed the question in this way. The first requirement of the double actionability rule, that is, the act must be actionable as tort according to the lex fori, is not a test of jurisdiction. It is a rule of choice of law to decide which law should be chosen to determine the relevant issue or issues. That is not an invariable rule. English law (so does Hong Kong law for that purpose) recognises that a particular issue between the parties to litigation may be governed by the law of the country which, with respect to that issue, has the most significant relationship with the occurrence and with the parties. In an appropriate case, a plaintiff could rely exclusively on the lex loci delicti even if under the lex fori his claim would not be actionable. This is the exception to the double actionability rule.

48. The exception, properly understood, is of no assistance to the plaintiff for two reasons. First, the exception, being an exception to a rule of the choice of law, cannot possibly be a test of jurisdiction. Second, under the exception, the court applies the lex loci delicti to see if the act complained of constitutes a tort. ......” (my emphasis)

But such exception would not assist D3’s contentions because (a) there was nothing to suggest P’s tort claim would not be actionable under the lex fori, (b) even if one focuses on the acts in Ningbo alone there was no evidence that D2 would not be liable for negligence under Hong Kong law and/or PRC law, and (c) neither counsel identified any particular issue in P’s tort claim that should be governed by the lex loci delicti on the basis that (i) such issue was not actionable under the lex fori and (ii) hence the lex loci delicti be applied to see if the act complained of would constitute a tort.

174.  Turning to the “double locality” point, Shanghai Reefero Container Co Ltd[128] referred to Metall und Rohstoff AG, and noted as follows:

“42. Double locality cases, as defined by the English Court of Appeal, involve cases where: (a) the several acts alleged to form part of one tort have occurred in more than one country; or (b) the injury or damage allege to constitute the tort has occurred in a country different from the place of one or more of the relevant acts. The focus of the inquiry is where the tort was committed. The questions relating to damage and where it is suffered come into play when such damage is an ingredient of the tort in question. (Emphasis added.)”

But the situation here (as in Coupland) did not involve any double locality. After all, the Accident happened in Ningbo and P’s immediate bodily injuries sustained at the time of the Accident being “damage alleged to constitute the tort” were sufficient to complete the tortious cause of action. As explained above, at the Hearing both counsel proceeded on the basis that the pleaded tort was a foreign tort, ie the alleged tort was committed in Ningbo. In the circumstances, there was no need to apply the “substance” test for the “double locality” cases as explained in Metall und Rohstaff AG at pages 446-447 on Hong Kong conflict of laws principles to locate the tort in one place for choice of law purpose.[129]

175.  I agree the governing law of the Employment Contract would not be relevant to the determination of the law applicable to P’s tort claim because (a) “it does not follow that the tortious cause of action is parasitic on the contract as a legal construct”, and (b) “on ordinary principles the contract is only relevant to the claim in tort in so far as it does, on its true construction in accordance with the proper law of contract, have the effect of excluding or restricting the tortious claim”.[130] Thus, had the governing law of the Employment Contract been PRC law, it would not have aided D3’s assertions on choice of law for P’s tort claim since (i) there were no clauses in the Employment Contract that would have excluded/restricted P’s tort claim, and (ii) P’s tort claim was actionable both in Mainland China (as per the PRC Opinion) and in Hong Kong. On the above analysis, I find there was a good arguable case that P’s tort claim could proceed in accordance with Hong Kong law.

176.  As to the factual focus and the evidence to be adduced, the major issues in the present action between P and D2 would be (a) whether there was any negligence, breach of statutory duty (if applicable) or breach of implied terms of the employment contract on the part of D2, (b) whether there was any contributory negligence on the part of P and/or others (if any), and (c) whether the quantum of P’s claim was appropriate and reasonable.

177.  In any event, D3 made clear the quantum of P’s claim would be disputed. The evidence (whether documents or witnesses) in the post-Accident period (save for events in Ningbo for 4 days immediately after the Accident) would be from Hong Kong. Mr Wang submitted P’s medical treatment records could simply be posted or emailed to Mainland China, but there was no evidence before me the PRC Courts would accept hearsay production of such documents from another jurisdiction.

178.  The key witness on quantum matters would be P himself (who was in Hong Kong since his return on 15 October 2014). But depending on how D2 (or D3 on behalf of D2) would contest the quantum of P’s claim (bearing in mind at this stage D3 declined to condescend upon the shape of the defence/contest), there might be other potential witnesses on quantum, eg treatment/expert medical doctors/ therapists (who could speak to any contested medical issues), P’s wife (who lived with P in Hong Kong and therefore could be expected to speak to his condition and disabilities), witnesses on potential jobs suitable for P in Hong Kong and the likely earnings, and/or Ng (who conducted surveillance on P). All such potential witnesses and their evidence would be closely connected to Hong Kong.

179.  Mr Wang submitted P’s injuries/disabilities would not immobolise him or prevent him from travelling to Ningbo, but it cannot be gainsaid it would be more convenient for P to testify in Hong Kong given his injuries, disabilities and need to attend regular medical follow-up in various disciplines (see paragraph 150 above). It was unclear from the PRC Opinion whether P need to personally attend any pre-trial hearings before the PRC Courts. Moreover, it was also doubtful whether Ng (whom D1 saw fit to include as its factual witnesses to resist P’s claim on quantum matters) could be compelled to attend the PRC Courts to give evidence.

180.  As for the medical experts, it was also unclear whether medical experts would have to give viva voce evidence at trials in the PRC Courts, but if they were so required either under PRC law or if they were required to address any particular medical issue depending on the shape of the resistance by or on behalf of D2, then clearly the Hong Kong courts would be more convenient for such witnesses with their local professional commitments. There was doubt whether such professional witnesses could be compelled to attend trial in the PRC Courts if they were unwilling to travel to Ningbo for such purpose. The practical reality was that P had engaged local medical experts to prepare expert medical reports at an early stage,[131] which I find appropriate since (a) P received and continued to receive medical treatment in Hong Kong, (b) D1 was in the picture at the time, and (c) Practice Direction 18.1 encouraged early arrangement for obtaining joint expert medical reports. I do not see any basis for D3 to say this was “an ill attempt of forum shopping which has been repeatedly criticized by the Court”.

181.  Mr Wang suggested P’s pre-trial and post-trial loss of earnings would essentially require evidence concerning the employment environment in Mainland China (especially in Shanghai where he had worked for years) to prove/challenge such heads of claim. For calculating loss of earnings, it is necessary to ascertain the notional earnings of the plaintiff’s pre-Accident work which he would have continued to perform but for the Accident, and his actual/notional post-Accident earnings in respect of work he could have taken up given his injuries/disabilities. On these, 2 matters were of note. First, P did not really compete and work in the open market in Mainland China for his trade specialty. Although he worked on various projects in Mainland China, he did so (on his own case) as an employee for employers in Hong Kong and in United States on employment terms particular to such arrangements (even though he performed services under such employment contract for projects in Mainland China). He was offered employment and signed the Employment Contract in Hong Kong. Query therefore arose as to whether evidence of commensurate employment position for proving/challenging the notional earnings of P’s pre-Accident employment ought to come from the market here or in Mainland China. Secondly, since P lived in Hong Kong after the Accident, any evidence of notional earnings of work he could have taken up after the Accident must be connected to the Hong Kong market.

182.  On the issue of liability, P was the only witness for himself as claimant, and Mr Wang agreed Lee and Suen (who were stationed in Hong Kong) of D1 (which was a Hong Kong company) would be potential witnesses. Mr Wang submitted (a) D1’s other staff had no knowledge about the Accident and “their evidence was focused on the employment relationship between [P] and [D1] which was no longer in issue”, and (b) the employment relationship between P and D2 was unlikely to be in much dispute.

183.  On the matter in paragraph 182(a) above, it was true that Yang and Song were stationed in Shanghai. But the evidence of other witnesses in Hong Kong were not limited to facts/matters concerning the employment relationship between P and D1. Both Lee in his WS (24 April 2017) and Lau in his WS (25 August 2017) described the employment relationship between P and D2 and the commercial relationship between D1 and D2. Both of them were stationed in Hong Kong, and their evidence would be pertinent to the employment issue between P and D2. Further, I do not agree the proposition in paragraph 182(b) above could be assumed if the trial was to take place in the PRC Courts. Although D2 had not submitted to the Hong Kong jurisdiction despite service of the CWoS on D2 in the United States, it was unknown whether D2 would contest P’s claim if P were required to bring his claim against D2 in the PRC Courts (bearing in mind it had presence by way of the D2 SHG Office and business operations in Mainland China). Indeed, Mr Wang suggested D2 would have receivables in Mainland China, and I note D2 did previously dispute it was P’s employer and alleged P’s employer was D1 (see paragraph 118(f) above).

184.  On the issue of liability, Mr Wang argued that P was working in Mainland China when the Accident happened in Ningbo, so the connection to Ningbo was self-evident. At this stage D3 only had access to evidence filed by P/D1, but the Li 2^nd Aff suggested it was reasonable to infer from the available materials there would be further evidence/ witnsses to be discovered or located in Mainland China, eg

(a)	investigation of the Accident by the public security of Ningbo;
(b)	a Mr Chen, who was employed by the installation contractor Ningbo Construction and who worked with P on the date of the Accident, might provide information on how the Accident happened and the surrounding environment (but he was not listed as witness in the present action “possibly due to inconvenience and hence his evidence had to be introduced through the mouth of [Lee] of [D1] (paragraphs 101-109 of Lee’s WS) (24 April 2017)”);
(c)	potentially other persons in Mainland China who were working at the Factory and at the Accident Area around the time of the Accident and who could provide information about the Accident and the surrounding environment, which evidence, Mr Wang suggested, might be more useful than that of P who (according to his case) became unconscious after he fell into the trench of the DSR aeration tank at the Factory;
(d)	evidence from the hospital in Ningbo where P was treated before he returned to Hong Kong.

185.  The Li 3^rd Aff further identified the following potential witnesses whom it was said would be able to testify about the surrounding circumstances of the relevant construction site and the Accident: (a) 2 staff from SUMEC being site manager Liu Zhengdong (劉鎮東) and Wei Wei (魏威) referred to in paragraph 31 of P’s WS (3 March 2017), (ii) a Liu Jindong (劉進東)[132] who was a manager of SUMEC referred to in the Record of Interview, and (iii) workers preparing for the installation of the excavator under P’s command as mentioned in paragraph 37 of P’s WS (3 March 2017) but the names of these workers were currently unknown to D3.

186.  In my view, Mr Wang’s submissions must be put in proper context. In considering forum conveniens under the Setting Aside Application, the starting point must be whether the Hong Kong courts would be the more appropriate forum to assume jurisdiction over P’s claim (then against D1 and D2) for permitting service of the CWoS on D2 out of jurisdiction, and it would not be fair to use ex post facto events and/or developments to dispute forum in such context. An obvious example of such ex post facto events and/or developments would be the Settlement between P and D1. This was to be contrasted with the Stay Application which required the court to consider as of now whether the PRC Courts would be the more appropriate forum for the trial of P’s claim as D3 proposed. Such distinction would explain the different onus for demonstrating the more appropriate forum in respect of these 2 applications.

187.  Turning to the matters raised by Mr Wang in paragraphs 184-185 above, whilst I agree D3 would not have personal knowledge about the circumstances of the Accident, the starting point must be that the Yu Order was granted years before D3 came into the picture, and its vitality ought not depend on the ex post facto consideration as to D3’s current lack of personal knowledge about the Accident. I sympathise with P’s complaint that apart from Mr Chen, Liu Zhengdong (劉鎮東) and/or (劉進東) (see footnote 132 above) and Wei Wei (魏威) D3 failed to pinpoint for the purpose of trial (i) who exactly would be the likely further witnesses residing out of jurisdiction, and (ii) how important or relevant their evidence would be to the determination of the issues. D3’s assertions in the paragraphs 184-185 above were not about identifying likely witnesses/evidence for trial. Rather, it appeared to be an attempt to identify likely sources or persons whom D3 might wish to approach for general inquiries/investigations about the Accident. D3, presumably not having started its inquiries/ investigations, had no idea where such inquiries/investigations (if and when pursued) would lead. For example,

(a)	it was unknown (i) whether the public security of Ningbo (1) actually carried out investigation at all as P left Ningbo the very day following his interview and did not return and/or (2) had any other relevant documents, and (ii) whether any of the relevant public security officers were still available, but if the answer was negative to (i)/(ii) above, these inquiries/investigations would have no bearing on the eventual trial as the Record of Interview was already available;
(b)	it was unknown whether there were any eye-witness(es) of the Accident, and if so, whether they were still available;
(c)	although paragraph 31 of P’s WS (3 March 2017) stated “神籌公司把從[D2]買到的刮泥機賣給[SUMEC] 。[P]因工作關係認識兩位[SUMEC]的員工, 一位為地盤管工劉鎮東, 另一位為魏威”, such statement gave no idea what useful evidence these 2 persons could give in relation to the Accident such that they would be likely or significant witnesses at trial;
(d)	it was also unclear whether the hospital in Ningbo still had P’s medical records from his hospitalisation for 4 days 6 years ago.

In face of actual/likely witnesses in Hong Kong whose evidence would or would likely address disputed liability and quantum issues at trial between P and D2 (or D3 on behalf of D2), I agree with Mr Wong it would be putting the cart before the horse to arrest P’s present action against D2 now and to require P to commence legal proceedings in the PRC Courts whilst D3 was to carry out inquiries/investigations to see if there might or might not be further witness(es)/evidence from Mainland China who/that would affect the shape of the trial.

188.  I bear in mind that prior to the Settlement D1[133] resisted P’s claim on both issues of liability and quantum, and presumably it had made investigations for such purpose, so it must be telling that D1 did not adduce evidence as alluded to by D3, eg it was not known whether Mr Chen was reluctant to be a witness despite D3’s suggestion that he merely found it inconvenient. In any event, even if these persons were potential witnesses of some significance (but there was no evidence of such on the materials before me), there was nothing to say they were subject to travel constraints or were not able-bodied, so there was no reason why they could not give evidence in Hong Kong. Further, Yang and Song were stationed in Shanghai, so in any event they would have to travel away from their place of work/residence to attend trial whether in Ningbo or in Hong Kong.

189.  As Cheung JA reminded in Dynasty Line Ltd (see paragraph 54 above), in assessing which forum “with which the action has the most real and substantial connection”, the courts must be astute to note some jurisdictional aspects are mere backdrop to the case which may have little, if any, substantial relevance to the issues that may be canvassed at trial. It is not good enough to load up the factors as the focus on the appropriateness of a forum must be “from the point of view of the trial of the action”. That being the case, there must be some realistic prospect that the likely witness(es) and other likely evidence would be available and of relevance to the disputed issues at trial, rather than on a hope that such person(s) might be located, might still have some recollection of the Accident, and might have some useful evidence for the purpose of trial.

190.  D3 went on to note P did not sue other “potential tortfeasors” (so described by D3) based in Mainland China (particularly in Zhejiang or Ningbo area) and having no connection with Hong Kong who might be solely/contributorily liable for the Accident[134] and it would be desirable for D2 (which defence was taken over by D3) to file third party / contribution notices against them: (a) SUMEC (end-user of the excavator being installed at the time of the Accident and the E&M contractor/ supplier of the Factory), (b) 神籌公司 (buyer of the excavator), (c) Hai Da Civil Work Construction Co (海達建設集團有限公司) (the civil work contractor of the Accident Area), and (d) Ningbo Construction (寧波建設) (installation contractor of the Accident Area).

191.  Mr Wang submitted (a) the Accident Area was not P’s work area (see paragraphs 2 and 5 of P’s SWS (11 August 2017)) so it was arguably not controlled/occupied by D2, (b) P alleged the other “potential tortfeasors” referred to in the above paragraph had not committed any tort and/or civil wrong actionable in Hong Kong against him in relation to the Accident, so (c) it was arguable D2 with even less control over the Accident Area / Factory would not have been in a worse position on the issue of liability than these other “potential tortfeasors”. On such basis, it was suggested the relevant staff of the occupiers/contractors of the Factory responsible for the installation of the excavator and the maintenance of the Factory (ie the other “potential tortfeasors”) would be key witnesses for ascertaining the circumstances of the Accident and/or whether any negligence has been committed and if so by whom. But Mr Wang argued this was a red-herring argument as D3 was quite unable to pinpoint what civil wrong these alleged “potential tortfeasors” had committed despite opportunity to file evidence in reply by way of the Li 3^rd Aff.

192.  In my view, for the Setting Aside Application in contra- distinction to the Stay Application, the court’s concern was whether it should assume jurisdiction over P’s claim against D2 to permit service of the CWoS on D2 outside jurisdiction, and not with the merits of the case save that P should show a serious issue to be tried (see paragraph 64 above). The court would not be concerned with D2’s defences on the merits (unless they would show there was no serious issue to be tried or P’s claim was bound to fail), and even less concerned with whether D2 could raise any third party claim against others. Here, Mr Wang acknowledged there was a serious issue to be tried in respect of P’s claim against D2. In my view, the fact P chose not to sue other parties was neither here nor there as the question was whether the Hong Kong courts should assume jurisdiction over P’s claim against D2. If P’s claim against D2 was otherwise a proper one for service out, it would not be right to decline leave because eventually in the course of the litigation D2 might (or might not) issue third party or contribution proceedings against parties outside jurisdiction. But even if this court were to consider Mr Wang’s submissions in the paragraph 191 above, Mr Wong was right in saying there was little if any particulars before this court as to how any of the “potential tortfeasors” would be liable in tort for the Accident or to P/D2. It was nothing more than a hope that further investigations might (but it might not) turn up something that D2/D3 could rely on. In my view, this is not sufficient to displace the suitability of the local forum.

193.  Next, it was true that (a) D2 had no business, presence or assets in Hong Kong, (b) it had the D2 SHG Office in Shanghai located where the D1 SHG Office was, and (c) D2 had various projects in Mainland China that required P to provide technical support/services. Mr Wang submitted it could be reasonably inferred D2 had assets in Mainland China, eg plant, machinery and receivables from end-buyers and/or recipients of P’s services on behalf of D2. Whilst I agree there might be some receivables it was quite unknown how payments were made to D2 when D1 acted as trader in relation to D2’s products and was also the one who liaised with the buyer/end-user for installation instructions. Further, P claimed that essentially he was the employee of D2 in Mainland China, so I doubt whether there would be significant plant/equipment, especially when installation work was done by others eg Ningbo Construction at the time of the Accident. Still further, although D2 had the D2 SHG Office in Shanghai and business operations in Mainland China, there was no evidence there was anyone else at the D2 SHG Office (in contra-distinction to staff at D2’s head office in the United States) who would deal with P’s employment/insurance/payment matters, his work instructions and risk assessment as regards his work, and who would be relevant witness(es) in respect of P’s claim against D2.

194.  Having considered all the above matters, I find Hong Kong was clearly and distinctly the forum conveniens. There was therefore no need for me to consider any juridical and/or personal advantages/ disadvantages if P were to proceed with his claim against D2 in the Hong Kong courts or the PRC Courts. But I will deal with these matters briefly for completeness.

195.  P claimed the present action began in Hong Kong since March 2016, but D3’s jurisdictional challenge was only taken out in November 2018. Substantive costs had been incurred in preparing for the litigation (eg preparation of the Jt Ortho/Neuro Reports which was relevant evidence for P’s claim against D1 and D2), and there was already the Settlement with D1 formalised by court order. P claimed if he were to start all over again to sue D2 in the PRC Courts, the delay (especially when the Accident happened 6 years ago) would cause prejudice as it would push back the trial and have adverse effect on witness recollection. On the other hand, Mr Wang submitted this was a non-factor. I have explained why for the Setting Aside Application it would be inappropriate to consider ex post facto events/matters, eg any suggestions that (a) the Yu Order should be set aside because P’s Settlement with D1 meant the present focus of the dispute was no longer the employment relationship between D1 and P which had dropped away (and even P’s costs in that regard had been resolved by the Settlement), and (b) the issues in P’s claim against D2 (which had not proceeded past the initial pleadings stage) were very different, so there would be no savings in time/costs whether the present action against D2 continued in Hong Kong or a fresh action be started in Mainland China.

196.  But even if the court were to consider such matters at the inter partes stage as Mr Wang suggested, I am not persuaded by his submissions. First, the conclusion of P’s claim against D1 did not necessarily mean all evidence in relation to P’s claim of employment by D1 would become irrelevant. Given (a) P’s case that he was employed by both Ds, (b) the Employment Contract involved P, D1 and D2, (c) D1’s involvement in D2’s work instructions for P and D1’s payments to P, and (d) evidence from D1’s witnesses to rebut P’s claim/evidence, evidence (documents/witnesses) disclosed by D1 could not be brushed aside merely by reason of the Settlement. Secondly, it was also not correct to say P’s costs/efforts in respect of his present claim against D2 was minimal such that it would not hurt to start afresh in the PRC Courts. Although default judgment on liability had been obtained against D2, P actively prepared its case against D2 for the assessment of damages, including witness statements, expert medical reports and discovery of documents, so much as that his case was essentially ready to set down for assessment of damages (see paragraph 31 above). Thirdly and quite importantly, in pursuing his claim against D2 in this jurisdiction, P had the benefit of legal aid for the bulk of the aforesaid efforts, which he would not have if he were to start his claim against D2 afresh in the PRC Courts.

197.  Lastly, Mr Wong pointed out the ongoing EC Action arose out of the same subject matter as the present action. Li understood that on 28 June 2016 P applied by ex parte summons for leave to serve the Application in the EC Action on D2 out of jurisdiction under rule 14 of the Employees’ Compensation (Rules of Court) Rules Cap 282B supported by P’s affirmation, that on 4 July 2016 DDJ J Chow granted an order for service out of the jurisdiction, and that on 11 November 2016 default judgment on liability was entered against D2. Subsequently, the EC Action was stayed pending the outcome of the present action.[135] I agree with Mr Wang that the EC Action should not affect the Setting Aside / Stay Applications.[136]

198.  For all the above reasons, I find Hong Kong to be clearly and distinctly the forum conveniens for the purpose of assuming jurisdiction for granting leave to serve the CWoS on D2 outside jurisdiction. On such basis, P had established the requisite elements for invoking the long-arm jurisdiction of the Hong Kong courts, but I have to go on and consider D3’s allegations that the Yu Order ought to be set aside for material non-disclosure.

VIII.  DAMAGES SUSTAINED WITHIN JURISDICTION?

199.  Before I proceed to consider the question of whether or not there was material non-disclosure, I wish to deal with D3’s complaint (which I have found was correctly made) that P did not alert the ex parte master of any intention to rely on the 2^nd Limb of Gateway F. P’s current reliance on the 2^nd Limb by way of the P 6^th Aff would go to the question of whether at the inter partes stage this court should exercise its discretion to maintain Yu Order on this basis, or even if this court were to discharge the Yu Order, whether I should re-grant leave to serve the CWoS out of jurisdiction on D2 by reason of Gateway F.

200.  At the Hearing, Mr Wong conceded that P suffered direct damage (ie immediate bodily injuries) as a result of the Accident at the Factory in Ningbo that would complete the cause of action in tort (ie negligence), and Mr Wang conceded that P (who returned to Hong Kong a few days after the Accident) experienced indirect damage (eg PSLA, medical treatment received and to be received, medical expenses incurred and to be incurred, etc) in Hong Kong. Thus, the issue became a pure legal one as to the meaning of “damage” within the 2^nd Limb, so I propose to deal with this separately from other allegations of material non-disclosure.

(a)  P precluded from relying on the 2^nd Limb?

201.  Mr Wang submitted P was precluded from ever relying on the 2^nd Limb even though the issue was pure a legal one. He referred to the guidance in Kayden Ltd (see paragraph 42 above), and suggested that when an applicant relies on a specific legal basis for leave to serve outside jurisdiction, he cannot be permitted to contend such head of claim can also be justified on another legal basis (unless perhaps the alternative basis has been specifically referred to in his affidavit evidence).

202.  I am not persuaded the above is a correct reading of Kayden Ltd. In that case, the Securities and Futures Commission (“SFC”) only sought interim orders restraining/prohibiting disposal of asserts in Hong Kong (1^st to 3^rd defendants) and worldwide (4^th defendant) pursuant to section 213(2)(c) of the Securities and Futures Ordinance Cap 571 (“SFO”) founded on the assertion that pursuant to section 213(1)(b) of the SFO it appeared to the SFC the defendants had contravened the insider dealing provisions of the SFO. Ex parte leave to serve out of jurisdiction on the 1^st, 3^rd and 4^th defendants was granted under Order 11 rule 1(1)(b) of the RHC, but at the inter partes hearing the judge set aside service out of jurisdiction on the basis that the case was outside such jurisdictional gateway because (a) the application was for interim and not substantive relief, and (b) in any event any injunction against the 4^th defendant with no assets in Hong Kong would not involve it doing or refraining from doing anything “within the jurisdiction” under such gateway. The SFC then sought to modify its case to bring its claim within the Order 11 gateways by (i) seeking to amend the originating summons to claim against the 4^th defendant for an order requiring it to return specified funds to Hong Kong to be maintained in a specified account, (ii) arguing (without amendment) that the relief claimed in the originating summons was not confined to Mareva relief but included relief under section 213(2)(b) of the SFO, and (iii) submitting that leave to serve out on the 4^th defendant could be justified  under Gateway C.

203.  The CFA held that the relief sought in the originating summons was interim in nature, so the SFC’s reliance on Order 11 rule 1(1)(b) of the RHC was undermined. The CFA also held that the SFC’s attempt to amend the originating summons at the inter partes hearing was rightly rejected. The amendment sought under paragraph 202(i) above was made in the hope of founding an argument for the applicability of Order 11 rule 1(1)(b) of the RHC which had already been undermined. The argument in paragraph 202(ii) above still resulted in interim relief outside Order 11 rule 1(1)(b) of the RHC, and since section 213(2)(b) of the SFO was open- textured, the SFC (if it intended to seek an order under it) had to make clear to the court and the defendants the basis for invoking the Order 11 jurisdiction. As for paragraph 202(iii) above, the CFA held that the 4^th defendant was not a necessary or proper party as the 1^st and 3^rd defendants had not been served and there was no live issue between the 2^nd defendant (who had been served) and the SFC.

204.  It is instructive to refer to Parker v Schuller,[137] which Ribeiro PJ at page 715 in Kayden Ltd summarised as follows:

“35. ...... There, the plaintiff had obtained leave to serve a foreign defendant alleging breach of a contract within the jurisdiction consisting of a failure to deliver goods at Liverpool. It later sought to allege instead that the breach was of an obligation to deliver the documents required under the CIF contract. The English Court of Appeal refused to entertain the new basis for establishing jurisdiction. Romer LJ stated:

 ... an application for leave to issue a writ for service out of the jurisdiction ought to be made with great care and looked at strictly. If a material representation upon which the leave was obtained in the first instance turned out to be unfounded, the plaintiff ought not to be allowed, when an application was made by the defendant to discharge the order for the issue of the writ and the service, to set up another and a distinct cause of action which was not before the Judge upon the original application.”

205.  The strict approach in Parker was approved by  the CFA in Kayden Ltd with Ribeiro PJ explaining it is justified on the basis that (a) special care is required before a plaintiff invokes the court’s extraordinary long-arm jurisdiction, (b) good faith is expected of the plaintiff’s representations made at the ex parte stage in the absence of the defendant, and (c) both the court and the defendant must be apprised of the cause of action alleged and the case which the defendant has to meet and decide whether to mount any challenge. Strict adherence to the legal basis advanced in support of service out is necessary otherwise the protection given to the defendant from the court’s exercise of its extraordinary long-arm jurisdiction could be easily circumvented.[138]

206.  It is quite clear from Parker and Kayden Ltd that what is prohibited is any attempt to set up and rely on a new and distinct cause of action and/or a different set of facts not before the ex parte master. This is made clear by the CA in Winland Enterprises Group Inc v WEX Pharmaceuticals Inc as follows:[139]

“31. On the state of the authorities, this court is bound by the Court of Final Appeal’s decision in Kayden Ltd. A plaintiff, who obtained leave at the ex parte stage to serve a writ out of the jurisdiction on the basis of a certain cause of action as framed in the writ, must adhere to that pleading when the regularity in that writ or service is challenged. He may not put forward a different case to improve the basis on which leave to serve out was granted. If he acknowledges that the original case as pleaded was insufficient to support the grant of leave to serve out, he must seek fresh leave for the new pleading to be served out either by making another ex parte application before the Master or to seek leave to amend the pleading before the Judge at the inter partes stage and reapply for leave to serve out.

......

61. Winland [plaintiff] obtained leave from the Master pursuant to O.11 to issue a writ out of the jurisdiction on WEX [defendant] on the basis of some inadequately pleaded grounds for lifting the corporate veil of Acro Pharm. When an application is made by a defendant pursuant to O.12 r.8 to discharge the order granting leave to serve out, the plaintiff may not put forward a different case to justify the grant of leave. It is therefore not permissible for Winland to advance a case of fraudulent concealment before Reyes J and again before this court in support of its application for leave which is profoundly different from that which was before Master de Souza upon the original application.

62. As the new evidence which Winland seeks to adduce is to support its case of fraudulent concealment which it is not permitted to argue on this appeal, the new evidence is irrelevant and will not have any influence on the result of this appeal. Accordingly, leave to adduce the new evidence is refused.

63. Winland relied on WEX’s fraud, concealment, and the use of Acro Pharm as a façade and its puppet as grounds for lifting the corporate veil of Acro Pharm. It is not open to Winland to present a case based on fraud and concealment on this appeal, which in any event was not pleaded or not adequately pleaded. Winland also failed to show that WEX’s use Acro Pharm as a façade and as its puppet was to cloak the fact that the Acro Pharm Agreement and its business was carried on by WEX to evade its legal obligation and liability. In the circumstances, Reyes J was right in not exercising the court’s power to lift the corporate veil of Acro Pharm and in setting aside the leave to serve out granted by the Master.” (my emphasis)

207.  In Metall und Rohstoff AG,[140] the plaintiffs obtained leave to serve the writ out of jurisdiction. The plaintiffs claimed damages for conspiracy without alleging the purpose of the conspiracy was to harm them. The English Court of Appeal held a claimant cannot rely on the pleaded facts as disclosing another unpleaded basis of his claim on Order 11 proceedings, so it rejected the submission by the plaintiffs that they had claims against the defendants for maliciously instituting legal proceedings and for abusing the process of the court, which issues the plaintiffs neither raised nor identified in their pleadings. In Kayden Ltd, Ribeiro PJ at page 716 cited the following passage from Slade LJ’s judgment in Metall und Rohstoff AG:

“39. In Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc, Slade LJ emphasised the need for strict adherence to the legal basis advanced in support of service out but was prepared to admit of a possible exception:

... if the draftsman of a pleading intended to be served out of the jurisdiction under O.11 r.1(1)(f) (or indeed under any other sub- paragraph) can be reasonably understood as presenting a particular head of claim on one specific legal basis only, the plaintiff cannot thereafter, for the purpose of justifying his application under O.11, r.1(1)(f), be permitted to contend that that head of claim can also be justified on another legal basis (unless, perhaps, the alternative basis has been specifically referred to in his affidavit evidence, which it was not in the present case). With this possible exception, if he specifically states in his pleading the legal result of what he has pleaded, he is in our judgment limited to what he has pleaded, for the purpose of an Order 11 application. To permit him to take a different course would be to encourage circumvention of the Order 11 procedure, which is designed to ensure that both the court is fully and clearly apprised as to the nature of the legal claim with which it is invited to deal on the ex parte application, and the defendant is likewise apprised as to the nature of the claim which he has to meet, if and when he seeks to discharge an order for service out of the jurisdiction.”

208.  In Inverness Corporation & ors v Magic Dreams Cosmetica Infantil, SL & ors,[141] the 1^st plaintiff (US corporation) owned the trademark, goodwill and copyright of a mark, and entered into a contract granting exclusive distributorship of products to the 1^st and 2^nd defendants (Spanish companies) of which the 3^rd defendant was one of the persons-in-charge. The 1^st plaintiff claimed that following the termination of such contract, the defendants sold imitation products to 2 Hong Kong companies (ie the 2^nd and 3^rd plaintiffs) and wrongfully applied to register the mark in Hong Kong. The 2^nd and 3^rd plaintiffs alleged they entered into a exclusive distributorship contract with the defendants as a result of the latter’s misrepresentation that they were owners of the mark. The plaintiffs claimed this second contract was made in Hong Kong or governed by Hong Kong law, but the defendants claimed such contract was made in Spain. The plaintiffs sued the defendants. The 1^st plaintiff’s claim was for an injunction for breach of copyright, and the 2^nd and 3^rd plaintiffs’ claim was based on misrepresentation and breach of contract. The plaintiffs made an ex parte application (with affidavit in support) to serve a concurrent writ out of jurisdiction, and such order was granted. The defendants applied to set aside the order inter alia on the basis that the supporting affidavit only mentioned the 1^st plaintiff’s claim and not the 2^nd and 3^rd plaintiffs’ claim.

209.  Yeung J (as he then was) agreed with the principles in Parker and Metall und Rohstoff AG, but went on to hold at page 1384 that on the matters disclosed in the statement of claim and the affidavit there was basis upon which an order for service out of jurisdiction in respect of claims by all plaintiffs could properly be made:

“...... But with respect, we are not dealing with a situation where the plaintiffs seek to change the cause of action or the legal basis upon which the claims by the plaintiffs have been put forward.

......

There is no doubt that it would have been better if Mr Hope had mentioned expressly the nature of the claims by [the 2^nd and 3^rd plaintiffs] and that such claims fall within the terms of O.11 r.1(1)(d). But I am not of the view that the failure to do so is fatal.

Mr Hope in his affidavit had made reference to the statement of claim which was also before Mr Recorder Tang, QC prior to the order granting leave to serve out of jurisdiction was made. In deciding whether an order to serve out of the jurisdiction should be made, the court must refer to the statement of claim to decide the nature of the claim. The affidavit in support of the application should of course make reference to the nature of the plaintiff’s claim but to insist that the affidavit should include details of matters already set out in the statement of claim may not be necessary. Having said this, it must not be taken that the requirement under O.11 r.4 needs not be complied with. But ‘[what] is required, to comply with the rule, is not some ritual incantation of the wording of O.11 r.4(1)(b) of the Rules of the Supreme Court.’ Century Yachts Ltd v Xiamen Celestial Yacht Ltd[1994] 1 HKC 331 per Litton JA.

The court must decide upon the application on the basis of the cause or causes of action expressly mentioned in the writ or statement of claim and not just on matters referred to in the supporting affidavit.

I am of the view that on the matters disclosed in the statement of claim and the affidavit of Mr Hope, there was basis upon which an order for service out of jurisdiction in respect of the claims by all the plaintiffs could be properly made. It had been made sufficiently to appear to the court that the case was a proper one for service out of the jurisdiction. The complaints by the defendants on this issue also fail.”

210.  Here, P’s existing pleadings (ie the SoC and SoD placed before Master Yu for the ex parte stage and the SoC and RSoD at the inter partes stage) already pleaded a cause of action in tort (ie negligence) and (as D3 conceded) already sought indirect damages that P incurred or will incur in Hong Kong. P did not assert any new facts or new cause of action, and he did not seek to amend the SoC, SoD and/or RSoD. In my view, D3’s objection was misplaced, and P was not barred from ever relying on the 2^nd Limb at the inter partes stage.

(b)  “Damage” within the meaning of the 2^nd Limb

211.  Dispute  Turning to the applicability of the 2^nd Limb of Gateway F, the disagreement between P and D3 turned on the meaning of “damage”. Mr Wang submitted it was confined to bodily injuries P instantly suffered upon occurrence of the Accident in Ningbo, but Mr Wong submitted it also included the indirect damage experienced by P (eg PSLA suffered or to be suffered, medical treatment received or to be received, various losses/expenses (including medical expenses) incurred or to be incurred) in Hong Kong. Mr Wang regarded the indirect damage as mere evidence of the financial value of the direct damage.

212.  Natural/ordinary meaning  Mr Wong submitted “damage” should be given its ordinary and natural meaning, ie “harm which has been sustained by the claimant, whether physical or economic” as described in Booth v Phillips & ors.[142] In that case, the claimant’s husband died in a work- accident on a vessel in Egypt. She commenced proceedings on her own behalf and as her husband’s executrix for damages in negligence against the 1^st defendant, and in negligence and breach of her husband’s contract of employment against the 2^nd to 4^th defendants. The claimant was given permission to serve proceedings out of jurisdiction on the 2^nd to 4^th defendants. In considering the meaning of “damage” under the Civil Procedure Rules (“CPR”) r6.20(8)(a) that refers to a claim in tort where “damage was sustained within the jurisdiction”, DHCJ Nigel Teare QC said at pages 3298-3299 as follows:

“35. There is no reference to the damage which completes the cause of action. Section 2(7) of the Civil Procedure Act 197 enjoined the Rule Committee to try ‘to make rules which are both appropriate and simply expressed’. Having regard to this I do not consider it appropriate to interpret damage in CPR r 6.20(8)(a) as meaning ‘the damage which completed the cause of action in tort’. It should be given its ordinary and natural meaning, namely, harm which has been sustained by the claimant, whether physical or economic. ......

36. On behalf of the second to fourth defendants it was objected that if the claimant’s construction of the rule were correct then a ground for exercising jurisdiction would exist where accidents causing personal injury or death occurred abroad so long as some damage, eg loss of earnings, was sustained within the jurisdiction. This was said to be an improbably wide construction to give the rule. However, it must be remembered that before jurisdiction is exercised the court must be satisfied that it is appropriate to exercise that jurisdiction, which involves considering whether England is the forum in which the case could most suitably be tried for the interest of all the parties and for the ends of justice. When regard is had to this requirement there does not appear to me to be anything objectionable about the claimant’s construction of the rule.

37. For these reasons a consideration of the ordinary and natural meaning of the words used in the rule suggests that the claimant’s construction of the rule is to be preferred to that of the second to fourth defendants.”

213.  Mr Wong then referred to Flora Stylianou v Madatomo Toyoshima & anor[143] which concerned a personal injury claim by the plaintiff who brought her claim in the English court for serious injuries sustained when travelling in Western Australia. She was granted leave to serve the defendant (a Japanese resident) at the insurer’s address in Brisbane, Australia. The insurer applied to have the order set aside and to strike out the English proceedings on the basis that (a) the plaintiff had not sustained “damage” within the jurisdiction, and (b) England was not the proper forum for her claim to be heard. Sir Robert Nelson held as follows:

“10. On their natural meaning, the words ‘damage ... sustained within the jurisdiction’ are wide enough to cover any kind of damage, direct or indirect. Prima facie therefore economic loss/financial damage, such as loss of earnings or loss of care sustained in the United Kingdom, is damage sustained within the jurisdiction, even though the initial injury causing direct physical harm occurred elsewhere.

11. This is the effect of the decision in the cases in Booth v Phillips [2004] 1 WLR 3292 and S.A. Cooley (by his father and litigation friend P.A. Cooley) v T.R. Ramsey [2008] ILP r 27, [2008] EWHC 129 (QB). ......”

214.  More recently, the English Supreme Court in obiter comments of the majority (Baroness Hale of Richmond PSC, Lord Wilson JSC and Lord Clarke of Stone-cum-Ebony) in Brownlie (SC) considered direct damage in the jurisdiction is not required for a claimant to bring himself within the jurisdictional gateway under paragraph 3.1(9) of Practice Direction 6B (“PD6B”) which permits the English courts to assume jurisdiction inter alia if “[a] claim is made in tort where – (a) damage was sustained [or will be sustained][144] within the jurisdiction” (page 202). However, there was a dissenting view by the minority (Lord Sumption and Lord Hughes JJSC) to which I will return in paragraphs 216-217 below.

215.  Brownlie (SC): facts and decision  In that case, the claimant was injured and her husband died in a car accident in Egypt on an excursion organised by the concierge of the Four Seasons Hotel in Cairo. The claimant commenced proceedings in England for a claim in tort against the defendant company which was the Canadian holding company of a group of companies that provided services to the Four Seasons Hotel chain. The claimant obtained permission to serve outside jurisdiction. Such permission was overturned by the English Court of Appeal, which unanimously held that consequential or indirect damage suffered in England by a person injured abroad did not satisfy the jurisdictional gateway. Due to an unusual procedural development, the English Supreme Court requested further evidence regarding the ownership/ operation of the Four Seasons Hotel in Cairo, and it transpired the defendant was not the owner/operator of that hotel. Consequently, the defendant could not be vicariously liable for the negligence of the driver of the excursion vehicle, and the interpretation of the jurisdictional gateway did not arise. Thus, the differing majority and minority views in Brownlie (SC) were obiter. Further, since the decision by the English Court of Appeal was reversed by the English Supreme Court (albeit on other grounds), such decision was also rendered obiter.

216.  Brownlie (SC): minority view of “damage”  The minority considered “damage” to mean “direct damage” (pages 204-206), ie bodily injury or death at the time of the accident in the case of a personal injury or fatal accident claim, but not “indirect damage, ie the pecuniary expenditure or loss resulting” from the accident or, to put it in another way, the subsequent events relevant to working out the pecuniary measure of the loss/damage (eg medical expenses or loss of future earnings). Lord Sumption said at pages 204-205 this was echoed by tortious damage to physical property when, eg, damage occurs as soon as there is a ship collision:

“23. There is, however, a more fundamental reason for concluding that in the present context ‘damage’ means direct damage. It concerns the nature of the duty broken in a personal injury action and the character of the damage recoverable for the breach. There is a fundamental difference between the damage done to an interest protected by the law, and facts which are merely evidence of the financial value of that damage. Except in limited and carefully circumscribed cases, the law of tort does not protect pecuniary interests as such. It is in general concerned with non-pecuniary interests, such as bodily integrity, physical property and reputation which are inherently entitled to its protection. Of these, bodily integrity has been described as ‘the first and most important’: Parkinson v St James and Seacroft University Hospital NHS Trust [2002] QB 266, para 56 (Hale LJ). Where these interests are deliberately or negligently injured, the tort is complete at the time of the injury, notwithstanding that damage is an essential element of it. This is the basis of the rule that all the damage flowing from bodily injury or damage to property must be claimed in one action, which may be brought as soon as the claimant has been injured or his property damaged. And, although damage is an essential element of the cause of action in tort, the limitation period in respect of any damage flowing from the breach will run from that time. I would readily accept that that ‘damage’ as that word is used in the rule is not necessarily limited to the damage which serves to complete a cause of action in tort. But the two concepts are clearly related, even if they are not coterminous.”

217.  According to Lord Sumption, “[the] law protects the claimant’s bodily integrity from deliberately or negligently inflicted harm. The damage to that interest is suffered as soon as the bodily injury has occurred, even if subsequent events are relevant to determine the pecuniary measure of that damage”, so “damage to the interest protected is sustained in the country A where the claimant has been injured or killed”, but “[the] pecuniary measure of that damage may depend on things that happened elsewhere. For example, medical or care costs may be incurred in country B, or earnings may be lost which would have been earned in country C or paid in country D, but the damage has not been sustained in these places” (pages 205-206).

218.  Brownlie (SC): majority view of “damage”  But Lady Hale noted not every tort requires damage to complete the cause of action, and further observed (which observation Lord Clarke expressly agreed at page 220) there was no reason to think that when the framers of the rule used the word “damage” they had in mind the completion of the cause of action as opposed to the ordinary and natural meaning of the word. Lady Hale was also reluctant to go against various first instance judges who considered “damage” as including all actionable harm suffered by the claimant (eg Booth and Flora Stylianou). Lady Hale at pages 215-216 said as follows:

“52. I also have great difficulty with the approach to ‘damage’ adopted by Lord Sumption JSC. He appears to equate ‘damage’ in the Rule with the damage which completes the cause of action. It is true that damage is an essential component of some torts, such as the tort of negligence and the economic torts, so that it is necessary to know if and when the cause of action is complete for purposes such as limitation. But damage is not an essential part of every cause of action in tort. There are many torts which are actionable per se, without proof of damage: trespass to the person, trespass to goods, libel and some slanders are the obvious examples. There is no particular reason to think that completion of the cause of action is what the framers of the Rules had in mind when they used the word ‘damage’. They are more likely to have had the ordinary and natural meaning of the word in mind. I would be very reluctant to disagree with the several first instance judges who held that this refers to the actionable harm caused by the wrongful act alleged. In this they have the support of a very distinguished Court of Appeal in New South Wales, in Flaherty v Girgis (1985) 63 ALR 466, where Kirby P and Samuels JA agreed with McHugh JA, construing a similar jurisdictional rule, that ‘damage, therefore, is to be contrasted with the element necessary to complete the cause of action; it includes all the detriment, physical, financial and social which the plaintiff suffers as a result of the tortious conduct of the defendant’: p 482.

53. Furthermore, it is quite clear that damage can be suffered by the same person in more than one place, just as the wrongful acts can be committed in more than one place. The Court of Appeal in the Metall case must have been right to say that the Rules contemplated the possibility of there being jurisdiction in more than one place. Nor do I find the distinction between direct and indirect damage easy to draw in all cases. If I am seriously injured in a road accident, the pain, suffering and loss of amenity that I suffer are all part of the same injury and in cases of permanent disability will be with me wherever I am.”

219.  Lord Wilson at pages 218-219 also agreed he would not interpret the word “damage” in para 3.1(9)(a) of [PD6B] as referring to the damage that “violates the interest protected by the law and which completes a cause of action in tort ......”. He then referred to Pike v Indian Hotels Co Ltd[145] and went on to say that “[it] would, to put it at its lowest, be legitimate to interpret the word “damage” as extending to the secondary damage which the claimant and her husband’s estate sustained in England and which flowed from the primary damage sustained in Egypt. CPR r 1.2(b) obliges a court which interprets another of its rules to seek to give effect to the overriding objective of enabling it to deal with cases justly. So, if an otherwise legitimate interpretation better serves the ends of justice, it ought in principle to be adopted ......”

220.  Brownlie (SC): rationale for differing views  To properly understand the differing views, it is necessary to consider (a) the relevance of the discretion as to forum conveniens, and (b) the drafting of the jurisdictional gateway. I will deal with these policy considerations in turn.

221.  Brownlie (SC): discretion as to forum conveniens  There has been debate on the relevance of the discretion as to forum conveniens. Turning first to the minority view, Lord Sumption said all jurisdictional gateways are concerned to identify some substantial and not merely casual/adventitious link between the cause of action and England, which purpose is better served by locating jurisdiction in the place where the relevant interest of the claimant was damaged than by asking where he/she experienced the effects of the damage, and he went on to say at pages 206-207 as follows:

“28. ...... In the context of personal injury, a principle which located damage in the place where the pecuniary consequences of the accident were felt or where any continuing pain, suffering or loss of amenity were experienced would in the great majority of cases confer jurisdiction on the country of the claimant’s residence. It would confer on the English courts what amounts to a universal jurisdiction to entertain claims by English residents for the more serious personal injuries suffered anywhere in the world. Yet that would be far too wide to be consistent with principle. English law has never asserted a jurisdiction for its courts on the basis of the English identity of the claimant, whether by virtue of residence, domicile or nationality. Personal connections between the parties and England are generally relevant to jurisdiction only in the case of the defendant, for example because the claim form can be served on him there or because paragraph 3.1(1) of [PD6B] applies by virtue of the defendant’s English domicile. This is the fundamental reason why I am unable to accept Baroness Hale’s analysis of this issue. It appears to me to produce a test for jurisdiction so wide as to conflict with the purpose of the rule.”

222.  Lord Sumption noted (a) Cooley v Ramsey[146] and Wink v Croatia Osiguranje DD[147] conclude that the risk of the jurisdictional gateway being too wide can be managed through the court’s overriding discretion as to forum conveniens, and that the Brussels Convention and Regulations regime is different given its mandatory character that excludes any discretion (see paragraph 225(d) below), (b) such view has “derived energetic support from Professor Briggs in his book Civil Jurisdiction and Judgments, 6^th ed (2015), para 4.73, and in various articles” (page 209), and (c) Professor Briggs by referring to Lord Sumption’s comments in Abela v Baadarani[148] has gone on to say it is time to “downgrade” and abolish the jurisdictional gateways altogether and to make forum conveniens the sole criterion for service out. But Lord Sumption opined that (i) the approach in (a)-(c) above is contrary to principle and not warranted by what he said in Abdela (pages 209-210), (ii) there should be no presumption in favour of a “widest possible interpretation” of the jurisdictional gateways (pages 209-210), and (iii) it is inappropriate to rely the court’s discretion on forum conveniens as its purpose is to limit the exercise of the court’s jurisdiction rather than to displace the criteria of the jurisdictional gateways:

“31.     ...... The jurisdictional gateways and the discretion as to forum conveniens serve completely different purposes. The gateways identify relevant connections with England, which define the maximum extent of the jurisdiction which the English court is permitted to exercise. Their ambit is a question of law. The discretion as to forum conveniens authorises the court to decline a jurisdiction which it possesses as a matter of law, because the dispute, although sufficiently connected with England to permit the exercise of jurisdiction, could be more appropriately resolved elsewhere. The main determining factor in the exercise of the discretion on forum conveniens grounds is not the relationship between the cause of action and England but the practicalities of litigation. The purpose of the discretion is to limit the exercise of the court’s jurisdiction, not to enlarge it and certainly not to displace the criteria in the gateways. English law has never in the past and does not now accept jurisdiction simply on the basis that the English courts are a convenient or appropriate forum if the subject-matter has no relevant jurisdictional connection with England. In Abela v Baaderani, I protested against the importation of an artificial presumption against service out as being inherently “exorbitant”, into what ought to be a neutral question of construction or discretion. I had not proposed to substitute an alternative, and equally objectionable, presumption in favour of the widest possible interpretation of the gateways simply because jurisdiction thus conferred by law could be declined as a matter of discretion.”

223.  On the other hand, while Lady Hale agreed that a claimant should not be in the position to choose where to bring his claim, she considered “...... the discretion [as to forum conveniens] should be robust enough to prevent that. It is looking for a substantial reason to allow a claim against a foreign defendant to be brought in the courts of this country and the courts have always treated such cases with caution. ......” (page 216). In this respect, I also refer to DHCJ Nigel Teare SC’s views in Booth at paragraph 212 above and to Sir Robert Nelson’s views at paragraphs 44 and 46 in Flora Stylianou in similar vein as follows:

“44. Professor Adrian Briggs in the 5^th edition of Civil Jurisdiction and Judgments 2009 supports the reasoning in Booth and Cooley. He considers that the function of Article 5(3) of Brussels I, as an exception to the general jurisdiction of Article 2, and as a rule of ‘Special Jurisdiction’ not further controlled in its application by the principle of conveniens, is quite separate and distinct, and has a function quite different from the rules as to service out of jurisdiction set out in the CPR. In the CPR, Professor Briggs says, the claimant must also, separately clearly and distinctly satisfy the requirement of forum conveniens before the court may exercise its power to give permission to serve the claim form out of the jurisdiction. He accordingly submits that damage may be sustained within the jurisdiction even in cases in which the damage which is done has its secondary effect in England, indirectly or consequentially, and whether as a result of other occurrences of damage to property or person sustained elsewhere (paragraph 4.65). Against that, Dicey, Morris and Collins note the decisions of Booth and Cooley, but do not discuss them, simply stating ‘sed quaere’. The case of Newsat Holdings Ltd v Zani [2006] EWHC (Comm) 342 is obiter on the issue of “damage sustained” and its conclusion on this issue is doubted by Professor Briggs.

......

46. For my part, I am satisfied that the decisions of Booth, Cooley and Wink are correct and I adopt the reasoning there set out and that of Professor Briggs.” (my emphasis)

224.  Brownlie (SC): drafting of the jurisdictional gateway The 2^nd policy consideration concerns the history of this jurisdictional gateway and its relation to the provisions in the Brussels Convention and Regulations. The minority opines “[it] would have been possible for the draftsman of the [PD6B] to provide that “damage” should extend to the financial or physical consequences of the damage, but there is nothing in the language to suggest that he has done so” (page 206), but the majority is of the view there is nothing in the wording of this jurisdictional gateway that commends a narrow interpretation (page 216).

225.  Lord Sumption said the Court of Justice of the European Union (“CJEU”) has drawn the same distinction as he did between “the damage sustained by the interest which the law protects and the expenditure which serves as the measure of that damage” (page 207), which he considered to be an unanswerable analysis of what constitutes damage by the “application of logic to the facts” (page 208). Lord Sumption further said the current form of the English jurisdictional gateway for tort claims has been deliberately drafted so as to assimilate the tests for assuming jurisdiction over persons domiciled in a European Union (“EU”) member state and over persons domiciled elsewhere (page 208):

(a)	Under the pre-1987 Order 11 rule 1(i)(h) of the Supreme Court Rules (“RSC”), leave for service out was permitted for an action “founded on a tort committed within the jurisdiction”, so the location of the damage (if different) was irrelevant.
(b)	Article 5.3 (“Article 5.3”) of the Brussels Convention and Regulations (ie the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1968 (“Brussels Convention”) as replaced by Council Regulation (EC) No 44/2001 (“Brussels I Regulation”) which in turn was replaced by Regulation (EU No 1215/2012 (“recast Brussels I Regulation”) – page 212) as interpreted by the CJEU was broader, ie in actions against persons domiciled in the EU the courts of “the place where the harmful event occurred or may occur” have jurisdiction. The CJEU in Handelskwekeru GJ Bier BV & anor v Mines de Potasse d’Alsace SA[149] interpreted “the place where the harmful event occurred” as referring “either to the place where the damage was sustained or to the place (if different) where the act was done that gave rise to it”, but in that case “the physical damage and its financial consequences were all suffered” in one place, so “it was unnecessary for the court to consider what losses or expense were encompassed by the word “damage”” (pages 207-208).
(c)	Lord Sumption said the question arose in Kingdom of The Netherlands v Rüffer[150] where the CJEU adopted the distinction (as he did) “between the damage sustained by the interest which the law protects, and the expenditure which serves as the measure of that damage”, but again the CJEU was able to deal with the matter without reference to this point (page 207).
(d)	Lord Sumption recognised that construction of the Brussels Convention and Regulations “depends in part on the policy considerations which are irrelevant in the context of the English rules governing jurisdiction over non-EU defendants”, and the Brussels Convention and Regulations “are a code for allocating jurisdiction between EU member states” whereby “[acceptance] of jurisdiction allocated in accordance with them is mandatory, and not merely permissive as it is under English rules” (page 208).
(e)	Effect was given to the Brussels Convention in England by the Civil Jurisdiction and Judgments Act 1982 and by amendments to the RSC by the Rules of the Supreme Court (Amendment No 2) 1982 (SI 1983/1181) which were expressed to take effect when the 1982 Act came into force (in any event, 1 January 1987). The new Order 11 rule 1(1)(f) of the RSC provided that jurisdiction could be exercised in a non-Convention case where “the claim is founded on a tort and the damage was sustained or resulted from an act committed within the jurisdiction”. Lord Sumption opined that this expansion of the tort gateway is to correspond with Article 5.3 as interpreted by the CJEU in the Bier case. (pages 208-209).
(f)	The language changed when the gateways were transferred to [PD6B] in 2000 (ie the current version of the tort gateway), but the substance of the provision remains the same except for the omission of the definite article before “damage”, which omission Lord Sumption said is “intended to exclude the suggestion that all the damage had to be sustained within the jurisdiction, thus allowing for the possibility that jurisdiction might be founded on the occurrence of some of the damage in England” (page 209).
(g)	Lord Sumption opined that Order 11 rule 1(1)(f) of the RSC and the corresponding provisions of paragraph 3.1(9)(a) of PD6B generally have been construed in light of the CJEU case law, and he referred to Metall und Rohstoff AG and also Sociéte Commerciale de Réassurance v Eras International Ltd (formerly Eras (UK)) (The Eras Eil Actions)[151] in which Mustill LJ treated the Advocate Generale’s analysis in Kingdom of The Netherlands “unanswerable” and equally applicable to the tort gateway under the RSC (page 209). It was said Dumez France SA v Hessische Landesbank[152] adopted the same analysis, and the CJEU in Marinari v Lloyds Bank plc (Zubaidi Trading Co, Intervener)[153] held that “damage” in Article 5(3) “cannot ... be construed so extensively as to encompass any place where the adverse consequences of an event that has already caused actual damage elsewhere can be felt. Consequently, that term cannot be construed as including the place where, as in the present case, the victim claims to have suffered financial damage consequential on initial damage arising and suffered by him in another contracting state” (pages 207-208).[154] Lord Sumption opined “[it] would be strange if the effect of expanding the gateway to match the wider special jurisdiction authorised in Convention cases had been to make it very much wider than even the Convention authorised” (page 209).

226.  Lady Hale also traced the history of the tort jurisdictional gateway as follows:

(a)	Service out of jurisdiction as governed by Order 11 rule 1(1)(h) of the RSC used to refer only to cases “founded on a tort committed within the jurisdiction” (page 211).
(b)	The RSC was amended (with effect from the date the Civil Jurisdiction and Judgments Act 1982 came into force) to read as “[the] claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction” (my emphasis). This broadened the gateway because Article 5.3 of the Brussels Convention (to which the United Kingdom acceded in 1978 and incorporated into United Kingdom law by the 1982 Act) has a special jurisdictional rule for a person domiciled in a contracting state to be sued in another contracting state in matters relating to tort, delict or quasi-delict “in the courts for the place where the harmful event occurred” (page 211).
(c)	The CJEU in the Bier case has interpreted the phrase “the place where the harmful event occurred” to refer to both “the place where the damage occurred and the place of the event giving rise to it”, but in that case the damage was all sustained on one place (page 211).
(d)	In Dumez France SA, the CJEU pointed out that Article 5.3 (as an exception to the general rule that defendants are to be sued in their country of domicile) “did not permit a claimant claiming for damage, which was the consequence of harm suffered by other persons who were the direct victim of the harmful act, to bring proceedings in the place where the claimant sustained the damage” (page 211).
(e)	The court in Marinari took the matter further by holding Article 5.3 did not cover every place where adverse consequences of an event which had already caused actual damage elsewhere could be felt. It does not refer to the place where the victim claims to have suffered financial loss consequential on actual damage arising and suffered by him in another member state (page 212).
(f)	The Brussels Convention has been replaced by the Brussels I Regulation which in turn has been replaced by the recast Brussels I Regulation. The new article 7.2 repeats the wording of Article 5.3, so Marinari is still the authoritative interpretation of “where the harmful event occurred” in European law (page 212).

227.  But Lady Hale noted that the defendant in the claim before her was not domiciled in the EU, so service out of jurisdiction was governed by the jurisdictional rules of the law of England and Wales contained in the CPR 1998 and not those of European law. At page 212, Lady Hale said as follows:

“40. Under the CPR, the equivalent rule to RSC Ord 11, r 1(1)(f) was contained in CPR r 6.20(8): ‘a claim is made in tort, where (a) damage was sustained within the jurisdiction; or (b) the damage sustained resulted from an act committed within the jurisdiction.’ The definite article was omitted from (a), in line with the holding of the Court of Appeal in Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc [1990] 1 QB 391, 437, that (a) did not require all the damage to be sustained in England; it was enough if ‘some significant damage’ had been sustained here; ...... Neither the [RSC] nor the [CPR] required that permission be given to serve out of the jurisdiction if the relevant gateway applied; there was always a discretion not to do so, exercised in accordance with the principles laid down in Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460. In the CPR, this was reflected in rule 6.21(2A): ‘the court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim.’”

228.  Having so traced the legislative history, Lady Hale concluded there was no reason to think that those who framed the RSC have intended them to precisely mirror the interpretation later given to the Brussels Convention. The language used in the RSC is quite different from the language of the Brussels Convention, and the CJEU decisions have come afterwards to restrict the scope of the language used in the Brussels Convention, but they do not override the language of the RSC in non-EU cases, so they are of no help in construing the RSC which have remained in essentially the same language ever since. If the Rules Committee had wanted to assimilate the RSC after the decisions in Booth and Cooley, they could easily have done so, and now even more easily as the gateways are contained in a Practice Direction rather than a rule (page 215). Lady Hale reminded there is difference between the two schemes, ie the European scheme deliberately eschews any discretion in favour of clear and certain rules, which explains why the CJEU has been anxious to restrict the scope of the Bier decision by drawing the direct/ indirect distinction, but the English scheme retains the “valuable safety valve” of discretion which need not be limited to the Spiliada principles but can concentrate on the real question being, as Professor Briggs has put it, “the proper place for the resolution of the dispute” (page 215).

229.  Lord Wilson at pages 217-218 also stated as follows:

“61. Our procedural rules for such service have therefore needed to be wide enough to enable us to comply with our duties under EU law. But it does not follow that, even if the natural construction of our rules indicates a wider gateway to service out of the jurisdiction in the case of a claim unconstrained by EU rules of jurisdiction, construction of them should be narrowed to the size of the gateway set by the EU rules, as interpreted by the Court of Justice.

......

63. ...... Where, by contrast, the jurisdiction of the English court is not governed by EU law, the decision in the Metall case demonstrates that our rules create a gateway wider, as is now clear, than EU law would permit.

64. ...... The absence of the definite article demonstrates the contrary; and, in that it therefore has to be accepted (as Lord Sumption accepts in para 23 above) that ‘damage’ for the purposes of the paragraph can be wider than the damage which violates the interest and which completes the cause of action, I find the relevance of the latter concept, whatever its importance in the substantive law of tort, to be elusive.

......

66. Is it possible that proponents of the narrow interpretation fail to invest due confidence in the appropriate forum inquiry? Is not that inquiry sufficiently muscular to exclude claims founded only on a tenuous amount of damage sustained in England? Lord Sumption contends in para 31 above that the main factor which determines such an inquiry is the practicality of litigation. But in the Spiliada case, ...... Lord Goff of Chieveley held (i) at p 474F-G that the question was not one of mere practical convenience; (ii) at p 480B-C that the court had to take into account the nature of the dispute as well as the legal and practical issues which it raised; and (iii) at p 480G that the fundamental requirement was to identify the forum in which the case might suitably be tried in the interests of all the parties and of the ends of justice.

67.       ...... A claim which requires service of the form out of the jurisdiction will not lightly be brought, not least because of the likely complexity of attempts to enforce any judgment ultimately obtained; and a rigorous exercise of the appropriate forum inquiry should in my view yield the proportionate outcomes which all of us, on both sides of what in the present case reduces only to a discussion, no doubt intend that our law should achieve.”

230.  Lord Clarke at page 220 also said: “...... In particular, like Lady Hale and Lord Wilson, I prefer the reasoning in the various decisions of first instance judges to which they refer. In particular, I agree with Lord Wilson JSC in his para 64 that, in the absence of the definite article in paragraph 3.1(9)(a) of [PD6B], it has to be accepted that “damage” for the purpose of the paragraph can be wider than the damage which violates the claimant’s interest and which completes the cause of action”.

231.  Brownlie (SC): English and Commonwealth authorities It is clear from the above there is divergence in judicial opinion as to what type of damage sustained within the jurisdiction can confer jurisdiction on the English court. But there is consistent line of first instance English decisions with respect to claims for damages for personal juries that have accepted indirect, secondary or consequential damage to be “damage” within the jurisdiction in contra-distinction to the minority view in Brownlie (SC) thathas limited “damage” to direct damage. Lady Hale in Brownlie (SC) said her views sat well with a “consistent line of first instance decisions holding that, in a case which is not governed by the European jurisdictional rules, a claim in tort may be brought in England if damage is suffered here as a result of personal injuries inflicted abroad” (page 212):

(a)	Lade Hale noted that in Booth (see paragraph 212 above) DHCJ Nigel Teare QC considered “[dropping] the definite article reflected the decision in Metall that it was enough that some significant damage had been sustained here. He also rejected the argument that this was “improbably wide”, because the court had also to be satisfied that it was appropriate, in Spiliada terms, to exercise jurisdiction” (page 213).
(b)	Then Tugendhat J in Cooley accepted the RSC has been changed to give effect to the 1982 Act, but “...... Parliament had not fully assimilated the rules relating to non-party states with those relating to the European member states. It had left in the significant difference that there was no discretion in the Convention and the Regulation, but there was such a discretion under the CPR. The object of the Convention and Regulation was to provide a clear and certain attribution of jurisdiction, but the CPR were more flexible. Hence a claimant who was severely disabled, with continuing needs for care, support and medical attention in this country as a result of a road accident in New South Wales, could bring his claim here” (page 213).
(c)	The CPR has been amended by the time of Harty v Sabre International Security Ltd (formerly SIS Iraq Ltd),[155] but in that case the defendant did not challenge the gateway (page 213).
(d)	It was argued in Wink that the gateway should be interpreted consistently with European law so that a claim for direct and indirect damage can only be brought at the place where direct damage has been sustained. But Haddon-Cave J pointed to a number of obvious problems with this argument (page 213): “there are no such limiting words in paragraph 3.1(9)(a) of [PD6B]; the natural and ordinary meaning of “damage” is any damage; the defendant’s argument was tantamount to saying that damage was sustained only where the injury occurs, which is plainly not so in many cases; it was this construction rather than that in Booth’s which required re-writing: paras 33-35. Agreeing with the “comprehensive” analysis in Cooley’s case, he held that the two schemes – in the Regulation and the Rules – were “fundamentally different in structure and policy”: para 41.”
(e)	In Flora Stylianou, the defendants argued that the coming into force of the Parliament and Council Regulation (EC) 864/2007 on the law applicable to non-contractual obligations (“Rome II Regulations”) required the CPR to be interpreted in the same way as provided in article 4 (“Article 4”) that refers to direct and not indirect damage. This was rejected by Sir Robert Nelson on the basis that “article 2.1 of the Rome II Regulation provides that “damage shall cover any consequence arising out of the tort/delict ...”, so Article 4 expressly excludes what would otherwise be included in the word “damage”. It was said there is no reason to interpret “damage” in the CPR as in the specific Article 4 rather than in the general article 2.1. In any event, the Rome II Regulations are not about jurisdiction and do not override the CPR. The court’s discretion is a “valuable safety valve rendering unnecessary a narrow definition of damage”: para 53” (pages 213-214).[156]
(f)	In Erste Group Bank AG (London Branch) v JSC “VTM Red October”,[157] Flaux J rejected the argument that “the Rules Committee was intending to mirror the Brussels Convention” because the English rules were wider, and hence the Brussels regime was not helpful in interpreting the rules (page 214).

232.  All the above views are obiter as there is no definitive decision of the English Court of Appeal or English Supreme Court. But such first instance decisions and the majority view in Brownlie (SC) enjoy the support of some Commonwealth authorities that also favour a broad interpretation. In Flaherty v Girgis,[158] the New South Wales Court of Appeal, when dealing with a similar (but not exactly the same) rule,[159] held that damage is suffered within the jurisdiction by the claimant (who has been injured/hospitalised abroad but has since returned home) because of the continuing need for medical attention and loss of earning capacity suffered within the forum. At page 266 McHugh JA held (and Kirby P and Samuels J concurred) that “[damage] ...... is to be contrasted with the element necessary to complete a cause of action; it includes all the detriment, physical, financial and social which the plaintiff suffers as the result of the tortious conduct of the defendant”.[160] Various Canadian authorities were to the same effect. In Vile v Von Wendt, it was held that where pecuniary losses (eg loss of wages and business profits due to personal injury) are suffered in the jurisdiction, damage has also occurred within the jurisdiction.[161]

233.  Lord Sumption agreed that similar tort jurisdictional gateways have been interpreted in Canada and New South Wales as “extending jurisdiction to the court of the place where the financial consequences of physical damage were experienced”,[162] which decisions have been followed in England.[163] He particularly referred to Erste Group Bank AG (London Branch) in which the English Court of Appeal questioned the wide effect given to the tort gateway, but did not decide the point despite having expressed misgivings (page 203). It was said Arden LJ drew analogy with Article 4 of the Rome II Regulations that confined “damage” to direct damage for the purpose of choice of law, which concept should be applied to questions of jurisdiction. Nevertheless, Lord Sumption agreed Article 4 is a “mechanical technique” for all EU member states as there can be only one proper law whilst “indirect damage may be suffered in more than one country and jurisdiction in both English and EU law may subsist in more than one country” (page 204). Further, Lord Sumption was “not persuaded the Rome II Regulations had any bearing on the construction of the jurisdictional gateways in [PD6B] or indeed the corresponding provision of the Brussels Convention and Regulations governing the position as regards EU-domiciled defendants. ...... It is also true that both jurisdiction and choice of law can broadly be said to depend on how closely the dispute is connected with a particular country. But there is no necessary connection between the two” (page 204).

234.  Post-Brownlie (SC) authorities  Although the majority and minority observations in Brownlie (SC) are obiter, this point has come for direct decision in 2 subsequent English cases in the personal injury context. In Allan Peacock v Del Seatek India Private Limited & anor,[164] which concerned a work-related injury suffered by the claimant whilst employed on board a vessel located off-shore in India and service of the claim form on the 2^nd defendant in South Korea, Mr Registrar Kay QC found that the absence of definitive appellate decision left a significant number of first instance decisions which have not been overturned and which may be regarded as persuasive, and he went on to say as follows:

“19. ...... Whilst some doubt has arisen because of the decision of the Court of Appeal nonetheless the approach taken in the earlier cases has been supported by the majority in the Supreme Court, at least with respect to claims for damages for personal injury. In the circumstances I consider that the fact that the Claimant has continued to suffer damage within the jurisdiction satisfies one of the limbs of the jurisdictional gateways in paragraph 3.1 of CPR 6BPD.”

235.  Next, after the decision by the English Supreme Court in Brownlie (SC), the claimant in that case applied to substitute the proposed defendant (ie the company that managed and operated the Four Seasons Hotel in Cairo at the relevant time) as the defendant in the proceedings in place of the existing defendant (paragraph 28) or alternatively to amend the claim form and particulars of claim and then to seek permission to serve the claim form and amended particulars of claim out of jurisdiction on the proposed defendant in Egypt (paragraph 1). In his judgment dated 1 October 2019 in Brownlie (“Brownlie (QB)”),[165] Nicol J dealt with the question whether the claimant’s tort claim could pass through the tort gateway, which is a question of law. The parties invoked the majority and minority views of the English Supreme Court in Brownlie (SC), and Nicol J held as follows:

“108. ...... I recognise that all of the views of the judges in the Supreme Court in Brownlie were obiter since none of the Justices of the Supreme Court accepted that the Claimant did not have a good arguable case that Holdings [ie the original defendant] was responsible for the losses in contract or in tort. With such illustrious range of opinions, it would seem somewhat superfluous for me to add to them. For what it is worth, I respectfully agree with the majority in the Supreme Court whose views I would anyway be inclined to prefer to those of the minority (and the decision of the Court of Appeal).

109.   It seems to me that no different consideration applies to the Claimant’s clam as Sir Ian’s dependent. ......  but if consequential damage is sufficient to past through the tort gateway for Lady Brownlie’s personal claim, I cannot see why it should be any different for the purpose of her claim as her husband’s dependent.”

236.  These 2 decisions after Brownlie (SC) added to the consistent line of pre-Brownlie (SC) first instance decisions which have held that “damage” under the English tort jurisdictional gateway includes indirect or consequential damage, but such ratio fortifies the majority view in Brownlie (SC).

237.  Discussion  I am informed by counsel there are no local authorities directly on point. Mr Wang raised 3 points to argue that the minority view of the narrowly split English Supreme Court decision in Brownlie (SC) is more convincing and should be adopted by this court.

238.  Mr Wang submitted Lord Sumption’s views should be preferred because the majority in Brownlie (SC) had no answer to his distinction as a matter of principle between “damage” and evidence of financial valuation of such damage, which was said to be a clear and convincing principle of law. Whilst I accept Lord Sumption did draw such distinction, it is not correct to say the majority in Brownlie (SC) had no answer. In fact, the majority did give a clear and, in my view, persuasive answer (in line with the rationale expressed in the long line of English first instance personal injury cases both before and after Brownlie (SC) and some Commonwealth authorities – see paragraphs 231-236 above).

239.  First, Lord Sumption’s distinction equates “damage” with “damage which completes the cause of the action” as an essential component of some torts eg negligence (see paragraphs 216-217 above), but the distinction on such premise flounders because damage is not an essential component for every tort (eg trespass to goods, libel and some slanders are actionable per se) and the English (and likewise the local) tort jurisdictional gateway covers any tort, so I agree with the majority view that the framers of such rule would not have in mind to limit the meaning of “damage” as Lord Sumption suggested (see paragraph 218 above). This is especially so when Lord Sumption himself readily accepted “damage” within the tort jurisdictional gateway “is not necessarily limited to damage which serves to complete a cause of action in tort”, and that these 2 concepts are not coterminous” albeit “clearly related” (see paragraph 216 above). But if “damage” and “damage which serves to complete a cause of action” are not coterminous, Lord Sumption did not clarify what damage other than “damage which serves to complete the cause of action” is also captured by “damage” under the tort jurisdictional gateway if it is not indirect/consequential damage that flows from the direct/immediate damage that serves to complete the cause of action.

240.  Secondly, Lord Sumption limited “damage” under the English jurisdictional gateway to “damage to the interest protected” that occurs upon breach of the relevant legal duty, eg “bodily integrity, physical property and reputation” (see paragraphs 216-217 above) by excluding any indirect/ consequential damage. Lord Sumption agreed that “damage” (which he said is limited to “damage that serves to complete the cause of action”) may be experienced in more than 1 jurisdiction (as explained in Metall und Rohstoff AG – see paragraphs 241-243 below), but logically immediate/direct damage should have been felt on one place, eg bodily injuries suffered at the time of the accident, hole in the hull caused by a ship collision, and lowering of reputation in the eyes of colleagues upon publication of a defamatory statement. Lord Sumption recognised this conceptual difficulty, and at page 206 said “[where] the relevant duty is not to cause a purely financial loss, the relevant interest may be located and damaged in more than one country, something which is conceptually harder to envisage in the case of bodily injury or injury to property” (my emphasis). But taking Lord Sumption’s point that “damage” can be felt in more than 1 place where the relevant duty “is not to cause a purely financial loss”, a prime example is a claim for general damages for PSLA (which is non-financial loss) in a personal injury claim for breach of common law duty of care, and I agree that loss can be felt in more than one place, eg in the case of P, during injury and hospitalisation in Ningbo, and from medical treatment and disabilities in Hong Kong, and they are, in the words in Metall und Rohstoff AG, significant damage. Indeed, as Lady Hale said, PSLA suffered by a victim of an accident is part of the same injury, and his permanent disability is part of him wherever he goes (see paragraph 218 above).

241.  Any discussion on “damage” being felt in more than 1 place requires a study of Metall und Rohstaff AG, which deals with the obverse situation where a Swiss company and its American parent suffered damage in England as a result of an actionable conspiracy, but the effects of that immediate damage were reflected in Switzerland where the Swiss company had its headquarters. Two matters are of note: (a) the tort jurisdictional gateway considered in Metall und Rohstoff AG was Order 11 rule 11(1)(f) of the RSC which has exactly the same wording as the local Gateway F (ie jurisdiction may be assumed inter alia where “the damage was sustained within the jurisdiction”), and (b) civil conspiracy is not actionable per se and damage is the gist of the action.[166]

242.  In Metall und Rohstoff AG, the 2^nd defendant argued “the damage”, not “damage” or “part of the damage”, in the rule required a strict approach to be applied, so “the only permissible claim would be one where the whole of the damage was sustained within the jurisdiction”, and on such basis the plaintiffs sustained damages for inter alia conspiracy “in his pocket” at their headquarters in Switzerland (page 410). Gatehouse J at page 402 said Order 11 rule 1(1)(f) of the RSC “presents a wider opening for the plaintiff to pass through ...... it is sufficient for the plaintiff, if he establishes ...... that the consequential damage was sustained within the jurisdiction ......” (my emphasis). On the facts of that case, Gatehouse J held as follows at page 410:

“...... [The broker’s] obligation was to return the warrants relating to the four ‘financing transactions’ in London to the plaintiffs’ subsidiary or former subsidiary ...... When [the broker] refused to comply with this, the plaintiff’s immediate damage was suffered in London though its effects would ultimately be reflected in Switzerland [the plaintiffs’ eventual adjudicated losses were over £50m including interest – page 400]. The ledger balance of £8.25m was due to be paid in London and payment was refused there. The plaintiffs were entitled to redelivery of the warrants in respect of ‘in the box’ metal in London. ......” (my emphasis)

243.  It was plain from the above the immediate/direct damage that serves to complete the cause of action in that case was the broker’s refusal to pay some £8.25m to the plaintiffs from their trading on the exchange, and the indirect/consequential damage were the plaintiffs’ losses suffered and reflected in Switzerland. On appeal, Slade LJ gave the judgment of the English Court of Appeal and at page 437 held as follows:

“As the rule now stands it is plain that jurisdiction may be assumed ...... where ...... (b) the damage was sustained within the jurisdiction ...... Condition (b) raises the question: what damage is referred to? It was argued [for the 2^nd defendant] that since the draftsman had used the definite article and not comply referred to ‘damage’, it is necessary that all the damage should have been sustained within the jurisdiction. No authority was cited to support the suggestion that this is the correct construction of the [Brussels Convention] to which the rule give effect and it could lead to an absurd result if there were no one place in which all the plaintiff’s damage had been suffered. The judge rejected this argument and so do we. It is enough that some significant damage has been sustained in England. ......” (my emphasis)

Mr Wang submitted Slade LJ did not deal with the meaning of “damage” in the tort jurisdictional gateway, and his Lordship merely held the definite article meant not all damage have to be all in one place. Mr Wang’s contention was tantamount to saying direct/immediate damage may occur in more than one place. But Slade LJ clearly endorsed Gatehouse J’s view that even though the plaintiffs’ indirect/consequential damage was felt in Switzerland, it was sufficient for the tort gateway if their direct/immediate damage was suffered in London (ie not that “the plaintiff’s immediate damage” was suffered in both London and Switzerland), and it was on such basis that he concluded that “damage” for the tort jurisdictional gateway does not require all “damage” to be all in one place. In my view, in coming to such view, Slade J must have acknowledged the plaintiffs’ indirect/consequential damage felt in Switzerland was part of the “damage” under the tort gateway that does not have to be in the same place as the direct/immediate damage (which in that case was sustained in London within the jurisdiction) (see Mustill LJ’s observations set out in paragraph 254 below). If it were otherwise (ie indirect/consequential damage does not come within the meaning of “damage” under the tort jurisdictional gateway and direct/immediate damage is the only “damage”), then the plaintiffs in that case would have sustained all “damage” within the meaning of the tort jurisdiction gateway in London without any need for Gatehouse J and/or Slade LJ to consider or explain that not all “damage” has to be sustained within the jurisdiction. In my view, Metall und Rohstoff AG lends support to the majority’s view as to the meaning of “damage” in Brownlie (SC), which explains why Lady Hale and Lord Wilson also referred to the helpful views in Metall und Rohstoff AG in their understanding of the meaning of “damage” under the tort jurisdictional gateway (see paragraphs 218-219, 227 and 229 above and paragraph 246 below).

244.  In Hong Kong, there was similar discussion by the CA in Dynasty Line Ltd. In that case, the 1^st and 2^nd defendants who resided/ operated in Singapore were the former directors/shareholders of a BVI company. They caused the BVI company to enter into contracts to purchase from Xs shares in a Hong Kong listed company, and persuaded Xs to hand over the share certificates before receiving full payment from the BVI company. They caused the shares to be pledged to financial institutions in Hong Kong which later sold the shares. Xs obtained judgment against the BVI company. The provisional liquidators of the BVI company then sued the defendants for inter alia conspiracy to defraud. There was dispute as to where damage was suffered for the purpose of Gateway F with the provisional liquidators arguing it was sustained in Hong Kong where the listed company shares were eventually disposed of by way of forced sale in the Hong Kong Exchange in 2001 and the 2^nd defendant arguing that the damage was sustained when the shares were 1^st pledged some years earlier in 1996-1997 with dispute as to where the pledges took place.

245.  This again appeared to be a debate between direct/immediate damage that serves to complete the cause of action (ie the defendants pledging the shares to financial institutions in 1996-1997) and the indirect/ consequential damage that quantifies the loss (ie the financial institutions sold the shares several years later in 2001). Cheung JA followed Metall und Rohstoff AG, and at page 465 held as follows:

“33. In considering whether damage is sustained in Hong Kong it is sufficient if some significant damage had been sustained here: see Slade LJ in Metall Und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 Q B 391 at p.437.

34. In my view, in considering para.(f), irrespective of the question where the shares were pledged, the plaintiff had also pleaded that it sustained loss when the shares were sold by the financial institutions. CDC is a Hong Kong listed company and the sales were effected in Hong Kong. In other words significant damage had been sustained in Hong Kong.

35. In my view the plaintiff has established a good arguable case that para.(f) was satisfied, namely, the claim was founded on a tort and the damage was sustained within the jurisdiction.”

In my view, there is clear recognition by the CA that indirect/ consequential damage (or what Mr Wang termed as financial consequences of the tort) sustained within the jurisdiction, if it is of some significance, is sufficient.

246.  Thirdly, I respectfully agree with Lady Hale and Lord Wilson that the framers of the tort jurisdictional gateway likely had the ordinary and natural meaning of “damage” (encompassing indirect/consequential/ secondary damage) in mind, and that there was no express qualification in the wording of such gateway that commends a narrow interpretation (see paragraphs 218-219 above). This is also supported by a series of consistent English first instance and Commonwealth decisions, and academic opinion by Professor Briggs. I will deal with the significance (if any) of the definite article for “damage” in Gateway F below (see paragraphs 247-256 below), but suffice to say here Lady Hale noted Metall und Rohstoff AG recognised the rule contemplates the possibility of damage suffered in more than one place (see paragraph 218 above), and I have explained that it appeared from Metall und Rohstoff AG that “the damage” under Order 11 rule 1(1)(f) of the RSC is not confined to immediate/direct damage (see paragraphs 241-243 above).

247.  Mr Wang next submitted that Lord Sumption’s narrow view was to be preferred because the wording of Gateway F (ie “the claim is founded on a tort and the damage was sustained ...... within the jurisdiction” (my emphasis)) is different from the current form of the English tort jurisdictional gateway in PD6B (ie “a claim is made in tort where – (a) damage was sustained [or will be sustained] within the jurisdiction”). Mr Wang argued the difference was significant in that (a) the retention of the definite article for “damage” in Gateway F meant (i) Lady Hale’s broad interpretation premised on the removal of the definite article in the current English provision (which argument Lord Clarke expressly endorsed – see paragraph 230 above) was not relevant to construction of Gateway F in Hong Kong and (ii) Lord Sumption’s narrow interpretation of “damage” that refers to damage that violates the interest protected by law should prevail in Hong Kong, and (b) the absence of any reference to future damage to be sustained in the local Gateway F is also indicative of the narrow range of loss covered by “the damage”.

248.  Such argument turns largely on the drafting and statutory evolution of the English jurisdictional gateway and the influence (if any) of European law. In 1982, the United Kingdom acceded to the Brussels Convention, which was incorporated into English domestic law by the Civil Jurisdiction and Judgments Act 1982. The 1982 Act introduced Order 11 rule 1(1)(f) of the RSC (ie the exact equivalent of Gateway F). Although it was said that such rule was to correspond to Article 5.3 of the Brussels Convention and the Bier decision (followed by Kingdom of The Netherlands) that drew a distinction between damage protected by the interest which the law protects and the financial consequences that serves as the measure of such damage for the purpose of identifying the place where the damage was sustained under European law (see paragraphs 225(b)-(c) and (e) and paragraph 226(b)-(c) above), I note with interest (a) the CJEU did not directly decide the point in these 2 cases (see paragraph 228 above), and (b) the subsequent CJEU decisions that restrict interpretation of Article 5.3 to the place of actual damage rather than the place where the consequence of harm was suffered (eg Dumez France SA and Marinari) came after the introduction of Order 11 rule 1(1)(f) of the RSC (see paragraphs 225(g), 226 and 228 above). Further, the language of Order 11 rule 1(1)(f) of the RSC does not follow that of Article 5.3 (later article 7.2) of the Brussels Convention and Regulations (see paragraph 228 above). For all the above reasons and also the analysis in the paragraph below, I respectfully agree with Lady Hale that the interpretation of Order 11 rule 1(1)(f) of the RSC should/would not precisely mirror that given by the CJEU decisions (see paragraph 228 above).

249.  Importantly, Article 5.3 of the Brussels Convention and Regulations concern claims against defendants domiciled in the EU, but Order 11 rule 1(1)(f) of the RSC concerns non-EU cases outside European law, so, in my view, there is no basis to say the interpretation of the Article 5.3 (later article 7.2) of the Brussels Convention and Regulations should/would override that of Order 11 rule 1(1)(f) of the RSC or be helpful in construing such rule (see paragraphs 225(d) and 228 above). As Lady Hale reminded, for defendants who are not domiciled in the EU, service out of jurisdiction is governed by the English jurisdictional gateways in the CPR/PD6B and not by European law (see paragraph 227 above). Indeed, Lord Sumption also recognised that the construction of Article 5.3 of the Brussels Convention and Regulations (being a code for allocating jurisdiction between EU member states) is partly dependent on policy considerations irrelevant to Order 11 rule 1(1)(f) of the RSC concerning non-EU cases, and a significant policy consideration is the mandatory nature of such allocation under the European scheme that favours clear and certain rules (which, as Lady Hale explained, underline the Bier decision and subsequent European cases) whereas the essence of the English rules is their permissive nature (with the “valuable safety valve” of the Spiliada principles and discretion in determining the proper forum conveniens) (see paragraphs 225(d) and 228 above). That being the case, I find it hard to accept, as Lord Sumption suggested, that Order 11 rule 1(1)(f) of the RSC (and the current English tort jurisdictional gateway under PD6B) was deliberately drafted to assimilate the test under European law for assuming jurisdiction over persons domiciled in the EU. The framers of the rules have chosen language different from Article 5.3, and have not expressly provided for this in the rules although it would have been easy to do so (especially when the current form of such gateway is in PD6B and not even in the CPR) (see paragraph 228 above).

250.  Thus, I find that even on Order 11 rule 1(1)(f) of the RSC (before its statutory metamorphosis to the current form of the English tort jurisdictional gateway that dropped the definite article – to be discussed in the paragraph below), the natural and ordinary meaning of “damage” in such provision prevails to embrace indirect/consequential damage.

251.  As regards dropping the definite article in the current form of the English tort jurisdictional gateway, there was no dispute that this change was to give effect to the decision in Metall und Rohstoff AG, ie to exclude the suggestion that all damage has to be sustained within the jurisdiction, so jurisdiction may be founded on the occurrence of some damage in England and some damage elsewhere (see paragraphs 225(f) and 227 above). It must be remembered that Metall und Rohstoff AG was decided under Order 11 rule 1(1)(f) of the RSC, so dropping the definite article to give effect to Metall und Rohstoff AG only serves to make the position clear but not to change the construction of the tort jurisdictional gateway or interpretation as to the meaning of “damage”. As Lord Wilson said, the decision in Metall und Rohstoff AG demonstrates the English rule in Order 11 rule 1(1)(f) of the RSC has already created a gateway that is wider than what European law permits, and the current form of such gateway merely makes it abundantly clear the narrow interpretation should be rejected (see paragraph 229 above).

252.  But Lord Sumption suggested the proposition that Order 11 rule 1(1)(f) of the RSC and the current form of the tort jurisdictional gateway under PD6B should be construed in light of CJEU case law is supported by (a) Metall und Rohstoff AG at page 424 of that decision and also (b) The Eras Eil Actions (see paragraph 225(g) above). In respect of (a) above, I note that page 424 of Metall und Rohstoff AG recorded submissions by the plaintiffs’ counsel. Insofar as counsel for the plaintiffs in that case suggested the phrase “the damage” includes the injury and is not limited to pecuniary loss and Order 11 rule 1(1)(f) of the RSC has been brought in line with the Brussels Convention (see the Bier decision), it is useful to refer to Lord Wilson’s observations about Metall und Rohstoff AG in paragraph 229 above (as echoed by Lady Hale and set out in paragraph 228 above) that the English procedural rules have to be wide enough to enable compliance with European law, but it does not follow that a wider interpretation under natural construction of the English rules in a claim unconstrained by EU rules of jurisdiction should be narrowed to the size of the gateway set by the EU rules as interpreted by the CJEU (see also paragraph 251 above).

253.  In respect of (b) above concerning The Eras Eil Actions, in that case Clarksons (a group of companies centred in the United Kingdom) perceived the possibility of a new way to write liability in respect of environmental hazards, and the scheme when put in practice was re-insurance led. Initially there were 2 environmental impairment liability pools, one of which sustained risks in the United States. Complex disputes arose out of the breakdown of the business relationships arising from contracts of insurance and reinsurance, and arrangements for underwriting and claims management. For service out of jurisdiction under Order 11 rule 1(1)(f) of the RSC (being the exact equivalent of Gateway F), Clarksons maintained they suffered damage in their pocket in London which was the centre of their commercial enterprise, but Howdens (group of United States companies alleged to be the marketing and underwriting agents) argued the resulting damage of the alleged negligent acts occurred in the United States “where disastrous consequences of the pool enterprise manifested themselves in great losses”.

254.  Mustill LJ referred to Metall und Rohstoff AG which he said disposed of “any possible argument to the effect that since Clarksons may well have suffered damages abroad in addition to any suffered within the jurisdiction paragraph (f) could not apply”, and such decision shows that on its facts damage to Metall und Rostoff AG “could for the purposes of the rule be suffered in London where the warrants were converted as well as their principal place of business”. I pause here to note that Mustill LJ made clear what I have said about Metall und Rohstoff AG, ie both the immediate/direct damage in London and the indirect/consequential damage in the “principal place of business” in Switzerland were “damage” under the rule.

255.  Mustill LJ also referred to the Advocate General’s analysis in Kingdom of The Netherlands under European law (see paragraph 225(c) above). In that case, the wreck of a vessel belonging to a German resident was removed by the Netherlands authorities and sold in Delfzijl. The state sued the owner in the Dutch courts for the balance of the removal costs. The owner disputed jurisdiction, and the state argued “the place where the harmful event occurred” was the Netherlands either because the sale was at Dalfzijl or because the state suffered financial loss at its seat of government. The Advocate General rejected such argument on the basis that all that happened in the Netherlands was that the pre-existing damage was quantified, and Mustill LJ found such reasoning unassailable (as noted by Lord Sumption in Brownlie (SC) in paragraph 225(g) above). But it is interesting to ascertain what exactly Mustill LJ regarded as “unassailable” since his Lordship went on to conclude that jurisdiction under the tort gateway did exist in that case:

“The reasoning of the Advocate General ...... could properly have been applied to the present case if Clarksons had been basing their claim to be within rule 1(1)(f) solely on the situs of the head office of their group. But they can say more than this, for the damage of which they complain is their exposure to claims by SCOR [a principal player in the pool that sustained risks in the United States] and the other plaintiffs. These are being pursued in England, and if successful will result in judgments of the English court enforceable against Clarksons in England. We consider that in a real sense this amounts to the suffering of damage in England.”

In my view, this helpfully highlighted that “the damage” under Order 11 rule 1(1)(f) of the RSC was not limited to “where disastrous consequences of the pool enterprise manifested themselves in great losses” in the United States (ie where the damage was immediately felt), but also covered consequential potential exposure to SCOR and other plaintiffs which might or might not result in judgment against Clarksons. What has been regarded as “unassailable” is the rejection of any proposition equating the situs of the claimant within the jurisdiction as “damage” in the jurisdiction, but if the claimant is able to go on and show some damage within the jurisdiction beyond mere situs, then it can “in a real sense ...... [amount] to the suffering of damage” in the jurisdiction. Actually, Lord Sumption must have recognised this when he said as follows at page 206:

“26. ...... But the fact that the amount of that damage falls to be measured by expenditure which has incurred somewhere else is irrelevant. Thus, if I carry on a single business in France and Germany, and an actionable conspiracy in damages that business, the interest protected is the business, and it may sustain damage for the purpose of the rule in both countries. But the fact that I am an English company whose balance sheet suffers in England, or that I incur expenditure in England to make the damage to my business good, is of no relevance. ...... ”

Putting this in the context of the present action, P’s case is not premised on mere situs in Hong Kong for calculation of loss, but on the basis that he has incurred damage (albeit secondary/consequential damage) here.

256.  In light of the above analysis, I respectfully disagree that the narrow interpretation advocated by Lord Sumption is an unassailable application of logic to the facts, and I am not persuaded the dropping of the definite article in the English provision would sway the interpretation of tort jurisdictional gateway though it serves to reinforce the wider interpretation.

257.  In my view, any concern that a wide interpretation of “damage” under the tort jurisdictional gateway will create a “universal jurisdiction” to entertain claims by local residents of personal injuries suffered anywhere in the world, which Mr Wang contended to be inimical to the strict approach to the Order 11 long-arm jurisdiction, is sufficiently addressed by the discretion as to forum conveniens. Lord Sumption argued such discretion and the gateways serve different purposes, and the former is to limit the exercise of the court’s jurisdiction rather than displace the latter that focuses on the practicalities of litigation rather than the relationship of the cause of action to England (see paragraph 222 above). I prefer the reasoning of Lady Hale (see paragraph 223 above) and Lord Wilson (see paragraph 229 above) that the essence of the discretion as to forum conveniens is to look for the proper place for the resolution of the dispute to justify allowing a claim to bring a foreign defendant to the local court. As explained by Lord Wilson, the Spiliada principles are not concerned with just practical convenience (or, as Lord Sumption put it, “the practicalities of litigation”), and the court in assessing the forum conveniens criterion has to carry out a rigourous exercise by taking into account the nature of the dispute as well as the legal and practical issues thereby raised, and identifying the forum where the case may suitably be tried in the interests of justice and the interests of all parties.

258.  Further, I am not persuaded by Mr Wang’s contention that the absence in the local Gateway F of any reference to future damage to be sustained is also indicative of the narrow interpretation of “the damage”. Such amendment to the English provision was introduced in 2015 (see footnote 144 above). Mr Wang did not give the rationale for such amendment, and indeed even Lord Sumption recognised that “[the] 2015 amendment extends the test to prospective torts and prospective damage, but will not affect the question what “damage” mean in this context” (page 203).

259.  Mr Wang’s final argument was to distinguish the present case from Brownlie (SC) on the basis that it did not involve any fatal accident so “no secondary damage that a relative or the estate of [P] has suffered is being claimed, hence “this part” of Lady Hale’s reasoning was also distinguishable. I disagree. The claims identified in the original claim form in Brownlie were based in both contract and tort. As explained by Nicol J in Brownlie (QB), such claims were brought by the claimant in 3 capacities: (a) in her personal capacity in respect of injuries which she herself suffered, (b) as her husband’s executrix and on behalf of his estate for the claim which he had before his death (which in English law would have been a claim pursuant to the Law Reform (Miscellaneous Provisions) Act 1934), and (c) as her husband’s dependent (which in English law would have been a claim under the Fatal Accidents Act 1976).[167] Lord Sumption had this to say at page 202 in respect of the claimant’s various claims:

“18. In the case of the claim for bereavement and loss of dependency under the Fatal Accidents Act 1976, the reason is that that Act operates as part of the proper law of the tort, and has no application to a tort which is not governed by English law ...... Since it is accepted that the proper law governing the driver’s negligence was that of Egypt,[168] Lady Brownlie’s claim under the Act of 1976 has no prospect of success. The only sustainable pleaded claims are her claims on behalf of her husband’s estate and in respect of her own injuries. It may well be that other claims, including a claim for bereavement and loss of dependency, will be available to her under Egyptian law, but as matters stand no such claims are advanced.

......

20. Leaving aside the statutory causes of action under the Fatal Accidents Act 1976, the losses claimed are (i) funeral, memorial, repatriation and probate expenses and reimbursement of the cost of the holiday, claimed on behalf of Sir Brownlie’s estate; (ii) medical expenses occasioned by Lady Brownlie’s injuries; and (iii) non-pecuniary damage for Lady Brownlie’s pain, suffering and loss of amenity. All these can loosely be described as after-effects of the accident. It may be assumed that they were experienced, at least in part, in England. Accordingly, the question at issue on this appeal is whether, when a tortious act results in personal injury or death, “damage” is limited to direct damage, ie the physical injury or death, or extends to the indirect damage, ie the pecuniary expenditure or loss resulting. ......” (my emphasis)

It was quite clear from the issue posed by Lord Sumption that no distinction is drawn between personal injury or death (see also paragraph 217 above). This was again made clear by Nicol J in Brownlie (QB) as follows:

“109. It seems to me that no different consideration applies to the Claimant’s claim as Sir Ian’s dependent. The Supreme Court followed its earlier decision ...... that the Fatal Accidents Act 1976 had no extra-territorial effect. That will be a relevant matter for me to consider in the context of whether this aspect of the Claimant’s claim has a reasonable prospect of success, but if consequential damage is sufficient to pass through the tort gateway for Lady Brownlie’s personal claim, I cannot see why it should be any different for the purposes of her claim as her husband’s dependent.”

In my view, P’s present claim was not distinguishable from Brownlie (SC) on the basis put forward by Mr Wang.

260.  In the circumstances, I prefer the majority view in Brownlie (SC), and respectfully disagree with the minority view. This means P suffered and will suffer “damage” in Hong Kong within the meaning of the 2^nd Limb of Gateway F. Since P will not be barred forever from raising the applicability of Gateway F on the basis of his existing cause of action and pleadings, and the point in dispute merely raised a pure legal issue that I have now resolved in P’s favour, had it been necessary, I would have maintained the Yu Order on the basis of the 2^nd Limb of Gateway F, but even if I were wrong and the Yu Order ought to be set aside for omission in the P 1^st/2^nd Affs to expressly rely on the 2^nd Limb of Gateway F, I would have no hesitation to re-grant leave to issue the CWoS and serve the same on D2 out of jurisdiction under the 2^nd Limb of Gateway F.

IX.  MATERIAL NON-DISCLOSURE

261.  Notwithstanding my views in Part VII above as to the applicability of Gateways C and D, Mr Wang submitted the Yu Order was liable to be set aside as it was obtained by material non-disclosure. In the circumstances, I need to go on to consider (a) whether such allegation was made out, (b) if it was made out, whether I should continue or discharge the Yu Order, and (c) if the Yu Order is discharged, whether to re-grant leave to issue and serve the CWoS out of jurisdiction. However, I should point out that D3’s allegations as to material non-disclosure does not affect the position in relation to Gateway F for the simple reason that such allegations were immaterial to such gateway.

262.  Mr Wang submitted there was “extensive, serious, fundamental, deliberate and repeated breaches of the duty to make full and frank disclosure on the part of [P]”. It was said the P 1^st/2^nd Affs filed in support of P’s Summonses and/or P’s application to serve the CWoS out of jurisdiction did not give full and frank disclosure of potential weaknesses of P’s application (whether relating to the jurisdictional considerations or the substantial merits of his claim), and in fact concealed and misled the court in respect of many aspects of P’s case. Essentially, D3 alleged material non- disclosure by P in 4 respects (which it was said P should have had knowledge at/about the time of P’s Summonses but failed to make disclosure):

(a)	D1’s and D2’s connection and presence in Mainland China;
(b)	P’s connection with and residence in Mainland China;
(c)	the signing of the Employment Contract;
(d)	the merits of P’s case against D1, ie the alleged employment relationship with D1.

Li said that by comparing the evidence/propositions above and the papers for the ex parte applications, it was apparent most of these issues/evidence were not disclosed or drawn to the attention of the ex parte master. D3 only discovered the existence of the P 3^rd, 4^th and 5^th Affs from the P 6^th Aff, and found their contents similar to the P 2^nd Aff, which Li alleged went to show P never disclosed the material matters in (a)-(d) above, so the ex parte leave for service out of jurisdiction should be set aside.

263.  On the other hand, P disagreed he failed to make full and frank disclosure in obtaining the Yu Order. Mr Wong submitted none of the matters in (a)-(d) above were material matters that went to the weighing operation by the ex parte master, but should this court take the view they were material and P failed to give full and frank disclosure, the P 6^th Aff explained “it was due to [P’s] inadvertence because many of these issues and the specific documents now raised in Section IV of [Li 2^nd Aff] simply did not appear to [P] to be relevant at the time”.

(a)  Ds’ connection with and presence in Mainland China

264.  Li claimed P failed to properly draw the court’s attention to the parties’ connection with Mainland China in the P 1^st/2^nd Affs, which failure was liable to create an impression that D2 had no presence in Mainland China at all, and that it had to totally rely on D1 which also did not have any presence in Mainland China:

(a)	Paragraph 8 of the P 2nd Aff stated D2 was a company incorporated in the United States with its office located in the United States, and D1 had its registered office in Hong Kong.
(b)	Paragraphs 8-9 of the P 1st Aff and paragraph 9 of the P 2nd Aff stated “[D2] did not have an office in Hong Kong”, and D1 acted for D2 in Hong Kong and in Mainland China;
(c)	P did not mention either the D1 SHG office or the D2 SHG Office.
(d)	The impression was biased or false as P must have known D1 had the D1 SHG Office[169] and D2 maintained the D2 SHG Office at the same address since 2008. P never drew attention to the D2 SHG Office (known as Polychem China Service Centre set up according to the agreement signed in December 2008) until P 6th Aff, but P must have knowledge of this as there was evidence P served on D2’s various projects in Mainland China.
(e)	D3 claimed P deliberately hid facts/evidence showing D2’s presence in Mainland China, which were important matters for the ex parte master to consider when deciding whether any of the Gateways was available to P (eg the governing law of the Employment Contract and the forum conveniens factors).

265.  The P 6^th Aff admitted on hindsight that P could have expressed himself clearer in the P 1^st/2^nd Affs, but reminded that P did depose in paragraphs 5 and 21-22 of the P 2^nd Aff that he was frequently assigned by D2 via D1 to work at various cities in Mainland China, and that the Accident occurred in Ningbo when P worked under instructions of D1/D2 to carry out inspection. Further, C/7 of the Employment Contract referred to D2’s projects outside Shanghai, and paragraph 9 of the P 2^nd Aff asserted D1 acted for D2 in Mainland China. It was also said C/5-6 of the Employment Contract also mentioned the D2 SHG Office as the Brentwood Service Centre. So P claimed there were materials before the ex parte master to show that at the material time D1/D2 had presence/projects in Mainland China. But Mr Wang argued it was not good enough to point here and there in the P 2^nd Aff and to a mere exhibit to the P 2^nd Aff (ie the Employment Contract) to say Ds’ presence in Mainland China might have been hinted, and he complained that P failed to tell the ex parte master the whole truth.

266.  I find the fact both Ds had presence in Mainland China were material facts which should have been set out in the P 1^st/2^nd Affs as they would go to the ex parte master’s weighing exercise to determine whether P’s claim against D2 had sufficient connection to Hong Kong or Ningbo under forum conveniens principles and in relation to choice of law for the Employment Contract. It is not enough to say the Employment Contract referred to the Brentwood Service Centre for it gave no inkling to the location of such centre. In my view, there has been material non-disclosure in this respect, which could not be salvaged by references in the P 1^st/2^nd Affs to P working in various cities in Mainland China and under instructions by D1 on behalf of D2. But I am not persuaded by D3’s complaint that P failed to mention D2 had various projects in Mainland China. P did state he was employed by Ds and he had been assigned to work in various cities in Mainland China. These disclosures and the fact P was injured whilst at work at the Factory in Ningbo made the position quite clear.

(b)  P’s connection with and residence in Mainland China

267.  To invoke the Order 11 long-arm jurisdiction, the P 2^nd Aff asserted the governing law of the Employment Contract, by implication of the parties’ conduct, was Hong Kong law (see paragraph 28(c) above), and “[my] temporary assignment to work at the factory was part and parcel to my employment by [D1] and [D2] in Hong Kong” (see paragraph 28(f) above).

268.  D3 claimed this was misleading and constituted material non-disclosure at the ex parte stage as it intimated P temporarily stayed in Mainland China to carry out particular job duty but in fact he was a habitual resident of Mainland China as he was primarily stationed/worked in Shanghai, he performed services as a site service specialist in Mainland China under the Employment Contract and its predecessor contract since 2008-2009, and his family lived in Shenzhen, especially when the WoS gave P’s address in Hong Kong. Mr Wang submitted that P failed to draw the ex parte master’s attention to:

(a)	C/3-4, C/6-8 and C/10 of the Employment Contract showed P’s job duties had much closer connection with Mainland China than Hong Kong;
(b)	P had been living in Shanghai in a rented apartment since 2008;
(c)	by the D2/Biwater Letter dated 19 September 2014 D2 introduced P’s work experience in Mainland China without mention of any project P performed in Hong Kong;
(d)	P’s family lived in Shenzhen even up to the time of the Accident (see C/7 of the Employment Contract).

269.  P disagreed he misled the court. Paragraph 21 of the P 2^nd Aff stated (a) P was “frequently assigned to work in various cities of the PRC”, which, according to Mr Wong, must have suggested he was residing in Mainland China during the course of his employment with Ds, especially given the nature of his job duties, and (b) P would “return” to Hong Kong to collect his salary payments at the D1 HK Office, which, according to Mr Wong, must have suggested he was residing in Mainland China. It was also said that P’s frequent presence in Mainland China and his usual residence in Shanghai were also evident from C/6-7 of the Employment Contract, eg P would return to Shenzhen once a month, his lodging outside Shanghai required pre-approval, etc. Since the Mainland Chinese features of P’s employment/residence were apparent from the 4-page Employment Contract, Mr Wong submitted it was unnecessary to specifically draw the court’s attention to them.

270.  Mr Wong further submitted that in any event the alleged non-disclosures were not truly material matters for they would not add to the relevant analysis or weighing operation by the ex parte master when the presence/connection of P to Mainland China were so noticeable from what had been deposed in the P 2^nd Aff or from necessary implication of such deposed facts. But even if they were regarded as material, the P 6^th Aff explained it was unfortunate that at the time it did not cross P’s mind to mention his Shanghai and Shenzhen addresses to the court, but P proceeded to make the following disclosures in the P 6^th Aff:

(a)	P’s Shanghai address (which was referred to in C/6 of the Employment Contract) was actually a “dorm” for which D2 paid the rent, and D2 sometimes sent other employees to stay there.
(b)	P explained that the 2 tenancy agreements dated 2008/2009 that D3 produced had no implication on the present dispute that arose out of the employment relationship between P and Ds entered into in February 2014.
(c)	Due to his work commitments in 2014, P at most only stayed at his Shenzhen address (which did not relate to his work and which was where his wife/son lived before they came to settle/live in Hong Kong) 1-2 days a month.

271.  Mr Wang submitted that simply exhibiting the Employment Contract to the P 1^st/2^nd Affs and saying P did not appreciate the materiality of his Shanghai/Shenzhen addresses were not sufficient answers to D3’s complaint. But in my view, there was no material non-disclosure as regards the fact that a substantial part of his work and job duties was in Mainland China. It had been made clear in the P 2^nd Aff that he was assigned to work in various cities in Mainland China, but nevertheless he would return to Hong Kong to collect his salary payments. I find it immaterial that P did not list out the clauses in the Employment Contract that showed connection to Mainland China in the body of the P 1^st/2^nd Affs. Further, I am also not convinced the D2/Biwater Letter was a material document to be disclosed, and I have found in paragraph 139 above that such letter did not demonstrate definitively that P worked exclusively in Mainland China. Nevertheless, I consider P should have spelled out more clearly in the P 1^st/2^nd Affs his then residence at the Shanghai/Shenzhen addresses as such facts would go to the weighing exercise for choice of law of the Employment Contract under Gateway D, especially when the Employment Contract and the WoS both gave his addresses in Hong Kong.

(c)  Signing of the Employment Contract

272.  D3 claimed the P 2^nd Aff did not mention how the Employment Contract was returned to him after it was signed on behalf of D2, so there was reasonable inference that D2 in the United States posted it back to P at his Shenzhen or Shanghai address, which D3 said would tend to establish the Employment Contract was made in the United States or in Mainland China. On such basis, D3 argued it was misleading for P to say in paragraph 20 of the P 2^nd Aff that he believed the Employment Contract was “made in Hong Kong” to advance his case for satisfying Sub-ground 1 of Gateway D and to strengthen his case on forum comveniens.

273.  The P 6^th Aff explained that at the ex parte stage the issue of the destination of the written Employment Contract after D2’s endorsement did not cross P’s mind, and P continued to believe it was not a material matter, so (assuming that the Employment Contract was a written contract) he did not address how he was notified of D2’s acceptance and how the signed Employment Contract was sent to him.

274.  In my view, as I have rejected the applicability of Sub-ground 1 of Gateway D even at the inter partes stage, I find it unnecessary to discuss whether was any material non-disclosure in this respect. After all, this fact only affected Sub-ground 1 of Gateway D, and was immaterial for the matter of forum conveniens. Further, the postal rule suggested the Employment Contract was made in the United States (see paragraphs 127-128 above), but neither P nor D3 suggested United States would be the forum conveniens. Further, the evidence did not clearly point to P’s likely receipt of the signed Employment Contract in Mainland China (see paragraph 129 above).

(d)  Alleged employment relationship with D1

275.  Mr Wang noted paragraphs 4-6 and 12-15 of the P 1^st Aff and paragraphs 3 and 9 of the P 2^nd Aff asserted P was employed by D1 (as a contracting/signing party of the Employment Contract), and D1’s Suen would give/pass instructions to P. Li complained that P in asserting D2 was a proper and necessary party to the present action failed to inform the ex parte master that D1 claimed it was not P’s employer, and failed to disclose to the ex parte master the Record of Interview, P’s application form dated 10 November 2014 to FWD Life for reimbursement of medical expenses, and the Resignation Letter/Email, which D3 said were consistent with D1’s assertion. D3 further complained that P failed to draw to the attention of the ex parte master the relevant clauses in the Employment Contract showing D2 effectively exercised full control over P’s employment to the exclusion of D1 (who was mentioned only in C/4 and C/10-11), and failed to explain that in the actual practice D1 only worked as conduit to translate/pass messages between P and D2. On the other hand, Mr Wong submitted the proper question was whether such alleged non-disclosures would show P’s claim against D1 was “perfectly groundless”, and the answer must be no.

276.  In my view, material disclosure in the present context for the purpose of making an ex parte application for service out of jurisdiction was not intended to catalogue disputed facts. Bearing in mind the context/ focus of the Order 11 inquiry before the ex parte master, which essentially is to decide whether the Hong Kong court is to assume jurisdiction (and which must be quite a different exercise from that for an application for ex parte restraining injunction), I find that the court in considering whether to grant ex parte leave for the plaintiff to issue/serve concurrent originating process out of jurisdiction is not concerned with the merits of the case or the defences to be raised save that it should be satisfied there is a serious question to be tried. Consequently, as explained in Hady (see paragraph 64 above), notwithstanding the strict approach, failure in such context to refer to arguments on the merits which the defendant may raise in answer to the claim will not amount to material non-disclosure unless they are of such weight that their omission would mislead the court in exercising its jurisdiction/discretion whether or not to grant leave. I have in paragraphs 92-109 above discussed the Record of Interview, P’s application form dated 10 November 2014 to FWD Life for reimbursement of medical expenses and the Resignation Letter/Email as well as various clauses of the Employment Contract, and found they were not so clear as to definitively demonstrate D1 was not P’s employer. In any event, D1’s role in translating instructions from D2 to P was mentioned in paragraphs 9 and 22 of the P 2^nd Aff. That being the case, I am not persuaded that these alleged non-disclosures were material and/or misleading.

(e)  Summary

277.  In the circumstances, I find there were material non-disclosures on the part of P in respect of (a) Ds’ presence in Mainland China by way of the D1 SHG Office and the D2 SHG Office and (b) P’s then residence in Shenzhen/Shanghai, Mainland China, which facts/matters would go to the issue of choice of law for the Employment Contract and the issue of forum conveniens.

(f)  Automatically discharge?

278.  Mr Wang submitted the Yu Order should be automatically set aside for material non-disclosures alone. I pause to note these facts/ matters (undisclosed at the ex parte stage) were before this court at the inter partes stage, but even after careful re-consideration of these additional facts I find Gateway C and Sub-ground 3 of Gateway D were still applicable and Hong Kong was still clearly the forum conveniens. I am persuaded that had the additional information been before the ex parte master, the Yu Order would still have been made by Master Roy Yu on the same terms. Given my conclusion on forum conveniens that the present case looks to be a suitable one for service out, the non-disclosures as found (which were more limited than what D3 would have me find) did not appear to be too important or significant to the outcome of the application. In my view, discharge of the ex parte Yu Order would be too out of proportion to P’s failure make full and frank disclosure on the matters as I have found.

279.  But Mr Wang argued otherwise on the basis that the non-disclosures were deliberate/culpable in disregard of the duty to make full and frank material disclosure, which amounted to “flagrant mockery of the administration of justice”:

(a)	Mr Wang suggested the P 1st/2nd Affs were tailored to avoid disclosure of any legal/factual matter that might prejudice P’s ex parte leave application, so connections with Mainland China were downplayed or concealed, and he further suggested that the extent/degree of the non- disclosures were telling.
(b)	Apart from a bare allegation that the omissions were due to his inadvertence and failure to appreciate their relevance, there was no proper explanation for the non-disclosures.
(c)	P’s breach of his duty of disclosure was continued/repeated in similar ex parte applications to serve process/documents on D2 out of jurisdiction by way of his 1st affirmation in the EC Action and by way of the P 3rd to 5th Affs in the present action.
(d)	Even up till now P still declined to tell the court the whole process of the signing of the Employment Contract so it was still unknown how D2’s acceptance and/or the signed Employment Contract was notified/ returned to P after it was signed by D2.

280.  I start with Mr Wang’s complaint that even by the time of the Summons P still failed to volunteer information (eg the matter in paragraph 279(d) above) whilst most of the additional information was elicited from the Li 2^nd/3^rd Affs. But I find P did disclose the D1 SHG Office, D2 SHG Office and his own residences in Mainland China in the P 6^th Aff. As to whether the Employment Contract was made within the jurisdiction, I note the P 6^th Aff put forward a case (not pleaded in the SoC) that the Employment Contract was concluded at the D1 HK office on 17 February 2014 when P accepted the offer of employment by D1 (in its own capacity via Lee and on behalf of D2), and the Employment Contract was merely circulated for endorsement by P, D1 and D2 who respectively signed the same on 17, 21 and 25 February 2014 to evidence the contract concluded in Hong Kong. I am not persuaded this unpleaded case (albeit verified on affirmation) should be allowed, but this probably explained why P did not deal with the eventual destination of the signed Employment Contract as such matter would be irrelevant to the above case set out in the P 6^th Aff. Taking into account these matters, including (a) the fact P exhibited the Employment Contract (which D3 claimed contained clauses showing connection to Mainland China) and affirmed he was assigned to work in various cities in Mainland China, and (b) the reality that the very Accident he suffered occurred when he was working at the Factory in Ningbo, I am not persuaded there was any deliberate breach of the duty to give full and frank disclosure on the part of P. In any event, as reminded by Kwan J (as she then was) in SFC v A, in most cases the matter has to be approached on the basis of considering the quality of material that was not disclosed without making any final decision whether or not there has been bad faith in the failure to disclose (see paragraph 72 above). Upon careful consideration and notwithstanding the material non-disclosures as found, I find it appropriate to continue the Yu Order.

(g)  Re-grant leave?

281.  Even if I am wrong and the Yu Order ought to be discharged for material non-disclosure, I would have re-granted leave for P to issue the CWoS and to serve it on D2 out of jurisdiction on the basis that there was no deliberate or intentional breach of the duty to make full and frank disclosure with a view to deceive, and any re-application would be bound to succeed (ie the result with disclosure would have been the same).

282.  I have borne in mind the strict approach explained in paragraph 60 above and the need to protect the public administration of justice and to uphold the public interest in requiring full and fair disclosure (see paragraph 71 above), but I have also taken into account the guidance by Rogers VP in Pacific Electric Wire & Cable Co Ltd that there is no absolute bar to a renewed application for service of a writ outside jurisdiction in cases where there has been material non-disclosure, and that it would be out of proportion and an unwarranted punishment to disallow a party from ever applying for an order for service out for material non-disclosure on a first application (see paragraph 74 above). I find on the facts now known to this court and the conclusions in Part VII above that this would be an appropriate case for service out, and if necessary, I would have re-granted leave for the CWoS to be issued and served on D2 outside jurisdiction.

283.  Mr Wang submitted that the shape of the litigation had become quite different after the Settlement between P and D1, and argued that upon D1 dropping out of the picture by virtue of the no-liability Settlement, P could no longer establish liability against D1 and there would no longer be any “anchor” defendant, so Gateway C must be closed to P for the purpose of any exercise of discretion to re-grant leave to serve out of jurisdiction. Mr Wong countered by citing Bonus Garment Co (a firm) v Karl Ricker GMBH & Co KG & anor to say the mere fact judgment has been obtained against an “anchor” defendant does not mean leave for service out under Gateway C has to be set aside and the plaintiff be barred from pursuing the defendant out of jurisdiction.[170] I am not persuaded such authority advances Mr Wong’s proposition. Bonus Garment Co (a firm) turned on whether default judgment against a defendant amounted to (a) an election by the plaintiff to proceed against her alone and (b) a bar against the plaintiff from recovering judgment against a foreign co-defendant. It was not evident from such Privy Council decision which jurisdictional gateway was adopted for leave to serve out of jurisdiction. I agree with Mr Wang that Gateway C would not be open to P if there were need to consider exercising discretion whether to re-grant leave to issue the CWoS and serve the same on D2 out of jurisdiction. But the Gateways are disjunctive, so failure of Gateway C would not prevent re-grant of leave on the basis of Sub-ground 3 of Gateway D and on Gateway F.

X.  STAY APPLICATION

284.  By the Stay Application, D3 asked for the remaining part of the present action against D2 be stayed on forum non-conveniens principles. I have dealt with the relevant considerations in Part VII(k) above, and concluded that Hong Kong was clearly the forum conveniens.

285.  Mr Wong took the additional point that the Setting Aside Application was made at a relatively late stage of the present action when P had incurred considerable time/costs in the pending action here, so he urged this court not to “punish” P by staying the present action, which would delay progress of his present claim to recover damages for his injuries/disabilities, put the effort/cost that went into the present action to waste, and cause P to incur further costs and expenses to commence another civil claim in Ningbo. Again, I have dealt discussed these matters in Part VII(k) above, and I find on the totality of the relevant considerations that D3 failed to show the PRC Courts were a distinctly more natural and appropriate forum. In coming to this view, I have taken into account Mr Wang’s submissions that D3 would not have proceeded with the Stay Application at an earlier stage given (a) the role/function of the Board and (b) its reticence in stepping into the present action when D1 was there to put up healthy resistance to P’s claim on both issues of liability and quantum, but the Board became involved as soon as practicable when it became aware of Settlement between P and D1.

XI.  CONCLUSION

286.  In the circumstances, the Summons (including the Setting Aside and Stay Applications) be dismissed. Save for the fact that the court’s displeasure over P’s non-disclosures as found should be reflected in costs, there is no reason why costs should not follow event. I therefore grant a costs order nisi that D3 shall pay 70% of P’s costs of and occasioned by the Summons, including all costs reserved if any, to be taxed if not agreed.

Schedule