XCHRX CHINA OCEAN SHIPPING CO. OWNERS OF THE M/V FU NING HAI v. WHISTLER INTERNATIONAL LTD. CHARTERERS OF THE M/V FU NING HAI

1999, No. CT 20

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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JUDGMENT

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1. The parties are involved in an arbitration brought by the defendant against the plaintiff. The plaintiff is seeking security for costs from the defendant and information regarding the defendant's place of incorporation and registration and its address. The plaintiff applied for this relief to the arbitral tribunal but, because, perhaps, the tribunal did not think it had jurisdiction to order this relief because the arbitration commenced before the coming into force of the 1996 Ordinance, the relief was refused. The plaintiff now seeks this relief from this court.

2. The plaintiff issued an originating summons claiming the relief I have mentioned on 4 March 1999. This summons was addressed to the defendant's solicitors in the arbitration and to the defendant's agent. The defendant's solicitors had told the plaintiff's solicitors on 2 March 1999 that it was taking instructions on whether they had instructions to accept service. They did not respond to later requests by the plaintiff's solicitors to say if they had received those instructions. Other attempts by the plaintiff's solicitors to get the plaintiff to tell it where service could be effected have come to naught.

3. On 9 March 1999, the plaintiff applied ex parte for an order that service on the defendant's solicitors and agent be deemed to be good and sufficient service. It is clear from the supporting affidavit filed by the plaintiff that, at the time of the issue of the summons, the plaintiff believed that the defendant was resident out of the jurisdiction. I granted the order sought on 15 March 1999.

4. On 30 March 1999, the defendant issued a summons seeking an order that my order of 15 March 1999 and all subsequent proceedings be set aside.

5. On 19 April 1999, Mr Hui Fung, the solicitor for the defendant filed an affidavit in support of this application. In this, he said, in essence, that the plaintiff should have applied for leave to serve out of the jurisdiction and did not do so. Mr Hui is careful not to say that the defendant is out of the jurisdiction or to give any information as to the defendant's whereabouts.

6. Before me, Mr Mak repeated this submission. He argues that the originating summons issued on 4 March 1999 cannot be legally served on the defendant at all without leave to serve outside the jurisdiction. On the face of it, this is an odd proposition. The plaintiff does not want leave to serve out of the jurisdiction. Indeed, because of the defendant's strange unwillingness to say where it is, the plaintiff cannot serve out of the jurisdiction. What the plaintiff wants is leave to serve within the jurisdiction by substituted service because it cannot do otherwise; the defendant will not say where it is.

7. For the argument he advances, Mr Mak relies heavily on the case of Myerson v Martin [1979] 1 WLR 1390. In that case, there was no basis on which the plaintiff could obtain leave to serve out of the jurisdiction. The alleged conspiracy took place in Jersey. The only handle that the plaintiff had to justify service in England was that the defendant occasionally visited there. At page 1396, Everleigh LJ said "Where the defendant is abroad and the case is outside the court's jurisdiction under Ord. 11, I do not think that the court should exercise its discretion under Ord. 65, r. 4, to order substituted service where the effect would be to add yet another cause of action to those listed in Ord. 11." That, I accept, is the proper approach to cases of this kind. In the case before me, the case is not outside the court's jurisdiction under Order 73, rule 7, which is the relevant equivalent to Order 11 in the Myerson case, so there is no question here of the effect of the order allowing substituted service adding to the list of cases in which the court may exercise is exorbitant jurisdiction.

8. So the situation is, as I see it, that where a plaintiff would be able to make out a case for leave to serve out of the jurisdiction under the Rules, but such an order would be inappropriate because, in fact, the plaintiff cannot serve out of the jurisdiction, and the plaintiff is able to establish a case under Order 65, rule 4, the court, in the exercise of its discretion may, and should, allow substituted service. Any other approach cannot accord with common sense. It makes no sense for a plaintiff to say to the court - "I want leave to serve out of the jurisdiction, but I cannot serve out of the jurisdiction. The only sensible and effective service I can achieve is substituted service within the jurisdiction, but I still want leave to serve out of the jurisdiction."

9. In this case, if it had been appropriate, the plaintiff could have obtained leave to serve out of the jurisdiction. The case fell squarely within the terms of Order 73, rule 4. Not only that; it is the defendant who came to the jurisdiction - it commenced the arbitration proceedings here. The plaintiff has also established an overwhelming case for substituted service within the jurisdiction. The need for that service has been brought about entirely by the defendant own intransigence. It ill lies in the defendant's mouth to say - "I will not tell you where I am so that you can effect conventional service on me, but you cannot serve me by service on my solicitors who are representing me in the matter with which the court is concerned."

10. There can be no doubt that the defendant does not suffer any prejudice by the substituted service. In fact, the defendant's solicitors have already filed an acknowledgement of service in respect of the concurrent originating summons, so it can be safely assumed that the defendant's solicitors are in touch with their client and able to obtain instructions.

11. No doubt driven to distraction by the defendant's attitude, the plaintiff then went into a tail spin. It issued another originating summons on 12 April 1999 claiming the same relief as in the summons of 4 March 1999. I am not sure why the plaintiff did this, but there was no need for it. On 20 April 1999, the plaintiff applied to me for leave to issue "a concurrent originating summons of the originating summons dated 4 March 1999" for service out of the jurisdiction, and to serve it by substituted service within the jurisdiction. I granted that application, and the plaintiff issued a concurrent summons dated 4 March 1999 on 20 April 1999. I am not sure now why I granted this application. The application and the leave were unnecessary. I think I was unimpressed with the defendant's attitude, and was anxious to help the plaintiff. But these events do not change the situation that the issue and service of the summons of 4 March 1999 were, in my view, valid. For the sake of neatness however, I should set aside the summons of 12 April 1999, my order of 20 April 1999 and the consequent proceedings, and I do so.

12. I conclude that there is no substance in the defendant's summons of 30 arch 1999, and this is dismissed.

13. We are left with the summons of 4 March 1999. The plaintiff filed its evidence in this respect on 19 April 1999. The defendant has filed no evidence on the merits. In terms of the Rules, the defendant has 28 days from 19 April 1999 to file its own evidence. If this time is not abridged, the defendant might achieve the delay that it is seeking by raising objections of the merest technicality. This is a simple matter and the defendant has had plenty of time to consider its position. I order that the defendant file its evidence before 4 pm on 4 May 1999. Thereafter, the plaintiff may set the matter down as matter of urgency.

14. As to costs, I have already indicated, and I said to Mr Mak during the hearing, that I am very unhappy with the defendant's attitude in this matter. I am inclined to order that the defendant pay the costs of its summons on an indemnity basis forthwith. I am also inclined to make the same order in respect of the matters I have set aside on the basis that these were brought about by the defendant's unreasonable attitude. I make an order nisi accordingly.