LIQUIDITY TECHNOLOGIES LTD AND ANOTHER v. MARK DAVID LAMB AND OTHERS

HCA 1646/2023

[2024] HKCFI 1821

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1646 OF 2023

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D E C I S I O N

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Introduction

1.  There are five summonses calling for determination by this court on paper. They are as follows:

(1)  D1’s summons dated 6 March 2024 (“the Jurisdiction Summons”) for a declaration that the Writ of Summons dated 12 October 2023 has not been duly served on D1 and a declaration that this court does not have and/or should not exercise jurisdiction over D1 in these proceedings.

(2)  D1’s summons dated 14 March 2024 (“the Relief Summons”) for relief from sanction in the unless order made by Master Doris To dated 19 February 2024 (“the Unless Order”) as to the filing of his Defence and Counterclaim by 4:00 p.m. on 6 March 2024 (“the Deadline”).

(3)  Ps’ summons dated 13 March 2024 (“the D1 Default Judgment Summons”) for default judgment against D1 on account of his failure to comply with the Unless Order to file and serve his Defence and Counterclaim by the Deadline.

(4)  Ps’ summons dated 24 May 2024 (“the D3 & D4 Default Judgment Summons”) for default judgment against D3 and D4 on account of their failure to file and serve their Defence and Counterclaim.

(5)  D1’s summons dated 3 June 2024 (“the VCF Summons”) for leave to attend the hearing of 5 June 2024 (“the Hearing”) by video conference facilities (“VCF”). The Hearing was fixed for the purpose of the determination of the Jurisdiction, Relief, D1 Default Judgment and D3 & D4 Default Judgment Summonses.

2.  Before examining the merit of each of these summonses in turn, I should first outline the undisputed factual and procedural background of the controversies among the parties.

Background facts and Procedural matters

3.  P1 is a company incorporated under the laws of the Republic of Seychelles (“Seychelles”). P2 is its wholly owned subsidiary incorporated in Hong Kong.

4.  P1 operated the CoinFLEX Exchange (“CoinFLEX”) which was a cryptocurrency exchange focused mainly on cryptocurrency derivatives trading. CoinFLEX issued a cryptocurrency named FLEX token (“FLEX”).

5.  P2 was an entity established to employ CoinFLEX’s Hong Kong team and the operational staff running CoinFLEX in which FLEX can be traded for cash according to its market value.

6.  D1 co-founded CoinFLEX with Mr Arumugam and was the CEO of CoinFLEX until his removal on 8 October 2023. D1 was also the director of both Ps until October 2023.

7.  D2 is a cryptocurrency investor. He had a margin agreement with P1.

8.  D3 is a company incorporated in Seychelles while D4 is its wholly owned subsidiary and also incorporated in Seychelles. D1 is the sole director of both D3 and D4 since their inception.

9.  Ps allege that D1, D3 and D4 have since 2023 operated an online cryptocurrency exchange named OPNX Exchange (“OPNX”) which issues a cryptocurrency named OX token.

10.  On 23 June 2022, D1 issued a statement on behalf of CoinFLEX that it was suspending withdrawals on the CoinFLEX Exchange “due to extreme market conditions and uncertainty involving a counterparty”.

11.  On 9 July 2022, Mr Arumugam and D1 jointly issued a statement on behalf of CoinFLEX stating that D2 had a written manual margin arrangements with CoinFLEX and D2 failed to honour his obligations to pay margin calls leading to a significant deficit of US$84 million. They further said that they were looking for ways to re-finance CoinFLEX.

12.  On 28 July 2022, P1 applied to the Supreme Court of Seychelles (“Seychelles Court”) for the approval of a Scheme of Arrangement based on the deficit of US$84 million caused by the default of D2. The application was granted and the Scheme of Arrangement was approved by the order of the Seychelles Court dated 6 March 2023.

13.  In July 2023, P1 made a claim against D2 in HKIAC arbitration proceedings (“the HK Arbitration Proceedings”) in respect of the margin agreement.

14.  It was later found out that D1 purportedly on behalf of P1 entered into a drop-handed agreement with D2 to settle the HK Arbitration Proceedings to the detriment of P1.

15.  The crux of Ps’ case against D1, D3 and D4 is that D1 transferred the business of CoinFLEX to D3 and D4 in breach of his duties to Ps. Ps further allege D1, D3 and D4 by false representations pass off their OPNX as that of CoinFLEX or as business in some way connected with CoinFLEX.

16.  On 11 October 2023, Ps made a pre-action ex parte interlocutory injunction application against D1 (“Ex parte Application”). DHCJ Phoebe Man heard the Ex Parte Application and granted an injunction (“the Injunction Order”) on 12 October 2023. By the Injunction Order, D1 is injuncted, among other matters, from acting or holding out as being authorised to act in the name of Ps and/or CoinFLEX.

17.  The deputy judge, nevertheless, refused to grant leave to Ps to serve the Writ out of jurisdiction and for substituted service on D1 on the ground that D1 was then a resident of Hong Kong and had a local address.

18.  On the same day, Ps issued the Writ of Summons herein.

19.  On 13 October 2023, a sealed copy of the Writ of Summons was purportedly served on D1 by (1) insertion through the letter box at a resident unit in Central, Hong Kong (“the Central Address”), (2) telegram message, (3) email and (4) WhatsApp message. Mr Walsh, who is a partner of Clifford Chance, the former solicitors of Ps, was the sender of the telegram message, email and WhatsApp message.

20.  On 20 October 2023, the return day of Ps’ summons for the continuation of the Injunction Order, the deputy judge, after hearing counsel for Ps and counsel for D1, continued the Injunction with amendments suggested by D1’s counsel.

21.  On 1 November 2023, Messrs Hauzen LLP (“Hauzen”) filed an Acknowledgement of Service on behalf of D1.

22.  On 13 December 2023, the Statement of Claim was served on Hauzen.

23.  Ps discontinued this action against D2 by a Notice of Discontinuance dated 22 December 2023.

24.  D1 had twice applied for an extension of time to file his Defence and Counterclaim (if any). To dispose of his second application, with the consent of the parties, Master Doris To made the Unless Order, which is in the following term,

“Unless (D1) do file and serve his Defence and Counterclaim (if any) by 4:00 p.m. on 6 March 2024, (D1) shall be debarred from so doing.”

25.  Eventually D1 has not filed any defence to comply with the Unless Order by the Deadline.

26.  Only after the expiry of the Deadline did D1 serve the Jurisdiction Summons and the 2^nd Affirmation of Ho Hau Yue (“Ho 2^nd Affirmation”) on Ps at 4:08 p.m. on 6 March 2024. . Mr Ho is an Associate of Hauzen.

27.  Ho 2^nd Affirmation consists of 5 short paragraphs only. Its sole purpose is to exhibit a signed 6^th Affirmation of D1. D1 was then in Europe. Mr Ho stated that D1 was making arrangements to affirm his 6^th Affirmation before a notary and that the original would be delivered to Hauzen by courier thereafter.

28.  D1 filed a Notice to Act in Person on 24 April 2024.

The Jurisdiction Summons

29.  There are some problems with the Jurisdiction Summons. It was taken out pursuant to O.12 r.8(1) and (2) of the Rules of the High Court (“the RHC”).

30.  O.12 r.8 (1) provides that a defendant shall make an application thereunder within the time limited for service of a defence. D1 accepts that the service of the Ho 2^nd Affirmation was effected 8 minutes after the Deadline.

31.  Apparently D1 tries to remove any obstacles caused by 8-minute lateness by paragraph 2 of the Relief Summons. He asks for an order that notwithstanding paragraph 1 of the Unless Order and insofar as necessary, the time for D1 to file and serve the Jurisdiction Summons be extended until 6 p.m. of 6 March 2024.

32.  Another problem is that O.12 r.8(3) stipulates that an application under paragraph (1) or (2) must be made by summons and the summons must state the grounds of the application. The Jurisdiction Summons does not contain any grounds of D1’s application.

33.  Furthermore, O.12 r.8(4) provides that an application under paragraph (1) or (2) must be supported by an affidavit verifying the facts on which the application is based and a copy of the affidavit must be served with the summons by which the application is made.

34.  The 6^th Affirmation of D1 was not properly notarised when it was served on Ps on 6 March 2024. After repeated reminders, a properly notarised 6^th Affirmation of D1 was only served on Ps on 4 July 2024 at long last.

35.  For the 8-minute lateness, by his 3^rd Affirmation, Mr Ho proffered an explanation. On 6 March 2024, Huazen sent a clerk and two trainees to the Court Registry at about 3:20 p.m. to file the Jurisdiction Summons and Ho 2^nd Affirmation. Due to an “extraordinary and unusually long and slow-moving queue”, the staff only managed to file the Jurisdiction Summons and Ho 2^nd Affirmation at 3:55 p.m. and left the Court Registry at 4:05 p.m..

36.  Mr Ho himself had waited at the lift lobby of the office of Tanner De Witt (“TDW”), Ps’ solicitors. Once he obtained the return day of the Jurisdiction Summons from his staff, he filled the information in a copy of the Jurisdiction Summons and served the same on TDW immediately. Despite his best effort, he managed to do so at 4:08 p.m..

37.  First of all, I accept the explanation of Mr Ho and the lateness is minimal. It is excusable in all the circumstances and D1 had no control over the situation. No conceivable prejudice could be caused to Ps. Ps do not allege that there was any.

38.  Strictly speaking, I do not think D1 needs any relief from sanction to make the application under O.12 r.8(1). He did make his application to the court by the filing of the Jurisdiction Summons and Ho 2^nd Affirmation 5 minutes before the expiry of the Deadline and was well within time. What was not done before the Deadline is the service of a copy of these documents on TDW only. The late service would not render D1’s application under O.12 r.8(1) out of time in my view.

39.  On the other hand, Ps do not complain about the lack of grounds specified in the Jurisdiction Summons. D1’s grounds of his application are clearly stated in his 6^th Affirmation and Ps have managed to deal with such grounds in their reply affirmations.

40.  Of course I disapprove of D1’s non-compliance with O.12 r.8(2). However, I believe it would be disproportionate to deny D1 a chance to have his application properly argued when the breach did not cause any practical problems or real prejudice to Ps.

41.  Lastly, concerning the copy of the 6^th Affirmation of D1, I accept that D1 did not comply with O.12 r.8(4) to serve the Jurisdiction Summons together with a proper supporting affidavit. The Ho 2^nd Affirmation, per se, has little probate value and the exhibited 6^th Affirmation of D1 is not notarised albeit signed.

42.  As with the lack of grounds stated in the Jurisdiction Summons, the failure to file and serve a proper supporting affirmation with the summons is a curable irregularity: Carmel Exporters (Sales) Ltd v. Sealand Services Inc. [1981] 1 WLR 1068 and Hong Kong Civil Procedure 2024 Vol.1 at §12/8/2.

43.  In view of the fact that the properly notarised 6^th Affirmation of D1 was eventually filed and served, in the absence of any significant prejudice caused to Ps, I am prepared to exercise my discretion to allow the belated filing of the notarised 6^th Affirmation of D1 to be a correction of the irregularity under Order 2 r.1(2).

44.  Now I turn to the individual grounds in the Jurisdiction Summons.

45.  D1 advances three main grounds for his challenge to jurisdiction:

(1)  D1 has not properly been served with the Writ;

(2)  Hong Kong is not the forum conveniens; and

(3)  In any event, D1 has not submitted to jurisdiction in Hong Kong.

46.  I do not understand why the last ground is an independent ground by itself. Ps do not say that D1 should be debarred from making the present application by reason of his submission to the jurisdiction already.

Writ not validly served?

47.  The governing rule is Order 10 r.1 of the RHC. The relevant part is as follows:

“(1) A writ must be served personally on each defendant by the plaintiff or his agent.

(2) A writ for service on a defendant within the jurisdiction may, instead of being served personally on him, be served―

(a) by sending a copy of the writ by registered post to the defendant at his usual or last known address, or

(b) if there is a letter box for that address, by inserting through the letter box a copy of the writ enclosed in a sealed envelope addressed to the defendant.

(3) Where a writ is served in accordance with paragraph (2)―

(a) the date of service shall, unless the contrary is shown, be deemed to be the seventh day (ignoring Order 3, rule 2(5)) after the date on which the copy was sent to, or as the case may be, inserted through the letter box for, the address in question;

(b) any affidavit proving due service of the writ must contain a statement to the effect that―

(i) in the opinion of the deponent (or, if the deponent is the plaintiff’s solicitor or an employee of that solicitor, in the opinion of the plaintiff) the copy of the writ, if sent to, or as the case may be, inserted through the letter box for, the address in question, will have come to the knowledge of the defendant within 7 days thereafter; and

(ii) in the case of service by post, the copy of the writ has not been returned to the plaintiff through the post undelivered to the addressee.”

48.  The starting point is that a writ must be served personally. The two alternative modes of service are specified in r.1(2). Service by telegram, email or WhatsApp messages is not allowed. Ps do not allege that D1 has agreed service by such messages. Such purported services were therefore invalid. The fact that D1 called Mr Walsh several times showing his knowledge of his receipt of Mr Walsh’s messages is neither here nor there.

49.  Apparently Ps rely on the insertion of a copy of the Writ through the letter box at the Central Address. I have read the Affirmation of Cheung Tick Hang in which Mr Cheung who was a clerk of the former solicitors of Ps says he inserted some court documents including a copy of the Writ enclosed in a sealed envelope through the letter box at the Central Address being one of the last known addresses of D1 at 1:20 p.m. on 13 October 2023.

50.  The prerequisite of service pursuant to Order 10 r.1(2) is that the defendant must be within the jurisdiction at the time of the service of the writ. This is clearly stipulated in the rule itself: Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506 applied by Cheung JA (as he then was) in Deng Minghui trading as Tianye Industrial (Hong Kong) Company v Chau Shuk Ling Elaine (CACV 309/2006, unreported, 13.2.2007).

51.  The case of D1 is that he left Hong Kong on 12 August 2023 and has never come back. At the time of the purported service of the Writ on 13 October 2023, he was in Barcelona, Spain.

52.  D1 produced a Statement of Travel Records issued by the HKSAR Immigration Department (“the Statement”). The Statement shows that after his departure at 2259 hours on 12 August 2023 through the Hong Kong International Airport, there is no further record of his entry to Hong Kong.

53.  The Statement provides solid proof of D1’s alleged absence in Hong Kong on 13 October 2023.

54.  Alarmingly, at the Ex Parte Application, Ps’ evidence indeed supports D1’s case that D1 was then in Barcelona: §9 of Affidavit of Kirill Gourov. Mr Gourov is the current director of P1. In addition, Ps’ former counsel, during the Ex Parte Application, submitted to the court that Ps might know that D1 was not physically in Hong Kong and Ps had no idea when he would return.

55.  Mr Clark, for Ps, now argues that the Statement cannot negate D1’s presence within the jurisdiction if he transited Hong Kong. This argument is, with respect, novel and without any evidential basis. The probability that D1 transited Hong Kong at the very moment when Mr Cheung went to the Central Address to attempt service must be negligible.

56.  Mr Clark further criticises the quality of the evidence of D1 about his alleged absence in Hong Kong at the material time. Such criticisms are merely nitpicking and I do not intend to set them out. To my mind, the overall picture is very clear. I accept D1’s evidence that he left Hong Kong on 12 August 2023 and has not come back ever since on balance of probabilities.

57.  Next, Mr Clark relies on the fact that the Central Address was provided by D1 to Ps and is registered in the record of P2 filed with the Companies Registry as D1’s residential address: sections 643 and 645 of the Companies Ordinance, Cap.622 (“the CO”).

58.  Mr Clark further refers to section 150(1A)(a)(i) of the Seychelles International Business Companies Act (“SIBC”). It provides that the address of a director shall be his address for service of documents. He submits that the address for service shall be his usual place of residence meaning the Central Address.

59.  Mr Clark goes on to submit that by agreeing to be a director of P1, D1 accepts to be bound by the law governing the operation of P1 and service can be effected at the agreed address, i.e., the Central Address.

60.  I cannot accept these submissions. No expert evidence of Seychelles law on the issue of service is adduced. Mr Clark’s own affirmation could not be considered as expert evidence. I have no idea what documents could be served at the address of a director under section 150(1A)(a)(i) of the SIBC but I have serious doubt as to whether they include a writ issued by P1 against D1.

61.  I am unable to accept that the Writ was validly served on D1 by service by agreement as contended by Mr Clark. As explained by Lord Bridge in Kenneth Allison Ltd. And Ors v A.E. Limehouse & Co. (a firm) [1992] 2 A.C. 105 at pp.116-117, for service of writ, if one party, knowing that another wishes to serve process upon him, requests or authorises the other to do so in a particular way which is outside the Rules and the other does so, then, unless the Rules themselves prohibit consensual service, the party so served cannot be heard to say that the service was not valid.

62.  I am unable to accept that D1’s provision of the Central Address to Ps for the purpose of the SIBC and the CO can be regarded as an agreement as to the mode of service of the Writ on him regardless of whether he was physically present at the Central Address. It should be noted that the Central Address had been provided well before any claim against D1 was intended. D1 could not have requested or authorised Ps to serve the Writ on him in anyway outside the RHC. There could be no agreement between D1 and Ps that the Writ could simply be served by insertion the same into the letter box at the Central Address.

63.  Given the foregoing analysis, I find as a matter of fact that D1 was out of jurisdiction when Mr Cheung inserted into the letter box at the Central Address a copy of the Writ. I can conclude that the Writ has never been validly served on D1. I, therefore, am minded to grant D1’s application for a declaration that the Writ has not been duly served on him.

Forum non convenien

64.  In light of my conclusion on the validity of the service of the Writ, strictly speaking, there is no issue of forum non convenien and there should be no proceedings as against D1 to be stayed in Hong Kong. I shall, nevertheless, proceed to state my view albeit briefly on this separate ground in the Jurisdiction Summons for completeness.

65.  D1 accepts that to obtain a stay on the ground of forum non convenien, he has to first show (1) Hong Kong is not the natural and appropriate forum for this dispute and (2) the most appropriate forum is Dubai or, in the alternative, Seychelles.

Hong Kong – natural and appropriate forum?

66.  To determine the appropriateness of Hong Kong as a forum, one has to consider whether Hong Kong has the most real and substantial connection with the action.

67.  Mr Clark first urges this court to take into account the submission of D3 and D4 to the jurisdiction of Hong Kong already. They are unrepresented and they have not filed any defence and they have not applied to challenge the jurisdiction of Hong Kong.

68.  I agree with Mr Clark that this is an important factor in the balance.

69.  It is not in dispute that D1 is a holder of Hong Kong Identity Card. I am aware of D1’s allegation that he was granted a 10-year “golden visa” by the government of the United Arab Emirates in May 2022.

70.  I have perused the claims of Ps against D1. The alleged breaches of duties (including authorised settlement of the Arbitration Proceedings) and misappropriation of Ps’ properties (including funds in the bank account of P2 in Hong Kong) were committed in Hong Kong.

71.  There is a passing off claim. The tort could only be committed in Hong Kong.

72.  Mr Clark refers to The Albaforth [1984] 2 Lloyd’s Rep 91. at p.96, Robert Goff LJ said this,

“If the substance of an alleged tort is committed within a certain jurisdiction, it is not easy to imagine what other facts could displace the conclusion that the Courts of that jurisdiction are the natural forum.”

73.  The tortious acts were/are allegedly committed in Hong Kong. Ps have suffered loss in Hong Kong. I am satisfied that Hong Kong has the real and substantial connection with the action. Nothing advanced by Ps can persuade me otherwise.

74.  D1 stresses that Seychelles law is applicable to all the issues arising from the rescue plan which is an integral part of his defence. Seychelles law is also relevant to the terms and conditions of CoinFLEX’s services and the licence agreement between P1 and D3. That does not mean that Hong Kong is not the appropriate forum. Hong Kong Courts are well-adapted to the application of foreign law with the assistance of expert evidence: Hong Kong Civil Procedure 2024 Vol.1 §§11/1/17. I fail to understand why D1 think that Dubai courts can handle Seychelles law better.

75.  D1 has referred to a number of relevant people who are potential witnesses in this action and say that these people including D2 are not based in Hong Kong. D1 does not say that they are based in Dubai or Seychelles.

76.  Ps by way of affirmation confirm that most of these people are willing to testify in Hong Kong. There is simply no contrary evidence.

77.  With regard to D2, he is now being imprisoned in Barcelona and according to D1, he would be extradited to the United States of America. If that is the case, VCF would be the only answer to secure his live testimony no matter where the trial is to be held.

78.  D1 alleges that he has no assets in Hong Kong and any claims made by Ps against him in Hong Kong would be futile as Ps would not be able to recover any damages from him. This does not render Hong Kong an unnatural and inappropriate forum of Ps’ action.

79.  I, therefore, conclude that D1 is unable to get over the first hurdle and there is no need to consider the second hurdle, i.e. whether Dubai or Seychelles is clearly or distinctly the more appropriate forum. In passing, I should point out that D1’s evidence in this regard is also unimpressive. D1 had all along said that Seychelles is the more appropriate forum of the Ps’ claim. All of a sudden, D1 now changes the appropriate forum from Seychelles to Dubai and it only shows his lack of conviction in his contention.

80.  To sum up, I find that the application under Order 12 r.8(1)(a) in paragraph 1 of the Jurisdiction Summons is made out on the evidence.

The Relief Summons and D1 Default Judgment Summons

81.  In light of my conclusion on the validity of the service of the Writ, there can be no default judgment against D1. The D1 Default Judgment Summons falls to be dismissed with costs.

82.  As regards the Relief Summons, I have expressed my view on the necessity of D1 for an extension of time to make his application by way of the Jurisdiction Summons. On the other hand, whilst I accept the issue of the Jurisdiction Summons, per se, does not relieve D1 from the sanction in the Unless Order for his failure to file a defence and counterclaim by the Deadline, his obligation to file his Defence and Counterclaim has not yet arisen due to the invalid service of the Writ of Summons on him. As the matter now stands, D1 does not need to file any defence before the Writ is properly served on him. I, hence, need not make any order on the Relief Summons.

The D3 & D4 Default Judgment Summons

83.  By the order of Master Matthew Leung dated 16 January 2024, leave was granted for Ps to serve the concurrent writ of summons against D3 and D4 in Seychelles.

84.  Pursuant to the said order, Ps served the concurrent writ of summons and the Statement of Claim on D3 and D4 on 11 March 2024.

85.  D3 has not made any response at all. No acknowledgement of service has ever been filed.

86.  D4 filed its acknowledgement of service on 24 April 2024 out of time. It, however, has not filed any defence thereafter.

87.  D3 and D4 are not legally represented. D1, their sole director, wrote to this court shortly before the Hearing and asked to represent these defendants. D1 in his written submissions explained that the Registry had refused to accept his summons for his application to represent D3 and D4 on account of his absence in the jurisdiction.

88.  I certainly cannot accept his application. D1 should have made a proper application to the Registrar with adequate supporting evidence.

89.  The upshot is that both D3 and D4 are unrepresented and absent in these proceedings.

90.  It is trite that for the purpose of the D3 & D4 Default Judgment Application, this court cannot receive any evidence and must give judgment according to the pleadings alone.

91.  I have gone through the labyrinth of factual allegations pleaded in the Statement of Claim against D3 and D4. I am of the view that I should not exercise my discretion to enter judgement against either of them for the following reasons.

92.  First, all the allegations against D3 and D4 involve D1 as well. For example, it is alleged that D1 signed a Technology License Agreement on behalf of both P1 and D3 whereby P1 granted a perpetual, irrevocable, non-exclusive, non-transferable licence to D3 to use all the technologies of CoinFLEX for zero consideration. P1 alleges that in doing so, D1 was in a position where there was a conflict of interest. It is further alleged that the Technology License Agreement is voidable under s.149 of SIBC and is voided by the service of the Writ of Summons herein. It follows that the purported use of the technologies under the Technology License Agreement would constitute infringement of the intellectual property rights (including copyright) licensed thereunder.

93.  There are other allegations against D3 and D4 that they have unlawfully conspired with D1 to cause loss to Ps and that they assisted D1’s misappropriation of the assets of Ps. Ps also allege that they are joint tortfeasors in respect of their passing off claim.

94.  It can be seen that most if not all of Ps’ claims against D3 and D4 are inseparable from their claims against D1. Their liability if any depends very much on whether Ps’ claims against D1 can be established. It would be in the interest of justice to have Ps’ claims against D3 and D4 to be determined together with their claims against D1.

95.  Second, Ps pray for several declarations to be made against D3 and D4. Whilst this court can make a declaration in an application for default judgment where appropriate, I have to be careful when the declarations sought suggest fraudulent or dishonest acts committed by D3 and D4. Such declarations would only be granted when I am satisfied that Ps have a genuine need for them and justice would not be done if they are denied such declarations without a trial.

96.  In all the circumstances of this matter, I believe that I should not exercise my discretion to grant such declaratory reliefs against D3 and D4 before the determination of Ps’ claims against D1 for the reasons given above.

The VCF Summons

97.  The VCF Summons was taken out only two days before the Hearing. The delay was unexplained. Even if Ps did not object to this application, the court could hardly accommodate such a request at short notice practically speaking.

98.  I have no hesitation in refusing to grant the application of D1 by the VCF Summons.

Conclusion and orders

99.  For the reasons given, I shall dispose of the Summonses in the following manner.

100.  The Jurisdiction Summons be allowed and I make an order in term of paragraph 1 of the same. I am aware that Ps did intend to make an application for service out at the Ex Parte Application. When their own information about the whereabouts of D1 was confirmed by the evidence of D1 and the Statement, they should not insist on the validity of the service of the Writ by Mr Cheung at the Central Address. They should accept that D1 was not within the jurisdiction and take appropriate steps to serve the Writ on D1 properly.

101.  Costs should follow the event and Ps do pay D1 costs of and occasioned by the Jurisdiction Summons forthwith, to be taxed if not agreed save such costs arising from the late filing of the notarised 6^th Affirmation of D1 including all the reminders issued by Ps, to be taxed if not agreed, should be paid by D1 to Ps forthwith.

102.  I make no order on the Relief Summons. I can well understand why D1 took out this summons. It was taken out immediately after Ps issued the D1 Default Judgment Summons out of abundance of caution. I make no order as to costs.

103.  I dismiss the D1 Default Judgment Summons and I order that Ps do pay D1 his costs of and occasioned by this summons forthwith, to be taxed if not agreed.

104.  I order that the D3 & D4 Default Judgment Summons be stood over to the trial of Ps’ claims against D1 or until further order and costs be reserved.

105.  Lastly, I dismiss the VCF Summons and D1 should forthwith pay costs of and occasioned by this summons to Ps, to be taxed if not agreed.

106.  All the costs orders made above are on a nisi basis. In the absence of any application for variation within 14 days from the date of this Decision, these orders nisi will become absolute.