HUA SUNG ENTERPRISES LTD v. PATEL, SATISH MOHAN t/a (CREATIVE STYLE ENTERPRZSE)

DCCJ1249/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1249 OF 2004

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D E C I S I O N

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1.  The plaintiff applies for leave to renew the re-amended writ of summons last amended on 20 April 2004 under Order 6, Rule 8 of the Rules of the District Court and to issue a concurrent writ of summons for service out of jurisdiction under Order 11, Rule 1(d)(i) and (iii) of the Rules of the District Court.  The application was refused by Registrar Yu on 24 October 2005.  The plaintiff appeals to this court to set aside Registrar Yu’s refusal to grant leave. 

2.  Application to Registrar Yu to renew the writ was made after the writ has expired and after the expiry of the relevant period of limitation.  The claim is a goods sold and delivered claim.  The writ was issued on 5 March 2004 by the plaintiff in person.  It was served on the defendant’s formal address in Hong Kong.  It could not be served. 

3.  According to the plaintiff’s affidavit, the plaintiff had engaged recovering agents in the UK in 1999 to look for and collect the debt from the defendant after the defendant left Hong Kong in or about March 1999.  The recovering agent located the defendant at an address in Surrey in the UK and had a number of conversations with the defendant in January 2000 and April 2000.  The recovering agent reported to the plaintiff that the defendant intended to pay the debt but he had no money and he may be receiving money soon because he had money outstanding from West Africa.  All these of course are hearsay from the report by the recovering agent to the plaintiff.  No further action seems to have been taken by the plaintiff but to wait for further news from the recovering agent and there was over three and a half years of inaction.

4.  Then in November 2003, the plaintiff wrote to the High Commission of India and received words from the High Commissioner of India a copy of a letter from the defendant to the Commissioner concerning the plaintiff’s claim in which the defendant claimed and denied he owed the plaintiff any debt. 

5.  In March 2004, the writ in these proceedings was issued.  Attempts were made by the court bailiff to serve on the defendant on his Hong Kong address as set out in the writ.  No effective service resulted.  Then the plaintiff applied to the court to amend the writ to change the defendant’s address to the UK address in April 2004.  He was advised by Master Ko, to serve the writ out of jurisdiction under Order 11, Rule 4.  But in May 2004, the plaintiff applied to re-amend the writ to change the defendant’s address back to the Hong Kong address.  Leave was granted on 14 May 2004 to amend the address.  In June 2004, the plaintiff applied for extension of time to re-amend the writ.  Leave was granted in June 2004.  As service was on the formal Hong Kong address of the defendant, service was not successfully effected for the simple reason the defendant was not at that address and had not been for some time.

6.  The plaintiff then applied for substitute service.  It was refused on 28 June 2004 by Master Ko.  Again Master Ko directed the plaintiff to apply for service out of jurisdiction, but nothing was done after the 28 June 2004 direction until August 2005 when the plaintiff, after locating the defendant’s new address in the UK, posted the first page of the writ to the defendant.  The defendant then engaged UK solicitors and informed the plaintiff by letter that the service was no good because only the first page of the writ was sent by post.  By “the first page of the writ,” I mean a photocopy of the first page of the writ.

7.  In October 2005, the plaintiff engaged solicitors and made the ex parte application to the court which was heard by Registrar Yu. 

8.  Under Order 6 Rule 8 of the Rules of the Supreme Court  with similar provisions in the Rules of the District Court, the writ is valid for 12 months and the renewal of the writ must be made before the 12 months expired to extend the validity of the writ. 

9.  As to the principles regarding the extension of the validity of the writ, Hong Kong Civil Procedure 2004, page 64, Order 683 has this to say:

“	Summary of Principles
	There is a large number of cases on this topic cited in these notes.  Reference should be made in particular to Kleinwort Benson Limited v Barbrak Limited The Mytro ( No. 3) [1987] 1 AC 597.”

And on page 65, the principles are set out as follows:

“	The principles to be deduced from the cases may be set out as follows:
	(1)	It is the duty of the plaintiff to serve the writ promptly.  It should not dally for the period of its validity.  If he does so and gets into difficulties as a result, he will get scant sympathy.
	(2)	Accordingly, there must always be a good reason for the grant of an extension.  This is so even if the application is made during the validity of the writ and before the expiry of the limitation period.  The later the application is made, the better must be the reason.
	(3)	It is not possible to define or circumscribe what is a good reason.  Whether a reason is good or bad depends on the circumstances of the case.  Normally, the showing of good reason for failure to serve the writ during its original period of validity will be a necessary step to establishing good reason for the grant of an extension.
	(4)	Examples of reasons which have been held to be good are:
		(a)	a clear agreement with the defendant that service of the writ be deferred;
		(b)	impossibility of real difficulty in finding or serving the defendant, more particularly if he is evading service.
	(5)	Examples of reasons which have been held to be bad are:
		(a)	that negotiations are proceeding in the absence of an actual agreement that service be deferred.  It is both incorrect and dangerous to defer service in the hope that negotiations will succeed.  Too often, the writ is forgotten until after limitation period has elapsed.  Offers may then be withdrawn and the plaintiff left without remedy save against his solicitors.
	(6)	The application for renewal should ordinarily be made before the writ has expired.  The court has power to permit a later application but it must be made within the appropriate period of the first expiry.
	(7)	A writ will not normally be renewed so as to deprive the defendant of the accrued benefit of the limitation period.
	(8)	Where application for renewal is made after the writ has expired and after expiry of the relevant period of limitation, the applicant must not only show good reason for the renewal but must give a satisfactory explanation for renewal before the validity of the writ expired.
	(9)	The decision whether an extension to the validity of a writ should be allowed or disallowed is a matter for the discretion of the court dealing with the application.  Applications involve a two-stage inquiry.  At stage 1, the court must be satisfied that there was a good reason to extend time and also that the plaintiff had given a satisfactory explanation for his failure to apply before the validity of the period.  If the court was so satisfied, then it should proceed to stage 2 and decide whether or not to exercise its discretion in favour of renewal by considering all the circumstances of the case, including the balance of prejudice or hardship.”

10.  Therefore, very clear principles have been laid out and set out in cases on this topic and how the court would exercise its discretion.  The background and facts in this case and the conduct of the plaintiff simply does not satisfy the requirements.  It is necessary for the court to take into account such factors and be satisfied that discretion should be exercised in favour of the plaintiff.

11.  The plaintiff knew all along where the defendant could be found since January 2000, but the plaintiff did nothing to pursue the claim in the courts, it waited for four years.  When limitation was due to expire, the plaintiff issued a writ and tried to serve it in Hong Kong, knowing full well the defendant had not been living in Hong Kong and /or working at the address stated on the writ.  When service failed, he applied to change the address for service.  He was told by the Master then that he should serve it out of jurisdiction and make an application to do so.  He failed to make the application, then amended the writ to change defendant’s address for service back to Hong Kong.

12.  In spite of the repeated directions by the Master, the plaintiff failed to comply with the directions until October 2005 when the plaintiff engaged solicitors and made the application to the Registrar for extension of the writ and for service out of jurisdiction.  Clearly, the plaintiff is guilty of dallying.  Ignorance of the rules of the court is not an excuse, he was directed by the master repeatedly the proper manner of service.  He waited until the writ had expired and the limitation period had also expired. 

13.  I do not see that the plaintiff’s case warrants any sympathy from the court and I cannot see the plaintiff’s application has any merits.  Therefore, I refuse the appeal.