SU XIN AND ANOTHER v. QIAN XIAOCHUN

DCCJ 5882/2019

[2023] HKDC 316

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5882 OF 2019

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BETWEEN
	SU XIN (苏欣)	1st Plaintiff
	SZM CORPORATION	2nd Plaintiff
	and
	QIAN XIAOCHUN (錢曉春)	Defendant

------------------------------------

Before:

Deputy District Judge Joseph Vaughan in Chambers

Date of Hearing:	24 February 2023
Date of Judgment:	24 February 2023

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JUDGMENT

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Introduction

1.  This is the plaintiffs’ application by summons dated 23 November 2022 for default judgment under Order 13 rule 6 and Order 19 rule 7 of the Rules of the District Court, Cap.336H (“RDC”).

2.  The writ in this case was issued on 30 October 2019 endorsed with the Statement of Claim. On 13 October 2022, leave was obtained by the plaintiffs for substituted service of the writ to be effected by advertising a notice of the present proceedings once in Sing Tao Daily, a Chinese newspaper published in Hong Kong, and it was ordered that such service shall be deemed to be good and sufficient service of the writ on the defendant. This the plaintiffs did on 4 November 2022.

3.  The Defendant has not acknowledged service nor filed any Notice of Intention to Defend subsequent to the substituted service of the writ.

Principles governing applications for default judgment

4.  In an application for default judgment, generally the court would not receive or consider evidence in support of the plaintiffs’ claim, and must give its ruling according to the pleadings alone – see: Leung Pak Ki v The Estate of Pang Kau, HCA 624 of 2009, 1 March 2016, DHCJ Paul Lam SC; Hong Kong Civil Procedure 2023, Vol.1, para.19/7/11.

The plaintiffs’ pleaded case

5.  By their Statement of Claim, the plaintiffs’ claim can be summarised as follows:

(i)  The 1^st plaintiff is a biostatistician residing in the United States. She is the sole director and shareholder of the 2^nd plaintiff which is a nominee company used solely as a corporate vehicle holding her assets, including a bank account held with JPMorgan Chase Bank (“P2’s Account”);

(ii)  The plaintiffs are and were at all material times not acquainted with the defendant and had no dealings with her;

(iii)  On about 6 November 2018, the 1^st plaintiff received a telephone call from an unknown male claiming himself to be from the Chinese Consulate, who told the 1^st plaintiff that her passport had been stolen and she was not allowed to travel to China. The line was then transferred to another male who alleged himself to be from the Shunyi branch of the Beijing Police Department, and indicating to the 1^st plaintiff that she had been involved in an international money laundering case. She was asked to keep this confidential since the investigation involved Chinese national secrets;

(iv)  On the next day, another person telephoned the 1^st plaintiff claiming that a criminal had used her passport to open a bank account in China and had committed commercial deception involving over RMB2 million. The 1^st plaintiff was also named as a criminal involved in the deception, and she was given screenshots of what appeared to be orders for her arrest issued by law enforcement agents;

(v)  The 1^st plaintiff’s line was then transferred to another unknown person claiming himself to be a Chinese prosecutor who told her that in order to clear her name, she had to provide details of all of her bank accounts in the United States for investigation purposes. She was also instructed to wire money to a bank in Hong Kong for investigation in order to prove that her money was “clean”. Upon verification of the source of her money, it would be transferred back to her immediately. Several mobile text messages were then sent over to the 1^st plaintiff containing instructions for the transfers of two sums of US$90,000. Relying on the instructions, the 1^st plaintiff then caused the 2^nd plaintiff to make two transfers from P2’s Account to two bank accounts in Hong Kong, namely (i) US$90,000 to a bank account held with the Bank of China (Hong Kong) Limited (“BOC”) on 7 November 2018 ( “1^st Transfer”) , and (ii) US$90,000 to a bank account held with the BOC also on 7 November 2018 (“2^nd Transfer”);

(vi)  Subsequent to the said transfers, the 1^st plaintiff discovered that the mobile text messages she received earlier containing the details of the bank accounts had disappeared, and the telephone number through which she had received the first call had been disconnected. She then discovered the telephone scam, and proceeded to instruct JPMorgan Chase Bank to cancel the said transfers. In the event, the 1^st Transfer was successfully cancelled, but the sum of US$90,000 under the 2^nd Transfer had been successfully remitted;

(vii)  She then reported the matter to the police, who later confirmed that the sum transferred had been subsequently remitted and transferred to the defendant’s account held with the Hongkong and Shanghai Banking Corporation (“the defendant’s HSBC Account”).

The applicable law

  (i)  Tracing and recovery of the money transferred

6.  Mr Leung for the plaintiffs submitted, and I accept, that it is a well-established principle that when property is obtained by fraud, equity imposes a constructive trust on the recipient so that the money is recoverable and traceable in equity. Money paid under mistake of fact is prima facie recoverable provided there was no change of position on the part of the recipient in good faith – see 800 Columbia Project Company LLC v Chengfang Trade Ltd & Ano [2020] 5 HKC 88 at para.12; Tai Ching Ling v Cai Guo Chuan, HCA 1782 of 2018, 11 September 2019, Marlene Ng J at para.15; Prescient Corporation v Dunse Trading Ltd, DCCJ 678 of 2019, 20 May 2019, HH Judge Li; and Guaranty Bank and Trust Co v ZZZIK Inc Ltd, HCA 1139 of 2016, 18 July 2016, DHCJ Cooney SC at paras. 28-30.

7.  The pleaded facts of this case show that this is clearly one of fraud perpetrated against the plaintiffs. Since the sum transferred has been deposited into the defendant’s HSBC Account, equity imposes a constructive trust on her upon tracing to hold the same in favour of the plaintiffs[1]. It would be unconscionable for the defendant to retain the funds as the defendant has no dealings with the plaintiffs and there is no legitimate reason for her to receive and retain such funds. Even if the defendant is not a party to the fraud, her state of knowledge concerning the funds would make it unconscionable for her to retain the same. The plaintiffs have a tracing remedy against her in such circumstances – see Prescient Corporation at para. 20.

8.  Further, knowledge about the questionable state of the funds received does not have to be acquired at the time of receipt. In Guaranty Bank and Trust Co, DHCJ Cooney SC said at paras. 34-36:

“34. The defendant has knowledge of the fraud because of the injunction order, the statement of claim, the summons for judgment and affidavits, all of which have been served on it. Notwithstanding, the defendant has neither paid nor made any attempt to pay the funds to the plaintiff.

35. I consider it unconscionable for the defendant to retain the funds for the following reasons:

(1)  There were no dealings between the customer and the defendant; and

(2)  There was no legitimate reason for the defendant to receive the funds from the customer.

36. I find that the defendant holds the funds on trust for the plaintiff and the funds are recoverable and traceable in equity.”

9.  The same applies to the present case. Based on the above analysis, it is unconscionable for the defendant to retain the sum transferred to the defendant’s HSBC Account that represents the traceable sum that originated from the sum remitted under the 2^nd Transfer. That sum is thus recoverable in equity.

  (ii)  Declarative relief

10.  It is not the normal practice of the court to make a declaration without a trial. In a judgment reached without hearing evidence, a declaration can only be based upon unproved allegations. The court ought not to make declarations as facts without proof. However, this is only a rule of practice which should not be followed when the plaintiff had a genuine need for declaratory relief, and that justice would not be done if such relief was denied - see Leung Pak Ki v The Estate of Pang Kau at para. 6, and Tsui Ming Sin v Tsui Chi Ping and another, HCA 2550 of 2014, 2 February 2016, DHCJ Kenneth Kwok SC at paras. 13-15.

11.  On the other hand, the effect of the failure by a defendant to file a Notice of Intention to Defend is that the pleadings are deemed to be admitted by the defendant by reason of his default – see Hong Kong Civil Procedure 2023, Vol.1, para. 13/0/10.

12.  It is submitted by the plaintiffs that they should not be placed in a position where they have to pursue their proprietary claim in competition with other creditors and that a monetary judgment against the defendant for the return of the transferred sum, without more, would put the 2^nd plaintiff in the position of an unsecured creditor. On the other hand, it is submitted that a declaration by the court that the transferred sum is held on trust for the 2^nd plaintiff would earmark the fund as its property which would be out of reach of other unsecured creditors – see Barclay Butera Inc v Tianxbang Trade Co Ltd, HCA 1277 of 2018, 14 September 2018, DHCJ Keith Yeung SC (as he then was) at paras. 14-15; Guaranty Bank and Trust Co at para. 38, and Tai Ching Ling at para. 17. In fact, declaratory relief had been granted in the absence of the defendants in various cases involving fraud – see e.g. Prescient Corporation and Tai Ching Ling referred to above. I agree with the plaintiff’s submissions in this regard.

Conclusion

13.  Based on the above, I am satisfied that the plaintiffs are entitled to default judgment, and I make the following orders:

(1)  A declaration that the defendant holds the sum of US$90,000 remitted by the 2^nd plaintiff and deposited at the defendant’s bank account held under the defendant’s name at the Hongkong and Shanghai Banking Corporation numbered 121326714833 and any interest accrued and profits earned thereon (“the Sum”), on constructive trust for an on behalf of the 2^nd plaintiff;

(2)  The defendant do pay or transfer to the 2^nd plaintiff the Sum (or its Hong Kong Dollar equivalent at the time of payment) together with interest thereon at the rate of prime plus 1% per annum from 30 October 2019 to the date hereof, and thereafter at judgment rate until payment;

(3)  The defendant, whether acting by himself, his servants and/or agents or otherwise, be restrained from disposing of or dealing with the Sum until the Sum is paid over or transferred to the 2^nd defendant;

(4)  The costs of and occasioned by this action, including the costs of this application be summarily assessed at HK$80,000 to be paid forthwith by the defendant to the plaintiffs.

14.  Lastly, I thank Mr Leung for his assistance.

(Joseph Vaughan) Deputy District Judge

Mr Leung Sze Lum, instructed by Chen & Lee Law Office, for the plaintiffs

The defendant was unrepresented and was absent

  

DCCJ 5882/2019

[2022] HKDC 156

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5882 OF 2019

------------------------------------

BETWEEN
	SU XIN (苏欣)	1st Plaintiff
	SZM CORPORATION	2nd Plaintiff
	and
	QIAN XIAOCHUN (錢曉春)	Defendant

------------------------------------

Before:  Deputy District Judge Tracy Chan in Chambers (Open to Public)

Date of Hearing:  20 August 2021

Date of Decision:  3 September 2021

Date of Further Hearing:  15 November 2021

Date of Further Submissions:  21 December 2021

Date of Further Decision:  11 April 2022

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FURTHER DECISION

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Introduction

1.  This is an appeal against Master’s decision taken out by the plaintiffs. Their application before the master was for leave to serve a concurrent amended writ (“Amended Writ”) by substituted service on the defendant on his last known address in the Mainland. The mode of service proposed was by way of public announcement to be effected by a PRC court (“Public Announcement Application”). Master refused the application on 25 February 2021 and the plaintiffs brought up this appeal.

Procedural History

2.  The plaintiffs claim to be victims of a fraudulent scheme by which they suffered loss and damage. Investigation revealed that an amount similar to the defrauded sum was withdrawn from the plaintiffs’ bank account and eventually deposited into the bank account of the defendant. The plaintiffs commenced this action to claim compensation and restitution. Leave to serve the Amended Writ out of jurisdiction had been granted by a master on 31 December 2019.

3.  Personal service was attempted through the Arrangement for Mutual Service of Judicial Documents in Civil and Commercial Proceedings between the Mainland and Hong Kong Courts (“Arrangement”) at the defendant’s last known address in the Mainland but not successful. The return form on the service issued by the Court of Mainland China was received by the High Court on 20 October 2020 (“the Return Form”). The reason for the unsuccessful attempt was that “the owner of the property at the address has changed. The whereabouts of Qian XiaoChun (the defendant herein) unknown and he could not be located”[1] . Attached to the Returned Form was a land search showing that the defendant was not an owner of the property[2] .

4.  By an affirmation dated 8 February 2021, the plaintiffs took out the Public Announcement Application before a master and was refused on 25 February 2021. The plaintiffs appealed from the master’s decision.

5.  The appeal was heard on 20 August 2021. I had the benefit of reading relevant correspondence produced by the plaintiffs in their affirmation in support which included but not limited to a letter dated 29 May 2014 sent by the Director of Justice (DoJ’s Letter) to the Law Society of Hong Kong. In answering a question on the mode of substituted service by way of public announcement, a letter from the Supreme People’s Court of the People’s Republic of China (SPC) issued in May 2014 (“SPC’s Letter”) was referred to and DoJ stated the latest development of the matter:

“…..although the Arrangement does not specify the mode of effecting service in the mainland, since service by “public announcement’ is a prescribed mode of effecting service under the Civil Procedure Law of the PRC, it would appear possible for the mainland court to consider entertaining requests for service of “public announcement……Nevertheless, since the Arrangement makes no express reference to service by public announcement” and give the special nature of this mode, the matter should be further considered by the High Courtand the SPC through consultation in accordance with Article 10 of the Arrangement[3].” (Emphasis added by court)

6.  Having considered all documents, expert opinion on PRC law by 杨全虎and counsel’s submissions before me, a decision was handed down on 3 September 2021 (“the Decision”) allowing the appeal and granting the application for Public Announcement Application (“the Order”).

7.  Before the Decision was sealed I however found it appropriate to reconsider the practical aspect of the Order. According to the DoJ Letter cited above, the Arrangement makes no express reference to service by public announcement and that the matter should be further considered by the High Court and the SPC through consultation. So, although, in principle, such mode of service is possible, there is no evidence indicating that the technicalities and practicalities have been sorted out, in particular, consultation has taken place between the Hong Kong High Court and the SPC as required. This point has not been specifically addressed by Mr Leung (erroneously referred to as Mr Ho in the Decision) representing the plaintiffs. Mr Leung was requested to appear before me to deal with the practical aspect of the Order and the power of the court to re-visit its order before it is sealed.

Power to revisit a Decision

8.  In his submissions before me, Mr Leung has fairly admitted that the court has the jurisdiction to revisit its decision before an order is perfected but such jurisdiction could only be exercised in exceptional cases. Liu Weiguang v Li Kent Ko citing Sun Jianqiang vTrans-Island Limousine Service Ltd [2004] 1 HKC 533 at paragraph 25 is on the point. What is stated therein is considered by this court. I have also considered the approach taken in Andayani v Chan Oi Ling [2000] 4 HKC 233 and Lo Yuk Siu v Fubon Bank [2017] 2 HKLRD 477. In these cases, to deal with the case justly is to consider, in particular, whether any party has acted upon the decision to his detriment. There is nothing in this relation that causes any concern of the court because the documents had not yet been successfully served on the defendant and he has never acted upon the Decision or the Order.

9.  Relying on the principle of finality, Mr Leung asked the court to see whether there is a sufficiently compelling reason before exercising the discretion to revisit the Decision even if in principle the court has the jurisdiction to do so.

10.  Mr Leung did not and could not dispute that there is no evidence or information before this court to show that there was consultation or consensus on the technicalities and practicality between the courts in the two jurisdictions. He could not offer any useful information further. In the circumstances, the mode of service approved in the Order is not appropriate because it cannot take effect under the Arrangement. I am of the view that this is a sufficiently compelling reason to revisit the Decision and the Order and they should therefore be set aside.

Other Possible Modes of Substituted Service under the Arrangement

11.  At the hearing for further submissions, the possibility of substituted service by post on a PRC address was explored. I took it as an oral application in addition to the Public Announcement Application (“Additional Application”). Mr Leung asked for time and later lodged with the District Court Registry further written submissions on 21 December 2021. It was submitted that substituted service by post was considered a possible means under the Arrangement. According to the legal opinion of 杨全虎, modes of service of legal documents by post is governed by Clause 88 of the PRC Civil Procedure Law which provides that where direct service proves to be difficult, service of litigation documents may be entrusted to another people’s court or done by mail.[4]

12.  It is noted that the address to effect the substituted service by post is in fact same as the one on which personal service had been attempted unsuccessfully by the PRC court. As it was stated on the Return Form that the defendant could no longer be located at the address specified, I cannot be satisfied that an order made to serve the Amended Writ on the defendant by his last known address could bring the same to his notice as required under O.65 r.4(3). For this reasons, I refuse to grant leave for the Additional Application.

13.  For reasons set out above, I now set aside the relevant parts of the Decision and the Order. The appeal against Master’s decision dated 25 February 2021 is dismissed. I also refuse the Additional Application.

14.  Order and directions:-

(1)  Paragraph 17 of the Decision and paragraphs 1 to 3 of the Order be set aside and there be order made as follows;

(i)  The Public Announcement Application is refused and the appeal dismissed;

(ii)  The Additional Application is also refused.

(iii)  There be no order as to costs of the appeal including the further hearing and further written submissions.

( Tracy Chan ) Deputy District Judge

Mr Leung Sze Lum, instructed by Au Yeung, Cheng, Ho & Tin, for the 1^st and 2^nd plaintiffs

The defendant acting in person, being absent

DCCJ 5882/2019

[2021] HKDC 1056

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5882 OF 2019

-------------------------

BETWEEN
	SU XIN（苏欣）	1st Plaintiff
	SZM CORPORATION	2nd Plaintiff
and
	QIAN XIAOCHUN（錢曉春）	Defendant

-------------------------

Before:  Deputy District Judge Tracy Chan in Chambers (Open to Public)

Date of Hearing:  20 August 2021

Date of Decision:  3 September 2021

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DECISION

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Background

1.  This is the plaintiff’s appeal against that the decision of Master Leung of the District Court given on 26 April 2021 refusing to grant leave for the plaintiffs to make substituted service of the Concurrent Amended Writ of summons dated 17 December 2019 (“Conqueror Amended Writ) on the defendant in the People’s Republic of China (“PRC”) by way of Public Announcement (公告送達) pursuant to:-

(a)  Articles 85 to 92 Civil Procedure Law of the People’s Republic of China[1];

(b)  Arrangement for Mutual Service of Judicial Documents in Civil and Commercial Proceedings between the Mainland and Hong Kong Courts (“Arrangement”), see full text of Arrangement in the Annex;

(c)  Rules of District Court

2.  This appeal is to be dealt with by way of rehearing.

Relevant Facts leading to the Claim

3.  The Plaintiffs’ claim allegedly arose from a telephone fraud scheme by which the Plaintiffs had been deceived to make 2 transfers, each of a sum of US$90,000 into the bank account of the Defendant in Hong Kong.  The Defendant, upon investigation made by the Hong Kong police, was found to be a PRC resident and her/his whereabouts are unknown.  There was however an address of hers made known to 中国江苏常州巿天宁区国泰名筑和平苑2幢901室.

Relevant Provisions and Legal Principles on Service

4.  Order 65 r4 of RDC is relevant to begin with.

“4. Substituted service (O. 65, r. 4)

(1)If, in the case of any document which by virtue of any provision of these Rules is required to be served personally or in the case of a document to which Order 10, rule 1, applies, it appears to the Court that it is impracticable for any reason to serve that document in the manner prescribed on that person, the Court may make an order for substituted service of that document.

(2)An application for an order for substituted service may be made by an affidavit stating the facts on which the application is founded.

(3) Substituted service of a document, in relation to which an order is made under this rule, is effected by taking such steps as the Court may direct to bring the document to the notice of the person to be served.”

5.  Mr Ho appearing for the Plaintiffs in this appeal relies also on Meleo Crown Gaming (Macau ) Ltd v Wong Yam Tak [2014]3 HKLRD 267 on the situations in which  substituted service could be invoked :-

“41. The rationale behind this principle arose out of the distinction between ordinary service and substituted service. Substituted service is invoked where service in accordance with the ordinary rules of service is ineffective and impracticable. Usually, this situation is brought about by the defendant providing an incorrect address inadvertently or deliberately with a view to avoid service or is caused by some conduct of the defendant which prevented effective service and for which the defendant is responsible, even if not to blame. Substituted service is to provide a practical solution to such situation to enable the proceedings to progress and to do justice between the parties in circumstances where the ordinary rules of service would prevent justice from being done. A party seeking to serve any process by substituted service has to apply to the court for leave. The court decides its propriety and the adequacy of the mode of service. Leave is only granted if the court is satisfied that it can do no more than its best, within the realm of reasonable practicability, to bring the proceedings to the notice of the defendant by the mode of service prescribed in the order. This special mode of service in compliance with an order of the court, as distinct from ordinary mode of service pursuant to rules of the court, has the sanction of the court and is therefore treated as actual, effective and valid service as a matter of practical reality.”

6.  Mr Ho further submits that in case practicable steps taken to effect personal serve on a defendant fail, application could be made to the court for substituted service including service out of the jurisdiction. He emphasizes that Order 11 r 5(2) makes it clear that nothing in rule 5A or any order or direction of the court made by virtue of it shall authorise or require the doing of anything in the country or place in which service is to be effected which is contrary to the law of the country or police.

7.  In relation to substituted service to be effected in the Mainland Mr Ho submits that the Arrangement and r 5A apply. She refers to Order 11 r 5A(3)(c) in particular.

“5A. Service of writ in the Mainland or Macao through judicial authorities

(1)Where in accordance with these Rules, a writ is to be served on a person in the Mainland or Macao, the writ must be served through the judicial authorities of the Mainland or Macao, as the case may be.

(2)A person who wishes to serve a writ under paragraph (1) must lodge in the Registry a request for such service, together with 2 copies of the writ and 2 additional copies thereof for the person to be served.

(3) The request lodged under paragraph (2) must contain—

(a)the full name and address of the person to be served;

(b)a description of the nature of proceedings; and

(c)if a particular method of service by the relevant judicial authorities is desired by the person making the request, an indication of that particular method.”

8.  As to the particular method proposed by the Plaintiffs herein, Mr Ho relies on an affirmation made by Mr 楊全虎, a PRC lawyer, in which his legal opinion on service is given.

Evidence before the court in support of this Appeal

9.  The court has the benefit of reading the following when considering this Appeal.

(a)Letter from the Supreme People’s Court of the People’s Republic of China (SPC) date May 2014

10.  In this letter the SPC cited the law in Mainland governing service where the person’s whereabouts are unknown.  It was stated therein that substituted service by advertisement in newspaper was not advisable as it was not consistent with the law in Mainland.  However it went further to say that “although the Arrangement does not specifically provide for public announcement as an accepted mode of service, it is provided in paragraph 6 thereof that service of legal documents under business jurisdiction could be served in accordance with the law of the country of the one to be served. It is clear that under the Civil Procedure Law of the PRC, public announcement is a prescribed mode of effecting service. Therefore,  if such service is specified by the High Court of Hong Kong in its requests pursuant to the Arrangement, that seems service by public announcement would appear possible for the Mainland courts to consider acceding to[2]. It went on to point out some issues on technicalities and practicalities and said that this could be sorted out by the courts in the two jurisdictions through consultation under Article 10 of the Arrangement.

(b) Letter from DoJ to the Law Society dated 29 May 2014

11.  This letter was to answer questions raised by the Law Society about effecting substituted service for Matrimonial Proceedings in the Mainland[3]. The above message from SPC was relayed.

(c) Letter from the Plaintiffs’ then solicitor to Registrar of High Court dated 11 May 2020 requesting for Service of Judicial Documents in Mainland to effect service of theConcurrent Amended Writ and documents to the defendant

12.  By this letter the then solicitor of the Plaintiffs requested for Service of the Concurrent Amended Writ out of jurisdiction to the Mainland[4].

(e) Letter from the Registrar of High Court to the Plaintiffs’ then solicitor dated 21 October 2020 enclosing the Return Form [p44]

13.  This letter enclosed the Return Form (协助送达文书回覆书) from江苏省高级人民法院with relevant documents returned[5].In the Return Form it was said that personal service on the defendant in case no DCCJ 5882/2019 had failed with documents returned.[6]

(e) Affirmation of楊全虎dated 20 January 2021

14.  In his affirmation Mr 楊全虎 set out the relevant provisions in the Civil Procedure Law of the People’s Republic of China.  His opinion was that according to Article 92 thereof, Public Announcement is an appropriate method permitted under the law in the present case for the purpose of effecting substituted service on the Defendant[7].

(f) Interpretation and application of the “Arrangement of the Supreme People’s Court on Mutual Entrustment in Service of Judicial Documents in Civil and commercial Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region”

15.  Mr Ho further relies on an article published by SPC as named above. It was stated in the article that:-

“No provisions on disallowing service of proceedings has been stipulated in the Arrangement. The main consideration is that service is merely a matter concerning delivering of the relevant papers from one judicial authority in one jurisdiction to another judicial authority in another jurisdiction, which does not constitute recognition of the legal proceedings and the judgements rendered thereon. Thus, when a request for service has been received, in particular the Court should not refuse such request, unless special circumstances exceeds such as the address to be served is unknown ….

In practice, if service cannot be effected through the Arrangement or by other means in order to protect the rights of the party situated in the Hong Kong Special Administration Region, service by way of Public Announcement should be made, as a final means to confirm service of proceedings.” (see Annex for text in full)

Decision

16.  Having read the above documents and hearing submissions of Mr Ho, the court is satisfied that:-

(a)  Public Announcement is a prescribed mode of service in the Mainland and is not excluded by the Arrangement;

(b)In a letter dated in May 2014, SPC gave its view that on acceptability of service by public announcement and suggested that issues in practicalities, if any, could be resolved by consultation between the courts in the two jurisdictions.

(c)  The Defendant is a PRC resident with a last known address at Room 901, Block 2, Guotai Mingzhu, Heping Yuen, Changzhou, Jiangsu, People’s Republic of China (中国江苏常州巿天宁区国泰名筑和平苑2幢901室).

(d)Pursuant to the Arrangement and the request made by the High Court of Hong Kong, SPC had endeavoured to assist in effecting service on the Defendant at the above address on 27 July 2020 but to no avail as the Defendant no longer resided there and his whereabouts were unknown.

17.  For reasons set out in the above, this appeal is allowed.

18.  Order:

(1)  Service of the Plaintiffs Amended Writ of Summons dated 17 December 2019 and all subsequent documents of this action on the Defendant be substituted by posting a notice of these proceedings once with copies of the same documents as a Public Announcement on the bulletin board of the People’s Court Tianning, Changzhou, Jiangsu, People’s Republic of China; such service shall be done through proper procedures under the Arrangement;

(2)  Time for service of the Amended Writ of Summons in this action to the defendant be deemed to be 60 days after posting of the said notice at the location provided in paragraph 1 above; and

(3)  There be no order as to costs of this appeal and the application before the master.

( Tracy Chan ) Deputy District Judge

Mr Leung Sze Lum, instructed by Au Yeung, Cheng, Ho & Tin, for the 1^st and 2^nd plaintiffs

The defendant acting in person, being absent

Annex