Chan Hon, The Administrator of the Estate of Poon Lai Ming, Deceased v. Bayer Healthcare Ltd and Others

HCPI 32/2016

[2019] HKCFI 2486

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 32 OF 2016

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BETWEEN

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D E C I S I O N

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1.This is the 2^nd and 3^rd defendants’ appeal from Master Roy Yu’s order dated 8 November 2018 dismissing the 2^nd and 3^rd defendants’ summons dated 3 January 2018 (“the Summons”) for the following orders:

(1)  the orders of Master Roy Yu dated 16 December 2016 and 20 March 2017 (“1^st Extension Order”, “2^nd Extension Order”, collectively “the Extension Orders”) extending the validity of the Writ for the purpose of service be discharged;

(2)  the order of Master Leong dated 29 December 2016 giving leave, amongst others, to issue and serve the concurrent Writ on the 2^nd and 3^rd defendants out of the jurisdiction (“the Service Out Order”) be discharged; and

(3)  that service of the concurrent Writ on the Applicants be set aside.

The Extension Orders and the Service Out Order had been obtained on ex parte basis.

Background

2.This is an action for damages arising from the death of Poon Lai Ming, deceased. who passed away on or about 27 January 2013 at 45 years of age. The cause of death was recorded in the autopsy report as a massive pulmonary embolism resulting from thrombosis in the inferior vena cava[1].

3.In a writ dated 13 January 2016, the plaintiff, the widower of the deceased, sued all 3 defendants, in his own capacity and in his capacity as the administrator of her estate, for alleged negligence and/or breach of statutory duties in manufacturing, distributing and/or causing to be distributed in Hong Kong the contraceptive pills called “Yasmin” (“the Pills”), which the deceased was said to have consumed.

4.The writ was taken out just 2 weeks before the expiry of the 3-year limitation period for an action for damages for negligence or breach of duty in respect of personal injuries or death. The limitation period was due to expire on 26 January 2016.

5.The 1^st defendant is a Hong Kong incorporated company and the authorized distributor of the Pills in Hong Kong.  Both the 2^nd defendant and 3^rd defendant are German companies without any presence or a registered place of business in Hong Kong. The 2^nd defendant is the contract manufacturer of the Pills, using active ingredients provided to it by the 3^rd defendant, to which it sold the finished product. The 1^st defendant purchased the Pills from the 3^rd defendant and imported the same into Hong Kong for sale on its own account.

6.The writ was served on the 1^st defendant on 6 December 2016.  The 1^st Extension Order extended validity of the Writ for 3 months from the date of its expiry, i.e. until 12 April 2017.  The 2^nd Extension Order further extended validity of the Writ for another 6 months, i.e. until 12 October 2017. The concurrent Writ was eventually served on the Applicants on 9 August 2017. Their respective acknowledgements of service were filed on 28 August 2017.

Hearing de novo

7.At the hearing on 23 August 2019, I indicated to the parties that I was treating the appeal as a hearing de novo, not as an appeal from a case management decision, as the orders appealed against impacted on the substantive legal rights of the parties.

8.I have considered the evidence filed by the parties including:

(a)  1^st and 3^rd affirmations of Chuang Yim dated 9 December 2016 and 21 December 2016 respectively for serving the concurrent writ out of jurisdiction (“CY1, CY3”);

(b)  2^nd affirmation of Chuang Yim dated 9 December 2016 for the 1^st Extension Order (“CY2”);

(c)  4^th affirmation of Chuang Yim dated 13 March 2017 for the 2^nd Extension Order (“CY4”);

(d)  affidavit of Charles William Allen dated 3 January 2018 in support of the Summons (“CWA”); and

(e)  5^th and 6^th Affirmations of Chuang Yim dated 21 February 2018 and 23 March 2018 respectively in opposition of the Summons (“CY5”, “CY6”).

9.The parties have agreed a chronology and a dramatis personae.

2 Discrete Issues

10.2 discrete issues arise on this appeal:

(a)  Was the Service Out Order rightly made and, if not, was there a submission to the jurisdiction by the 2^nd and 3^rd defendants?

(b)  Were the Extension Orders rightly made and, if not, was there a further step taken in the action by the 2^nd and 3^rd defendants?

Was the Service Out Order rightly made

11.The legal principles regarding leave for service out have been properly and succinctly summarised in Queenston LLC v Serlen Ltd & others [2001] HKCFI 320 by Recorder Edward Chan SC at pp.19-20:

“24. The law is well established that the Plaintiff may rely on any number of sub-paragraphs (a) to (p) of Order 11 rule 1(1). He must show a good arguable case that his case falls within any one of the sub-paragraphs. This standard of proof 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). The reason for the threshold to be set at the level of good arguable case is because under Order 11 rule 4(2) it is provided that “no such leave 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 the jurisdiction under this Order”. Under this rule 4(2), the minimum requirement was thus merely that it was “made sufficient to appear” to the Court that the claim falls within the rule and for this reason, it is not appropriate to set the standard of proof any higher than merely a good arguable case. However, under rule 4(2) the Court obviously has a discretion in deciding whether to grant leave even though the Court has been satisfied that there is a good arguable case that the claim is within the Rule 1(1). In this respect, the Court is entitled and should also take into account the merits of the claim. The issue of merits is also relevant, because under rule 4(1)(b), the affidavit of the applicant in support of the application would have to state that in the deponent’s belief the Plaintiff has a good cause of action. In relation to the merits, it is now well established that the Plaintiff needs only to show that there is serious issue to be tried (see Seaconsar Far East Ltd. v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438, at 457A). Of course the Court must also consider other factors before exercising the discretion in favour of granting leave. One of the most important factors to consider is the question of forum conveniens.” [Emphasis added]

12.As further set out in that decision in §§26, 30 and 33 at pp.20-26:

(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 the 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;

(3)  if the plaintiff has opted to apply for leave to serve out of jurisdiction on the basis of a generally endorsed writ, he must in his affidavit in support give all the necessary details as to how his cause of action arises. He would be bound by the way he formulates his cause of action in the general endorsement on the writ, if he so chooses to state his cause of action in the general endorsement. 

13.The plaintiff relied on 2 “gateways” for service out under O.11 r.1 of the Rules of the High Court (“RHC”), namely:

(1)  O.11, r.1(1)(c) RHC, that “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”; and

(2)  O.11, r.1(1)(f) RHC, that “the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction”.

14.I am quite satisfied that the plaintiff has demonstrated a good arguable case that both gateways for service out are available in this case.

15.The 2^nd defendant is the contract manufacturer of the Pills, using active ingredients provided to it by the 3^rd defendant, to which it sold the finished product.  The 1^st defendant purchased the Pills from the 3^rd defendant and imported the same into Hong Kong for sale on its own account.  If the plaintiff can establish a serious question to be tried that the defendants committed tortious acts in manufacturing, distributing and/or causing to be distributed in Hong Kong the Pills which the deceased had consumed and which caused, or materially contributed to, the massive pulmonary embolism resulting from thrombosis in the inferior vena cava that caused her death, then the 2^nd and 3^rd defendants are proper parties to these proceedings within the meaning of O.11, r.1(1)(c) RHC.  The courts strive to prevent multiplicity of proceedings arising from the same facts or series of facts. It does so to ensure procedural economy and, more importantly, to prevent conflicting findings of facts by different courts, whether in the same jurisdiction or whether in local and overseas jurisdictions.

16.Further, if the plaintiff can establish a serious question to be tried that the defendants committed tortious acts in manufacturing, distributing and/or causing to be distributed in Hong Kong the Pills which the deceased had consumed in Hong Kong and which caused, or materially contributed to, the massive pulmonary embolism resulting from thrombosis in the inferior vena cava that caused her death in Hong Kong, then the claim is founded on a tort and the damage was sustained within the jurisdiction, within the meaning of O.11, r.1(1)(f) RHC.

17.Has the plaintiff demonstrated a serious question to be tried?

18.In addition to the general averments in the generally endorsed writ, the plaintiff’s case is set out in CY1 dated 9 December 2016 in these terms[2]:

“5.  It is the Plaintiff’s case that his wife’s death was the consequence of the negligence and/or breach of statutory duties on the part of the 1^st Defendant and/or the 2^nd Defendant and/or the 3^rd Defendant and their servant(s) or agent(s). Specifically, the Defendants manufactured and/or distributed and/or caused Yasmin to be distributed in Hong Kong when there were increased risks of death or injury, including from thromboembolism, when using Yasmin as compared with other contraceptives, and the Defendants manufactured and distributed the same without any or any proper warning thereof.

…

9.  We are instructed that the Deceased started taking Yasmin from 2003 and continued to take Yasmin up until the time of her death. The Deceased generally enjoyed good health until shortly prior to her death.

10.  I have obtained an expert report dated 25^th November 2016 from Professor Brian Tomlinson who is currently the Adjunct Professor and the former Chair Professor of Medicine and Therapeutics at the Chinese University of Hong Kong, where he has been employed for 25 years and was Head of the Division of Clinical Pharmacology since July 2001. He has practised internal medicine for over 35 years and has specialised in Clinical Pharmacology for 30 years. He has been Clinical director of the Drug Development Centre of the Chinese University of Hong Kong, which undertakes clinical trials with drugs at all stages of development.

11.  According to the Autopsy Report dated 9^th March 2013, and the expert opinion of Professor Brian Tomlinson, the cause of death was massive pulmonary thromboembolism resulting from thrombosis in the inferior vena cava (IVC).

…

14.  In view of the expert opinion of Professor Tomlinson, it is my belief that the Plaintiff has a good cause of action against the manufacturers and distributers of Yasmin, within the meaning of O.11 r.4(1)(b) of RHC.”

19.The report of Professor Tomlinson was exhibited to the said affirmation, in which Professor Tomlinson summarised his opinion in these terms[3]:

“31.  In summary, the increased risk of VTE with drospirenone-containing CHCs compared with levonorgestrel-containing CHCs was first reported in two publications in 2009. The findings were initially uncertain because two earlier publications in 2007 had not shown this increased risk. The U.S. FDA posted a comment about this in April 2010. Further studies published in 2010 and 2011 confirmed this increased risk with rate ratios of VTE between users of CHC with drospirenone versus levonorgestrel from 1.5 to 2.8. The FDA warning became more definite in September 2011 and the Yasmin Prescribing Information in the U.S. was updated in April 2012 to include this information. The Yasmin Prescribing Information in Hong Kong was presumably updated sometime after June 2011.

32.  In the case of the Deceased, Madam POON Lai Ming, the cause of death was pulmonary embolism originating from a thrombosis in the inferior vena cava. Madam POON Lai Ming was at increased risk for venous thrombosis because of her age of 45 years and because she was mildly overweight with a BMI of 25.3 kg/m². Her use of the oral contraceptive Yasmin containing drospirenone increased her risk for venous thrombosis by about two-fold compared to a second generation oral contraceptive containing levonorgestrel and by about six-fold compared to a non-pregnant women not using hormonal contraception.

33.  Considering the incidence rate of venous thrombosis in non-pregnant women not using hormonal contraception aged 40 years is 5 per 10,000 and that the use of the oral contraceptive Yasmin increases this by about six-fold, the incidence rate of venous thrombosis in a woman aged 40 years using the oral contraceptive Yasmin would be 30 per 10,000, and of those 30 cases 25 cases or 83% of the total would be attributed to the use of Yasmin. In the case of the Deceased, the only factors predisposing to venous thrombosis, apart from the use of Yasmin, were her age and a mild degree of overweight so I would conclude that there was a chance of up to 83% that the use of the oral contraceptive Yasmin had caused the venous thrombosis and pulmonary embolism in the Deceased.

34.  The increased risk of venous thrombosis with Yasmin was established in 2011 and was recognized by regulatory authorities in the United States, Europe and Hong Kong in 2011. The prescribing information for Yasmin was updated in 2012 to include more details on this increased risk of venous thrombosis. However, these details do not make it clear to a lay person that there is an increased risk of venous thrombosis with Yasmin compared to oral contraceptives containing levonorgestrel and in my opinion a lay person would find it difficult to follow the information regarding the risk of venous thrombosis with Yasmin from the revised prescribing information.

35.  This increased risk of venous thrombosis with Yasmin should have been notified to the general public more clearly in 2012 so that women who were taking Yasmin could make an informed decision on whether to stop the oral contraceptive completely or to change to an oral contraceptive containing levonorgestrel that carried a lower risk of venous thrombosis.”

20.Mr Michael Ozorio SC leading Ms Corinne D’A Remedios appeared for the plaintiff.  Mr Raymond Leung SC, appearing with Ms Theresa Chow for the 2^nd and 3^rd defendants, submitted that the Service Out Order sought to be set aside on the ground that the plaintiff had failed to demonstrate a serious question to be tried and/or was guilty of material non-disclosure for these reasons:

“17. In his application for the Service Out Order, P wrongly characterized the Pills as an “over the counter” pharmaceutical product without any reference to the Caution printed on the outer package box … . P also failed to disclose that pursuant to regulation 8 of the Pharmacy and Poisons Regulations (Cap.138A), nothing in the Pharmacy and Poisons Ordinance (Cap.138) shall apply to any of the articles or substances specified in Group II to Schedule 2 thereto, which includes “preparations intended to be taken orally for contraceptive purposes only” containing not more than the prescribed dose of drospirenone, gestodene, or levonorgestrel etc. The Pills are therefore sold as non-poisons without the need for any prescription.

18. P relied heavily on the expert report of a Professor Brian Tomlinson dated 25/11/2016 on causation …, which concluded, inter alia, that

(1) use of the Pills increased the Deceased’s risk of venous thrombosis by about two-fold compared to a second-generation oral contraceptive containing levonorgestrel (§32);

(2) there was a chance of up to 83% that use of the Pills caused venous thrombosis and pulmonary embolism in the Deceased (§33);

(3) the increased risk of venous thrombosis with the Pills was established in 2011 (§34);

(4) the increased risk of venous thrombosis with the Pills should have been notified to the general public more clearly in 2012 (§34).

19. Apparently, Prof Tomlinson has been provided with the outer package box and packing insert of the Pills (revised in August 2011) (“Packing Insert”). For reasons unknown, in arriving at the conclusions in his report, Prof Tomlinson singularly failed to refer to or discuss:

(a) the caution printed on the outer box which reads “While you are receiving this medication, you should see a doctor at least once a year for advice on suitability of continued use” (the “Caution”); and

(b) the relevant excerpt from the Packing Insert regarding the risk of venous thromboembolism.

20. Instead, the excerpt from the Packing Insert can now be found in the expert report of a Dr Peter Feldschreiber dated 27/2/2018, who is described as P’s product liability expert. It reads:

“20. Epidemiological studies have shown that the risk of venous thromboembolism for combined oral contraceptives that contain drosperinone [ie. the Pills] is higher than the risk for levonorgestrel containing second generation of [combined oral contraceptives] and may be similar to the risk for desogestrel containing or gestodene containing third generation [combined oral contraceptives].” (emphasis supplied) (“Warning”)

21. The Caution was printed on the outer box all along and the Warning was added in the August 2011 Packing Insert shortly after the Hong Kong Registration Committee of the Pharmacy and Poisons Board’s 15/6/2011 decision that higher risk of venous thromboembolism reported in some literature be made known in packing insert of drugs such as the Pills. It expressly addressed the risk identified in the Tomlinson Report.

22. The Packing Insert containing the Warning was plainly in P’s possession, it having been found among the Deceased’s personal effects. Yet, it was not mentioned in any of CY1 to CY4. Obviously, the Feldschreiber Report was not before the Court either when the Extension Orders and the Service Out Order were applied for in 2016 and early 2017.

…

24. On 14/3/2019, D1 filed its Defence (a) denying liability with full particulars (at §14) as to how the Warning, which was commensurate with the state of scientific knowledge at the material times and consistent with the practice in different pharmacovigilance regimes, came into being under the direction and with the approval of the Department of Health; and (b) asserting contributory negligence on the Deceased’s part (at §48). …

…

54. The Tomlinson Report §§34-35 suggests that the increased risk of venous thrombosis with the Pills is not made clear to a lay person or the general public. However, that precise risk has been expressly made known in the Warning as approved by Hong Kong regulatory authorities which Prof Tomlinson failed to address in any detail.

55. As pleaded at D1’s Defence §21, the incidence and standard of duty of care is informed by the statutory requirement set out in ss. 36 & 37 of Pharmacy and Poisons Regulations (Cap. 138A) (“PPR”). It is permissible to have regard to the statutory regime when considering what standards are to be expected of a reasonable drug manufacturer/ distributor at common law. …

56. In updating the Packing Insert to include the Warning, D1 (and to the extent that any other entity within its corporate group owes a duty to the Deceased) would have discharged its duty.

…

70. P had failed to disclose the following which would have afforded the Applicants a full defence to P’s poorly formulated claim:

(1)  Any detail as to P’s claim against Dr Chik Poon Yin commenced by a generally indorsed writ dated 29/9/2016, who appears to be the Deceased’s gynaecologist since 15/12/2003 until 20/10/2010, and had given her medical treatments and advice;

(2)  the   Deceased’s own negligence and/or personal attributes causing her demise as pleaded in D1’s Defence §48, including the fact that she refused to be admitted to hospital and cancelled her booking on 26/1/2013 (the day before her passing), contrary to the advice of Dr Lai Sek Fai (“Dr Lai”) and Dr Terry TY Lau (“Dr Lau”), who both attended to her on 25/1/2013 and returned a diagnosis of anaemia with suspected underlying acute illness which required immediate hospitalisation.

71. These events could break any alleged chain of causation as between the Applicants and the Deceased in respect of her consumption of the Pills.”

21.I have considered the authorities cited to me that are relevant on these matters including, in particular, the principles regarding the need for full and frank disclosure at ex parte applications that were set out comprehensively in Velatel Global Communications Inc & Another v Chinacomm Ltd & Others [2012] HKCFI 1655 §§25-31 by DHCJ Au-Yeung (as she then was).  In particular:

(1)  the duty of the applicant is to make a full, frank and fair disclosure of all the material facts;

(2)  in considering what matters should be disclosed to the court, the test is whether the facts are relevant to the exercise of the discretion, regardless of whether they are relevant to the merits of the claim, and irrespective of whether the matters, if disclosed, would have caused the court to refuse to grant the ex parte application. The court was not concerned with whether the matters not disclosed would, if they had been disclosed, have caused it to refuse to grant the ex parte order.  The test was whether the court should have these matters in the weighing scales;

(3)  materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers;

(4)  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;

(5)  where there has been material non-disclosure in an ex parte application, the practice of the court is to discharge the order without going into the merits.

In addition, I have had particular regard to Hartanto Hady v Radnaabazar Bazer, HCA 89/2008, 4 May 2012, in which DHCJ Peter Ng SC, as he then was, observed at §§101–103:

“101.  In Mattel Inc v Tonka Corp [1991] 2 HKC 411, 430A-B, Deputy High Court Judge Andrew Li QC (as he then was) reiterated the principle that material facts were those which were material for the judge to know in dealing with the particular application before it. …

102.  Hence, even though the principle requiring full and frank disclosure is the same whether application is for the grant of an injunction or for leave to serve a writ outside jurisdiction, the context and the focus of the inquiry is different.

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… 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. …” [Emphasis added]

22.I approach this matter on the basis that the hearing before me is a hearing de novo. The main point taken by Mr Leung is that Professor Tomlinson singularly failed to refer to or discuss:

(a)  the Caution printed on the outer box which reads “while you are receiving this medication, you should see a doctor at least once a year for advice on suitability of continued use”;

(b)  the Warning from the Packing Insert, which came into being under the direction of and with the approval by the Department of Health, regarding the risk of venous thromboembolism which stated that “Epidemiological studies have shown that the risk of venous thromboembolism for combined oral contraceptives that contain drosperinone [i.e. the Pills] is higher than the risk for levonorgestrel containing second generation of [combined oral contraceptives] and may be similar to the risk for desogestrel containing or gestodene containing third generation [combined oral contraceptives].” [Emphasis added]

It is conceded that Professor Tomlinson’s report does refer to the increased risk identified in the epidemiological studies.  However, Professor Tomlinson omitted any reference to the Warning and to the Caution contained in the Packing Insert.  Mr Leung further submitted that in updating the Packing Insert to include the Warning, the 1^st defendant (and to the extent that any other entity within its corporate group owes a duty to the deceased) would have discharged its duty.

23.Although Professor Tomlinson did not quote the Warning verbatim from the Packing Insert, he did state that the prescribing information for Yasmin was updated in [November 2011[4]] to include more details on “this increased risk of venous thrombosis”. More importantly, it was his opinion that a lay person would find it difficult to follow the information regarding the risk of venous thrombosis from the revised prescribing information.

24.I accept that Professor Tomlinson entirely omitted to mention the Caution which stated that “while you are receiving this medication, you should see a doctor at least once a year for advice on suitability of continued use”.  The disclosure of the Caution is likely to have led to an enquiry as to what steps, if any, the deceased took to obtain medical advice.  However, the disclosure of the Caution does no lead me to conclude that there is no serious issue to be tried between the plaintiff and the 2^nd and 3^rd defendants in the present case.

25.Notwithstanding these additional matters that have now been raised, I find there is a serious issue to be tried as to whether the 2^nd and 3^rd defendants owed a duty of care to the deceased and, if so, whether the Caution and Warning was sufficient to discharge such duty of care owed to the deceased.

26.The other matters raised by Mr Leung do not lead me to conclude there is no serious issue to be tried in the proceedings brought against the 2^nd and 3^rd defendants.

27.The plaintiff did inform the court that the Pills are sold as an “over the counter” pharmaceutical product, which is to say that they are sold as “non-poisons” and do not need a prescription before they could be sold.

28.The incidence and standard of duty of care may be informed by the statutory requirement set out in ss.36 & 37 of Pharmacy and Poisons Regulations, Cap.138A, however, it is the court that defines the duty and standard of care in any particular relationship.

29.Contributory negligence is only a partial, and not a complete defence, ever since the enactment of section 1(1) of the Law Reform (Contributory Negligence) Act 1945, which we can find in section 21 of our Law Amendment and Reform (Consolidation) Ordinance, Cap.23.

30.The fact that triable issues can be raised, that possible negligence on the part of Dr Chik Poon Yin and/or the deceased’s own refusal to be admitted to hospital broke the chain of causation, only goes to confirm that there is a serious question to be tried whether or not there has been a break of causation by reason of these matters.

31.I would exercise my discretion in the same way as the learned Master did, by granting leave to the plaintiff to serve out of the jurisdiction.

32.Was there material non disclosure?  In Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350, at 1356F-1357F, Gibson LJ explained that material facts are those which it is material for the judge to know in dealing with the application as made. Gee on Commercial Injunctions,5^th ed at para 9.002 explains that:

“The duty extends to placing before the court all matters which are relevant to the court’s assessment of the application, 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. The test as to materiality is an objective one, and it is not for the applicant or his advisers to decide the question; hence it is no excuse of the applicant subsequently to say that he was genuinely unaware, or did not believe, that the facts were relevant or important. All matters which are relevant to the ‘weighing operation’ that the court has to make in deciding whether or not to grant the order must be disclosed.”

Further, as explained in Pacific Base Services Ltd & Anor v Silver Gain Development Ltd & ors [1996] 1 HKC 610 at 617I-618A, the materiality of matters undisclosed or misstated, if relevant, will depend on the importance of the facts to the issues which were to be decided by the judge on the ex parte application.

33.For the reasons set out above, I conclude that, other than the non-disclosure of the Caution, there was no material non disclosure in the present case, as the various non disclosures that were complained of were not material in the sense that, when properly analysed, they were not relevant to the exercise of the court’s discretion to serve out of the jurisdiction.

34.However, after careful consideration, I conclude that the non disclosure of the Caution was material, as it was relevant to the exercise of the court’s discretion to serve out of the jurisdiction, even though it is likely that, after due consideration of the same, the court’s decision to grant leave to serve out of the jurisdiction would have been the same.

35.By reason of the said material non disclosure, I would set aside the leave granted to serve outside the jurisdiction on the 2^nd and 3^rd defendants. 

36.I will deal with whether or not I ought to recall the parties to address me on the question of regranting leave, either retrospective or prospective, to serve out of the jurisdiction[5], after I have dealt with the other matters raised in this appeal.

Submission to Jurisdiction

37.CY5 §§6-7 contain the assertions made on behalf of the plaintiff that the 2^nd and 3^rd defendants had submitted to the jurisdiction of the Hong Kong Court and/or waived any entitlement to object to the Service Out Order and the Extension Orders.

38.Pursuant to O.12, r.8(1) RHC, a defendant who wishes to dispute the jurisdiction of the Court in the proceedings shall make the relevant application within the time limited for service of a defence.  The time allowed to the 2^nd and 3^rd defendants to file a defence was extended by order dated 26 September 2017 to 9 January 2018. The summons of the 2^nd and 3^rd defendants was taken out, on 3 January 2018, within the time limit.

39.A mere application for extension of time to file the defence does not constitute a submission to jurisdiction.  It merely preserves the status quo pending launch of the summons: see Hong Kong Civil Procedure 2019 [12/8/3]; Hwoo Huang Linda v Fu Being San & others [2013] 1 HKLRD 259 per DHCJ Reyes SC (as he then was) at §§36-37.Guidelines that assist in the evaluation of whether or not there has been a submission to Hong Kong jurisdiction or a step in the action amounting to a waiver of irregularity can be found in the following cases.

40.If a defendant chooses to make such an application, he should not take any step to defend the case on the merits, or apply for other primary relief as this may be construed as a submission to the jurisdiction.  A defendant who takes a further step in the action or invokes or utilises the jurisdiction of the court with a view to his own advantage waives, by doing so, his right to object to any earlier procedural irregularity[6].

41.A party submits to the jurisdiction if he takes steps, which in all the circumstances, amount to a recognition of the court’s jurisdiction. The dicta in Astro Exito Navegacion SA v WT Hsu [1984] 1 Lloyd’s Reports 266 was adopted in Hong Kong by the Court of Appeal in Miruvor Ltd v Panama-Globe Steamer Lines SA [2006] 2 HKC 617 and applied in ABN Amro Bank N.V. v Charles Fabrikant Fortgang [2008] 2 HKLRD 349.  In the latter case, Sakhrani J observed:

“24. The proper test as to whether there has been a submission to the jurisdiction of the Court has been set out in the judgment of Sir Andrew Morritt C in Global Multimedia International Ltd v Ara Media Services and another (Abu-Aljadail and others, Part 20 defendants) [2007] 1 All ER (Comm) 1160:

“[27] The test to be applied in determining whether any particular conduct amounts to a submission to the jurisdiction was considered by Colman J in Spargos Mining NL v Atlantic Capital Corp reported only in (1995) Times, 11 December, but quoted in full by Patten J in SMAY Investments Ltd v Sachdev [2003] EWHC 474 (Ch) at [41], [2003] 1 WLR 1973 at [41]:

‘In Astro Exito Navagacion SA v WT Hsu, otherwise known, more pronounceably, as The Messiniaki Tolmi [1984] 1 Lloyds Reports, 266, Goff LJ said “Now a person voluntarily submits to the jurisdiction of the court if he voluntarily recognises, or has voluntarily recognised, that the court has jurisdiction to hear and determine the claim which is the subject matter of the relevant proceedings.  In particular, he makes a voluntary submission to the jurisdiction if he takes a step in the proceedings which in all the circumstances amounts to a recognition of the court’s jurisdiction in respect of the claim which is the subject matter of those proceedings.  The effect of a party’s submission to the jurisdiction is that he is precluded thereafter from objecting to the court exercising its jurisdiction in respect of such claim.  Whether any particular matter, for example an application to the court, amounts to a voluntary submission to the jurisdiction must depend upon the circumstances of the particular case.”  In [Sage v Double A Hydraulics Ltd [1992] The Times, 2 April 1992, TLR 165], Farquharson LJ said (and this is a report of the judgment which is not reported in oratio recta): “A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge”. [Emphasis added]

42.The full quotation in Sage v Double A Hydraulics Ltd, [1992] Times Law Reports 165, which appears in the Court of Appeal’s decision in Miruvor Ltd v Panama-Globe Steamer Lines S.A. and others, [2007] 1 HKLRD 804 at 808J - 809E,  are set out as follows:

“A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the Defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge.’

In arriving at the view to be imputed to the disinterested bystander, it seems to me that one has to bear in mind that there will be an effective waiver, or a submission to the jurisdiction, only where the step relied upon as a waiver, or a submission to the jurisdiction, cannot be explained, except on the assumption that the party in question accepts that the court should be given the acceptance of jurisdiction, is a step which can be explained also because it was necessary or useful for some purpose other than acceptance of the jurisdiction, there will, on the authorities, be no submission.. . …. If the well-informed bystander had been left in doubt because what the defendants had done was equivocal, in the sense that it was explicable on other grounds in addition to agreement to accept the jurisdiction of the court, then the conclusion must be, on the authorities, that there would have been no submission to the jurisdiction. The representation derived from the conduct of the party said to have submitted must be capable of only one meaning.” [Emphasis added]

43.In Chambers v Starkings, which was heard together with Sage v Double A Hydraulics Ltd, the English Court of Appeal made clear that “when considering the defendant's conduct objectively it is necessary to know what she had told the plaintiff or his advisers”. The “disinterested bystander” is therefore supposed to have knowledge of the relevant facts of the case and “in particular of what had passed between the parties’ solicitors”.

44.In Hwoo Huang Linda v Fu Being San & Others [2013] 1 HKLRD 259, Deputy High Court Judge Reyes SC gave guidance in the following terms in §26:

“(1) A party may be treated as having submitted to the jurisdiction if he files a pleading setting out his case on the substantive merits of an action.

(2) A party may be treated as having submitted to the jurisdiction if he invokes the Court’s jurisdiction to obtain an interlocutory or final order requiring the opposite party to perform some act (for example, disclose documents, provide further and better particulars, or answer interrogatories).

(3) A party does not submit to the jurisdiction if he merely acts to preserve the status quo pending the mounting and resolution of an application to challenge forum.

(4) A party does not submit to the jurisdiction if he merely takes defensive action in interlocutory injunction proceedings brought by the other side.

(5) A party may be able to preserve an option to challenge forum, despite having engaged in conduct which might be regarded as submission to the jurisdiction, if before or at the time of such conduct he makes it clear that his action is without prejudice to the bringing of a challenge to forum.

(6) The Court should adopt a common sense approach. It must not be overly subtle or astute to find that a party has submitted to the jurisdiction. Otherwise the question of submission could easily become a technicality trap for the unwary. The real question is whether a party's conduct is so inconsistent with maintaining an option to challenge forum that the party should be assumed to have waived such option. In the case of any doubt, the party proposing to challenge forum should probably be given the benefit of that doubt.” [emphasis added)

45.The following chronology is relevant to consider for the purposes of the present discussion:

6.12.16	A4/54	D1 served in person in HK
9.8.17	CY 5th Aff  §104 A3/654	Service on D2 & D3 in Germany
28.8.17	A1/39 A1/41	D2 & D3 acknowledge service; M/s Orrick, Herrington & Sutcliffe (“Orrick”) acting for all 3 Ds
29.8.17	A4/93	Orrick requesting all documents filed in support of Extension Orders and Service Out Order
7.9.17	Annex 1A of D2 & D3s Supplemental Skeleton Submissions	Orrick’s letter to Registrar to inspect and take copies from the court file
11.9.19	§10 of D2 & D3s Supplemental Skeleton Submissions	Orrick obtained P’s ex parte application documents directly from the Registry
12.9.17	A1/43	P’s Questionnaire
13.9.17	A4/96-1	M/s Cheng Yeung’s (“Cheng Yeung”) letter proposing adjournment of the CLR: “to save costs and time” & enclosing consent summons - no response
13.9.17	A1/63 § G6	Ds’ Questionnaire: - “I confirm that I do not presently intend to take out other interlocutory applications.” - P did not respond D2 & D3s’ request for all documents filed in support of Extension Orders and Service Out Order
22.9.17	A1/Tab 4A	P’s time summons for Statement of Claim to be filed on 31.10.17
22.9.17	A4/97	Denying request for all documents filed in support of Extension Orders and Service Out Order as a “fishing expedition”
25.9.19	A4/98-1	Orrick’s letter confirming that they had obtained P’s ex parte application documents directly from the Registry and “we are in the course of considering the same with our clients. Their rights are reserved.”
26.9.17	A1/148	The CLR hearing/order: (inter alia) - filing of SoC extended to 31.10.17; - Defence 70 days thereafter; - within 28 days of SoC, P to notify Ds of liability experts, serve copy if ready, with a list of issues
3.1.18	A1/151	D2 & D3’s summons to challenge
6.1.18		Defence of D1/D2/D3 due (70 days after SoC)
18.1.18	Ds’ Questionnaire 25.1.18	Master Yu ordered D1 to file Defence after determination of D2/D3’s Summons or the determination of P’s application to adduce a further expert report
20.9.18		Hearing of the challenge summons before Master Yu
14.3.19	A1/132-1	D1’s Defence (filed 1½ years after the CLR)
23.8.19		Hearing of the Appeal

46.Orrick’s failure to respond to Cheng Yeung’s request on 13 September 2017 for an adjournment of the CLR cannot be construed as a submission to the jurisdiction of the court.

47.The statement in the defendants’ questionnaire that the plaintiff did not respond to the 2^nd and 3^rd defendants’ request for all documents filed in support of the Extension Orders and Service Out Order did not amount to a submission to jurisdiction or a step in the action amounting to a waiver of irregularity on the part of the 2^nd and 3^rd defendants.

48.The statement in the defendants’ questionnaire that “I confirm that I do not presently intend to take out other interlocutory applications” would not have been misleading if, on 13 September 2017, they had not yet received the documents filed in support of the Extension Orders and Service Out Order. If so, they would have been in no position to say whether or not they would apply to set aside the Extension Orders and Service Out Order. In these circumstances, the filing and service of the questionnaire without an express reservation in the said questionnaire that the 2^nd and 3^rd defendants might apply to set aside the Extension Orders and Service Out Order would not have amounted to a submission to jurisdiction or a step in the action amounting to a waiver of irregularity on the part of the 2^nd and 3^rd defendants.

49.However, the 2^nd and 3^rd defendants had obtained the documents filed in support of the Extension Orders and Service Out Order on 11 September 2017, 2 days before the defendants’ questionnaire was filed containing the statement that “I confirm that I do not presently intend to take out other interlocutory applications”. That statement does not sit well with the state of play at that time, as set out in Orrick’s letter dated 25 September 2017, namely, that “we are in the course of considering the same with our clients. Their rights are reserved.”  After receipt of the documents filed in support of the Extension Orders and Service Out Order on 11 September 2017, Orrick and the 2^nd and 3^rd defendants were considering making an application to set aside the Extension Orders and Service Out Order.  Accordingly, the statement in the defendants’ questionnaire that “I confirm that I do not presently intend to take out other interlocutory applications” was misleading. Read literally, the statement is factually correct as on 13 September 2017. However, by the time of the hearing of the CLR before the learned Master on 26 September 2017, more than 2 weeks had passed since the receipt of the documents in support of the ex parte applications.  At the very least Orrick ought to have made an express reservation, at the hearing of the CLR on 26 September 2017, that, whilst they were not, at present, making any application, the 2^nd and 3^rd defendants were considering whether or not they would make an application in due course to set aside the Extension Orders and the Service Out Order.

50.Indeed, one may question Orrick’s motives in expressly stating, in the questionnaire on 13 September 2017, that the plaintiff did not respond to the 2^nd and 3^rd defendants’ request for all documents filed in support of Extension Orders and Service Out Order when Orrick had obtained all those documents directly from the Registry on 11 September 2017 and, it appears to me, quite intentionally failed to inform the court of that fact.

51.As provided under O.1A r.3 of the RHC, the parties are under a duty to assist the court to further the underlying objectives of Order 1A, r.1, including:

“(a)  to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b)  to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c)  to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

…

(f)  to ensure that the resources of the Court are distributed fairly.” [Emphasis added]

52.Active case management by the court is defined in O.1A r.4(2) to include:

“…

(g)  fixing timetables or otherwise controlling the progress of the case;

(h)  considering whether the likely benefits of taking a particular step justify the cost of taking it;

…

(j)  dealing with the case without the parties needing to attend at court;”

53.In his judgment below,  the learned Master rightly referred to the duty of the court to manage cases and the duty on the parties to provide up-to-date answers in the questionnaire that represent the true position of the parties[7]. The 2^nd and 3^rd defendants failed to comply with such duty.  The learned Master said he might not have wasted time on the further directions had he been informed of the possible challenge[8].  

54.It appears to me that Orrick did not do so in order to facilitate the negotiation of a longer period of time for the defendants to serve their defence.  As it happened, Orrick procured an extension of time of 70 days for the defendants to serve their defence.  If Orrick had made an express reservation in the terms set out in §49 above, Cheng Yeung might not have been as generous in agreeing to such a long extension of time for defendants to serve their defence.

55.But, more than that, by not making an express reservation in the term set out above on or before 26 September 2017, Orrick misled the learned Master into believing that the proceedings ought to be case managed in the usual manner and wasted the court’s valuable resources and time. The learned Master thus became fully focused that morning on the expert evidence that ought to be obtained in connection with the complex issues raised in the proceedings and eventually directed the plaintiff, within 28 days of service of the Statement of Claim, to notify the defendants of their liability experts, serve copies of their reports, if ready, together with a list of issues. The hearing that morning lasted from 11:35 amto 1:01 pm, having been stood down from 11:58 am to 12:38 pm, during the entirety of which Orrick remained silent about the fact that the 2^nd and 3^rd defendants were considering whether or not they would make an application in due course to set aside the Extension Orders and the Service Out Order.  As noted above, the learned Master said in his judgment being appealed against that he might not have wasted time on the further directions had he been informed of the possible challenge[9].

56.I accept Mr Leung’s submission that the learned Master had expressly drawn the distinction between the 1^st defendant and the 2^nd and 3^rd defendants in respect of case management matters[10]. The relevant exchange between bench and bar is important and bears repeating in its entirety[11]:

“[8I] COURT: So there is quite a number of things because of the way how to deal with it and it seems there is quite a number of thing that have not been dealt with, and in particular the liability expert, because when you apply to me for the liability expert, then it is also for the defendant to address me whether they agree that this is the right and correct discipline of medical -- of expert to deal with the liability issues, and they may be coming up with other expert as well. (emphasis added)

MR CHUANG: Yes.

COURT: Now, we have also to consider how these expert report are to be exchanged. So I -- given all the time I thought your -- and you are assisted by counsel, so then your counsel in Hong Kong who have been granted legal aid should address all this issue.

MR CHUANG: Yes.

COURT: So we have adjourned this until now and it seems, except for an adjournment, we got no progress. That is very unsatisfactory. So how do you propose to proceed with the case? I am not going to deal with it stage-wise; (a) as far as the pleading is concerned, I think that that shouldn’t be a lot of problem because, as you said, you need 35 days and it seems Miss Chong have no objection. (emphasis added)

MR CHUANG: Yes.

COURT: And then I’ll fix a date for them to come back with the defence and possibly she may be asking for more than 28 days, and then you’ll be -- both parties will be coming back some time next year.

[9B] But before that, at the same time, since you have said -- you said you have got the liability expert, now, when are you going to take out that application and what will be the response from the defendant? And you said you have additional experts. Now, what are those additional expert and when are these report to be adduced and be ready?

MR CHUANG: The new one will be ready in about two weeks’ time, yes. And I’m not sure whether it’s a good idea if we write to the defendant setting out all the expert we intend to rely and then to see if we can agree and then we apply jointly for leave. We can save the time of court if they have other expert and then if that can be agreeable, and I think that can be done in this stage by correspondence, say, in three weeks’ time.

COURT: Well, why has this -- all this have not been done before today?

MR CHUANG: Because we are focused on the service out and then the pleading stuff and -- yes.

COURT: Service out concern the 1st...

MR CHUANG: 2nd and 3rd.

COURT: The 2nd and the 3rd defendant.

MR CHUANG: Yes, yes.

COURT: For the 1st defendant, this, all the question I ask, should have been dealt with before today.

[9O] MR CHUANG: Yes.

COURT: So this checklist is not moving and I’m also a bit puzzled why your statement of claim should not be ready long before today. Because once you serve on the 1st defendant, then your statement of claim should be ready.

MR CHUANG: Yes, last time we briefly talk about this. We want to have a consolidated one instead of two set of statement of claim and that would be in one pleadings about the case ‑- again, that would mean a case against the three defendants, so I understand Master’s concern but that’s our purpose.

COURT: So from then and now -- now, when did they put in their acknowledgement of...

MR CHUANG: Their AS was filed on 28 August.

[10A] COURT: August.

MR CHUANG: Yes.

COURT: Right.

MR CHUANG: So taking into account the summer vacation, the deadline is 14 September, yes. I understand that’s the deadline but we are only out of time two weeks -- I understand that’s late, but we are seeking 35 days for doing all this in. But of course during this time we can write to the defendant setting out all the expert we propose and then to seek their view and if parties can come to a consensus...

COURT: So what is the proposed direction you want to show me? There is not one single except this -- for this time.

MR CHUANG: Yes.

COURT: Where is your draft order?

MR CHUANG: Can we stand down for say 10 minutes for drafting the...

COURT: All right. Please make sure you cover all this.

MR CHUANG: Yes.

COURT: Yes, case stood down. I have another case at 12.

MR CHUANG: Yes.

MS CHONG: Master, I’m not sure that, you know, we can agree with the directions and...

MR CHUANG: Just a timeframe.

COURT: Well...

MS CHONG: Sure.

COURT: ...you may not agree everything but I want the parties to come back and address me on what is the steps that is required to prepare for the case to move on. I don’t want to happen something like this, nothing was done now, so next year you come back and then -- is it by then Mr Chuang will ask me for leave to adduce expert evidence because although this was served technically they have no leave and then there will be another argument. You may disagree with those disciplines or you may come back with your discipline of your experts.

[11A] Now, then taking this to and fro, then that will create another three or four months’ delay before the case can move on. And when the witness statement to be exchanged, most likely in this case the key witness statement is the witness statement on liability, it’s not on quantum.

MR CHUANG: Yes, we’ll cover both but mainly as to liability.

COURT: Yes, because I anticipate the complication there is maybe on the liability or maybe there is not much issue on liability because the liability may have to be established by various inference, from various facts.

MR CHUANG: Yes, there will be statement from husband of the deceased and...

COURT: Is there a post-mortem report?

MR CHUANG: There’s a post-mortem report, yes, yes.

COURT: Yes.

MR CHUANG: Showing the death of the deceased.

COURT: So is there any report on the causation of the death?

MR CHUANG: There -- showing the cause of death, yes, in the post-mortem report. It’s thrombosis, the clogging of blood in the lung and -- the lung region.

COURT: All right.

MR CHUANG: Yes.

COURT: Now those are the reason of death and how does that link up to -- I presume your liability expert is going to say...

MR CHUANG: Yes, that’s covered by -- yes, the professor.

COURT: But those are the key factors.

MR CHUANG: Yes.

COURT: We have to get into those and this may be one of those cases that ultimately I will transfer to the PI judge because of the implication and also parties may consider, because I suspect there will be a big fight on the liability issue, especially including the expert, this might be a case that parties should consider a split trial. First we deal with the liability issue before we come back to quantum.

MR CHUANG: Yes.

[12A] COURT: Because once liability is established, the quantum issue -- well, I don’t know what’s the amount that you are claiming but it should be more straightforward.

MR CHUANG: Yes. Comparatively, yes.

COURT: All right. Do go -- stand down...

MS CHONG: Yes.

[12E] COURT: ...and you may step out and have some discussion first.

[emphasis added]”

57.The learned Master had almost grasped the point by himself when he said[12]:

“[9H] COURT: Well, why has this -- all this have not been done before today?

MR CHUANG: Because we are focused on the service out and then the pleading stuff and -- yes.

COURT: Service out concern the 1st...

MR CHUANG: 2nd and 3rd.

COURT: The 2nd and the 3rd defendant.

MR CHUANG: Yes, yes.

[9N] COURT: For the 1st defendant, this, all the question I ask, should have been dealt with before today.”

The learned Master should have continued, at this point, to ask about the position of the 2^nd and 3^rd defendants regarding the Extension Orders and the Service Out Order and whether they were going to apply to set them aside. But he did not: he had almost grasped the point but it slipped away from him because Cheng Yeung then reminded him that the plaintiff did not want to proceed only against the 1^st defendant but against all the defendants together[13]:

“[9N] COURT: For the 1st defendant, this, all the question I ask, should have been dealt with before today.

MR CHUANG: Yes.

COURT: So this checklist is not moving and I’m also a bit puzzled why your statement of claim should not be ready long before today. Because once you serve on the 1st defendant, then your statement of claim should be ready.

MR CHUANG: Yes, last time we briefly talk about this. We want to have a consolidated one instead of two set of statement of claim and that would be in one pleadings about the case ‑- again, that would mean a case against the three defendants, so I understand Master’s concern but that’s our purpose.

COURT: So from then and now -- now, when did they put in their acknowledgement of...

MR CHUANG: Their AS was filed on 28 August.

[10A] COURT: August.

MR CHUANG: Yes.

COURT: Right.

MR CHUANG: So taking into account the summer vacation, the deadline is 14 September, yes. I understand that’s the deadline but we are only out of time two weeks -- I understand that’s late, but we are seeking 35 days for doing all this in. But of course during this time we can write to the defendant setting out all the expert we propose and then to seek their view and if parties can come to a consensus...

COURT: So what is the proposed direction you want to show me? There is not one single except this -- for this time.

MR CHUANG: Yes.

COURT: Where is your draft order?

MR CHUANG: Can we stand down for say 10 minutes for drafting the...

[10J] COURT: All right. Please make sure you cover all this.

[emphasis added]”

From this point onwards, the learned Master continued to focus on the medical expert evidence that was needed in the case and how they should be dealt with, not only by the plaintiff and the 1^st defendants, but by all defendants[14]:

“COURT: All right. Please make sure you cover all this.

MR CHUANG: Yes.

COURT: Yes, case stood down. I have another case at 12.

MR CHUANG: Yes.

MS CHONG: Master, I’m not sure that, you know, we can agree with the directions and...

MR CHUANG: Just a timeframe.

COURT: Well...

MS CHONG: Sure.

COURT: ...you may not agree everything but I want the parties[15] to come back and address me on what is the steps that is required to prepare for the case to move on. I don’t want to happen something like this, nothing was done now, so next year you come back and then -- is it by then Mr Chuang will ask me for leave to adduce expert evidence because although this was served technically they have no leave and then there will be another argument. You[16] may disagree with those disciplines or you may come back with your discipline of your experts.

Now, then taking this to and fro, then that will create another three or four months’ delay before the case can move on. ...”

[emphasis added]

The point in time when the learned Master grasped the distinction between the 1^st defendant, on the one part, and the 2^nd and 3^rd defendants, on the other part, was the most opportune point for Orrick to interject and inform the Master that the 2^nd and 3^rd defendants were considering making an application to set aside the Extension Orders and the Service Out Order.  I cannot blame Cheng Yeung for not alerting the learned Master about the possibility that the 2^nd and 3^rd defendants might make an application to set aside the Extension Orders and the Service Out Order.  They must have been hoping against hope that they would not do that.

58.The learned Master has expressly said he might not have wasted time on the further directions had he been informed of the possible challenge[17]. And that is entirely right.  The challenge to jurisdiction ought to be dealt with before directions are given to obtain expert evidence on liability.  Doing so furthers the aim of achieving procedural economy, particularly as the defendants in this case are related parties. It does not appear to me to be particularly sensible for the 1^st defendant on its own to prepare its expert evidence on liability and for the 2^nd and 3^rd defendants to do so later on, in the event that their challenge to jurisdiction fails.

59.I also accept Mr Leung’s submissions that Orrick did not invoke the court’s jurisdiction by pressing the court to give directions on expert evidence or other case management directions.  Orrick was consistent in its stance that these ought to be dealt with after pleadings had been exchanged.  However, by participating in the proceedings without making an express reservation at the hearing of the CLR on 26 September 2017, in the terms set out in §49 above, which resulted in the court’s utilisation of its time and resources to give directions in respect of expert evidence which required the plaintiff to notify “the defendants”[18] of the liability experts the plaintiff relied on, and to serve copies of the same on “the defendants”[19], if ready, together with a list of issues of the experts, the 2^nd and 3^rd defendants submitted to the jurisdiction of the court and took a further step in the action thereby waiving any irregularities that might have occurred before then.

60.In my judgment, the disinterested bystander, looking objectively at what transpired that day before the learned Master, in the context of the defendants’ questionnaire that they were not presently intending to make any applications, would conclude that the 2^nd and 3^rd defendants were submitting to the jurisdiction and waiving any irregularities that might have occurred before then.  The learned Master rightly so concluded, stating in his judgment being appealed against:

“Would a disinterested bystander with knowledge of the case have regarded acts of the defendants or the solicitor as inconsistent with making and maintaining of the challenge? The answer must be yes. The defendants would have no difficulty to reserve the position at the hearing before me, or even better, to set it out in the questionnaire.”[20]

61.For these reasons, I dismiss the appeal brought by the 2^nd and 3^rd defendants. As I have dismissed the appeal, I need not, as mentioned in §36 above, recall the parties to address me further on re-granting leave to serve out of the jurisdiction.

62.In the event that I am overturned on appeal in my conclusion that the 2^nd and 3^rd defendants had submitted to the jurisdiction and had waived any prior irregularities, I turn to deal briefly with the 2^nd and 3^rd defendants appeal in connection with the Extension Orders.

The Extension Orders

63.If I had not concluded that the 2^nd and 3^rd defendants had waived any prior irregularities, I would have allowed the appeal by setting aside the 2^nd Extension Order that were made.

64.The deceased passed away on 27 July 2013.  The plaintiff knew the identity, role and addresses of the 2^nd and 3^rd defendants since July 2015[21].  The Writ was issued on 13 January 2016.  The 3-year limitation period expired on 26 January 2016. The Tomlinson Report on liability was dated 25 November 2016 and the Writ expired on 12 January 2017. The 1^st Extension Order dated 16 December 2016[22] extended the Writ for 3 months until 12 April 2017, and the 2^nd Extension Order dated 20 March 2017[23]  for another 6 months, until 12 October 2017.  Service was effected on the 2^nd and 3^rd defendants on 9 August 2017. The 2^nd and 3^rd defendants acknowledged service on 28 August 2017.

65.I conclude that the plaintiff has not demonstrated any “good reason” for the second time extension to be granted, thus the discretion to extend the writ does not even arise.

66.From as early as 9 July 2015[24], the plaintiff was alive to and acknowledged the need to apply for service out on the 2^nd and 3^rd defendants as he was informed that the 2^nd and 3^rd defendants did not have any agent or legal representative in Hong Kong to accept the writ. Hoping that the 2^nd and 3^rd defendants would be “cooperative” is simply not a good reason.  The costs of serving out of the jurisdiction were not capable of being saved given the plaintiff’s knowledge that the 2^nd and 3^rd defendant did not have any agent or legal representative in Hong Kong to accept the writ.

67.The plaintiff had the 2^nd and 3^rd defendants’ addresses for service as early as 7 August 2015[25].

68.The plaintiff should have sought legal aid approval for translation of the documents into German, as required under O.11 r.6(5) RHC, much earlier than 14 December 2016[26],  2 days before the 1^st Extension Order was granted on 16 December 2016.  CY2 §54(e)[27] made in support of the application for the 1^st Extension Order referred to that criteria in terms.  No explanation has been given as to why the plaintiff had to wait until 14 December 2016 before seeking Legal Aid approval for translation of the documents into German[28], which resulted in the need to apply for a 2^nd extension. 

69.As a matter of principle, administrative delay on the part of the Department of Legal Aid, even if established, does not afford “good reason”[29].  It is incumbent upon the plaintiff’s solicitors to obtain legal aid approvals, if any, in good time[30]. Section 24(3) of the Legal Aid Ordinance, Cap. 91, specifically provides that:

“Save as provided by this Ordinance, the rights conferred by this Ordinance on an aided person shall not affect the rights or liabilities of other parties to the proceedings or the principles on which the discretion of any court or tribunal is normally exercised.”

70.In CY4 §12[31], Cheng Yeung estimated that it would take at least 4 to 5 months for the judiciary to attend to the service out.  No explanation has been given why Cheng Yeung could not have made the same estimation earlier and, if necessary, sought a longer extension of validity when applying for the 1^st Extension Order.

71.In my judgment, there was no good reason demonstrated to permit the 2^nd Extension Order to be made.  A failure to obtain a timely translation of the documents into the German language is not a good reason to permit the second extension of the validity of the writ.  A failure to obtain a timely and appropriately lengthy extension to enable the judiciary to attend to the service out is not a good reason to permit the second extension of the validity of the writ.  I would allow the appeal and set aside the 2^nd Extension Order.  As service out of the jurisdiction was effected by the service of a writ the validity of which was extended by the 2^nd Extension Order, it follows that the service out of the jurisdiction was invalid.  Therefore, I need not consider whether or not a good reason was demonstrated to enable the 1^st Extension Order to be made.

Appeal dismissed

72.For these reasons, I dismiss the appeal of the 2^nd and 3^rd defendants.

Costs

73.I make a costs order nisi that the 2^nd and 3^rd defendants pay the costs of the plaintiff to be taxed, if not agreed, with certificate for 2 counsel.  I also direct that the plaintiff’s own costs be taxed pursuant to the Legal Aid Regulations.

74.I must express my gratitude to all counsel involved in this case for the assistance that they have rendered to me.

Mr Michael Ozorio SC and Ms Corinne D’A Remedios, instructed by Cheng, Yeung & Co, assigned by Director of Legal Aid, for the plaintiff

Mr Raymond Leung SC and Ms Theresa Chow, instructed by Orrick, Herrington & Sutcliffe, for the 2^nd and 3^rd defendants