Evrochoice International Ltd v. Superstar International (Group) Ltd

HCA 520/2023

[2025] HKCFI 2448

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 520 OF 2023

_________________________

_________________________

________________________

REASONS FOR DECISION

________________________

A.  Introduction

1.This is the hearing for the summons (“Summons”), filed and dated 14 January 2025, taken out by the Plaintiff for:

(a)  expunging the witness statement of Mr Xiang Jian Zhong (“Mr Xiang”) (相建中的證人陳述書) dated 10 October 2024 and filed on 14 October 2024 (“Xiang WS”), and debarring the Defendant from adducing viva voce evidence from Mr Xiang at the trial (“WS Application”); and

(b)  alternatively, striking out Attachment 1 (附件1) of the Xiang WS and debarring the Defendant from relying on Attachment 1 as evidence at the trial (“Attachment 1 Application”).

2.As relevant context:

(a)  On 14 May 2025 and 16 May 2025, Defendant’s solicitors on record, Messrs K T Tam & Co (“KT Tam”) wrote to this Court seeking leave for their attendance of this hearing to be excused.  Reasons cited were (i) they are applying to cease to act for the Defendant, and (ii) they do not have instructions and/or authority to make submissions on behalf of the Defendant. 

(b)  On 16 May 2025, I gave directions by fax refusing KT Tam’s application for leave to be excused.  

(c)  On 19 May 2025 in the morning prior to the hearing, Mr Xiang, director of the Defendant, lodged with this Court a folio containing a letter and certain attachments, stating inter alia that he had not properly received nor been explained of the relevant papers regarding the Summons, and the Defendant did not have an opportunity to respond properly.  This letter with attachments were duly faxed to both sides’ solicitors. 

(d)  At the hearing, KT Tam failed to attend the hearing. Mr Xiang was present.  However, as no formal application for leave was made under Order 5 rule 6(2) of the Rules of the High Court (“RHC”), Mr Xiang did not have leave to formally represent the Defendant.  The Defendant therefore was not present at the hearing.  The Court heard Mr Xiang on a de bene esse basis, and explained relevant procedures and legal matters to Mr Xiang. 

3.At the hearing, I made the following orders:

(a)  Both applications were dismissed;

(b)  In exercise of my discretion under Order 2 rule 5 of the RHC, I granted the Defendant relief from sanction of the Unless Order, being paragraph 3 of the Order of Master Maurice Lam dated 2 September 2024;

(c)  Retrospective extension of time was granted for the exchange and/or service of the witness statements of the Defendant to 17 October 2024 by 4 pm, notwithstanding the time stipulated in the Unless Order dated 2 September 2024 having expired;

(d)  For the avoidance of doubt, the Xiang WS filed by the Defendant which reached the Plaintiff’s solicitors on 17 October 2024 at around 11 am by post was deemed validly served and exchanged;

(e)  Solicitors for the Defendant KT Tam do write to the Court within 3 days to explain their absence despite the Court’s refusal to grant leave excusing them from attending the hearing on 19 May 2025.  

4.As indicated at the hearing, in light of the complication caused by the absence of KT Tam, it is appropriate to record my decision and reasons in writing to ensure parties (and those acting for them) are duly informed of the same. Those acting for the Plaintiff have kindly agreed to assist this Court by ensuring a copy of this reasons for decision will be served upon the registered address of the Defendant company, for which this Court expresses its gratitude. 

5.Below are my reasons for my decision, together with directions. 

B.  WS Application

6.The Plaintiff’s WS Application (ie to expunge the entirety of Xiang WS) was based on an alleged breach of an unless order dated 2 September 2024 (“the Unless Order”), which provided that “unless the parties do exchange witness statement(s) as to facts by 4:00 p.m. on 14^th October 2024…the defaulting party be deemed to have elected not to adduce any factual evidence in this case and be debarred from adducing on any viva voce evidence from any witness at the trial; and the party ready to exchange its witness statement shall serve the same on the defaulting party;” (emphasis added). 

7.The Defendant’s solicitors at the time, CM Chow & Co (“CM Chow”) faxed the Xiang WS to the Plaintiff’s solicitors on 14 October 2024 at 3:45 pm  The hard copy of the Xiang WS did not reach the Plaintiff’s solicitors by post until 17 October 2024.  

8.Based on the above, the Plaintiff says there had been a breach of the Unless Order, in that service by fax is not a proper way of service recognized under Order 65 rule 5 of the RHC.  The Plaintiff cited Au Shui Lam v Wong Cheung Tai [2018] HKDC 275 at §23 in support of their proposition.  The Plaintiff further states that the Defendant has failed to file any affirmation in opposition to the Plaintiff’s applications, and therefore no proper explanation had been given for the Defendant’s breaches, which further warrants expunging of Xiang WS.  

9.Eventually, I did not need to rule on whether service by fax is “not a proper way of service” under Order 65 rule 5 of the RHC.  However, from the authorities cited before me, there does appear a degree of uncertainty on the question. In particular:

(a)  In Hastie & Jenkerson (a firm) v McMahon [1991] 1 All ER 255, in considering the English equivalent of Order 65 rule 5 of the RHC, the English Court of Appeal held that the rule is not exhaustive, and fax may be a valid mode of service:

“The purpose of serving a document is to ensure that its contents are available to the recipient and whether the document is served in the conventional way or by fax the result is exactly the same ......” (at 259 f-g)

“The purpose of Ord. 65, r. 5 is not to restrict methods of service but to assist the parties to achieve service and if necessary to prove that that service has taken place in the-specified circumstances. If, as the note to the rule which has been quoted makes clear, service can be proved to have taken place apart from reliance on the rule, then there is no need to make use of the rule. If, however, unlike this case there is no admission or other evidence of receipt of the document, recourse to the rule may be necessary.” (at 261 c-d)

“In my view Sharpley v. Manby is authority, binding on us, for the proposition that if a document is served by a method not expressly provided for by the rules, but it is nevertheless proved that the document was delivered to and received by the person for whom it was intended (in time where that is material), good service has been effected. To this proposition the Rules of the Supreme Court add the provisions of Ord. 65, r. 5(1), the effect of which is that, if a document has been served by one of the methods set out in the rule, in the absence of any other evidence, there has been good service. If, however, it be proved that the document has not been received, the presumption derived from the rule that there has been good service can be rebutted.

I emphasise that if a document is served by a means for which neither the rule nor statute provides, there will only be good service if it be proved that the document, in a complete and legible state, has indeed been received by the intended recipient. I realise that transmission of documents by fax is a relatively recent development ......” (at 264h to 265a)

(b)  In Aqua-Leisure Industries Inc & Anor v Aqua Splash Ltd (No 1) [1999] 3 HKC 338 at 342D the Court of Appeal ruled that “fax is, rather surprisingly, not a method of service which the Rules of the High Court recognise…” In AXA China Region Insurance Co Ltd v Leong Fong Cheng [2016] 6 HKC 220 at §9, the Court of Appeal again ruled that “service cannot be effected by fax (under Order 10 and Order 65 of the Rules of the High Court) in the absence of any specific order for substituted service to such effect.” It appears however that Hastie & Jenkerson (a firm) was not referred to in either Aqua-Leisure or AXA China Region Insurance.

(c)  In Au Shui Lam at §23, the Court accepted the submission that “fax is not valid service”.

(d)  In Choi Man Wing & Cheung Kwan v Wong Tang Hoi Alice [2018] HKDC 1083 at §§12 to 15, the Court accepted submission by the plaintiff in reliance of Hastie & Jenkerson (a firm) and held that fax can be a valid mode of service under O 65 r 5 RHC.

(e)  Since Hastie & Jenkerson (a firm), the English Rules of the Supreme Court had explicitly included service by fax as a prescribed mode of service. There is no equivalent amendment made to the RHC.

10.To summarize from the above, it is fair to say there may have been a technical breach of the Unless Order by the Defendant in only faxing the Xiang WS.  However, as Ms Tang, counsel for the Plaintiff, fairly accepted and as held in Li Yulong v Liu Jing [2024] HKCFI 3163 at §§4.1-4.3, the Court has inherent jurisdiction to grant relief from sanction in the absence of a formal application by the Defendant.  In light of the following circumstances, I exercised my discretion in favor of the Defendant and grant such relief from sanction: 

(a)  what is undisputed is that the Xiang WS did in fact reached the Plaintiff’s solicitors on time, albeit only by fax.  It is also noted that the document also reached the Plaintiff’s solicitors by post on 17 October 2024.  As such, the prejudice caused to the Plaintiff was relatively minor, if any. 

(b)  This is to be weighed against the serious consequences of the Defendant not being able to rely on any witness statement and/or call any witness to give evidence for their case.  Despite submissions by Ms Tang, counsel for the Plaintiff,  that the Defendant will still have the chance to test the Plaintiff’s case by cross-examination and/or adducing documentary evidence, it must be noted that the Defendant has a substantial counterclaim. Hence, taking away the Xiang WS in full will be serious and disproportionate.

(c)  I have also in mind the possible reasons behind the procedural hiccup, and it seems that the Defendant’s solicitors at the time might bear primary responsibility.  Usually, the lay client will not have knowledge about the precise legal procedure.  It was the Defendant’s solicitors at the time who decided to use fax.  I do not think the Defendant, being a limited company having left matters of legal technicalities to its solicitors, should bear such a serious and substantive consequence. 

(d)  I have not lost sight of the fact that, from the limited materials before me, the dispute between parties does not seem to be a simple matter which should be summarily decided at this interlocutory stage.  

11.Given the above, I granted relief from sanction for the breach of the Unless Order, and retrospective time extension for filing of Xiang WS.  Consequentially, the Plaintiff’s WS Application was dismissed.  

C.  Attachment 1 Application

12.As an alternative, the Plaintiff made the Attachment 1 Application seeking to expunge Attachment 1 of the Xiang WS. Attachment 1 is a signed statement of one Mr Alan Tsui (“Mr Tsui”), who according to the Defendant’s case was the intermediary between the Plaintiff and the Defendant and would have had knowledge of the dealings and disputes between parties.  The Plaintiff’s basis for the application is that:

(a)  Mr Tsui was not called by the Defendant as a witness;

(b)  Attachment 1 is not a witness statement and is mere hearsay;

(c)  Under sections 47, 49 of the Evidence Ordinance (Cap 8), whilst hearsay evidence per se is not inadmissible, it may be excluded if the interests of justice so requires.  

13.Having considered the Plaintiff’s submissions, I decline to make any order for expunging Attachment 1 at this stage.  I refer in particular to the comments by Master Kenneth KY Lam in Alcohol Countermeasure v Li Chi Kong Peter [2019] HKCFI 2892 at §§16 to 17 that whilst the jurisdiction to rule on admissibility of hearsay evidence prior to commencement of trial does exist, the circumstances for such exclusion must in practical terms be quite limited.  Relevant are the following considerations: 

(a)  First, there is no property in a witness.  Whilst the Defendant has yet to call Mr Tsui as a witness, the Plaintiff can apply for subpoena against Mr Tsui if they so wish.

(b)  Second, Mr Xiang at the hearing (albeit on de bene esse basis) says that he does not know what has occurred on the legal side of things, and that he has in fact mentioned to the Defendant’s solicitors the possibility of calling Mr Tsui as a witness.  However, according to him, the Defendant’s solicitors ignored his request/query.  He (and thus the Defendant) did and still do to eventually call Mr Tsui. 

(c)  Third, if eventually the Defendant chose not to call Mr Tsui at trial, this is a point which the Plaintiff can comment and/or make submission on at trial for purposes of both admissibility and weight.  But this is not something which warrants expunging Attachment 1 outright at this interlocutory stage when the Court does not have the benefit of full facts and evidence before it.  

(d)  Fourth, Attachment 1 is a document which is clearly relevant, and which will inevitably make its way back to trial via discovery.  There seems little practical effect or purpose of expunging it at this stage.  

(e)  Finally, the Plaintiff has not been able to cite any authorities whereby the mere lack of calling of a witness led to expunging of a signed statement before trial. 

14.Given the above, the Attachment 1 Application is dismissed.  

D.  Conclusion and Directions

15.Regrettably, what ought to have been a simple matter was vexed with unnecessary complications due to the lack of filing of affirmation by the Defendant, the lack of proper application for relief from sanction, the failure to attend the hearing by the Defendant’s solicitors, and the absence of the Defendant. Who should bear the blame for such waste of time and costs is a matter which has to be decided.

16.KT Tam has subsequent to the hearing written to this Court, stating that their absence was due to a “mistake in overseeing the Court’s note dated 16^th May 2025…it was due to clerical miscommunication in handling incoming fax and letters before and after the weekend”.  I find this explanation unsatisfactory.  Since KT Tam wrote to the Court seeking leave to be excused, they must know that absent such express leave, they must as officers of the Court attend the hearing as they remain solicitors on record for the Defendant.  

17.As indicated at the hearing, in light of the absence of both the Defendant and its solicitors, it was not appropriate to deal with costs then. I therefore now give directions for such issue of costs (on both liability and quantum) to be dealt with by way of paper disposal:

(a)  The Plaintiff shall lodge written submissions on costs with the clerk of this Court within 14 days of handing down of this reasons for decision, with copies served on the Defendant (at its registered address) and on the Defendant’s solicitors.  

(b)  The Defendant shall lodge written submissions on costs (if any) with the clerk of this Court within 14 days thereafter, with copy served on the Plaintiff’s solicitors.  

(c)  The Court will hand down its decision on costs and/or any further directions (if any) after having the chance to read the written submissions to be lodged by parties.  

18.For the avoidance of doubt, KT Tam, being solicitors on record for the Defendant, are duty bound to ensure the Defendant is duly informed and explained of my directions herein, and ensure any submissions on costs by the Defendant are properly filed and served.

19.Lastly, it remains for me to thank Ms Tang, counsel for the Plaintiff, for assisting the Court in a fair manner especially given the unexpected complications in this case.