Michael Scott Ormiston v. Destination Marketing International Ltd.

DCCJ013808/2001

DCCJ13808/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13808 OF 2001

Coram: H H Judge Carlson

Date of Ruling: 15 April 2002

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R U L I N G

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1.This is an application by the defendant to set aside a default judgment dated 7 November 2001 in the sum of $68,010.70 on the grounds that it has been irregularly obtained.

2.The circumstances are unusual and, in my experience unique, although that feature may not be particularly significant. The matter comes about in this way.

3.The defendant is a limited company. It is an Australian company which operates in Australia and Singapore where it has a more substantial presence, and also in Hong Kong. In Hong Kong its registered office is that of its solicitors, Messrs Minter Ellison & Co. Those offices were at 1910-1913 Hutchison House and that was the defendant's registered address.

4.In August 2001, for reasons quite unconnected with this modest piece of litigation, Minter Ellison decided to change its professional address to 915-918 Hutchison House. On 20 August 2001, Minter Ellison sent the statutory form R1 to the Companies Registry informing it that the defendants new registered office from 8 August 2001 would be 915-918 Hutchison House. Inevitably the information on form R1 took time to process within the registry and it was not until about 5 September 2001 that the registry microfilmed the form and that did not become available for viewing by the public until 9 September 2001.

5.Going back a few days, the plaintiff's solicitors caused a search to be made of the registry microfilm. That, of course, showed 1910-1913 Hutchison House as the defendant's registered office and on 3 September 2001 a writ was served by a process server by leaving it at that address. By then, of course, Minter Ellison had already removed to 10 floors below.

6.According to Mr Sherry's affidavit, the defendant first learnt of the writ and the judgment when it was served at its new registered address with enforcement proceedings relating to the default judgment. The point at issue is whether the plaintiff had served the defendant at its registered address on 3 September 2001.

7.The defendant says that by 22 August 2001 when form R1 reached the registry, its registered address was that shown in the form, superseding the address on the 19th floor of Hutchison House. Mr Chan for the plaintiff, submits that until the microfilm of R1 was available for viewing, the original address must have remained as the registered address with the result that service had been properly effected on 3 September 2001.

8.The Companies Ordinance is silent as to when a new registered address takes effect. Inevitably there must be a delay between receipt of form R1 and its filming for viewing by anyone searching the registry records. But this problem, according to the correspondence from the registry, is alleviated because within two days or so that new information on R1 is entered into the registry's computer records prior to filming and anyone searching the records can retrieve that information very easily from the computer, although from the examples that I have been shown, the information is not entirely clear-cut and it does show that the matter is pending.

9.Mr Sherry asks the rhetorical question, what else could the defendants have done? The Companies Registry was properly informed. The understandable delay to publish the microfilm can hardly be laid at the defendant's door and by 1 September 2001 the record would have been updated onto the registry's computer.

10.It seems to me that neither party is at fault here but I am of the view that service on the 19th floor was not valid service. The registered office on 1 September when the search was made had moved, in my judgment, to the address on form R1 and to the 9th floor. By then the new particulars had been recorded on the registry computer and a search of that record would have put the plaintiff on notice that something had changed or was about to change. Had they carried out that search, they could have sought further clarification either from the registry itself or from Minter Ellison with whom they had already communicated about this matter and to whom they had addressed a letter before action dated 13 July 2001.

11.There is a suggestion by Mr Chan that any irregularity had been waived by Mr Sherry in a telephone conversation with Mr Chan but the matter is far from clear to permit that sort of finding by me. I am afraid that in these circumstances where I have held service not to have been effected on the defendant's registered office, and where I am satisfied that they had no knowledge of the writ prior to the date of judgment, they are entitled to have this judgment set aside as of right and accordingly that is the order that I propose to make.

12.I have in the course of my ruling found that this has been an entirely unusual situation and although the plaintiff was entitled to adopt a difficult stance initially and declined to resolve the matter, it must have become clear to them by the time they had received Minter Ellison's letter of 25 February that they were in real difficulties and so what I am going to say is that the costs up to and including 26 February 2002, that is by the time they had shown their intention to resist the notion that judgment should be set aside, up till then the costs shall be costs in the cause. But thereafter the costs of and occasioned by this summons should be to the defendant in any event and on a party and party basis. I really do not think this is an occasion for going any further than that. Mr Sherry has suggested indemnity costs but this is clearly not that sort of situation and I do not really feel that an intermediate award on a common fund basis is justified either.

Representation:

Present: Mr R Chan, of Edward C T Wong & Co., for the Plaintiff

Mr Sherry, of Messrs Minter Ellison, for the Defendant