Service of process – Non-Hong Kong company not registered under Part XI of Companies Ordinance (Cap 32) – Service at Hong Kong office of parent company – Whether service valid – Whether defendant had established place of business in Hong Kong – Companies Ordinance (Cap 32) s 338(2)

SINGAMAS MANAGEMENT SERVICES LTD v AXIS INTERMODAL (UK) LTD T/A SEAAXIS [2011] 6 HKC 29

Court of First Instance
Action No 228 of 2010
Sakhrani J
17, 30 August 2011

Tony TF Ng (Hampton, Winter & Glynn) for the plaintiff.
Jeremy Bartlett (Wilkinson & Grist) for the defendant.

This was the plaintiff ’s appeal against an order of a master that service of the writ on the defendant be set aside on the basis that it was irregular. The plaintiff carried on business in, inter alia, the design and manufacture of containers. The defendant was at all material times a company incorporated in accordance with the laws of the United Kingdom. Its registered office was situated in the United Kingdom accordingly. The defendant carried on the business of, inter alia, purchasing and leasing containers. The plaintiff ’s claims against the defendant were for damages for breach of two contracts for the sale by the plaintiff to the defendant of containers. The writ was served on the defendant by leaving a true copy of the same at an address in Hong Kong on 9 April 2010. As no notice of intention to defend was given by the defendant judgment in default was entered against the defendant. The issue in this appeal was whether service was irregular.

Held, dismissing the appeal:
Service of process was permitted on a non-Hong Kong company by leaving it at or sending by post to ‘any place of business established by the company in Hong Kong’ even though the company was not registered under Part XI of the Companies Ordinance (Cap 32) (the Ordinance). The burden of proving that the defendant had established a place of business in Hong Kong lay on the plaintiff.

It was important to bear in mind that ‘any place of business established by the company in Hong Kong’ was not the same as any place where the company carried on business in Hong Kong. A foreign company that carried on business in Hong Kong through an agent did not merely thereby establish a place of business in Hong Kong. It did not have a local habitation of its own. The defendant was a subsidiary of Axis Intermodal Ltd (the Holding Company) which had established a place of business in Hong Kong. The fact that there were meetings and discussions at the Hong Kong address did not mean that the Hong Kong address was a place of business established by the defendant. The Hong Kong address was the address of the Holding Company as shown in the business registration certificate of the Holding Company. As the Holding Company was the defendant’s agent in the business dealings with the plaintiff it was not surprising that meetings were held at the Holding Company’s offices at the Hong Kong address.

The evidence showed that the defendant had not signed or entered into any contract in Hong Kong, paid or received payment for any equipment or services in Hong Kong, rented any premises or entered into any employment contract with any person residing in Hong Kong. It was also clear on the evidence that the plaintiff did not address letters, invoices or correspondence to the defendant at the Hong Kong address. All correspondence from the plaintiff to the defendant had been addressed to the defendant at its United Kingdom address. There was no evidence that any correspondence or invoice was addressed to the defendant at the Hong Kong address.

The plaintiff knew that documents including invoices addressed to the defendant at its United Kingdom address were to be forwarded to the defendant in the United Kingdom. The plaintiff had failed to discharge its burden of showing that the defendant had established a place of business in Hong Kong at the Hong Kong address. The master had rightly set aside the judgment and purported service of the writ of summons on the ground that it was irregular.