In Hwang v Golden Electronics Inc,(1) the Court of First Instance of the High Court has approved a novel order allowing the plaintiffs to serve certain court documents on several of the defendants using a data room. The order provides that the plaintiffs shall send a court-approved letter by post or email to the defendants providing a link to the data room and, by separate post or email, an access code with instructions to access the data room. The decision is an example of the courts allowing an innovative method of service of court documents on defendants who seek to evade service. However, the order does not extend to documents that are an originating process (eg, a writ) or that require personal service.
Certain court documents are required to be served personally. Other court documents can be served using 'ordinary service', such as leaving them at the proper address, posting them or using a document exchange.(2)
In Hwang, the plaintiffs claimed ownership of certain funds held by some of the defendants. It appears that the first plaintiff (a man) and the sixth defendant (a woman) had at one time been intimate and that she had worked as an assistant in his electronics trading business.
The first five defendants were companies stated to have been set up at the suggestion of the sixth defendant, to whom the first plaintiff had entrusted matters, although she does not appear to have had any beneficial ownership in the companies. It is alleged that the sixth defendant absconded in mid-2019 and that in the previous few years there were unauthorised transfers of money between the first five defendants and numerous other defendants (defendants seven to 28) who were subsequently joined to the proceedings. Many of the other defendants appear to be based in Taiwan.
The plaintiffs obtained interim injunctive relief against most (but not all) of the defendants with respect to the funds that they claimed.
The plaintiffs' lawyers and agents attempted to effect service of the court documents (including the court proceedings and injunction papers) on the defendants in Taiwan. In particular, the court documents appear to have been served on 13 of the defendants separately at different addresses in Taiwan, only for the individual packages to be returned to the plaintiffs' lawyers in Hong Kong by courier in five similarly wrapped boxes – what the court described as, in effect, "a consolidated return" of 13 different packages.(3) Notwithstanding this, the court was satisfied that service had been effected on these 13 defendants and that they had chosen not to participate or be represented in the proceedings – in effect, they were attempting to refuse or evade service.
An issue arose as to the method of service of future court documents to be served on the 13 defendants, given the voluminous nature of the documents going forwards and the defendants' behaviour to date in attempting to refuse or evade service.
The plaintiffs requested that the court make an order that future court documents be served on the 13 defendants using a data room (that the plaintiffs would create). It appears that the plaintiffs had an email address for some of the 13 defendants.
The court granted the order. The court noted that any court document, not being an originating process or a document that was required to be served personally, could as an alternative be served "in such other manner as the court may direct".(4)
The reasons for the court's decision include as follows:
- In the modern era of litigation, it is not uncommon in certain circumstances for the courts to permit service by electronic means such as email. Indeed, in several cases, service of court documents has been allowed using Facebook Messenger or WhatsApp.
- There was persuasive English case law that had approved the use of a data room to effect service of court documents on a defendant:(5)
The process comprised sending the relevant party by a previously approved Court method (for example, email or hardcopy) a link to a data room, and by separate email an access code to the data room. If the code was used, it would enable the user to view all of the evidence adduced up to that point of time, together with all applications and court orders made.(6)
- The underlying objectives of the court rules included cost-effectiveness, reasonable proportionality and procedural economy and the courts were required to further these objectives through active case management. Three factors pointed to this case being one which justified the use of available technology, including effecting service by means of a data room. First, there was a substantial volume of ordinary court documents, in the form of affidavits and exhibits, which had been filed to date and there were likely to be further voluminous documents. Second, the large number of defendants (and potential new defendants) added to the time and cost in trying to effect service. Third, in so far as the plaintiffs sought disclosure orders against certain banks regarding the alleged flow of funds to the 13 defendants, it was unlikely that the banks would wish to be "deluged with reams of paper only some of which might be relevant to their particular considerations".(7)
The court's decision also draws an analogy between service via a data room and service using a hardcopy package:
In some ways, the provision of the link to the data room might be regarded as akin to an envelope or package containing documents, and the access code or password to use on that link as akin to the method by which to open the envelope or package. Clearly, the link and the access code together will provide ready access to the documentation in a form which many, if not most, would find more convenient than hardcopy.(8)
Finally, the court noted that the method by which the link and access code is provided to the 13 defendants may vary. For example, the plaintiffs could use email where they have an email address for a defendant – where they do not have an email address, the plaintiffs could send the link and access code by post.
The decision is likely to be welcomed generally as an example of another innovative method of service, in keeping with the modern era, particularly with respect to defendants who are thought to be evading service. Hopefully, it is also an example of the courts in Hong Kong trying to catch up with technological advances in arbitration.
However, such innovative methods of service are still the exception and whether they are justified in any particular case will be fact dependent – as the court recognised, there is no one-size-fits-all approach.(9) An innovative method of service with respect to some individuals may not be appropriate depending on the extent of their technological know-how.
Whichever alternative method of service is used, it is important that it is effective in bringing the court documents to the notice of the party to be served. Some instant messenger apps allow the sender to know when a message has been sent and have a 'read receipt' feature (depending on the privacy setting). Depending on the facts, this may be relevant in persuading a court that a proposed method of service should be successful in bringing the court documents to the notice of the party to be served.
Further, as the court emphasised in this case, before the courts approve of an innovative method of service, it is important that the first attempt at service is done using another court-approved method. Using an innovative method of service, such as a data room or an instant messenger app, to serve court documents is not a default option – on each occasion, it must be authorised by the courts.
Endnotes
(1) [2020] HKCFI 1084, 9 June 2020.
(2) Rules of the High Court, Order 65, Rules 1 to 3 and 5. For substituted service (of court documents that are required to be served personally or of an originating process), see Rule 4.
(4) Rules of the High Court, Order 65, Rule 5(1)(d).
(5) CMOC Sales & Marketing Ltd v Persons Unknown [2018] EWHC 2230.
(7) Supra note 1, at para 34. Also see the court's decision in [2020] HKCFI 1233, 15 June 2020, requiring various banks to supply documents to the plaintiffs and permitting the banks to do so by electronic or digital versions being uploaded to a data room.
