Deyi Investment Ltd v Macjin Info-com Tek., Ltd
Court of Appeal
Civil Appeal No. 253 of 2015
Cheung, Kwan and Barma JJA
15 September 2016

Writ – service – leave to serve writ out of jurisdiction – setting aside – whether contract between plaintiff and second defendant within O. 11 r. 1(1)(d)(iii) and (iv) – whether Recorder’s approach to plaintiff’s application to amend pleadings, jurisdictional issue and merits flawed

P brought proceedings against D1–2, two South Korean companies, alleging that it had entered into a contract with D1, for and on behalf of D2, to purchase goods which D2 had refused to deliver. P claimed against D2 as the principal of the contract, asserting that D2 had clothed D1 with apparent authority to represent that it was D2’s agent during negotiations held in September 2013 (the “Negotiations”). P obtained leave to serve a writ out of jurisdiction on D2 on the basis of O. 11 r. 1(1)(d)(iii) and (iv) of the Rules of the High Court (Cap. 4A, Sub. Leg.) (the “Order”). The Recorder allowed D2’s application to set aside the Order and refused P’s application to amend its pleadings. The Recorder noted that all the pleaded representations came from D1’s personnel only and P had failed to establish any good case that D2 was a contracting party with P through D1 as its agent for the purpose of seeking service out of the jurisdiction. As for P’s application to further amend its re-amended statement of claim by pleading that during the Negotiations, the representations as to authority to P came from D1 and D2’s personnel, specifically S who was employed by both D1–2, the Recorder found that P had not pleaded that S held such a position with D2 in September 2013 when the representations were allegedly made to P; on D2’s undisputed evidence, it had terminated S’s employment in August 2012 (ie, before the Negotiations); and so the proposed amendment added nothing to P’s case on apparent authority. P appealed against both decisions of the Recorder.

Held, dismissing the appeal, that:

  • Although the Recorder had referred to the proposed amendment in her discussion on the merits of the appeal on service out of jurisdiction, this had no impact on the overall soundness of her judgment because she had also addressed the merits of P’s case separately from its proposed amendment. Her approach in holding that the amendment should not be allowed unless P could show a good arguable case that S was in D2’s employ in September 2013 in order to demonstrate that a representation of D1’s agency emanated from D2 as its principal so as to ground leave for service out under one of the O. 11 r. 1(1) gateways was not flawed.
  • On the jurisdictional aspect, the Recorder was correct in applying the good arguable case test to the issue of whether P had sufficiently proved the existence of the contract with D2 on agency principles in order to bring its claim within O. 11, r. 1(1)(d)(iii) and (iv), when the contract was ostensibly only with D1. She adopted the same approach when she considered the proposed amendment.
  • Even if the question of agency and the apparent authority of D1 was an aspect of the merits of P’s case and not jurisdiction under O. 11 r. 1, the Recorder’s approach had not gone beyond the threshold of a serious issue to be tried. Based on the pleadings including the proposed amendment, she considered that P’s case based on apparent authority had no prospect of success.

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