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Service of Process: If it's not done right, you start over

By Bethany Schols

Sometimes, because of where the evidence is, or where the defendants are, or where the money is, it is necessary to file suit outside of the United States or other jurisdiction with which you are eminently familiar. 

When doing so, it is imperative that you have a thorough understanding of the laws regarding service of process and personal jurisdiction of the country in which you are suing. If you don?t, you could end up wasting valuable time, tipping off the defendant, and having to start over, as a well-known bookmaker registered in Gibraltar learned.

In Victor Chandler (International) Ltd v. Zhou Chu Jian He (High Court of Hong Kong 2006), the plaintiff filed suit against one of its bookmaking clients in Hong Kong. The defendant, a resident of mainland China, had substantial business interests and real property in Hong Kong and was therefore subject to service in Hong Kong. The writ was served by inserting it in the letterbox of his Hong Kong address. However, the defendant was not in Hong Kong at that time. 

The defendant did not appear and the plaintiff obtained a default judgment. The defendant moved to set aside the default, returned to Hong Kong and signed an affirmation in support of his application to set aside the default. The court set aside the default. Shortly thereafter, the defendant served a notice to defend and moved for a declaration that he had not been served with the original writ and, therefore, the court lacked jurisdiction over him.

The Hong Kong High Court held that, as the defendant was not in Hong Kong at the time the writ was served, service was not proper and the court lacked jurisdiction over him. The High Court explained, the defendant did not submit to the jurisdiction of the court by appearing in the proceedings. In Hong Kong, the filing of a notice of intention to defend should be viewed as a neutral act, not as submission to the court?s jurisdiction. 

Further, by refuting the merits of the case in his application to set aside the default judgment, the defendant was merely demonstrating that he had a bona fide defense to the claims, and such action did not serve as submission to jurisdiction.

At the end of the day, the plaintiff had to start over. To ensure this does not happen, you must have a thorough understanding of, not just how a defendant is to be served in the given jurisdiction, but all other nuances of service in that jurisdiction, including who can serve process, and whether the defendant need be in the jurisdiction at the time of service.

Full post as published by International Asset Recovery Law Blog on March 16, 2007 (boomark / email).