In a recent ground-breaking decision, the Hong Kong Court of First Instance sanctioned a new mode of ordinary service of court documents. Coleman J held that any document, as long as it is not an originating process or one required to be served personally, may be served by access to an online data room with authorisation by the court.
Coleman J was dealing with proceedings with a large number of defendants, none of which had ever participated in the proceedings. In the proceedings, the plaintiffs asserted proprietary claims over funds in bank accounts held by the defendants. The original action was commenced in 2019 against six defendants. Interim injunction orders were granted against them which were later continued until trial or further order. Bankers books disclosure was also ordered, which identified transactions involving another 22 defendants, many of whom were outside of the jurisdiction and in Taiwan.
The writ was amended in February 2020 and new defendants were joined. Documents were served on the newly joined defendants. Sixteen defendants in Taiwan were served with the documents using the traditional route, 13 of which were returned in unusual circumstances.
On the facts, Coleman J was satisfied that, despite the return of the documents for 13 defendants, service was properly effected. He also commented that those defendants were attempting to refuse or evade service.
Going forward, the plaintiffs invited the court to consider permitting an alternative mode of service – service by access to a data room – in light of the substantial (and growing) volume of papers and the particular behaviour of some of the defendants, and in order to save costs, time and resources.
Coleman J granted leave to the plaintiffs to serve certain future court documents on the defendants using a data room. For proper service to be effected, the plaintiffs would need to send to the defendants a court-approved letter containing a link to the data room and a separate communication containing an access code to the data room. By analogy, the judge explained that provision of the link to the data room may be regarded as an envelope or a package containing documents, whilst the access code or password to use on that link is similar to someone opening an envelope or package. The rationale behind is that the link and access code will provide ready access to the documentation in a convenient form – quick, efficient, cost-effective and relatively secure.
This novel method of service would be suitable in circumstances where (i) there is already a substantial body of material in the form of affidavits, exhibits and previous court orders as a result of numerous court applications; and (ii) there would likely be further documents added. In this case, such factors demonstrated that there was already significant expense involved in addition to the use of time and paper in continued service of large volumes of hard copy materials, not least if that also involved employment of agents or lawyers overseas to effect that service. The large number of defendants and the potential addition of further defendants exacerbated these points.
On a related note and insofar as orders were sought against banks, against whom there strictly lie no cause of action, Coleman J took the view that it was unlikely that banks would wish to be deluged with reams of paper only some of which might be relevant to their particular considerations.
Another factor that led the judge to agree to the alternative mode of service was evidence that the defendants were attempting to refuse or evade service.
Notably, however, Coleman J held that this method of service is not available for use by default and ought to be authorised by the court on each occasion. He further emphasised that other court-approved methods should be used for any first occasion of service on any defendant or third party, before an alternative method of service is mooted.
Whilst the new mode of service is innovative and in line with the times, it may not be suitable in certain cases where, for example, for some persons or classes of people technology would be a bar or a hurdle rather than an aid. Similarly, where the data room method is approved by the court as a mode of service, the method of providing the link and the access code, so as to facilitate access to the data room may vary from party to party. This may depend on various factors, for example on whether or not the plaintiff knows or has the defendant’s email address. The judgment does not describe how a defendant may access a data room where no email address is available. Presumably, in such a case, the court may order that the link to the data room and the password be provided on hard copy letters approved by the court.
As is evident from a myriad of judgments and the other recent methods of service permitted by the court, such as by Whatsapp or Facebook, there is no ‘one size fits all’ approach. The courts will assess the actual need of the parties and the appropriate mode of service in each case.