Independent Liquor & Gaming Authority v Melco Resorts & Entertainment Limited

Background

1. The evidence suggests that at all relevant times Melco's offices in Hong Kong occupied three floors (36, 37 and 38) of a building called "The Centrium" at 60 Wyndham Street, Central, Hong Kong SAR.
2. Up until at least 16 December 2021 the records filed in the Companies Register of Hong Kong indicated that the principal place of business in Hong Kong of Melco was "36/F The Centrium, 60 Wyndham Street, Central, Hong Kong" and that the Authorised Representative of Melco was Ms Cheung, whose Hong Kong address was that address.
3. On 16 December 2021, Melco lodged a "Return of Change of Address" form (NN9) and a "Return of Change in Particulars of Authorised Representative" form (NN8C) with the Companies Registrar (Hong Kong). Form NN9 recorded Melco's "principal place of business" as being 38/F The Centrium, 60 Wyndham Street, Central, Hong Kong. Form NN8C stated that the authorised representative of Melco was Ms Cheung and gave the same address for her. Both forms stated that the effective date for the change in address was 15 December 2021.
4. ILGA arranged for the originating process to be served by Gall, a firm of solicitors in Hong Kong. At 10.18 am on 24 December 2021, an online search was conducted by someone at Gall of the Integrated Companies Registry Information System to confirm Melco's details. The resulting search indicated that forms NN9 and NN8C had been submitted on 16 December 2021, but that their status was "Pending". According to an affidavit of Mr Chung Ngai Sun, a litigation clerk at Gall, neither form could be downloaded nor viewed online. Gall did, however, download a copy of the most recent Annual Return, which showed Melco's principal place of business as level 36.
5. Mr Sun went to level 36 of The Centrium building for the purpose of serving the documents. There was no reception or main entrance on that level, only a locked glass door. He saw a man entering the office and asked him where the reception was for Melco Resorts & Entertainment Limited. The man told him it was on level 37 and that the company occupied levels 36 to 38. Mr Sun then went to level 37 where he saw a nameplate with the name "Melco Resorts" on the wall beside the main entrance door and a person sitting behind a reception desk. He told that person that he was an employee of a law firm and that he was there to serve certain documents on Melco. He asked the person behind the desk whether the offices were the offices of Melco and she replied that they were. He then handed her a sealed envelope containing the documents to be served on Melco. Those documents included a letter addressed to each of the defendants from Gall enclosing the documents to be served. Each copy of the letter identified the proposed recipient by an arrow in the shape of a finger pointing to the relevant name and address. In the case of Melco, the letter was addressed to the company and marked to the attention of Ms Cheung. Mr Sun asked the receptionist to acknowledge receipt. She did so by applying the chop of "Melco Resorts Services Limited" on a copy of the letter.
6. Mr Sun also asked the receptionist whether the other persons named as defendants were in the office. The receptionist indicated that some of them worked on level 38, but that she was "not allowed to go up to 38/F without permission" and that she could not let Mr Sun go there either.
7. Mr Sun asked the receptionist if she would take the documents addressed to the individual defendants, which she did. He also asked her to acknowledge receipt of those documents by applying the company chop against each of their names on a copy of the letter he had which was addressed to all of them. The receptionist did so by again applying the chop of Melco Resorts Services Limited against each addressee on the letter.
8. At 2.20 pm (HKT) on 24 December 2021, Mr Sun sent a copy of the documents to be served to the individual defendants by registered post in six separate sealed envelopes. The envelopes were addressed to the defendants at the level 36 address. According to mail tracking records obtained on 3 January 2022, the documents are shown as delivered to the individual defendants on 29 December 2021.
9. On 4 February 2022, the Australian Financial Review published an article titled "Melco taken to court to pay costs for Bergin inquiry", which referred to these proceedings. The article includes quotes from a "Melco spokesman" who commented on ILGA's claims against Melco.
10. At the time the letters were posted, none of Mr Ho, Ms Cheung and Mr Winkler was in Hong Kong. The evidence is that Mr Ho left in September 2021 and has not yet returned, and Mr Winkler left in July 2021 and has not returned. It is not clear when Ms Cheung left. She returned on 5 January 2022. On or about 25 February 2022, Mr Scott Atkins, the solicitor for ILGA, sent an email to each of Mr Ho, Mr Winkler and Ms Cheung attaching copies of the documents to be served. The email sent to Ms Cheung was to an address which she had previously used in correspondence with ILGA's solicitors. In the case of the emails to Mr Ho and Mr Winkler, Mr Atkins sent emails to two addresses in each case which conformed to the formatting used by Melco for its staff. With one exception (one of the emails sent to Mr Winkler) there has been no indication that delivery of the emails has failed.

Preliminary matters

1. Before addressing the issues raised by the notice of motion directly, three preliminary matters should be mentioned.
2. First, the rules relating to the service of court documents and originating processes, in particular, are primarily directed at ensuring that a defendant is on notice of the plaintiff's claims and is given a reasonable opportunity to defend them. The rules are necessary because, as is typically the case, the UCPR gives the Court power to make orders against a defendant in the defendant's absence, but on the basis that the defendant has been given a reasonable opportunity to appear and to be heard. For that reason, strict proof of service in accordance with the rules is necessary where a court proposes to make orders against a defendant in the defendant's absence. However, strict compliance with the rules relating to service is less important where it is evident to the court that the defendant is on notice of the proceeding and has been or will be given a reasonable opportunity to defend it. These principles are recognised by UCPR r 10.14(3). They are also reflected in Art 15 of the Hague Convention on Service.
3. Second, and related to the first point, although in the past strict compliance with the rules relating to the service of court documents has sometimes been regarded as a desirable end in itself, that is no longer the case: see Ritchie's Uniform Civil Procedure NSW notes on r 10.14(3) at 5902 (Service 131). The Court is given power under UCPR r 2.1 to dispense with the requirements of the rules, including the rules in relation to service, where to do so would promote the just, quick and cheap disposal of the proceedings. That principle is complimented by s 61(1) of the Civil Procedure Act 2005 (NSW), which gives the Court power to "give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings". Although expressed as powers, it is apparent from s 56 of the Civil Procedure Act that those powers must be exercised to achieve the stated objectives. That section relevantly provides: (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
4. Third, the service of court documents (and of an originating process, in particular), even in civil proceedings involving private citizens, is seen as an exercise of State power, so that service of such a document issued by the court of one State in the territory of another may be seen as an interference with that State's sovereignty. The position prior to the adoption of the Hague Convention on Service was explained by Austin J in these terms in Australian Securities & Investments Commission v Sweeney (No 2) [2001] NSWSC 477; 38 ACSR 743: [20] It is important to bear in mind the international context in which questions of service abroad arise. As Lord Denning MR said in The Vrontados [1982] 2 Lloyd's LR 241, at 245: 'service of a writ out of the jurisdiction is an exercise of sovereignty within the country in which service is effected. It can only be done with the consent of that country. That is why our rules provide for service through judicial authorities of that country: or through a British Consular authority in that country... .' [21] Young J took up this idea in his 'subpoena' judgment (paragraph 5). He pointed out that the rules restricting substituted service on a person resident abroad are justified by two considerations: namely, that the courts should not without due cause trespass into a field that is properly filled by a foreign tribunal; and they should not harass a person who resides outside Australia. [22] In Williams v Lips-Heerlen BV (Supreme Court of New South Wales, unreported, 1 November 1991) Giles J considered the scope of s 81 of the Supreme Court Act 1970 (NSW), according to which failure to comply with the rules is to be treated as an irregularity that does not nullify the proceedings. After observing that s 81 should be construed in a wide and generous way, he noted that special considerations apply to an irregularity in service out of the jurisdiction, such that the irregularity should be disregarded only in exceptional cases. He referred to Camera Care Ltd v Victor Hasselblad Aktiebolaa (1986) 1 FTLR 348, where Ormrod LJ said (at 354): 'service of process out of the jurisdiction is an unusual assertion by this Court of an extra-territorial jurisdiction which could have international repercussions, and so is carefully controlled by the Rules of Court. It is consequently very important to ensure compliance with the rules. So, irregularities should be cured only in exceptional cases.'
5. These principles explain why the Hague Convention on Service, and UCPR r 11.8AC, make the effectiveness of service other than in accordance with the procedures set out in the Convention depend on the law of the place where service is to occur rather than the law of the forum.

Service on Melco

1. It is common ground that the Special Administrative Region of Hong Kong is a party to the Hague Convention on Service. There is no suggestion that it has made any relevant reservations to the Convention.
2. Service on a registered corporation is relevantly governed by s 803 of the Companies Ordinance (Cap 622) (HK). It may also be governed by Order 10 of the Rules of the High Court of Hong Kong, but no party suggested that that order affected the outcome in this case. Consequently, those provisions can be put to one side in this context. Section 803 relevantly provides: (1) Subject to subsections (3) and (4), any process or notice required to be served on a registered non-Hong Kong company is sufficiently served if - (a) it is addressed to an authorized representative of the company whose required details are shown in the Companies Register; and (b) it is left at, or sent by post to, the representative's last known address in Hong Kong. (Amended 35 of 2018 s. 80) (2) Subsections (3) and (4) apply if - (a) no required details of authorized representatives of a registered non-Hong Kong company are shown in the Companies Register; or (b) every one of the company's authorized representatives refuses to accept service on behalf of the company or the process or notice cannot be served on any of them. (3) Any process or notice required to be served on the registered non-Hong Kong company is sufficiently served if it is left at, or sent by post to, any place of business established by the company in Hong Kong. …
3. There was considerable debate between the parties on whether the details shown in the Companies Register of Ms Cheung's address was level 36 or level 38. ILGA submitted that it was level 36 because that was the address shown on the most recent Annual Return. Melco submitted that it was level 38 because that was the address shown on the change of address (NN9) and change of particulars (NN8C) forms, which were both expressed to take effect from 15 December 2021. The debate appears to be somewhat arid, since it is accepted that the documents were left on level 37. However, to the extent that it is significant, in my view the correct address for the purposes of s 803(1) was level 36. The expression "shown in the Companies Register" must be understood as a reference to information shown in documents that have been accepted by the Registrar and are available to be searched by members of the public. It could not mean an address shown on a document whose registration was pending. The only address that satisfied the former requirement was level 36.
4. An alternative argument appears to be available and that is that on 24 December 2021 no address was shown for the authorised representative on the Companies Register, since it was apparent from the lodgement of forms NN9 and NN8C that the address had changed since the last Annual Return but the new address was not "shown" in the Companies Register since the relevant documents could not be viewed. In that event, of course, s 803(3) would apply and service would be effective if the documents were left at "any place of business established by the company in Hong Kong". It seems clear that level 37 satisfies that requirement.
5. On the assumption that the correct address was level 36, were the documents served in accordance with s 803(1)? The answer to that question under Hong Kong law appears that they were not. The defendants filed expert evidence on Hong Kong law from Mr Jose-Antonio Maurellet SC, a barrister practising in Hong Kong. The effect of his evidence is that, although there is no authoritative decision on the point, service of an originating process, by analogy to service of a creditor's statutory demand, requires strict compliance with the relevant rules. There has not been strict compliance in this case because the documents were not left on level 36 when they could have been.
6. Even if that represents the law in Hong Kong, in my opinion the Court should exercise its power under UCPR r 10.14(3) and order that the summons and list statement should be taken to have been served on Melco on 24 December 2021.
7. It seems plain that level 37 formed part of the business premises of the Melco group, and absent any evidence to the contrary, it is reasonable to assume that that included the listed company in the group - that is, Melco. It also seems plain that, unlike level 36, level 37 was set-up to receive documents addressed to Melco. In those circumstances, it was more likely that the documents would come to the attention of Melco if they were served on level 37 than if they were served on level 36. That, of course, is the purpose of service. In the circumstances, it seems reasonable and appropriate for Mr Sun to have left the documents on level 37, rather than level 36.
8. It is plain that the documents came to the attention of Melco. It has instructed solicitors and counsel to make the current application.
9. Moreover, there is no reason not to make an order under UCPR r 10.14(3). As the decisions to which Austin J referred to in Australian Securities & Investments Commission v Sweeney (No 2) [2001] NSWSC 477; 38 ACSR 743 make clear, even before adoption of the case management principles set out in s 56 and the other provisions of the Civil Procedure Act, the Court was prepared in exceptional circumstances not to require strict compliance with the rules relating to service abroad. Exceptional circumstances exist in this case because the steps taken by ILGA were more likely to bring the relevant documents to the attention of Melco than strict compliance with the rules; and those steps were, in fact, successful.
10. There is nothing in the laws of Hong Kong which suggest that by making an order under UCPR r 10.14(3), the Court would be trespassing on the sovereignty of the People's Republic of China. The laws of Hong Kong permit the service of court proceedings on residents there, including proceedings issued out of a foreign court. It is apparent that, like New South Wales, the relevant rules are designed to bring the proceedings to the attention of those who it is intended to serve. There could be no objection from the point of view of Hong Kong to a decision of this Court that recognises a mode of service that was more likely to, and did in fact, achieve the objective to which it was directed.
11. Melco pointed out that no application had been made by ILGA for an order under r 10.14(3). However, the issue was clearly raised during argument. To require ILGA to file its own notice of motion or to require it to re-serve the originating process strictly in accordance with the rules would involve a departure from the principles stated in s 56 of the Civil Procedure Act.

Service on the other defendants

1. Service on an individual in Hong Kong is governed by Order 10 of the High Court Rules. Order 10 r 1 relevantly provides: (1) A writ must be served personally on each defendant by the plaintiff or his agent. (2) A writ for service on a defendant within the jurisdiction may, instead of being served personally on him, be served - (a) by sending a copy of the writ by registered post to the defendant at his usual or last known address, or (b) if there is a letter box for that address, by inserting through the letter box a copy of the writ enclosed in a sealed envelope addressed to the defendant. (L.N. 404 of 1991) (3) Where a writ is served in accordance with paragraph (2) - (a) the date of service shall, unless the contrary is shown, be deemed to be the seventh day (ignoring Order 3, rule 2(5)) after the date on which the copy was sent to, or as the case may be, inserted through the letter box for, the address in question; (b) any affidavit proving due service of the writ must contain a statement to the effect that - (i) in the opinion of the deponent (or, if the deponent is the plaintiff's solicitor or an employee of that solicitor, in the opinion of the plaintiff) the copy of the writ, if sent to, or as the case may be, inserted through the letter box for, the address in question, will have come to the knowledge of the defendant within 7 days thereafter; and (ii) in the case of service by post, the copy of the writ has not been returned to the plaintiff through the post undelivered to the addressee.
2. ILGA accepts that none of the individual defendants has been served personally. Consequently, the primary question is whether service occurred in accordance with Order 10 r 1(2). That depends on whether (1) they were "within the jurisdiction" and (2) level 36 was the "usual or last known address" of each of the defendants.
3. ILGA accepts that neither Mr Ho nor Mr Winkler was within the jurisdiction at the time of service. In relation to them, they seek an order under UCPR r 2.1 dispensing with the requirements of UCPR r 11.8AC.
4. There is a question whether Ms Cheung was "within the jurisdiction". She was not at the time the letter to her was posted, nor at the time that it was deemed to have been received (seven days later). However, she was in Hong Kong from 5 January 2022. According to Mr Maurellet, consistently with the current state of the law of Hong Kong, there could be valid service at the time Ms Cheung returned to Hong Kong and became aware of the originating process (presumably by reading the documents addressed to her). It appears from the opinion of Mr Maurellet that the most recent decision on the point is the decision of Linda Chan J in Goldteam Group Limited v Qin Hui [2021] HKCFI 2422. After reviewing the relevant authorities, her Honour said this (at [51]): In summary, there can be valid service under Order 10 rule 1(2) if the defendant was outside the jurisdiction at the time the writ was served by Postal Mode or Insertion Mode but he subsequently came within the jurisdiction and had knowledge of the writ during the Relevant Period. Service would be effected at the time when the defendant's presence within the jurisdiction and his knowledge of the writ coincide.
5. In my opinion, it is appropriate to proceed on the basis that this is a correct statement of the law in Hong Kong, since it is the most recent decision which addresses the others to which Mr Maurellet refers.
6. The next question is whether level 36 was the "usual or last known address" of the individual defendants (other than Mr Ho and Mr Winkler) (together, the relevant defendants).
7. The uncontested evidence of Look Chan Ho, a Hong Kong barrister who gave expert evidence for ILGA, is that under Hong Kong law (1) the expression "usual or last known address" is to be read disjunctively; (2) the reference to "last known" is a reference to the address that was last known to the plaintiff; (3) a person may have more than one usual and more than one last known address, which could include a place where the person resides and a place where the person works; (4) the essential question is where a person may be reached by letter at the relevant address.
8. Applying these principles, in my opinion, level 36 falls within the description of the "usual or last known address" of each of the relevant defendants, since that is the business address of the company for whom each of them works.
9. It seems clear from the title of each of the relevant defendants that each has a senior executive role with Melco. Consequently, it is to be expected that a letter addressed to each of them at Melco's offices would come to their attention.
10. The defendants submitted that ILGA has not proved that each of the relevant defendants actually worked at the address of Melco's offices, particularly in the present circumstances, where many office workers work from home because of the COVID-19 pandemic. All the receptionist told Mr Sun was that a number of the individual defendants worked on level 38. Melco is a large listed company and it cannot be assumed that its offices in Hong Kong were a usual address for each of them.
11. I do not accept those submissions. The important question is whether it could be expected that letters addressed to the principal place of business of Melco in Hong Kong would come to the attention of each of the relevant defendants. In my opinion, it could. It can be inferred that each of the relevant defendants worked out of Melco's principal place of business in Hong Kong from their seniority and the fact that it appears that each is based in Hong Kong. Even if they were not always physically present in the office because of the pandemic, it is reasonable to assume that procedures would have been put in place so that correspondence addressed to them at the offices of Melco would come to their attention. It seems clear that the letters did come to their attention since the tracking information available from the post office indicates that each letter was delivered and each defendant has instructed lawyers to make the current application. Those facts suggest that the offices of Melco was a usual address for each of them.
12. The defendants submitted that ILGA bore the onus of proving that Melco's principal place of business in Hong Kong was a usual address for each of the relevant defendants and that they have failed to discharge that onus because the evidence is not sufficiently clear to permit the inferences on which that conclusion rests to be drawn. All that can be said on the basis of the available evidence is that each of the relevant defendants occupied senior positions with Melco and were in Hong Kong at the time the letters were deemed to have been served (or shortly after, in the case of Ms Cheung). That is not sufficient to establish that Melco's registered office was their usual place of business.
13. Again, I do not accept that submission. It is unquestionably true that ILGA bears the onus of proving that the address to which the letters were sent was a usual or last known address of each of the relevant defendants. However, in considering whether ILGA has discharged that onus it is important to bear in mind the principle stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". See also Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 at [14]-[15] per Hodgson JA. Here, matters such as whether Melco had an office in Hong Kong besides the one shown on the Companies Register, whether the relevant defendants worked at another office despite being senior executives of Melco and whether Hong Kong was a usual place where they worked were all matters peculiarly within the knowledge of the defendants. The fact that they led no evidence on those matters enables the Court more readily to draw the inference that Melco's offices were a usual address of each of the relevant defendants.
14. The defendants submit that ILGA knew that level 36 was not a usual address of the defendants because Mr Sun had discovered as much when he had attempted to serve the documents in person. It was not apparent that Melco had an office on level 36. The office appeared to be on level 37, and he was told by the receptionist on level 37 that some of the individual defendants were located on level 38. Consequently, even if level 36 was the most recent address shown in the documents lodged with the Companies Register, Mr Sun knew that those documents were not up to date.
15. In my opinion, this submission must be rejected. The important question is not where the relevant defendants were physically located in Melco's offices. Substantial companies are usually spread across a number of floors of a high-rise building. The fact that an employee is located on one floor does not mean that some other floor is not an appropriate address for service by post. The most recent records retained by the Companies Register that were available to be searched by members of the public indicated that the address of Melco was level 36. That made that level an appropriate address for service even if ILGA had become aware that Melco occupied other floors. It is to be expected that if Melco was in the process of changing its postal address (as appears to be the case), it would have put in place procedures to ensure that mail addressed to the old address was still received by the relevant addressee, at least until the change in address became publicly available information. During the changeover, both addresses could properly be described as usual addresses for Melco and therefore usual postal addresses for its senior executives. For those reasons, I regard the summons and commercial list statement as properly served on each relevant defendant.
16. The last question is whether the Court should dispense with the requirements of UCPR r 11.8AC in relation to Mr Ho and Mr Winkler.
17. I accept that the Court should only dispense with the requirements of UCPR r 11.8AC in exceptional circumstances. As I have said, UCPR r 11.8AC is one of the rules that implements Australia's obligations under the Hague Convention on Service. The Court should not lightly dispense with the operation of a rule that has that character. However, three features of the present case make it exceptional. First, dispensing with the operation of the rule in this case does not undermine any of the principles that underlie the Convention. It is clear in this case that Mr Ho and Mr Winkler are on notice of the proceedings since they have instructed legal advisors to make the current application. The purpose of the treaty is to provide a mechanism by which court proceedings in one jurisdiction against a resident of another can be brought to that person's attention and to give effect to the principle that a court should not proceed against a defendant who is not aware of or has not had a proper opportunity to contest the plaintiff's claim.
18. Second, there is no reason to think that the principle of comity would be infringed if the Court were to dispense with the requirements of UCPR r 11.8AC in this case. The laws of Hong Kong permit the service of proceedings issued out of a foreign court by post and it is apparent that those laws are primarily directed to the effectiveness of service. As I have said, Hong Kong law appears to take a strict view on compliance with rules relating to the form of service. It is unclear whether that approach is limited to cases where service must be proved in cases where the court is proposing to proceed in the absence of the defendant. But, in any event, it is difficult to see what interest Hong Kong has in ensuring strict compliance with the requirements of its laws in relation to service where the relevant defendant is on notice of the proceedings and will be given a reasonable opportunity to defend them. It appears that Mr Ho and Mr Winkler are not currently resident in Hong Kong. However, it was not suggested that some other State had an interest in the question whether service had been properly effected on them.
19. Third, it would be quite contrary to the principles stated in s 56 of the Civil Procedure Act for this Court to insist on strict service in accordance with UCPR r 11.8AC when it is plain that Mr Ho and Mr Winkler are on notice of the proceedings and the Court is in a position to give directions about the further conduct of the proceedings to ensure that they are given a reasonable opportunity to be heard. Insistence on service strictly in accordance with the UCPR would only be productive of delay and wasted costs.
20. It seems appropriate to treat the date of service on them as the date the notice of motion was filed, since they were aware of the proceedings no later than that date.

Orders and costs

1. UCPR r 42.1 provides: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
2. In the present case, ILGA has been successful on the defendants' motion. It certainly should obtain its costs if it is ultimately successful in the proceedings. On the other hand, if it is unsuccessful, it seems unreasonable that the defendants should be liable for costs in resisting a claim that ultimately fails. In those circumstances, it is appropriate that the costs of the motion be ILGA's costs in the cause.
3. Accordingly, the orders of the Court are: 1. Order that the summons and commercial list statement be taken to have been served on the first defendant on 24 December 2021; 2. Order that the requirements of UCPR r 11.8AC be dispensed with in relation to service of the summons and commercial list statement on the second defendant and sixth defendant; 3. Order that the summons and commercial list statement be taken to have been served on the second defendant and sixth defendant on 3 February 2022; 4. Otherwise, dismiss the notice of motion filed on 3 February 2022; 5. Order that the costs of the notice of motion filed on 3 February 2022 be the plaintiff's costs in the cause; 6. Stand the matter over for directions on 25 March 2022.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 March 2022