The case Hugo Boss Trademark v Britain Boss International Co Ltd [2015] 3 HKLRD 4 serves as a reminder to what the traditional common law approach of setting aside irregular default judgments as of right entails.
The Plaintiffs commenced legal action against a company and its sole director and shareholder (“the director”) for trademark infringement and passing off. The company’s registered address was identical to the director’s residential address provided in the company’s annual returns (“the address”). The Plaintiffs served the writ on both the Defendants at the address. In particular, the writ was served on the director at her “usual or last known address” pursuant to Order 10, rule 1(2) of the Rules of the High Court (Cap. 4A, Sub.Leg.). In fact, the director ordinarily resided in mainland China at the time of the service. The company’s office was shared with an unrelated company owned by its secretary, who would forward documents addressed to the Defendants to the director. However, while the writ of summons and summons for default judgment were served at the address in November 2013 and January 2014 respectively, the secretary did not forward these to the Defendants until March 2014. The Plaintiffs had already obtained default judgments against both the Defendants in January 2014 as a result of their failure to defend the action.
The default judgment against the director was set aside due to the irregularity in the service of the writ. The court reiterated that irregular judgments ought to be set aside “as of right”. Such, however, does not mean the court would ignore the circumstances surrounding the issues of the case; instead it indicates the court would not go into the actual merits of defense. The court therefore has a residual discretion to take the parties’ conduct into consideration in determining whether to exercise the right to set aside a default judgment.
In the present case case, the director was not within the jurisdiction at the time of service. Since Order 10, rule 1(2) only provides an alternative method of service to be effected on a defendant within the jurisdiction, the service was irregular. Although there was delay in making the setting aside application and it was doubtful whether the director really became aware of the proceedings as late as March 2014, such was insufficient for the court to exercise its residual discretion to refuse to set aside the irregular judgment.