BENCHMARK ELECTRONICS (THAILAND) PCL AND OTHERS v. CARGO CONTRAINER LINE LTD

HCAJ 65/2016

[2018] HKCFI 699

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 65 OF 2016

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D E C I S I O N

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1.  This is an application by Summons dated 13 October 2017 (Summons) by which the Defendant (CCL BVI) applies to set aside the Concurrent Amended Writ and service of the same on it, to discharge the Order granting leave for the service of the Concurrent Amended Writ out of jurisdiction and to dismiss this Action.

2.  What happened in this case was that the Plaintiffs had issued the Writ in this Action on the last day before the expiration of limitation period.  By a mistake, the Writ was issued against a company with the same name as CCL BVI but was incorporated in Malta instead of the BVI. 

3.  The issue in this application is whether the amendment of the Writ, by substituting the Malta address with the BVI address, constituted the substitution of a new party.

Background

4.  The background facts are not in dispute.  Pursuant to 6 bills of lading that CCL BVI issued (Bills of Lading), CCL BVI contracted to carry cargoes (Cargoes) on the vessel “MOL COMFORT” (Vessel).  Although it was clear from the Bills of Lading that the carrier was “Cargo Container Line Ltd”, those documents did not provide the address of that company or any information as to its whereabouts.  On 17 June 2013, the Vessel sank during the course of a voyage across the Indian Ocean.

5.  In this Action, the Plaintiffs claim damages for breach of the contracts of carriage contained in or evidenced by the Bills of Lading.  Clause 20 of the terms of the Bills of Lading (Terms) specified that the contracts of carriage are governed by Hong Kong law and any dispute is subject to the exclusive jurisdiction of the Hong Kong Courts.

6.  A one-year limitation period existed pursuant to the Terms and Article III, r 6 of the Hague-Visby Rules (applicable to the Bills of Lading by virtue of clause 6(1)(A) of the Terms) for the Plaintiffs to commence any claim relating to the loss of the Cargoes.  The parties agreed various time extensions for the Plaintiffs to commence any proceedings relating to the loss of the Cargoes, up until and including 17 August 2016.

7.  By a Writ of Summons dated 17 August 2016, the Plaintiffs commenced these proceedings against Cargo Container Line Ltd of “147/1 St Lucia Street, Valetta VLT 04, Malta” (Malta Address).

8.  On 5 May 2017, the Plaintiffs applied for leave to issue and serve a Concurrent Writ of Summons on CCL of the Malta Address (CCL Malta) out of the jurisdiction in Malta.  

9.  On 12 May 2017, the Plaintiffs obtained an order (1^st Order) to issue a Concurrent Writ of Summons against CCL Malta and to serve it on the same at the Malta Address or elsewhere in Malta.

10.  After an attempt was made to serve the Concurrent Writ of Summons on CCL Malta, the Plaintiffs received a telephone call from its insurer informing the Plaintiffs that CCL Malta operated only in the Eastern Mediterranean and not in the Far East. 

11.  The Plaintiffs then made various efforts to ascertain the address of CCL BVI, including making enquiries with CCL BVI’s solicitors in the UK.  By an email dated 31 July 2017, CCL BVI’s UK solicitors stated that the Plaintiffs’ claims were time barred, and that the carrier under the Bills of Lading was incorporated in BVI with the registered office address at “PO Box 3340, Road Town, Tortola, BVI”.

12.  On 31 July 2017, the Plaintiffs amended the Writ of Summons pursuant to O 20, r 1 of the RHC (without the court’s leave) to correct the defendant’s address from the Malta Address to a BVI address.

13.  Two orders dated 3 August 2017 were obtained by the Plaintiffs pursuant to an ex parte application.  The first one set aside the 1^st Order.  The second order gave leave to issue a Concurrent Amended Writ of Summons and to serve it on CCL BVI out of the jurisdiction at Ernst & Young Trust Corp (BVI) Ltd, PO Box 3340, Barclays House, Road Town, Tortola, BVI or elsewhere in the BVI.

14.  Subsequently, the Concurrent Amended Writ of Summons was served on CCL BVI in the BVI.  

15.  There is no issue that CCL Malta, despite the identity of its name with CCL BVI, is a separate legal entity with different directors and shareholders.

CCL BVI’s case

16.  On behalf of CCL BVI, Mr Luxton advanced a number of propositions :

(1) The amendment of the Writ involved the substitution of CCL BVI as the defendant to the proceedings in place of CCL Malta;

(2) Such amendment was made after the expiry of limitation period under the Hague-Visby Rules, and the expiry of such limitation period had the effect of extinguishing the Plaintiffs’ causes of action against CCL BVI: see Aries Tanker Corporation v Total Transport Inc [1977] 1 WLR 185 at 188C-F; The Jay Bola [1992] 3 All ER 329, 342h-343a and 350a-b; Pohang Iron & Steel Co Ltd v Norbulk Cargo Services Ltd [1996] 4 HKC 701 at 705B-C;

(3) If a claim is time barred, then any leave to serve a concurrent writ of summons out of the jurisdiction should be set aside, because there is no serious issue to be tried: see Newocean Petroleum Co Ltd v Rio Tinto Shipping (Asia) Pte Ltd, HCA 446/2015, 15 April 2016, §§16-17; Timmerton Co Inc v Equity Trustee Ltd [2015] 1 HKLRD 247, §28.

17.  The lynchpin of these propositions rests in the contention that the amendment of the Writ was not merely a correction of the address of the defendant but substituting of a new party.  The legal propositions encapsulated in (2) and (3) above are not in dispute.

Analysis

18.  It cannot be seriously doubted that the Plaintiffs had all along intended to sue the carrier under the Bills of Lading, namely, CCL BVI.  Plainly, it was a mistake that CCL Malta was sued instead of CCL BVI. 

19.  According to the evidence of the Plaintiffs, the mistake arose when a search was made about the address of “Cargo Container Line Ltd” on the day the Writ was issued.  The evidence of CCL BVI suggests that the mistake should not have been made because, inter alia, the Plaintiffs could have asked CCL BVI’s solicitors to confirm its identity before the Writ was issued (see paras 6 and 11 above).  However, I am inclined to agree with Mr Smith SC, who appeared for the Plaintiffs, that fault is not a relevant consideration in this application. 

20.  Mr Luxton submitted that the evidence filed by the Plaintiffs in support of the 1^st Order demonstrated that they intended to sue CCL Malta.  With respect, the evidence simply reflected the fact that the Plaintiffs were labouring under a mistaken belief.  I do not believe that there is any further mileage in that point[1].

21.  This court was taken by Mr Luxton to s.35(1) of the Limitation Ordinance, Cap 347 (S.35)[2], O 20, r 5 and many of the authorities on whether a writ may be amended to substitute a new party despite the expiry of limitation period. With respect, these materials are of limited assistance in resolving the present issue.   

22.  To begin with, it is common ground that the scheme under S.35 did not apply to a case where the limitation period had expired under the Hague-Visby Rules: The Jay Bola, supra, at 342h-343a.

23.  Secondly, O 20, r 5[3] was never relied upon by the Plaintiffs (see para 12 above), and there is nothing on the face of those provisions to suggest that they were relevant to the amendment application.  In particular, O 20, r 5(3) is the only rule which touches upon the substitution of a new party after the expiry of limitation period :

“An amendment to correct the name of a party may be allowed … notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.”

[emphasis added]

There was no correction of the name of the defendant in the Writ in this case.

24.  Thirdly, the authorities on the issue of substitution of a new party were concerned with the scheme under the English equivalent provisions of S.35.  Therefore, they cannot be applied directly to the present case.

25.  Fourthly, it must be borne in mind that under the S.35 scheme and the relevant rules made thereunder, it is permissible for a new party to be sued by way of substitution despite the expiry of limitation period if certain criteria are satisfied.  Whereas in the present case, it is common ground that if indeed there was a substitution of a new party against which the limitation period had expired, that should not have been permitted by virtue of the “no useful purpose rule”[4], ie, it would be futile to allow such an amendment because the cause of action against the new party had been extinguished. 

26.  To resolve the issue in question, I first consider whether there was any rule which inhibited the amendment of the address of the defendant in the Writ.  None had been suggested.  The other side of the coin is that I am unable to discern any reason why the Plaintiffs could not rely upon O 20 r 1 for the amendment. 

27.  It is relevant to bear in mind that giving a wrong address of the defendant in a writ is not an irregularity which justifies the setting aside of the writ or its service, unless the defendant has been misled or prejudiced: Hong Kong Civil Procedure 2018, Vol 1, rubric 6/1/12.  

28.  The mistake over the address of CCL BVI had, somewhat fortuitously, resulted in a wrong party (CCL Malta) being sued under the Writ.  Did the amendment of the address mean that a new party is sued in place of the wrong one?  One may argue that even the amendment of a wrongly spelled name would result in substituting a non-existing party (assuming that there is no entity by the misspelled name) with a new party.  Mr Luxton did not suggest that a misspelled name cannot be amended after the expiry of limitation period.  What then is the correct legal test on substitution of a new party in these circumstances?   

29.  Before the question is answered, it should be borne in mind that neither counsel had managed to find any authority on whether the amendment of the address of the defendant may or may not result in the substitution of a new party.

30.  The rival submissions before the court were focused on two elements of O 20 r 5(3) the satisfaction of which are required to allow a claim against a new party after the expiry of limitation period.  Mr Luxton relied on some of the authorities involving that rule to support his contention of substitution of party.  On the other hand, Mr Smith referred to some of those authorities on the test whether there was any reasonable doubt as to the identity of the person intended to be sued (see O20, r 5(3) at para 23 above). 

31.  The authorities included the following. Firstly, Mitchell v Harris Engineering Co Ltd [1967] 2 All ER 682.  In that case, the plaintiff brought a personal injury claim against his employer. The writ of summons originally named Harris Engineering Co (Leeds) Ltd, a company incorporated in England, as defendant.  In fact, the plaintiff’s employer was Harris Engineering Co Ltd, a company incorporated in Northern Ireland.  Both companies had the same address for service.  The plaintiff attempted to amend the writ to name the Northern Ireland company without obtaining the court’s leave.  However, the plaintiff acknowledged that it was not entitled to do so because the amendment involved substitution of a party (p 684H).  On the question of whether the amendment was within the scope of O 20, r 5, Davies LJ stated (p 688C):

“I turn to the next point, whether the present case is within the language of the rule. I think that it is. The amendment sought involves the correction of the name of the defendant, albeit that it is alleged, and correctly so, that it also involves the substitution of the Irish company for the Leeds company.”

32.  Secondly, in The Jay Bola the plaintiff cargo owner issued a writ against O Ltd as the party liable as carrier under a bill of lading for the loss of his cargo.  The plaintiff was subsequently informed that O Ltd had sold the ship to ASC 3 months before the fire which had damaged his cargo, by which time the limitation period under the Hague-Visby Rules had expired.  It was accepted in that case (apparently by the parties) that it involved the joinder of a new party (p 349g).

33.  Thirdly, in The Anna L [1994] 2 Lloyd’s Rep 379 a writ in personam was issued claiming damages for the damage suffered by Anna L but named the plaintiffs the managers instead of the owners. The writ also suffered from a host of other irregularities.  Subsequently, the plaintiffs issued a summons for various relief to remedy the irregularities, including for leave to amend the writ by substituting the existing plaintiffs with the owners of the vessel.  It was held that there was no doubt that the amendment would substitute a new party for an existing one (p 390, col.2).

34.  These authorities must be understood in the context of O 20, r 5(3) where an amendment is made of the name of a party, and that such amendment can be allowed after the expiry of limitation period if certain conditions are met.  It appears from these authorities that the issue of new party was simply one of fact – was the entity named in the amendment different to the existing one.  Hence, the parties had no dispute on the issue in 2 of the above cases.  These authorities do not answer the question in this case where there was no need to amend the name of the defendant but only the address, and the effect of the amendment may be said to be substituting CCL Malta with CCL BVI. 

35.  Mr Smith relied upon the Sardinia Sulcis test (The Scardinia Sulcis [1991] 1 Lloyd’s Rep 201), which was set out in the judgment of Lloyd LJ at p 207[5] :

“The ‘identity of the person intending to sue’ is a concept which is not all that easy to grasp, and can be difficult to apply to the circumstances of a particular case, as is shown by the fact that in two of the cases to which I have referred there has been a dissenting judgment.

  In one sense a plaintiff always intends to sue the person who is liable for the wrong which he has suffered.  But the test cannot be as wide as that.  Otherwise there could never be any doubt as to the person intended to be sued, and leave to amend would always be given.  So there must be some narrower test.  In Mitchell v Harris Engineering the identity of the person intended to be sued was the plaintiff’s employers.  In Evans v Charrington it was the current landlord.  In Thistle Hotels v McAlpine the identity of the person intending to sue was the proprietor of the hotel.  In The Joanna Borchard it was the cargo-owner or consignee.  In all these cases it was possible to identify the intending plaintiff or intended defendant by reference to a description which was more or less specific to the particular case.  Thus if, in the case of an intended defendant, the plaintiff gets the right description but the wrong name, there is unlikely to be any doubt as to the identity of the person intended to be sued.  But if he gets the wrong description, it will be otherwise.”

36.  I agree with Mr Smith that the general endorsement of the Writ had identified the Plaintiffs’ causes of action as those against the contract carrier under the Bills of Lading.  Accordingly, there can be no doubt as to the party intended to be sued, namely, CCL BVI. 

37.  Further, Mr Smith relied on the following dicta of Hobhouse J (as he then was) which was quoted with approval by Philips J (as he then was) in The Anna L, col.1 :

“As Mr Justice Hobhouse pointed out in The Jay Bola there are two types of ‘amendment to correct the name of a party’. The amendment may effectively substitute one party for another in the action or it may merely clarify by (for instance) correction of spelling, initials, title or corporate status the name that the plaintiff had intended to plead from the outset. In the latter case the amendment will clarify the name of an existing party, O 15, r 5 will be no bar to the amendment and there will be no need for the plaintiff to rely on O 20, r 5.”

38.  In The Anna L, the address of the defendants was wrongly stated to be one at Monte Carlo when it should be an address in Gibraltar.  This was treated as a “lessor irregularity” which could be remedied by applying O 2, r1(2) (non-compliance with Rules) (see p 381, col.2 and 383, col.2).

39.  Accordingly, Mr Smith submitted that, given that there was no ambiguity over the intended defendant, the amendment of the address stated in the Writ was only one to clarify its identity.  Such amendment did not introduce a new party in substitution of the existing one. There is considerable force in the submissions.

40.  What the arguments boil down to is that the correctly named defendant with a wrong address happened to be a different entity. I do not believe that the law should depend on a matter of accident.  If the combination of the right name with a wrong address did not disclose an existing entity, it is unlikely that this application would arise.

Conclusions

41.  For these reasons, I believe that Mr Smith’s submissions should prevail.  Accordingly, I dismiss the Summons and make an order nisi that the costs of and occasioned by this application be to the Plaintiffs, to be taxed if not agreed.

42.  I am grateful to counsel for their assistance.