VANSOVYCH ANDRIY AND OTHERS v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL “STARRY METROPOLIS”

HCAJ 76/2020

[2021] HKCFI 2961

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 76 OF 2020

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HCAJ 91/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 91 OF 2020

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DECISION

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1.  There are two applications before the court to strike out the Defences filed by the Defendants in these actions (“Actions”). 

2.  These Actions are related to HCAJ 3/2021 and HCAJ 16/2021.  All 4 proceedings were actions in rem instituted by the crew of the vessel “Starry Metropolis” (“Vessel”) against the owners and/or demise charterers of the Vessel for unpaid wages.

3.  Judgment in default of acknowledgement of service was granted by the court in HCAJ 3/2021 on 12 January 2021.  This morning, prior to the hearing of these applications, similar judgement was granted in HCAJ 16/2021. 

4.  The Vessel was kept in Hong Kong with its scheduled voyage cancelled due to the COVID-19 pandemic since March 2020.  In October 2020, it was arrested by the DLA acting upon the instructions of some of the crew who were owed their wages. 

5.  On 3 February 2021, an order for sale pendent lite was made in respect of the Vessel.  It was sold on 1 April 2021 and there has been no distribution of the proceeds.

6.  It is not clear why the Defendants had chosen to defend these Actions but not HCAJ 3/2021 and HCAJ 16/2021.  At the hearing on 3 February 2021, this court had expressed the concern that it was not clear what defence there was to the unpaid wages claims. 

7.  On 16 September 2021, the Defendants’ former solicitors had obtained an order to cease to act for them in these Actions. The Defendants had failed to attend this hearing.

8.  The strike out applications are made on the usual grounds that the Defences disclose no reasonable defence to the Plaintiffs’ claims for wages, or are scandalous, frivolous or vexatious, or they may prejudice, embarrass or delay the fair trial of these Actions, or they are otherwise an abuse of process of the court (see O 18, r 19).

9.  The applicable legal principles are trite and can be found in Hong Kong Civil Procedure 2021, vol 1, [18/19/4] to [18/19/9].

10.  Before I deal with any substantive defence which had been pleaded by the Defendants, on behalf of the Plaintiffs, Mr Ng argued that the Defences had failed to meet the requirements of O 18, r 13(5) that the party who denies an allegation made in a statement of claim must state his reasons for doing so and if he intends to put forward a different version of events from that given by the claimant, state his own version.  Both Defences consist of bare denials or non-admissions of the Plaintiffs’ claims, save for one substantive defence raised in each pleading (see below).

11.  The failure in question means that the Defendants would not be able to call any evidence of facts contrary to or inconsistent with the Plaintiffs’ pleaded contentions (see HKCP 2021, vol 1, [18/13/8]).  In itself, the failure may not justify a strike out.

12.  Collectively, there are only two substantive issues raised in the Defences, namely, (1) when the Vessel had arrived in Hong Kong as the earliest place of repatriation, the employment agreements with the Plaintiffs had come to an end (para 5 of the Defence in HCAJ 76/2020); and (2) the Defendants had requested the Plaintiffs to leave the Vessel by 31 March 2020 and their failure to do so constituted a refusal to obey or follow the Defendants’ instruction (para 3 of the Defence in HCAJ 91/2020). 

13.  The evidence filed by the Plaintiffs had set out their factual case[1].  On the other hand, the evidence filed by the Defendants in March 2021 consisted of little more than legal arguments most of which could not be found in the Defences. 

14.  It was suggested in the Defendants’ affirmations that amendment to the Defences would be made to plead the legal arguments. However, more than 6 months had lapsed since the filing to the Defendants’ evidence and no amendment application had been made.  Given these circumstances, I see no justification to deal with the unpleaded arguments for the present purposes.  However, for completeness, I agree with Mr Ng’s analysis of these arguments and that they were ill-conceived (see the Plaintiffs’ skeleton submissions, para 10).

15.  I agree with Mr Ng that the two pleaded substantive issues were also ill-conceived.  In respect of issue (1), the relevant contractual provisions are :

Definition of Point of Hire:

“refers to the place indication (sic) the contract of employment which shall be the basis for determining commencement and termination of contract.”

Section 2(A) under the heading “Commencement/Duration of Contract”:

“The employment contract between the employer and the seafarer shall commence upon actual departure of the seafarer from the international airport or seaport in the point of hire. It shall be effective until the seafarer’s date of arrival at the point of hire upon termination of his employment pursuant to Section 15 of this Contract.”

Section 15(A) under “Termination of Employment”:

“The employment of the seafarer shall cease when the seafarer completes his period of contractual service aboard the vessel, signs-off from the vessel and arrives at earliest place of repatriation.”

Section 16(A) under “Repatriation”:

“If the vessel is at inconvenient port upon the expiration of the contract, the seafarers shall continue his service on board until the vessel’s arrival at a convenient port and/or after arrival of the replacement crew provided that, in any case, the continuance of such service shall not exceed one month. The seafarer shall be entitled to earned wages and benefits as provided in his contract.”

16.  It is reasonably plain that pursuant to S.2(A) and the definition of point of hire, the contract should end upon the return of the crew to the point of hire (none of them was hired in Hong Kong). 

17.  The “place of repatriation” was not defined in the contract.  It was introduced in S.15(A).  Reading the contract as a consistent whole, I believe that the term was introduced by reason of S.16(A) pursuant to which the crew might have to be repatriated from a convenient port where the contract had expired at an inconvenient port. 

18.  I do not believe that the S.15(A) was intended to change the basic arrangement that the crew should be returned to the point of hire upon termination of contract as provided in S.2(A).  Where the contract expired whilst the Vessel was at an inconvenient port, then the crew should continue their service (not exceeding 1 month) until the Vessel reached a convenient port (and/or after arrival of the replacement crew) and from which they could be repatriated, pursuant to S.16(A). 

19.  There is no basis to treat S.16(A) as giving rise to a right to the employer to terminate the contract of the crew as and when it suited them.  There is no evidence that S.16(A) was applied in these cases because the conditions prescribed therein were met.

20.  If necessary, this court will invoke its empower to determine this issue of law on the present application when it is crucial and all the relevant facts are certain and before the court: Chuang Yue Chien v Ho Yau Kwong [2002] 4 HKC 245 at 255B-C per Ma J (as he then was). 

21.  As regards issue (2), firstly, the alleged instruction is disputed by the Plaintiffs.  Apart from a bare assertion, the Defendants had produced nothing to substantiate their allegation.  One would have expected that such instruction would have been recorded in some written form. 

22.  Secondly, and more importantly, I am unable to see the legal basis for the instruction to leave the Vessel.  The contract did not allow the Defendants to ask the crew to leave without their wages paid and having any repatriation arrangement agreed whilst the Vessel was “stranded” in Hong Kong. 

23.  Having come to view that there is no merit in the two pleaded substantive issues, the only thing left of the Defences is putting the Plaintiffs to prove their case.  As noted above, evidence had been filed by the Plaintiffs to verify their claims.  The Plaintiffs’ factual evidence has not been answered by the Defendants. 

24.  The above circumstances demonstrate that there is no merit in the Defences.  Instead, they were put forward for the sake of buying time.  The process of the court should not be so used. 

25.  Bringing a case knowing that it has no substance is frivolous and an abuse of process (see HKCP 2021, [18/19/7] and [18/19/9]).  The interests of justice will not be served by unwarranted delay and keeping the Plaintiffs out of their wages.  I am satisfied that these are clear cases for strike out, and I accede to the applications. 

26.  The Defences filed in these Actions are struck out.  The Plaintiffs be at liberty to apply to enter judgment against the Defendants.  The terms of the judgment should be modelled on those entered in HCAJ  3/2021 and HCAJ 6/2021.  The costs of these Actions, including the costs of and occasioned by the strike out Summonses, be paid by the Defendants.  The Plaintiffs’ own costs be taxed in accordance with Legal Aid Regulations. 

27.  For the further conduct of these Actions and HCAJ 3/2021 and HCAJ 6/2021, they should be consolidated, and I so order.

28.  I am grateful to Mr Ng for his assistance.