KEEN LLOYD LTD. AND OTHERS v. SAM KEE LIGHTERING AND TRANSPORT CO. LTD. AND OTHERS

HCCL166/93

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST NO.166 OF 1993

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J U D G M E N T

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1. On or about 2330 hours on 29th October 1992, the merchant vessel "Rubin Crest" berthed at the North Bridge Pier of Ocean Terminal Hong Kong. Her purpose was to discharge motor cars, which she duly did. This claim involves five such motor cars which never reached the owners thereof, (or to put it at its lowest), the persons claiming such rights of ownership. These five Nissan motor vehicles were discovered to be missing when the cars were tallied in the Ocean Terminal roof-top car park. The vehicles have not been traced in spite of extensive police inquiries, and are presumed stolen.

2. There are a variety of Plaintiffs, the identity of which are dealt with in the Amended Points of Claim, which details which Plaintiffs were allegedly entitled to which particular Nissan cars.

3. The Defendants to this action were each allegedly involved at different stages of the discharge of the vehicles from the "Rubin Crest". The 1st Defendant was the Hong Kong agent for the Eastern Car Lines, which issued the Bills of Lading for the carriage of the cars aboard the "Rubin Crest", the 2nd Defendant a stevedoring and transportation company, the 3rd Defendant a subsidiary of the 1st Defendant, the 4th Defendant a stevedoring company, the 5th Defendant the owners of the Ocean Terminal, and the 6th Defendant the company responsible for security at the Ocean Terminal.

4. By a Writ issued out of the Registry of the Supreme Court on 29th October 1993, the Plaintiffs commenced this action. The Writ was amended, as were the Points of Claim, in September 1994, and the Points of Claim were further re-amended pursuant to Order 20, rule 12 on 24th May 1996.

5. I presently have before me for decision a summons dated 18th November 1998, whereby the Plaintiffs ask for leave to amend the Writ and the Points of Claim in violet and green respectively in the manner shown on the copies of the drafts annexed to the summons.

6. This summons is in fact the second such summons that has been issued by the Plaintiffs. What happened was that by an earlier summons, dated 16th October 1998, like relief was sought, and at the same time by another summons dated 17th October 1998, application was made for an order that the time be abridged for service of a Notice of Intention to Proceed served on 17th October. These two applications came before this Court at 9:30 a.m. on 27th October 1998, and resulted in a short judgment of that date. That judgment speaks for itself, but basically what occurred was that the Court then took the view that it was clearly inappropriate to abridge the one month notice period required pursuant to the issuance of a Notice of Intention to Proceed, and that the Defendants should have the opportunity to consider, at relative leisure within the period allowed by the rules, the amendments that were proposed. The reason for the urgent application made in those terms by the summonses of 16th and 17th October was, of course, the imminence of the expiry of the limitation period. In any event, as a result of that which fell from the Court on 27th October 1998, a second summons now has been issued, that is, the present summons of 18th November 1998, and it is backed by an affidavit of Mr Jonathan Wyatt sworn on the same date.

7. Mr Anselmo Reyes, instructed on behalf of the Plaintiffs to advance this application, has rehearsed the relevant principles for leave to amend outside the limitation period, with particular reference to the provisions of section 35 of the Limitation Ordinance, Cap.347 and to Order 20, rule 5 and the sub-rules thereunder; he has also read to the Court extensive extracts from the case of Hancock Shipping Co. Ltd. v. Kawasaki Heavy Industries Ltd. [1992] 1 WLR 1025, and in particular from pages 1028-1032 in the judgment of Staughton L.J. I have been particularly assisted by those passages and I note that I must be satisfied, in considering any proposed amendments, of two matters : first, that the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action; and second, that the Court thinks that it is just to grant leave to make such amendments; indeed the judgment of Staughton L.J. goes in some detail into the reasoning the Court should undertake under these two heads. I note also that Mr Reyes stands on the evidence as currently filed, and that he is content to advance the case solely upon the material presently before the Court.

8. As to the amendments themselves, there are, in real terms, three in number, namely, paragraph 3A, paragraph 6A and paragraph 9 of the Draft Re-Amended Points of Claim.

9. Mr Reyes suggests that paragraph 3A is no more than a recitation of facts and matters in support of the contention that the Plaintiffs were the owners of and/or were entitled to possession of the vehicles at the material time, and is little more than a convenient rehash of material which is already contained in the documents which have been discovered, and which for the most part has been the subject of particulars already supplied to each of the various Plaintiffs in the Further and Better Particulars which have been filed.

10. So far as paragraph 6A is concerned, this is one-line, and simply recites that "Further or in the alternative in failing to deliver the vehicles to the Plaintiffs, the Defendants have converted or committed the tort of detinue in respect of the same." So far as this pleading is concerned, says Mr Reyes, this is no more than the convenient affixing of the relevant legal label or legal conclusion from the facts which are before the Court anyway. And as to these basic facts, essentially these are agreed or admitted by the Defendants, in particular that his clients, the Plaintiffs, demanded the goods - the vehicles in question - and that they failed to get delivery thereof. I believe in this connection, as Mr Reyes has told me, that delivery orders were actually given to the 1st, 2nd and 3rd Plaintiffs and that armed with those delivery orders they demanded delivery from the 4th Defendant. But I see no need for present purposes to get into precise detail. In a case like this, what inevitably happens in pleading terms is that the Plaintiffs' net is spread as wide as possible so far as the Defendants are concerned. Someone will be liable to somebody if the ingredients of the relevant cause of action are established to the satisfaction of the Court, and all that is left then is an argument on costs as to whether certain parties had or had not been properly joined.

11. The real problem in this case, and that which undoubtedly brought these three groups of Plaintiffs to this Court to object, with various degrees of force, to the proposed amendments, is paragraph 9 of the Draft Re-Amended Points of Claim. Rather than attempt to describe it in narrative form, it seems simpler simply to read it as it was presented to the Court at the outset of this hearing :-

"Further or in the alternative if (which is not admitted) at the time of the loss of the vehicles the owner thereof was Nissan :

(1) By an assignment in writing dated 8 October 1998 ("the assignment") Nissan absolutely assigned to the 4th Plaintiff all rights to sue against the Defendants in respect of loss and/or damage sustained as a result of the theft of the vehicles.

(2) By letter dated 15th October 1998 express notice in writing of the assignment was on that day given to the Defendants."

12. In the course of his submissions, Mr Reyes made it clear that so far as he was concerned (and he has not been responsible for this pleading), what paragraph 9 was not saying was that there was any question of the 4th Plaintiff or any other Plaintiff exercising rights to sue qua assignee of Nissan. All that he was doing, said Mr Reyes, was crossing his t's and dotting his i's because he was concerned about any possible defence of ius tertii, and he wanted to plead the fact of this subsequent assignment in the Statement of Claim simply to stop this line of defence being run. In truth he was not greatly concerned about the issue, he said, because of his other points on bailment and attornment, but, in any event, he wanted the pleading to stand in this form. In a nutshell, he submitted that this pleading as it stood was a shield and not a sword, and if it had indeed been an attempt to advance a new cause of action qua assignee, a further sub-paragraph would have been needed to convert such shield into a sword.

13. Unsurprisingly perhaps, given the history and rather convoluted progress of this action, this particular proposed re-amendment did cause difficulties to the Defendants. Because until Mr Reyes' assertion in the terms outlined about the intention behind this amendment, each of the Defendants had, it seems, independently come to the conclusion that, in the words of Mr Ng, who appears for the 1st to 3rd Defendants, this was yet another (and I quote from his skeleton) "last-ditch attempt to paper over the cracks in terms of the Plaintiffs' case on title to sue". The Court appreciated this concern, and had it not been for Mr Reyes' submissions on the point in terms of what the proposed re-amendment was attempting to do, the Court would no doubt have entertained in greater detail the submissions contained in Mr Ng's detailed skeleton on this point, and, in particular, would have scrutinized well-known cases such as Roban Jig & Tool Co. Ltd. v. Taylor [1979] FSR 130 and Eshelby v. Federated European Bank Ltd. [1932] 1 KB 254. However, such did not become necessary because of a further proposed amendment that Mr Reyes was minded to make whilst on his feet. Now, drafting 'on the hoof' is always a problematic exercise, but he did it well, and I read verbatim the proposed further re-amendment which is to be appended beneath sub-paragraph 9(2), which in my view puts the matter beyond doubt should this trial take place either before another judge, or with different Counsel representing the Plaintiffs. Mr Reyes' formulation, upon which he took instructions before making it, was this :-

"For the avoidance of doubt, by the paragraph herein the Plaintiffs are not intending to, and do not, bring a claim against the Defendants as assignee of Nissan's rights."

14. That seemed to the Court to be an admirable way of defusing the potential argument over this particular re-amendment, at the same time making as plain as a pikestaff what the Plaintiffs' position is and was on the point. Indeed, the matter can, I think, now admit of no further doubt.

15. So far as the three groups of Defendants are concerned, the broad position basically is this. Mr Ng, as I have said, represents the 1st to the 3rd Defendants. He has put in an excellent skeleton argument, analyzing each of the amendments in question - I have found it of great assistance - and in that written submission he took exception to each of the main categories of re-amendment proposed. Mr Yap, who appeared on behalf of the 4th Defendant, also put in a most helpful skeleton, and made it clear in the first paragraph thereof that he sought only to object to the proposed new paragraph 9 of the Draft Re-Amended Points of Claim. Whilst Mr Peter Yip, who appeared on this application on behalf of the 5th and the 6th Defendants, equally made it clear at the outset in his helpful skeleton that again it was only paragraph 9 that concerned him.

16. The initial hearing of this matter took place on the afternoon of the 16th December, and the case had to be adjourned to this afternoon because of the shortage of time. At this afternoon's hearing, Mr Yap, for the 4th Defendant, and Mr Yip who, as I have said, appears for the 5th and 6th Defendants, both made it clear that in light of Mr Reyes' further amendment - that is, the amendment which I have set out in full above - they had no further objection, although of course they remained very interested in costs.

17. That, however, was not the case for Mr Ng, who on behalf of the 1st to the 3rd Plaintiffs maintained his objection to all three categories of amendment, objections to which he added his further comments during this afternoon's hearing. Basically, I think, he says that the amendments in paragraph 3A are not necessary because they can be found in the case materials anyway, that the re-amendment in paragraph 6A was defective and embarrassing because in simply drawing or asserting a legal conclusion this plea is bereft of necessary particulars, and in so far as the further amended paragraph 9 was concerned, he remained suspicious and would have been far happier if it had been placed in the Reply, although as to whether he would have objected if application had been made to put it in the Reply, rather than the proposed Re-Amended Points of Claim, he reserved his position. I do not think that in this summary I have done justice to his submissions, but in any event I am fortified by the fact that should this matter go further, his skeleton is there to be read.

18. After considering the submissions made, suffice it to say that in the Court's view, paragraph 9 of the proposed re-amendments apart, there did not seem to be much to get unduly exercised about. I suppose it could have been thought that paragraph 3A was in absolute terms unnecessary, and indeed Mr Reyes, in the course of his submission, was constrained to agree that if pushed, he could just have presented various documents to the Court at trial and asserted factual and legal conclusions. Equally, for paragraph 6A Mr Reyes effectively says that this is simply the appending of a legal label and serves only to clarify and assist. I agree. I do not think that had paragraphs 3A and 6A alone been in the original proposed draft that it is likely that I would have had the concerted opposition, as there was at the beginning of this application, from all the Defendants. Indeed, the 4th to the 6th Defendants were constrained to say that they had no objection other than to paragraph 9. And as to paragraph 9, it seems to me that any potentially valid objection has been now met foursquare by the further amendment that now has been proffered.

19. So, to return to the application as a whole and, in particular, to the ingredients the Court should look at as outlined by Staughton L.J. in Hancock Shipping Co. (op.cit), the Court is in little doubt, and so finds, that the cause of action arises out of the same or substantially the same facts as the causes of action in respect of which relief had already been claimed in the action; in other words there is undoubtedly "sufficient overlap" between the facts supporting the existing claim and those supporting the new claim. And having found that, and having been satisfied that potential problems have been averted by the gloss placed upon the proposed re-amendment to paragraph 9, the Court is in little doubt that in all the circumstances it is just to grant leave to make these amendments, which I now do in the exercise of my discretion. It is important to note that, apart from what are, or what may be thought to be, legitimate forensic objections taken by the Defendants, there is little, if any, prejudice which will be encountered by these Defendants as a result of these amendments; indeed, the only real reference to prejudice occurs in Mr Ng's skeleton in the context of the allegation as to deficient particularization, and in all the circumstances, I do not consider this to be at all compelling.

20. I would make the point that this is the Commercial Court. Now that is not to say that attempts are not made to hear or determine cases on strictly correct and precise procedural lines. But the essence of the operation of the Court, within necessary constraints, is to be in a position to enable the respective parties to put up their cases and to come to a quick and speedy conclusion untrammelled, if at all possible, by narrow procedural arguments. Sometimes, this is a difficult line to draw, and I dare say that if the problems surrounding paragraph 9, to take this particular case as an example, had not been deflected by the further amendment made on his feet by Mr Reyes, the Court would have been constrained to take a far harder look at the situation.

21. For the moment, however, these re-amendments are to be permitted, and the Court now looks forward to getting this case set down for trial. In this regard, I recall that leave to set down was granted by Waung J. in, I believe, 1996, and yet here we are, some two years later. I wish to make it known that the Court would view with displeasure any further delay in resolving this matter, and confidently expects that now that these amendments are in, subject of course to any appeal and to the consequential defences to be filed, that the case can now proceed quickly and speedily to a resolution. I will now hear the parties as to costs, and as to any necessary directions.

[Submissions from Counsel]

22. I have now had the advantage of hearing Counsel both on directions consequential upon my judgment as to the grant of leave to re-amend, and also on the issue of costs. Let me take them in turn.

Directions

23. It is the view of Counsel, with which I agree, that the following directions are immediately appropriate :

1. that service of the Re-Re-Amended Writ and Re-Amended Points of Claim be dispensed with;

2. that there be leave to the Defendants to consequentially amend their Points of Defence within 21 days of the date hereof;

3. that there be leave to the Plaintiffs to amend their Reply, if thought necessary, within 14 days of the date of service of such Amended Points of Defence;

4. that there be liberty to apply generally for leave to apply to set down within 7 days after the filing of such Amended Reply, if any.

Costs

24. With the help of Counsel, it seems to me that I now have three different costs orders to make :

First, Mr Reyes concedes, as is usual in such circumstances, that the costs of and occasioned by the re-amendments made by the Plaintiffs must be to the Defendants in any event, to be taxed if not agreed. I so order.

Second, I note from my earlier judgment of 27th October 1998 that the original summons to re-amend of 16th October was adjourned, with costs reserved. Mr Reyes, with great good sense, concedes that the costs of and occasioned by that first summons be to the Defendants in any event, to be taxed if not agreed. I so order.

Third, and last, this leaves outstanding the costs of and occasioned by the application the subject of today's judgment. In this regard, Mr Reyes again makes concessions which serve to narrow down the issues. He does not resist costs other than the costs of the hearing today. In other words, the costs of the application generally, together with the costs of the hearing two days ago be to the Defendants, but he digs in his heels because he says that the costs of this afternoon's hearing were unnecessary. He made the further amendment to paragraph 9 at the hearing on the afternoon of the 16th, and any further argument in light of that was, I think he would say, superfluous.

In this connection I applaud his attempts to rescue something from the costs wreckage, but ultimately I do not think that I am minded to make an order in those terms. The short point is that the original hearing was simply insufficient in terms of time, and certainly as far as the 4th to 6th Defendants were concerned they had no chance to make any representation to the Court whatever on the afternoon of Wednesday, 16th December. It is true that I have been against Mr Ng on the residue of his opposition to the amendments, notwithstanding Mr Reyes' further amendments, but on analysis I am satisfied that it was necessary for the parties to return, and ultimately I feel that I cannot justify any piecemeal costs order. It seems to me, therefore, that the fair and just order in all the circumstances, looking at the matter in the round, is that the costs of and occasioned by this application, including the hearings on the afternoon of 16th December and of this afternoon, that is 18th December, must be to the Defendants in any event, to be taxed if not agreed.

Doubtless these orders as to costs will come out in the wash, so to speak, depending on the outcome of the trial. That being all for this afternoon, I thank Counsel for their considerable assistance.