FULL SUM INTERNATIONAL CO LTD v. HONG KONG FOO WIN LTD AND ANOTHER

HCA 2211/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2211 OF 2014

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J U D G M E N T

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1.  The plaintiff claims to be the owner of a cargo of red wood timber, shipped in 10 containers, and claims that the 2^nd defendant has wrongly issued a bill of lading with the 1^st defendant as the consignee. On 30 October 2014, believing the cargo to be on board the vessel “Brevik Bridge” sailing from Singapore to Hong Kong with an estimated time of arrival of 8 am the next day, the plaintiff applied ex parte (on notice) for, and was granted by Deputy Judge S T Poon, an injunction restraining the 1^st defendant from presenting the allegedly wrong bill of lading for delivery of the cargo and restraining the 2^nd defendant from delivering the cargo under the allegedly wrong bill of lading to anyone other than the plaintiff.

2.  On 7 November, on the plaintiff’s application, Deputy Judge Mayo continued the injunction in the interim while giving directions for the substantive hearing of the argument on the injunction.

3.  On the evening of 12 November, the plaintiff’s solicitors wrote to the defendants’ solicitors indicating that the plaintiff agreed that the injunction should be lifted. On 17 November, the plaintiff took out a summons for discharging the injunction.

4.  There is no dispute that the injunction should be discharged and I so order. The question in issue is costs. The plaintiff submits that the proper order is the plaintiff’s costs in the cause or simply costs in the cause.  The defendants submit that they should have their costs against the plaintiff.

5.  It appears that the 2^nd defendant, having received an informal email from the plaintiff’s Taiwanese lawyers, decided to rest the cargo briefly in order to seek advice from its P&I club.  As a result, the cargo was not loaded on a ship that would arrive in Hong Kong on 31 October.

6.  By written skeleton argument dated 6 November and given to every party on 7 November, the 2^nd defendant’s counsel (who was not Mr Alder, but another counsel) made clear that the cargo was still in Singapore and that the 2^nd defendant was content to hold the cargo pending the determination by the court of the entitlement to the cargo, subject to its being covered in respect of the storage expenses.  In effect, the 2^nd defendant was prepared to interplead.

7.  Despite being told by the 2^nd defendant’s letter dated 18 November that the cargo is now on its way to Hong Kong, the plaintiff still accepts that the injunction should be lifted unconditionally because, according to Mr Brown, the plaintiff is satisfied, given the 2^nd defendant’s stance, that it would be highly unlikely for the 2^nd defendant to deliver the cargo to the 1^st defendant without the parties’ entitlement being resolved first.

8.  In these circumstances, when it comes to costs, the court has to take a robust approach and not be drawn into satellite litigation. In my view, the costs up to and including the hearing on 7 November should be in the cause.  I accept Mr Brown’s submission that effectively the application for injunction has served its purpose.  Had the plaintiff been told the cargo was in Singapore and not being shipped to Hong Kong yet, perhaps at least there would have been more time for everyone to consider the position.

9.  At the end of the day, as between the plaintiff and the 1^st defendant, it seems to me just that the incidence of those costs should be determined as part and parcel of the costs of the action, which will depend on who have the underlying merits in the claim.

10.  So far as the 2^nd defendant is concerned, such an order means its relevant costs are treated as its costs generally, which may have to be dealt with before the final disposal of the action if the 2^nd defendant interpleads.  On an interpleader, provision will generally be made about the costs of the party holding the goods.

11.  The costs after the hearing on 7 November up to the plaintiff’s summons for discharge of the injunction dated 17 November should, however, in my view, be paid by the plaintiff.

12.  The primary reason given for agreeing now to lift the injunction, ie the 2^nd defendant’s indication of its stance, was stated in the 2^nd defendant’s counsel’s skeleton argument and made clear at the hearing on 7 November.  Indeed, the 2^nd defendant was prepared to give an undertaking at that point in time.  Even after knowing this, the plaintiff proceeded with the hearing on 7 November and pursued an order for the continuation of the injunction.  I do not see any change of circumstances between then and 12 November or 17 November.  The plaintiff is at liberty to abandon its application for continuation of the injunction, but in these circumstances, it seems to me it can only do so with costs to the defendants during the period I have mentioned.

13.  Mr Leung for the 1^st defendant argues that the application for injunction was fundamentally misconceived and is vitiated by various defects in the information and documents provided by the plaintiff. I do not think it would be appropriate for me to go into these matters on the basis of the materials before me.

14.  I will now hear counsel on the costs of the plaintiff’s summons for discharge of the injunction.