KAWANISHI SHIPPING SERVICE (HK) LTD v. METRO CONSOLIDATORS LTD AND OTHERS

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

COMMERCIAL LIST

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DECISION

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1. I have before me a summons date 4 ^th November 1997 issued by the 1 ^st and 2 ^nd Defendants. It is an application that the issues enumerated in the summons be determined pursuant to Order 14A Rules of Supreme Court or, alternatively, Order 33 rules 3 and 4. Directions for hearing are also sought. I am told by Mr Darton, who has appeared today on behalf of the Defendants, that the first two questions set out in the summons are intended for Order 14A purposes and the second two questions, Nos. 3 and 4, have been drafted with Order 33 in mind. What actually happened at the hearing today is that the matter was optimistically set down for 9.30 a.m., half an hour duly expired, and I then adjourned the matter to 2.30 p.m. for argument. That argument has now taken place.

2. As I understand the procedural situation, it is this. Possibly regrettably, the structure of the rules is that I have no discretion as to whether or not to entertain an Order 14A application. There is no question of leave. One party decides he wants to make such an application and simply obtains a date, and asks for directions as to the filing of evidence. At the hearing of that application, I either grant the relief sought or decline to do so. But procedurally the matter is fixed in stone, so to speak, and I must hear it.

3. Order 33 is rather different. It is a trial of a preliminary issue. It requires leave under the rules, and the bulk of the hearing today has been an argument attaching to precisely this question. Should I give leave or not? Mr Darton, who appears for the Defendants, suggests Yes. He says disarmingly that the Order 14A and Order 33 aspects are merely two sides of the same coin. Why go to trial when the matter can be dealt with simply and quickly by this process?

4. Mr Smith appears for the Plaintiff. He, of course, cannot oppose the fact of the holding of an Order 14A hearing, but he does oppose the grant of leave for the hearing of a preliminary issue. His arguments are many and various, and he has kindly set them out in a skeleton. I agree with him. I do not think this is an exceptional case, as required by the rules, and I think also that in this action the preliminary issue would be a recipe for disaster. This is a fact-sensitive case. The scope of the contract of carriage must be disputed. The Plaintiff's solicitors told the Defendants' solicitors so by correspondence, and they have said so again today. So I do not grant leave for the hearing of the preliminary issue. The profession should know that I view preliminary issues with a very considerable degree of caution. They frequently produce procedural muddles of the highest order. Unless it is the most clear case with a following wind, I am disinclined to make such an order as a matter of principle, although, of course, I remain open to argument. So I declare my predilection. But in this case there really is no argument. In my view it is hopeless. Rarely can the words of Lord Scarman J. in Tilling v. Whiteman have been better exemplified than in this case. So I am against Mr Darton on the Order 33 point. Leave is refused.

5. As to Order 14A, I have, as I have already observed, no choice in the matter. Possibly that is something that needs to be addressed by the Rules Committee, but there it is. So I will make such directions as are required. I will however say this. The notes to Order 14A in the White Book make it abundantly clear that in fact-sensitive issues the Court should proceed with a good deal of caution. See Marginal Note 14A/1-2/5. I have looked at the proposed issues for Order 14A, contained, as I have said, in questions 1 and 2 in the summons. I cannot begin to see, although I do not seek now to decide the point, how question 2 can be susceptible to an Order 14A treatment. The very scope of the contract of carriage and the consequent applicability of the Hague Rules and Hague-Visby Rules seems to me to be crucial. Nor in this regard do I forget that one of the remedies sought by the Defendants is rectification by counterclaim. It seems to me that the only possible argument under Order 14A must be what Mr Smith has called "the construction point" in terms of Clause 19 of the Bill of Lading. Does "delivery" therein mean correct and proper delivery, or does it encompass misdelivery? I do not know the answer. I have not yet heard argument. I shall be interested to find out. But without deciding the point, I find myself wondering whether indeed anything worthwhile would be achieved were I so decide the Clause 19 issue alone at the date that is now going to be solemnly fixed for the Order 14A hearing. However, I say no more at this stage. I will leave it to the Defendants and their capable solicitors to consider the position.

6. Now on the basis that the Order 14A is going ahead as planned, I need to make directions. I think a day is probably the right estimate. Evidence will need to be filed, and Mr Darton has certainly applied for this in his summons. I think it is stretching the boundaries of credibility to assume that there will be any agreement at all on the question of evidence. So, pursuant to the Order 14A application and that application alone, Mr Darton shall have leave to file and serve an affidavit in support within 21 days from the date hereof. If so advised, the Plaintiff can reply thereto within 21 days thereof. Thereafter the Defendants shall have 14 days to respond to any such affidavit as the Plaintiff may have filed. There is, of course, liberty to apply. Indeed in the Commercial Court I hope by now the profession is beginning to understand that if the parties have a problem, they can come straight in at short notice.

7. This leaves only the question of costs. I have reviewed the correspondence. It is clear on its face. It is abundantly clear that the attendance of Counsel was required only because of the application to proceed in the alternative by way of Order 33. The Defendants have lost that argument. So they must pay the costs of today in so far as such costs were expended in instructing and thereafter briefing Counsel. The Plaintiff will accordingly have those costs in any event, to be taxed if not agreed. In the normal course of events, had this merely been an Order 14A application, the solicitors on both sides may or may not have attended for directions. Perhaps it could have been done by consent, but let us assume, for the sake of argument, that they would have come. It would have been a normal 9:30 a.m. application. Such costs as are merely referable to the directions made for the Order 14A hearing are to be costs in the application. I will leave it to the Defendants to engross the Order in terms; it is their summons and they have the carriage of the Order thereon.