XCHRX ESSEX MONITOR (HK) CO. LTD.v. HECNY SHIPPING LTD.

DCCJ11403/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 11403 OF 2000

-----------------------

________________

Judgment

________________

On 7 March 2001, I gave judgment for the Plaintiff on its Order 14 summons. I said detailed reasons for my decision would be given on request. In fact in my view the Defendant's case was patently untenable ab initio and those representing the Defendant would have realized that had they considered their client's case with the barest objectivity. Anyway, there being a request made on 16 March 2001 on behalf of the Defendant in this regard, here are my reasons.

2. The facts of the case averred by the Defendant in its Defence are as follow:-

"5. Paragraphs 5 and 6 of the Statement of Claim is denied. The Defendant avers that:-

(a) There was an 1st agreement between the Defendant and the Plaintiff for the Defendant arranging shipment of the Container from Hong Kong to Santos, Brazil.

(b) The said agreement was completed by the Defendant on or before 8th June 1999.

(c) Due to the buyer of the Plaintiff rejecting the Container and the Plaintiff could not find another buyer in the meantime, the Plaintiff asked the Defendant to arrange shipment of the Container form Santos, Brazil back to Hong Kong.

(d) The Plaintiff and the Defendant have made the 2nd Agreement whereby the Plaintiff promised to pay all expenses incurred by the Defendant in arranging the return of the Container. Besides, the Plaintiff agreed that the Defendant could debit its account in Hong Kong for the said extra costs. The Defendant has received from the Plaintiff the sum of HK$90,370.80 being deposit for the potential extra costs involved in this return shipment.

(e) While the customs of Brazil refuses to release the Container to Hong Kong (an unexpected event), the Container has been detailed in Brazil up to day.

(f) Not until the Plaintiff terminated their instructions and the 2nd Agreement by email to the Defendant on 8th June 2000, the Defendant tried their best to ask for the release of the Container from the customs of Brazil and arrange for its return to Hong Kong but in vain."

3. It is immediately apparent that, as admitted by the Defendant, $90,370.80 was received by the Defendant from the Plaintiff as deposit for the potential extra costs involved for return of the container of goods. The $90,370.80 was not meant to pay the Defendant's own service charges but rather to cover the Defendant's disbursements to be incurred. Obviously, the $90,370.80 must be refunded if no extra costs have been incurred.

4. The Defendant pleads in the Counterclaim that :-

"10. Before the Plaintiff terminated their instruction on 8th June 2000 as mentioned in paragraph 5 hereof, the Defendant has already incurred extra costs that have not yet been met by the deposit for handling the Container pursuant to the 2nd Agreement. As at 1st March 2000, the said extra costs amounted to USD 9,401, which is made up as follows:

(1) Customs release charge:	USD 450
(2) Container Pick-up Charge:	USD 60
(3) Broker handling:	USD 150
(4) O/Time storage:	USD 4,100
(5) O/Time demurrage:	USD 4,641
Total:-	USD 9,401 ========

5. It is common ground that the container of goods had been detained in Brazil and never left Brazil for return to Hong Kong. Because Brazilian customs never released the container, it defies common sense to believe that charge for customs release (US$450) and charge of pick up ($60) had been incurred. The defendant does not explain what for or why the broker handling charge (US$150), storage (US$4,100) and demurrage (US$4,641) were incurred. It does not appear that these last three items of alleged expenses were incurred before Brazilian customs made the decision to detain the container of goods. Since the Brazilian customs never released the container of goods, there is absolutely no reason to believe that, for example, demurrage (which is a shipping charge for delay) was payable or incurable.

6. In fact, the truth about the extra costs allegedly incurred is revealed in two emails produced by the Defendant (hence all the time in the possession and knowledge of the Defendant) which are reproduced below:-

(i) Email from the Defendant's agent in Brazil to the Defendant dated 23 May 2000

">RE: NON-DLV CTNR HK G/SS 。/。 FOR C/PREVENT - UNDER HB1.//83665R0/6 PER S.S.IYO

>V.020S ETD/HKG MAY/08-99 EX S/ESSEX MONITOR

>

>S/ESSEX MONITOR FINALLY CONFIRM THAT THEY WLD NOW GIVE-UP THE A/M CTNR AND

>REQ US FOR THE REFUND OF PAYMENT WHICH HAD BEEN ADVANCE FOR US ON SEP 1723-99

>

AND THE B/DOWN AS BELOW:-

>

>**O/FRT COST HKG/SSZ & SSZ/HKG: USD 2900.-/40' x 2 = USD5800.-

>**O/TIME STORAGE: USD2,265 (TILL OCT/03-99)

>**O/TIME DEMURRAGE: USD2,990.- (TILL OCT/03-99)

>**MISC HANDLING CHG AT DSTN: USD53l- (AS PER GIANT/SAO ISNTR)

>

>PLS DOUBLE-CHK AND CFM BY RTN WHAT KIND OF CHGS THAT WE SHOULD REFUND TO

>SHPR AND AWAIT YOUR ADV. TKS

>

>B REGARDS.

>

>----Original Message-----

>From: HAS/HKG - Fanny Cheung

>Sent: Tuesday May 23, 2000 6:34 PM

>To: Giant Transportes/Sao - Lidia Lee

>Co: JULIA-PROVIU: HSA/YYZ - Gloria Lee: HSA/YYZ - General ID: ISSA/YYZ -

>Simon Lo: Gladish & Assoc (TW)

>Subject: RE: RTN CTNR#TEXU4797205 UNDER HB/L#83665RO/3 FOR C/ESSEX

>MONITOR"

(ii) Email from the Defendant to the Defendant's agent in Brazil dated 23 May 2000

">TO: GIANT/SAO -- LIDIA

>CC: HSA/YYZ - GLORIA/SIMON

>CC: GA/IPE - KIM/ELLEN

>

>FM: HSA/HKG - FANNY

>

>RE: PENDING RTN CTNR UNDER HBL#83665RO/3 EX S/ESSEX MONITOR FOR C/PREVENT

>

>WELL NOTED YOUR MSG WITH TKS X HV RVT TO S/ESSEX MONITOR AND AWAITING

>SHPRS FINAL DECISION X FURTHER PLS ADV IF SHPR AGREE TO GIVE UP THE

>CTNR AND SHOULD THE FILE THEN BE CLOSED AND HAS WLD THEN BE FREE FM ALL

>RESPONSIBILITY

>

REMARKS: PLS NOTE THE AMT HSA/HKG RCV FM S/ESSEX MONITOR IS ONLY

>HKD90,370.80 AND NOT IN USD!!! AND NO PROBLEM TO REFUND THE FULL AMT TO

>SHPR IF CASE CFM CLOSED X TKS

>

TKS & REGARDS

>

>----Original Message-----

>From: lidia.lee@giantcargo.com.br [mail to : lidia.lee@giantcargo.com br]

>Sent: Tuesday May 23, 2000 3:43 AM

>To: HSA/HKG - Fanny Cheung

>Co: JULIA-PROVIU: HAS/YYZ - Gloria Lee

>Subject: RE: RTN CTNR#TEXU4797205 UNDER HB/L#83665RO/3 FOR C/ESSEX

>MONITOR"

7. Because of the time difference and that part of email(i) is missing, it is not clear which of the two emails preceded the other. However, it is abundantly clear in the Defendant's email that full refund may be made. The extra charges alleged by the Defendant to have been incurred appear from email(i) to be based on a breakdown by the Defendant's agent in Brazil. But the items in the breakdown, as I have said, are highly questionable. It is incredible that demurrage would be incurred for delaying a ship when Brazilian customs refused to release the container which apparently was already on land (also at the same time incurring storage charge). In any event, the amounts for storage and demurrage as stated by the agent do not tally with the Defendant's counterclaim. The Defendant can be gullible or charitable towards its agent's claim, but not at the expense of the Plaintiff. In a nutshell, there was no credible evidence before me to support the Defendant's Defence and Counterclaim that extra costs had been incurred.

8. The Defendant's own evidence says that the $90,370.80 was an advance, a deposit. There bring no valid or lawful reason at all for the Defendant to hold on to this sum any more, the Plaintiff was hence entitled to judgment for full refund (with interest and legal costs) of course.