XCHRX SUZIKA ELECTRONICS CO. LTD. v. EUROPEAN TRANSPORT SYSTEM (HAMACHER) LTD.

1994, No CL-37

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

COMMERCIAL LIST

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JUDGMENT

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1. The plaintiff wants to re-amend its Reply, and applies for leave to do so. The defendant opposes the granting of that leave.

General Approach

2. A Reply is a reply. It does not raise a fresh cause of action, but seeks to answer the defendant's allegations in the Defence. In the ordinary course, a plaintiff should not be prevented from making a Reply to deal with a defence raised. If the amendments sought are fit for consideration by the trial court; that is, that they are not plainly unarguable, a judge generally should allow them to be made. I should not, I believe, at this stage, when no evidence has been led, when the full details of the case are not known to me and full legal argument, which would be inappropriate in an application for leave to amend, has not been given, seek to decide the strength of the allegations, in fact or in law, that the plaintiff wishes to make. I should refuse leave to amend only if it is plain and obvious that the allegation sought to made cannot be established as a matter of fact, or, if established as a matter of fact, cannot make any difference to the outcome of the case as a matter of law. There is no other consideration here; the trial is not imminent, and the defendant has not suggested that it is prejudiced by any delay in making the allegations. In its summons, the plaintiff seeks an order that it pay the costs of and occasioned and thrown away by the amendments.

3. The amendments that the plaintiff wants to make to its reply fall under four headings.

The Construction Point

4. The plaintiff wishes to amend its reply to say, in the alternative, that if the events giving rise to the causes of action occurred before or on 7 June 1993, they are not events to which certain conditions of the contract contained in the defendant's standard trading conditions apply so that the plaintiff's claims are barred.

5. The events concerned are those alleged by the plaintiff in its statement of claim as the foundation for the defendant's liability. These are that the defendant released the goods or failed to prevent their release in breach of implied terms of the contracts, or there was negligence for which the defendant was directly or vicariously liable. It is also alleged that, if the defendant was the plaintiff's agent, it was negligent or in breach of an implied duty to ensure that the goods were not released.

6. I have read the standard trading conditions concerned. It may be that the plaintiff will find it difficult to establish a case under which it is not caught by them, but it is not plain and obvious to me that it would not be able to do so. Indeed, Mr Faulkner does not argue that the plaintiff should not be allowed to raise this point. He says that it has not been done with sufficient clarity. I believe it has.

The Hague Visby Rules

7. The plaintiff wishes to allege, in the further alternative, that, if the events do fall within the scope of the conditions, the conditions have no effect by reason of Article III rule 8 of the Hague Visby Rules. These Rules have, of course, statutory effect in Hong Kong.

8. Mr Faulkner argues that, in the absence of any averment that the contracts were subject to the Rules in their entirety, they apply only to events during the sea leg of the carriage, and the events actually took place after that leg. I think it is likely that Mr Faulkner is correct. I think the plaintiff will probably fail to establish this point. But I do not think that this is for me to decide now, without the benefit of hearing the evidence and a full argument on the law. It is possible to argue that the Rules apply to the whole contract, including the obligation to deliver, and it would not be right for me to say to the plaintiff, at this stage, that it will not be allowed to advance its case on this point.

Control of Exemption Clauses Ordinance

9. The plaintiff wants to be able to put forward a case based on the Control of Exemption Clauses Ordinance (Cap. 71). This is to be put forward "further and in the yet further alternative". If the Hague-Visby Rules do not apply because the relevant events happened after the sea leg, it is clearly arguable that this Ordinance applies to the conditions limiting liability. To some extent, at least, whether or not the plaintiff will succeed on this will depend on the evidence.

Estoppel

10. The plaintiff seeks to respond to the defence with an allegation of estoppel. At the hearing before me, Mr Scott sought, in effect, to amend his summons to put forward a revised plea of estoppel. Mr Faulkner's response to this was that he had not had the opportunity of taking instructions on the allegations made. As I understood him, he accepted that, if the facts alleged were not accepted by the defendant, this would be a matter for trial, but he said that the defendant may be able to show that the factual basis of the plea was totally untenable. If the case that the defendant could advance factually was that devastating, the law provides a remedy. This is very doubtful. It is much more likely that the defendant will want to contest the allegations in the ordinary way, most probably as to the effect of events, rather than their existence. I do not see any prejudice to the defendant in allowing the plaintiff to amend its summons to include the revised allegation of estoppel, including the allegation that the plaintiff relied on requests for forbearance and that it did subsequently forbear, and I grant this.

11. With this allegation, the situation, as I see it, is the same. The case may be weak. The plaintiff may well fail to establish it. But it is too early for me to judge this. This allegation, perhaps even more so than the others, will depend on the evidence. I cannot, at this stage, say the case of estoppel is plainly unarguable.

Result

12. In the result, I grant to leave to the plaintiff to re-amend its reply as asked, and order that the re-amended pleading be served within 7 days.

Costs

13. The defendant is entitled to the costs of and occasioned and thrown away by the amendments in any event, and I so order.

14. As to this application, the plaintiff has succeeded in the face of opposition. In these circumstances, I believe the just order is that the defendant should have its costs in any event, as if the matter had been unopposed, but the plaintiff is to have its costs, in any event, occasioned by that opposition. I make an order nisi accordingly.