NEW UNITED TRADING CO AND ANOTHER v. KAWASAKI KINKAI KISEN KAISHA LTD. AND OTHERS

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JUDGMENT

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Cons, V.-P.:

1. In January 1983 the 1st Plaintiff loaded eight cases of electrical goods and cameras onto the vessel "Cosmos". The Bills of Lading were issued in Hong Kong by the 1st Defendant as Carrier and it would seem that the 1st Defendant was the time charterer of the vessel. The 2nd and 3rd Defendants respectively were the demise charterers and the sub-demise charterers. The consignee was the 2nd Plaintiff in Khota Kinabalu.

2. The Cosmos arrived in that port. There is some doubt as to the exact date. According to some of the documents it was 1st February. According to the affidavit of the 4th Defendant's solicitors, it was the 7th February. But the exact date is immaterial. She was unloaded. The practice in that port is that all cargoes unloaded go first, into the custody of the 4th Defendant, who are the Sabah Ports Authority, a corporate body established, I assume, under Malaysian law.

3. If the vessel did arrive on the 7th, then that same day the 1st Defendant delivered to the 4th Defendant two delivery orders in respect of the eight cases, but the eight cases could no longer be found.

4. On 8th March there was a letter from the 4th Defendant to the 2nd Plaintiff stating that the records showed that the goods were not landed, and there are records in the file from the 4th Defendant to support that allegation.  On the other hand the agents of the owners and the charterers by a letter of theirs dated 7th March to the 2nd Plaintiff said "their records showed that all the cargoes were duly landed". Thus either the 1st Defendant or the 4th Defendant is responsible for the loss. It is quite impossible at the moment to say which of them it is.

5. On 1st May 1984 the two Plaintiffs together issued a writ against both the 1st Defendant and the 4th Defendant. They included as Defendants, the 2nd and 3rd, but no relief is claimed against either.

6. Clause 27 of the Bill of Lading provides that the contract shall be governed by Japanese law and any action against the Carrier, that is the 1st Defendant, shall be brought in the Tokyo District Court. The 1st Defendant has however submitted to the jurisdiction of this Court and filed a defence in July last year. Before that, in April to be precise, the Plaintiffs obtained from Rhind, J. an order for leave to serve a concurrent writ out of the jurisdiction on the 4th Defendant. The 4th Defendant gave no notice of intention to defend within the appropriate period and judgment in default was entered towards the end of May. In July the 4th Defendant applied for leave to defend and that the judgment be set aside. In addition they asked that the service of the writ be set aside and for a declaration that this Court has no jurisdiction over the 4th Defendant.

7. The application came before Nazareth J, and on the 3rd December he acceded to the first part; he set aside the judgment and he gave leave to defend. He refused to set aside the service of the writ.

8. The 4th Defendant now appeals. There is no cross appeal. There is a Respondent's Notice by which the 1st Defendant seeks, as I see it, to uphold the judgment by a refinement of the ground upon which the judge came to his conclusion.

9. Leave to serve a writ outside the jurisdiction is a matter of discretion for the individual judge. Mr. Yu who appears before us for the 4th Defendant accepts that fact. He says that the judge simply went wrong, in particular as to whether the Plaintiff has shown a good arguable case against the 4th Defendant. Now it is beyond doubt that whether a plaintiff has a good arguable case against the party whom he seeks to serve out of the jurisdiction is a factor to be considered. That is not surprising, because no court would seek to bring a foreigner within its jurisdiction if it thought the plaintiff had little or no chance of success at the end of the day.

10. A good arguable case is a concept that is incapable of comprehensive definition. Stephenson L.J. gave some indication in Brinkibon v. Stahag Stahl⁽¹⁾ case when he said:

It may be observed that that leaves a large area squarely within the discretion of the judge.

11. Mr. Yu submits that all the Plaintiffs have in the present case is a bare assertion, not an assertion by the Plaintiffs themselves, but by the Carrier's agents. In substance it is the letter from the owner's agent to which I have already referred. The crucial point is contained in this paragraph -

12. Mr. Yu observes that the tally sheet has not been exhibited below, as well as it might have been, and he could have added that this is in contradistinction to the records of the 4th Defendant which do appear upon the court file. He submits that the contents of that letter are, technically speaking, not evidence on which the Plaintiff should be allowed to rely. In my view that takes too strict a view. Courts will act and do act in interlocutory proceedings upon evidence that might well in itself not be admitted at the trial.  It is true of course that the letter in itself may perhaps carry very little weight, but it would be wrong in my view to ignore the implications of the situation in which it came to be written. It is not unusual for a plaintiff to be forced to bring an action against two defendants, each of whose defence would be mutually exclusive of the other. An example is Massey v. Heynes ⁽²⁾, referred to us by Mr. Ma who appears for the 1st Defendant, although the situation in that case is not on all fours with the present. Nevertheless there must be many other cases. It is by no means an uncommon situation.

13. I may digress slightly far the moment to say that there is a further complaint against the judge, that he was wrongly influenced by the words of the actual pleadings in the case. He said-

14. With respect, I do not read those words in the way that is suggested. The judge's decision, as he said very shortly afterwards, was made "against the general background of the case", although he did not particularly specify the items of that background. As I see them the earlier words that I have just read do more than indicate the position in which the Plaintiffs found themselves.

15. Where a plaintiff finds himself in that position and he and the defendants are all in the same jurisdiction, there can be no doubt that the plaintiff would sue both defendants in the alternative and that both defendants would be counted proper parties to the action.

16. If the parties are in separate jurisdictions, which must often be the case in disputes connected with the shipping trade, the defendants are equally proper parties. In my view it would be most undesirable that actions against them should be tried in two separate jurisdictions. In circumstances of this kind, there should be only one forum.

17. Mr. Yu said that the questions of a good arguable case and of forum conveniens are two completely separate questions and that the judge ought to consider, and come to a separate decision on, each. From this it would follow, I suppose, that if he finds against the plaintiff on either, he should refuse leave to serve out of the jurisdiction. That was the approach adopted by the judge.

18. With respect, for my part I do not accept that as completely correct. Both matters are factors to be considered, but both are very much interrelated. The judge must include them in his consideration but must look at the matter as a whole in coming to his decision. I draw support from the words of Lord Oaksey in the Korner Case ⁽³⁾. At p.881 he said-

19. I accept that the matter he was dealing with is not exactly the same as the one before us, but it seems to me the principle is.

20. One matter to be included when the whole is looked at is the fact that the 1st Defendant has, contrary to his contractual rights, submitted to this jurisdiction. I accept that it is a factor which has been brought into existence by the Plaintiff, but nevertheless it is a factor that is there and, in my view, is one of great importance. There are other factors to be considered, such as the costs of bringing witnesses to this jurisdiction. As I see it this is not a matter of great significance, for I see no reason to think that there will be a great number of witnesses to be brought here.

21. I do agree with Mr. Yu that the fact that the 1st Defendant has not availed himself so far of the limitation period given to him by the Bill of Lading is a matter not of importance. However taking all in all it seems to me that this is a clear case for leave to serve out of the jurisdiction, and I would for my part dismiss the appeal.

(1)    [1980] 2 Lloyd's Rep. 556
(2)    (1881) 21 Q.B.D. 330
(3)    Vitkovice Horni v. Korner [1951] A.C. 869

Huggins, V.-P.:

22. I agree. The jurisdiction of the learned judge is not now in dispute: what is in dispute is solely a matter of discretion. Applying the test which my brother has cited from Stephenson L.J.'S judgment in Brinkibon Ltd. v. Stahag Stahl and Stahlwarenhandelsgesellschaft m.b.H. [1980] 2 Lloyd's Rep. 556, 559 I have no doubt that this order lay within the discretion of the judge, and I see no reason to say that it was not open to him to come to the conclusion that he did.

23. I, too, would dismiss this appeal.

Fuad, J.A.:

24. I also agree with my Lords that this appeal should be dismissed.