MARITIME DELIVERY INC. v. THE OWNER OF THE SHIP OR VESSEL "KITTY 1" (LICENCE NO.10285)

HCAJ18/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY JURISDICTION ACTION NO.18 OF 2002

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Admiralty action in rem against : the ship or vessel
"Kitty 1" (Licence No.10285)

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J U D G M E N T

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1. This is an application for summary judgment by the plaintiff, Maritime Delivery Inc., against the defendant, the owner of the ship or vessel "Kitty 1" by the name of Mr Sun Ling Yung ("Mr Sun").

2. This action, having been started on 24 January 2002, was followed by the arrest on the same day. The acknowledgement was made by the defendant in February 2002, followed by the security put up in the form of payment into court of some HK$850,000 on 13 March 2002. The summary judgment summons was issued on 31 May 2002 on the basis that there is no defence to the claim.

3. The claim arose in this way. By a contract of sale between the plaintiff, Maritime Delivery Inc. as buyer and Orientalis International Ltd as seller, dated 15 October 2001, the buyer agreed to buy and the seller agreed to sell the vessel "Orientalis" for a sum of US$1,170,939.96 with delivery to be between 25 October to 15 November 2001, and with a deposit to be paid of US$250,000, to be transferred to the account of Mr Sun at Citibank, Hong Kong.

4. There was a provision in the contract for repayment of that US$250,000 deposit in the event that sale should fail for any reasons. By a contemporaneous document, headed "Letter of Undertaking" dated 15 October 2001 signed by Mr Sun, Mr Sun acknowledged and agreed as follows :

"... I, Sun Ling-Yung, bearer of China Passport No.130877497 hereby irrevocably and unconditionally guarantee, as a continuing obligation, that in the event of any failure in the sale of the Vessel, for any reasons, I shall immediately repay the Advancement in full to the Buyers and my motor vessels with Marine Department Hong Kong Pleasure Vessel Licence No.10285, namely 'Kitty1' and Licence No 9865, namely 'Argo' (copies Licences as attached) ('the Security') are hereby pledged as security against the non-payment of the Advancement. ..."

5. There is no doubt that the payment of the deposit of US$250,000 was made by the plaintiff and there is also no doubt that the contract failed because of problems of the seller in not being able to make delivery. It is therefore clear that the obligation to repay under the Letter of Undertaking guarantee has arisen - no repayment had been made. It seems to me therefore that there is clearly no defence shown to this claim.

6. The defendant has filed a Defence alleging that there is default on the part of the plaintiff, but there has been no evidence adduced at all to support those allegations.

7. In the circumstances, I am satisfied that the application for summary judgment has been fully made out, and that an order in terms of the summons should be made. I therefore order that final judgment be entered against the defendant for the sum of US$250,000 plus interest thereon, from the date of the writ until today at the rate of 2% above prime. And further I order that costs of the application and costs of the action should be awarded to the plaintiff, to be taxed if not agreed. I further order that the sum in court in the amount of HK$850,000 plus accrued interest be paid out to the plaintiff having regard to the fact that that sum is very much less than the amount awarded in this action.