PREMIER BEARING AND EQUIPMENT LTD v. IFB INTERNATIONAL FREIGHTBRIDGE (CHINA) LTD

1996, No.CL355

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTMTIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST

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Coram: The Hon Mr Justice Stone in Chambers

Date of Hearing : 14th November 1997

Date of Delivery of Ruling : 14th November 1997

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RULING

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1. I am in the course of hearing a summons dated 22nd July 1997 taken out on the part of the Defendant in this action. It is taken out pursuant to Order 14A of the Rules of the Supreme Court. The shape of the action is broadly thus: the Plaintiff is the unpaid seller of a cargo of bearings which was shipped from China via Hong Kong to Santos, Brazil. The Defendant issued the Bill of Lading. The goods were misdelivered. They were misdelivered to the buyer who had not paid the price. Accordingly, since they were misdelivered without production of the Bill of Lading, which otherwise would have entitled the buyer to gain possession of the goods, the Plaintiff sued the Defendant under the contract of carriage. Simple enough one might think. The case actually involves at this stage the interplay between the time-bar of nine months in the relevant Bill of Lading, and the one year statutory time-bar contained in Article III rule 6 of the Hague-Visby Rules.

2. What the Defendant wants to know by this summons is whether it can rely on the nine-month contractual limitation period contained in the Bill of Lading, and whether the Plaintiff’s claim is time-barred; this in turn raises the consequent question, which is Question 2 on the summons, namely, whether the Hague-Visby Rules applied to the carriage of the goods and if so, whether the Rules continued to-apply whilst the goods were in storage, notwithstanding Article 1(e) of the said Rules.

3. The Hague-Visby Rules relate to carriage by sea. Their apparent ambit, for present purposes, is from loading to discharge. Mr Kerr, who appears for the Defendant, has caused certain affidavit material to be put in. It is in slightly unusual form because it is done in the form of declarations which, I understand, were executed in the Republic of Brazil, South America. There are two or three of these declarations, and Mr Kerr has proceeded on the basis that the simple statement of facts that appears on the face of his excellent skeleton argument are the only matters relevant to the issue of law which needs to be decided.

4. Mr Coleman, who appears for the unpaid Plaintiff, frankly tells me that he is not in a position to put up opposing positive facts nor to contradict such facts as Mr Kerr is basing his argument upon, but that he wishes, within the ambit of Order 14A, to attack the evidence. He does so perfectly properly because, he says, that that is necessary for legal precision, and that the only way in which this Court can answer the questions of law contained on the face of the summons is by being absolutely sure of the matrix of facts. He says that if the Defendant wishes to cut the Plaintiff out on what is accepted to be, by Mr Kerr with typical realism, an "unsurprising" claim, then it is simply not enough to put the matter broadly, and that if the Court is to make a decision on whether it be a one year bar or a nine-month time-bar, it must be able properly to conclude when discharge of these goods itself concluded. At bottom Mr Coleman places great stress on the fact that Order 14A is a summary remedy. He says that if the case is fact-sensitive, this procedure should not be used.

5. The-difficulty which has arisen is this. In the middle of Mr Coleman's submission, and stimulated (I expect) because of an interplay between Bench and Counsel, Mr Kerr stood up and, after ten minutes reflection which I granted, has asked for an adjournment to put in further evidence. Put bluntly, I expect he sensed danger. He was well aware of the summary nature of Order 14A and he wondered whether in fact his evidence, such as it is, is up to the task. Because, of course, if I am to grant the relief he seeks, that will be the end of the matter. So it is an important consideration from both the Defendant's and the Plaintiff's view point. His difficulty stemmed, he told me, from an impression he had gained from two conversations with Mr Coleman. They Were Counsel-to-Counsel conversations, but they have been referred to by each Counsel without constraint and I do not, in the circumstances, find difficulty in myself looking at the situation overall.

6. The first conversation was some time ago. I understand that Mr Kerr talked to Mr Coleman on the telephone, and that reference was made between Counsel to the evidence. Mr Coleman' s recollection of the telephone conversation was that the substance of it went to the rather unusual form of the evidence, to which matter I have earlier reverted. It appears to have indicated to Mr Kerr, as indeed he indicated to me during argument, that it was about this being evidence by way of declaration rather than affidavit; I do not know at that stage whether he had in mind the contents of Marginal Note 14A/1/2/8 dealing with the type of evidence which is required in Order 14 proceedings. Mr Kerr tells me that he interpreted the conversation rather more broadly, and that he rather took it that there were going to be no evidential problems raised. This of course is rather different from the mere matters of form to which Mr Coleman has alluded, although Mr Kerr does also say that, looking at the matter fully and fairly, he can appreciate how Mr Coleman may have got the impression that "form" only was the consideration. In any event, and this is the crux of the matter, Mr Kerr says this : that if he had realised what the situation was, he would have boosted his evidence.

7. The second conversation apparently was one that took place yesterday. Mr Coleman, with characteristic frankness, has told the Court, and the Court of course accepts, that in fact his ideas with regard to a submission based upon the sufficiency of the evidence did not really begin to crystallise until he heard the argument in the way it was put by Mr Kerr. Possibly too, the judge has something to do with it, given the interplay between Counsel. But these are the vagaries of litigation, and anyone who has been in the position of Counsel can understand how ideas which were perhaps half formed or ill thought out at the beginning of a case sometimes come together during that case. Indeed Mr Coleman says this angle of attack on the sufficiency of the evidence did not really begin to gel until he heard Mr Kerr submit that discharge would have been completed once the goods had gone over the ship's rail and had landed in a truck on the quayside. So that yesterday's conversation although an interesting by-play, perhaps does not have any real significance in the manner in which this case has now developed.

8. Mr Coleman for his part objects to an adjournment. He says that although there was indeed this earlier conversation, which to the best of his recollection concentrated on the formal position, the Defendant in fact, via its Counsel, Mr Kerr, can never have been under any assumption or impression that the facts were agreed or effectively agreed. Certainly, he says, with the best will in the world he cannot see how it could have been assumed that the evidence put forward would not have been subject to critical scrutiny. He also points out that his client had been served with a lengthy notice to admit facts by the Defendant and that out of that list, which incidentally I have not seen and hitherto did not know about, only two uncontroversial matters were admitted. In a nutshell, he says, if the Defendant, who is the applicant in this Order 14A application, wishes to take a procedural shortcut, it has to make sure its tackle is in order, and that he does not feel that he has caused the Defendant to be diverted from this path.

9. Mr Kerr wants, therefore, an adjournment for a date to be fixed, time estimate, one morning. He wants to bolster his evidence. Should I allow him to do so? It is a difficult decision. I have two reputable Counsel who are apparently at cross-purposes. I blame neither. Both are men of integrity, let there be no doubt about that. Both have tried to help me as best they could with their respective memories of a conversation which admittedly took place. It would also be less than honest of me intellectually if I did not indicate, as I indeed indicated in the case that I handed down yesterday, Commercial List No.322 of 1996, that I have a predilection against shortcuts, whether they be by way of Order 14A or Order 33 or indeed Orders 18 rule 19; my experience has consistently been, at both Bar and on the Bench, that shortcuts of this type are dangerous. So I factor that in too, although at the same time I had very much hoped that this case might be a case in which the facts were sufficiently self-contained and sufficiently without loose ends in order to enable me to get down to examining the extremely interesting issues of law to which Mr Kerr has so capably drawn to my attention. In short I want to decide the point as a matter of law.

10. Now of course this application has not yet concluded. It has taken a somewhat unusual course because Mr Kerr's adjournment application has arrived, as I have indicated earlier, in the middle of Mr Coleman's submission. I do not know, and I did not press him as to whether the fact of making the application is indicative of what he thinks are his chances. And I have yet, of course, to hear him in reply to Mr Coleman's criticisms of possible lacunae in the evidence. And so I do not at the moment know what I am going to do on the issue raised. But I do have to decide whether the matter should come off for four or five weeks to enable the evidence to be supplemented.

11. After giving the matter anxious consideration, and after weighing the argument of each side carefully in the balance, I have decided to refuse Mr Kerr's application. I regret that there appears to have been some form of crossed wires between Counsel, although I note that Mr Kerr, with characteristic honesty, has not put it on the basis that Mr Coleman had assured him that there would be no evidential points taken whatever, and at least he says that he can appreciate how Mr Coleman may have got the impression that really it was the form of the evidence that was the main point at issue. At the end of the day I think that if you are going to make an Order 14A application or any shortcut of similar ilk, you have got to ensure that you absolutely shore up your evidence to protect against the sort of observations that Mr Coleman was making in the course of his argument. But I do not think from what Counsel have both told me, that the situation is sufficiently clear or obvious for me to grant the indulgence of an adjournment. And of course I have not yet heard the conclusion of argument, and I have not yet rendered my decision on the issues before me. We shall have to wait and see what I say. As to that my mind remains open to argument.

12. That therefore is my ruling. It is now ten to five, the matter presumably will come on again before me at ten o'clock on Monday morning, which will give the parties time to reflect upon what I have said. I am anxious to bring this application to a conclusion, but I think that I must do it, in all the circumstances, on the basis of the material presently before me.