海寧漢林沙發有限公司 v. AGX LINES LTD

HCA 1298/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1298 OF 2008

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BETWEEN

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REASONS  FOR  JUDGMENT

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1.  On 13 August 2009 I dismissed the defendant’s appeal against the order of Master J Wong made on 1 June 2009 with costs to the plaintiff. The costs were summarily assessed at $30,000. I indicated at the time that reasons in writing would be given later. This I now do.

2.  There were three summonses before the master:

(a) the defendant’s summons dated 19 November 2008 to strike out the plaintiff’s statement of claim;

(b) the plaintiff’s summons dated 12 December 2008 for judgment under O.14, r.1 RHC against the defendant for the amount claimed together with interest and costs;

(c) the defendant’s summons dated 9 February 2009 for security for costs against the plaintiff in the sum on HK$287,099.87.

3.  On the plaintiff’s summons for summary judgment, the master ordered that judgment be entered for the plaintiff against the defendant as claimed. By the judgment entered on 1 June 2009 it was adjudged that the defendant do pay the plaintiff:

(a) the sum of US$217,022.00 or the Hong Kong dollar equivalent at the time of payment and RMB60,582.95 or the Hong Kong dollar equivalent at the time of payment;

(b) interest at the rate of 8.353% per annum from 11 July 2008 to the date of judgment and thereafter at judgment rate until payment.

4.  The master also ordered that the defendant’s summons to strike out the statement of claim and the defendant’s summons for security for costs be dismissed.

5.  The master also ordered that the costs of all three summonses and the proceedings be paid by the defendant to the plaintiff to be summarily assessed.

6.  At the hearing of the appeal Mr Chu, for the defendant, did not pursue the appeal against the order of the master dismissing the defendant’s application to strike out the statement of claim. It was accepted by Mr Chu that if the appeal against the order of the master granting summary judgment to the plaintiff were dismissed then the appeal against the order dismissing the defendant’s application for security for costs would fall to be dismissed.

7.  It is important to bear in mind that the plaintiff brought this action to enforce a foreign judgment in the PRC against the defendant.

8.  The background leading to the foreign judgment is that there were 17 agreements made between the plaintiff and the defendant in September 2005 whereby the defendant agreed for valuable consideration to carry and deliver goods from Shanghai, PRC to various destinations in the United States of America as pleaded and particularized in the amended statement of claim. The plaintiff was the holder of 17 sets of bills of lading. The defendant however failed and/or refused to account to the plaintiff for the goods or to return the same to the plaintiff.

9.  On 8 May 2006 the plaintiff commenced 17 civil actions in the Maritime Court in Shanghai, PRC against the defendant for damages as particularized in the amended statement of claim.

10.  On 31 July 2006 the parties settled the 17 civil actions. As is set out in the Civil Mediation Statement dated 31 July 2006 issued by the Shanghai Maritime Court (“the Civil Mediation Statement”):

“The plaintiff 海寧漢林沙發有限公司 brought an action on the defendant AGX Lines Limited on 8^th May 2006 in this court concerning disputed compensation on the contract of delivery of marine cargo without the original bill of lading. On 11^th May 2006 this court accepted the case and formed a collegiate bench to hear the case. During the hearing, both parties, after negotiating with each other, voluntarily reached the following agreement:

1. Within 10 working days upon signing the settlement agreement the defendant AGX Lines Limited shall pay the plaintiff 海寧漢林沙發有限公司 USD160,000 in a lump sum and into an account specified by the plaintiff, to settle all disputes.

2. If the defendant AOX Lines Limited fails to comply with the clauses of the settlement agreement, the plaintiff 海寧漢林沙發有限公司can rely upon this settlement agreement and claim the total amount of USD217,002 arising from the 17 shipments.

3. The defendant AGX Lines Limited shall bear the handling fee of RMB60,582.95.

4. Both parties have no more disputes on this matter.”

11.  According to the expert evidence of H & Y Law Firm in their letter dated 26 February 2009 to the plaintiff’s solicitors (“the plaintiff’s expert evidence”), the Civil Mediation Statement was legally enforceable and could be enforced in the same way as a regular judgment granted by the Shanghai Maritime Court.

12.  The defendant has not put forward any expert evidence.

13.  It is for the defendant to show cause why judgment should not be entered against it.

14.  Mr Chu submitted that a triable issue has been raised by referring to the Civil Mediation Statement and pointing out that it had not been signed by the judge and the court clerk. He referred to the plaintiff’s expert evidence where Article 89 of the Civil Procedure Law of the PRC was mentioned which requires a mediation statement to be signed by the judge and court clerk. Mr Chu also submitted that the court could not interpret the Civil Mediation Statement without other supporting documents which were not before the court and hence a triable issue was also raised.

15.  I am unable to accept Mr Chu’s submissions.

16.  It is clear from the plaintiff’s expert evidence that the expert was asked to advise on the enforceability of the Civil Mediation Statement. And the plaintiff’s expert did advise that the Civil Mediation Statement made by the Shanghai Maritime Court was legally enforceable and could be enforced in the same way as a regular judgment granted by that court. The expert could have gone into more detail to reinforce his view but I bear in mind that the defendant has not put forward any expert evidence disputing the enforceability of the Civil Mediation Statement in the same way as a regular judgment granted by that court.

17.  There is further support for the view that the Civil Mediation Statement was legally enforceable as a regular judgment of the Shanghai Maritime Court. By a Notice of Execution dated 8 February 2007 issued by the Shanghai Maritime Court the defendant was ordered to perform the terms of the Civil Mediation Statement before 26 February 2007 and to pay interest and expenses as set out therein and the defendant was given clear notice that

“If this is not performed within the timeframe, this court shall force an execution”

This clearly shows that the Civil Mediation Statement was legally enforceable as a regular judgment granted by the Shanghai Maritime Court.

18.  In Colt Industries Inc v Sarlie (No.2 )[1966] 1 WLR 1287 it was held that the judgment of the Supreme Court of the State of New York, being a judgment of a court of competent jurisdiction in the territory in which it was pronounced, namely the State of New York, was final and conclusive for the purpose of enforcing it in the English courts. As Lord Denning MR said at page 1291:

“It seems to be that the proper test is this: Is the judgment a final and conclusive judgment of a court of competent jurisdiction in the territory in which it was pronounced? The relevant territory here is the State of New York. Applying this test, there was here a final and conclusive judgment.”

19.  In the absence of any contradictory expert evidence put forward by the defendant I am not satisfied that a triable issue has been raised by the defendant.

20.  There is also no merit in the submission that a triable issue has been raised as there are other supporting documents which have not been placed before the court. It is for the defendant to show how these unspecified documents give rise to a triable issue to the plaintiff’s claim in this action to enforce the foreign judgment.

21.  The defendant has failed to raise a triable issue as to why judgment should not be entered against it. In my judgment the master was right to grant summary judgment to the plaintiff as ordered by him and to dismiss the defendant’s summons to strike out the statement of claim and the defendant’s summons for security for costs.

22.  For the above reasons, I dismissed the defendant’s appeal against the master’s order.

23.  Applying a broad brush approach to the plaintiff’s statement of costs I summarily assessed the plaintiff’s costs for the appeal in the sum of $30,000 such costs to be paid to the plaintiff by the defendant.