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HCA 937/2016
[2021] HKCFI 2310
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
HIGH COURT ACTION NO 937 OF 2016
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| BETWEEN |
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PERFECT BEST ASSET MANAGEMENT INC. |
Plaintiff |
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and |
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ADL EXPRESS LIMITED |
1st Defendant |
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NET LOGISTIC JVM OY |
2nd Defendant |
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Before: Deputy High Court Judge Whitehead, SC in Court
Dates of Hearing: 13 - 15 and 23 July 2021
Date of Judgment: 13 August 2021
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J U D G M E N T
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BACKGROUND
1.This action arose out of a claim of misdelivery of computer accessories in 7 containers (“the Cargos”) without presentation of the original bills of lading (“Bs/L”).
2.The Plaintiff is a Samoa-incorporated company, based in Taiwan and was the manufacturer and seller of the Cargos. The 1st Defendant is a Hong Kong company, which provides logistics services and who arranged for the Cargos to be shipped.
3.The 2nd Defendant, which did not take part in the trial, is a Finland-based company nominated as consignee in respect of the Cargos. On day 1 of the trial, Mr Edward Alder, counsel for the Plaintiff, informed the Court that the writ was never served on the 2nd Defendant, and the Plaintiff’s action against the 2nd Defendant should be dismissed.
4.One distinct feature of this action is that, unlike many misdelivery cases, the Cargos were ultimately delivered to the Plaintiff’s end buyer, Koodoo Technologies (“Koodoo”). It is not disputed that the Plaintiff was paid by Koodoo for at least part of the Cargos, although the final amount of payment is in dispute.
5.The Plaintiff now claims against the 1st Defendant for the principal sum of US$1,299,189.87, together with interest thereon, representing the invoice value of the Cargos and deducting part payment from Koodoo.
UNDISPUTED FACTS
6.In September and October 2014, the Plaintiff sold the Cargos to Esdida Limited (“Esdida”), a Cypriot company related to Koodoo, for a total amount of US$1,412,584.47. Sales invoices were issued by the Plaintiff to Esdida, whilst Koodoo remained the ultimate buyer of the Cargos.
7.The Plaintiff, through liaison by its agent, Western Shipping (HK) Ltd (“Western Shipping”), placed shipping orders with the 1st Defendant to arrange for the transportation of the Cargos from Hong Kong to Kotka, Finland. Between October to November 2014, 7 Combined Bills of Lading (“the CBs/L”) were issued by the 1st Defendant as carrier to the Plaintiff as shipper.
8.Under the CBs/L, the Cargos, loaded into 7 containers in total, were shipped from Hong Kong via Hamburg to Kotka, Finland, in 2 shipments:
8.1 4 of the containers were carried in October 2014 on the vessel YM Uniform (“the YMU Containers”).
8.2 The remaining 3 containers were carried in November 2014 on the vessel Helsinki Bridge (“the HB Containers”).
9.The Cargos were carried by 2 sea-legs. First from Hong Kong to Hamburg, and then from Hamburg to Kotka.
10.On the face of the CBs/L[1], Hong Kong is the “place of receipt” and “port of loading”. Hamburg is the “port of discharge”. The “place of delivery” is Kotka.
11.The 1st Defendant does not own any vessels. To arrange for the carriage of the Cargos, it contacted Yang Ming Transport Corp (“Yang Ming”), the actual ocean carrier represented by its agent Yang Ming Line (HK) Ltd (“YM HK”). In respect of the arrangement between the 1st Defendant and Yang Ming, 2 ocean Bs/L (“OBs/L”) were issued by Yang Ming as carrier and the 1st Defendant as shipper, one OB/L for the YMU Containers shipment and one OB/L for the HB Containers shipment.
12.Under all the CBs/L and the OBs/L, the 2nd Defendant was named as the consignee. As noted, there is no dispute between the parties that Koodoo was the ultimate buyer of the Cargos.
13.Particulars of the 7 containers of the Cargos are as follows:
|
Container No. |
P’s Sales Invoice No. |
CB/L No. |
OB/L No. |
Vessel |
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SEGU4355800 |
001, P/I 004[2] |
ES/KOT/1741[3] |
YMLUN300152120[4] |
YM Uniform |
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BMOU4806017 |
002, P/I 045[5] |
ES/KOT/1738[6] |
YMLUN300152120 |
YM Uniform |
|
FSCU9802053 |
003, P/I 046[7] |
ES/KOT/1742[8] |
YMLUN300152120 |
YM Uniform |
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BMOU4062888 |
004, P/I 047[9] |
ES/KOT/1740[10] |
YMLUN300152120 |
YM Uniform |
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BMOU4429485 |
042, P/I 52-3[11] |
ES/KOT/1751[12] |
YMLUN300154284[13] |
Helsinki Bridge |
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BMOU4423527 |
102, P/I 52-5[14] |
ES/KOT/1753[15] |
YMLUN300154284[16] |
Helsinki Bridge |
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CAXU8203245 |
104, P/I 52-7[17] |
ES/KOT/1755[18] |
YMLUN300154284[19] |
Helsinki Bridge |
14.The YMU Containers and the HB Containers arrived at Kotka on 8 November 2014[20] and 11 December 2014[21] respectively.
15.At some time between November 2014 and March 2015, following the discharge of the Cargos, they were released by the 1st Defendant and Yang Ming without presentation of any of the original CBs/L (“the Release”). The Cargos were eventually delivered to the end buyer, Koodoo.
16.Following the Release, between November 2014 to March 2016, the Plaintiff continued to engage with the 1st Defendant in respect of the carriage of different cargos.
17.On 16 March 2016, a Gigi Sin (“Gigi”) of Western Shipping emailed Tiffany Kong (“Tiffany”) of the 1st Defendant to confirm the status of the Cargos.[22] Thereafter, email correspondence and negotiations were exchanged between the Plaintiff, the 1st Defendant, Western Shipping, Yang Ming, YM HK, and Koodoo concerning the status of the Cargos.
18.On 29 March 2016, Cindy Law (“Cindy”) of the 1st Defendant wrote an email to Emily (“Emily”) of A4 Tech Co Ltd (“A4 Tech”), an associate company of the Plaintiff, informing her of the Release.[23] It is the Plaintiff’s case that that this was the first time that it learned of the Release.
19.On 12 April 2016, the writ in this action was issued. It was not served on the 1st Defendant until a few months later on 1 December 2016.
THE PLAINTIFF’S CASE - SUMMARY
20.The Plaintiff claims that the Release was made by the 1st Defendant without the knowledge of the Plaintiff, without obtaining the original CBs/L, and/or written authorisation from the Plaintiff.
21.It is the Plaintiff’s case that it has held the original CBs/L and has never given any authorisation for the release of the Cargos to any party.
22.The Plaintiff first learned of the Release on 29 March 2016 from the email sent by Cindy to Emily.[24] The Plaintiff has pleaded that the 1st Defendant had deliberately concealed or failed to disclose the Release to the Plaintiff.[25]
23.The Plaintiff claims that the CBs/L evidenced the terms of the carriage agreement between the Plaintiff and the 1st Defendant (“the Carriage Agreement”).[26] As a result of the Release, the 1st Defendant breached the terms of the Carriage Agreement, was negligent and/or breached its duty of care.
24.This, the Plaintiff submits, also amounts to a breach of the “Presentation Rule”: Carewins Development (China) Ltd v Bright Fortune Shipping Ltd (2009) 12 HKCFAR 185, §§21-23 per Ribeiro PJ.
25.In its Re-Amended Statement of Claim, the Plaintiff refers to email correspondence between the 1st Defendant and the Plaintiff, alleging that by these emails, the 1st Defendant has admitted the wrongful and unauthorised release of the Cargos. These emails include:
25.1 An email dated 29 March 2016, from Cindy to Emily (“29 March 2016 Email”);[27]
25.2 An email dated 31 March 2016, from Henry Chung (“Henry”), then CEO of the 1st Defendant, to Emily (“31 March 2016 Email”);[28]
25.3 An email dated 16 June 2016 from Henry to Annie Cheng (“Annie”) of A4 Tech (“16 June 2016 Email”).[29]
26.On the first day of the trial, I made a ruling that the 31 March 2016 Email is without prejudice correspondence and thus inadmissible.
27.In May 2016, Koodoo paid US$113,394.60 to the Plaintiff. and the Plaintiff thereafter adjusted the quantum of its claim to US$1,299,189.87.
THE 1ST DEFENDANT’S CASE - SUMMARY
28.The 1st Defendant does not dispute that the Cargos were released in Kotka and that no CBs/L were presented. Despite this, the 1st Defendant has raised a number of defences.
29.As a preliminary but important point, the 1st Defendant claims that its standard Trading Conditions (“Trading Conditions”) were incorporated into the Carriage Agreement as the Plaintiff, through Western Shipping, was sent a substantial number of documents which stated “All business undertaken will be subject to [the 1st Defendant’s] trading conditions. For details, please study our website.”[30]
(i) Defence 1: 1st Defendant as Agent Only
30.There was initially confusion as to the position of the 1st Defendant - whether it was claiming to be the agent of the Plaintiff, or Yang Ming. Mr Toby Brown, counsel for the 1st Defendant, has now clarified that the 1st Defendant’s case is that the CBs/L were contracted or issued by the 1st Defendant as agent for and on behalf of Yang Ming. And as such, the 1st Defendant is not liable.
31.In support of this defence, the 1st Defendant principally relies on the following:
31.1 the CBs/L state that the 1st Defendant signed “AS AGENT”;
31.2 the terms of the CBs/L; and
31.3 Clauses 2.3, 4.3, 4.4 and 5.3 of the Trading Conditions.
32.The 1st Defendant further submits that the Plaintiff must have known at the time of the Carriage Agreement that Yang Ming was acting as the principal under the Carriage Agreement.
(ii) Defence 2: No Claim against Sub-contractors of the Combined Transport Operator (“CTO”)
33.It is the 1st Defendant’s position that the Plaintiff undertook not to sue any agent or sub-contractor of the CTO under clause 9.3.1 of the CBs/L. The 1st Defendant claims Yang Ming was the CTO, and that it was merely a sub-contractor. This action is therefore said to be brought in breach of the Plaintiff’s undertaking.
34.The parties agree that the success of this defence is contingent upon the outcome of the agency defence.
(iii) Defence 3: Telex releases
35.It is not disputed that the Plaintiff and the 1st Defendant had a long-standing telex arrangement which could be utilised to release cargos without presentation of the Bs/L. The 1st Defendant says that in this case it had consent of the Plaintiff to release the Cargos in the form of telex release instructions. Following the Release, a telex release fee of HK$500 per container for the Cargos was invoiced by the 1st Defendant and paid for by the Plaintiff.
36.In respect of the YMU Containers, the 1st Defendant further relies on an email dated 30 September 2014 from Suye Cheung (“Suye”) of Western Shipping[31] (“30 September 2014 Email”) in submitting that telex releases of the Cargos were explicitly authorised by the Plaintiff. The said email reads:
“Dear Tiffany,
We confirm the above mention B/L is OK. (Telex release)
Please kindly send the invoice to us asap.”
37.For the HB Containers, Mr Brown submitted that because the telex release fees were prepaid, there must, similarly, be instructions from Western Shipping for the release of the HB Containers. It is the 1st Defendant’s case that it was not uncommon for Western Shipping to give oral release instructions by telephone.
38.The 1st Defendant further submits that the Plaintiff had not provided any explanation as to why there was an approximate 18-month time gap between the Release and the time when the Plaintiff started raising issues.
(iv) Defence 4: Time Bar
39.In relation to time-bar issues, the 1st Defendant initially raised 3 lines of defence: -
39.1 Clause 8.2.1 of the CBs/L
39.1.1 Clause 8.2.1 of the CBs/L:[32]
“The CTO shall be discharged of all liability under this Bill of Lading unless suit is brought and written notice thereof given to the CTO within nine months after delivery of the goods. In the case of total loss of the goods the period shall begin to run two months after the goods have been received for transport.”
39.1.2 Mr Brown relies on the “total loss” limb and submits that it covers situations such as the present, where goods are not delivered or misdelivered. As such, the 11-month limitation period had expired by the time the writ was issued.
39.2 Clauses 21.2 & 21.3 of the Trading Conditions; Mr Brown has now abandoned this defence.[33]
39.3 Hague Visby Rules (HVR) Article III, rule 6:
“6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier of his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.
If the loss or damage is not apparent, the notice must be given within three days of the delivery of the goods.
The notice in writing need not be given if the state of the goods has, at the time of their receipt, been the subject of joint survey of inspection.
Subject to paragraph 6bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended of the parties so agree after the cause of action has arisen.
In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.”
(v) Defence 5: No Loss
40.Mr Brown further submits that even if liability is established, the Plaintiff has failed to prove its losses. He refers to (i) a spreadsheet prepared by the Plaintiff dated 22 January 2016 headed “KOODOO Payment Record - 2014 Orders” (“the Payment Record”)[34] and (ii) email correspondence between Annie and Ms Anna Mesheryakova (“Anna”) of Koodoo in April 2016,[35] to suggest that the Plaintiff was in fact paid in full by Koodoo.
41.Mr Brown further submits that if there be any confusion with the Plaintiff’s accounts, that the Plaintiff has failed to call any evidence to properly explain the same and as such the Court may draw adverse inferences as a result of such failure.
(vi) Defence 6: Goods never in D1’s Possession
42.The 1st Defendant relies on Clause 20 of the Trading Conditions which states it can only be liable where the Cargos are in its “actual possession” and its “actual control”. Mr Brown submits that the Plaintiff had never pleaded that the 1st Defendant had “actual possession” of the Cargos. Again, this defence will fail if the Trading Conditions are found to be irrelevant.
(vii) Defence 7: Packing Limitation
43.It is the 1st Defendant’s case that if the Trading Conditions are applicable, the 1st Defendant’s liabilities would be capped by the Packing Limitation.
44.As to the alleged admissions of liability, Mr Brown submits that none of the emails amounted to such.
45.Mr Brown, as noted, also invites this Court to draw adverse inferences against the Plaintiff in respect of its decision to call no factual witnesses.
THE PLAINTIFF’S RESPONSES
(i) Trading Conditions
46.It is the Plaintiff’s case that the Trading Conditions do not apply where a CB/L has been issued. Any possible application of the Trading Conditions is therefore excluded.
47.The Plaintiff relies on Clause 2.1 of the CBs/L:
“By the issue of this [CB/L] the CTO undertakes to perform or to procure the performance of the entire transport from the place at which the goods are taken in charge (place of acceptance) to the place designated for delivery in this [CB/L] and assumes liability as set out in these conditions.” (emphasis added by the Plaintiff)
48.Mr Alder further relied upon Clause 2.3 of the Trading Conditions which, he submits, themselves make clear that when a B/L is in play, its terms prevail over those contained in the Trading Conditions. Clause 2.3 provides:
“Where Company (in its own name) issues its own bill of lading … and provides in it that it contracts as a carrier, or otherwise enters into any separate contract in writing on other terms and conditions for any Service, the terms and conditions (“Separate Terms”) embodied or incorporated in such bill of lading shall be paramount and prevail in respect of the Service contracted for the extent that these Conditions are in conflict with the Separate Terms…”
49.Furthermore, it is the Plaintiff’s case that Trading Conditions must be clear, unequivocal, and must be readily accessible, which, in this case, says Mr Alder, there were not. The Plaintiff claims that the website stated by the 1st Defendant, “www.adlexpress.com”, where the Trading Conditions could purportedly be accessed, never existed.
50.Mr Alder further notes that the Trading Conditions produced by the 1st Defendant in the course of discovery are dated 1 January 2019, and do not contain reference to any website. He suggested that the version produced was only created when the pleadings were settled.
(ii) 1st Defendant as Agents or Sub-Contractors
51.It is the Plaintiff’s case that the 1st Defendant was not Yang Ming’s authorised agent or sub-contractors of the CTO. Rather, the 1st Defendant was the contractual carrier.
52.The Plaintiff relies on the following matters:-
52.1 On the OBs/L issued by Yang Ming, the 1st Defendant, instead of the Plaintiff was named as the shipper.
52.2 YM already has a Hong Kong agent, YM HK, as named on the OBs/L.
52.3 If the CBs/L were issued by the 1st Defendant as Yang Ming’s agent, they would have named Yang Ming as principal on the front of the document.
52.4 There is no written authority from Yang Ming authorising the 1st Defendant to act as Yang Ming’s agent and bind it to contracts.
53.Mr Alder submitted that although the 1st Defendant might have used Yang Ming often as carrier, this of itself obviously did not create any form of agency.
54.The Plaintiff avers the 1st Defendant is the CTO pursuant to the definition in the CBs/L under Clause 1.3:
“Combined Transport Operator (CTO) is the person by whom or for whom this Bill of Lading is signed.”
55.The 1st Defendant was the person “by whom” the CBs/L was signed.
(iii) Telex Release Arrangement
56.It is the Plaintiff’s case that it had never given any telex release letters or instructions to the 1st Defendant regarding the Cargos.
57.The Plaintiff submits that the 30 September 2014 Email was merely an arrangement made in advance for a potential telex release and that no actual release instructions were given.
58.It was accepted by Mr Alder that the telex release fees were paid to set up the potential telex release. However, Mr Alder emphasised that for a telex release to be carried out, further procedures were required.
59.The Plaintiff submits that telex release was a 2-step process: (i) a prior telex release arrangement; and (ii) an actual telex release request or instruction from the shipper. Step 2 was not taken in respect of the Cargos.
(iv) Time Bar Defence
60.As regards D1’s defence of time-bar pursuant to clause 8.2.1 of the CBs/L:-
60.1 Mr Alder first submits that the clause should be construed contra proferentem.
60.2 Mr Alder then submits that the 1st Defendant must be put to an election between the “delivered” limb and the “total loss” limb pleaded in its Re-Re-Amended Defence[36] as the two limbs are inconsistent factual assertions.
60.3 In respect of the “total loss” limb eventually elected by the 1st Defendant, Mr Alder submits that construing clause 8.2.1 contra proferentem, “total loss” should be narrowly construed to cases where the goods are physically totally lost and where the 1st Defendant has given prompt notice of that to the Plaintiff.
61.As regards clauses 21.2 and 21.3 of the Trading Conditions, reliance upon these clauses has been abandoned by the 1st Defendant.
62.As regards HVR Article III, rule 6:-
62.1 Mr Alder submits that the obligations under HVR only apply during ocean carriage and discharge operations themselves. It does not apply to the present case as the losses occurred after the discharge of the Cargos from ships at Kotka.
62.2 Mr Alder also submits that it is not a case where the goods were delivered or should have been delivered by an identifiable date.
62.3 It is also submitted that rule 6 should not be applied to breaches of the telex release arrangement.
(v) No Loss Defence
63.The Plaintiff claims that it was only paid in part by Koodoo for one of the seven containers in a sum of US$113,394.60 by two bank transfers. There was not any further repayment from Koodoo in relation to the Cargos.
64.The payments referred to by Mr Brown, as recorded in the Payment Record, were submitted (from the bar table) to have been reallocated for the release of containers not relevant to the present case. The Plaintiff and Koodoo had something like a running account where the buyer would send funds when it could and ask for containers to be released. Such reallocation was noted by Annie in emails as a request from Koodoo’s management.
65.Furthermore, Mr Alder drew the Court’s attention to an email from Anna to Annie dated 4 May 2016,[37] whereby Koodoo offered to repay the Plaintiff the outstanding sum, with a proposed payment plan attached.[38]
(vi) Goods never in D1’s Possession
66.Regarding clause 20 of the Trading Conditions, the Plaintiff submits that the defence contradicts the acknowledgment on the front of the CBs/L in the 2nd line of signature box. It states:
“Taken in charge in apparent good order and condition, unless otherwise noted herein, at the place of receipt for transport and delivery as mentioned above.”
67.The Plaintiff maintains that the Trading Conditions do not apply where the 1st Defendant issued a CB/L, so this defence should fail.
(vii) Package Limitation
68.It is the Plaintiff’s case that the Trading Conditions do not apply where the 1st Defendant had issued a CB/L.
WITHOUT PREJUDICE COMMUNICATIONS
69.On the first day of the trial, an issue arose as to whether (i) the 31 March 2016 Email and (ii) an email dated 16 June 2016 (“16 June 2016 Email”), were written on a without prejudice basis, and as such were inadmissible in these proceedings.
70.These documents are not marked “WP”, but that is not the end of the matter.
71.Having considered the background to this matter, the pleadings, and the circumstances in which the emails were sent, counsels’ submissions, and the contents of the emails themselves, I ruled that:-
71.1 The 31 March 2016 Email is a without prejudice communication in which the parties were communicating to attempt to settle the claim. As such, it is inadmissible in these proceedings.
71.2 The 16 June 2016 Email is not a without prejudice communication, in that it contains no elements of settlement.
72.Following my ruling on this issue, I directed myself to disregard and place no weight on the 31 March 2016 Email.
THE WITNESSES
73.The Plaintiff did not call any factual witnesses.
74.The 1st Defendant called one factual witness, Mr Choi Kwong Ming (“Mr Choi”), who acted as a consultant of the 1st Defendant from 2014 to 2016. He briefly retired from the 1st Defendant in 2016, and has been re-employed from 2017 onwards.
75.The Plaintiff and the 1st Defendant also tendered the expert reports of the Single Joint Expert on Shipping & Logistics, Mr Lo Chau Ping Stephen (“Mr Lo”). Mr Lo was not called to give evidence in Court, although he was on standby until after Mr Choi finished giving evidence.
THE SINGLE JOINT EXPERT
76.Mr Lo tendered a Joint Expert Report dated 11 March 2019[39] and a supplemental report dated 5 May 2021.[40]
77.Mr Lo was instructed to address the following issues:[41]
77.1 In telex-releasing cargos,
77.1.1 Explain the practice, what it does and why shipper / carrier would opt for such a “release” mechanism.
77.1.2 How is the telex release usually carried out? Is it usual for shipper / carrier to deviate from the usual practice, adopt specific practices to streamline / cater for their business needs?
77.1.3 After release of the cargos, can a shipper hold onto the original bill(s) of lading without surrendering it to the carrier immediately?
77.2 In releasing cargo containers,
77.2.1 What would normally happen if cargos arrived at their port of destination but no instruction / authorisation was given to the carrier for their release?
77.2.2 Who would normally be responsible for storage costs incurred as a result?
77.2.3 Would cargo containers be returned to the shipper?
78.Mr Lo dealt with the above issues and I have carefully considered the same. However, counsel for both parties have in submissions barely touched upon any of Mr Lo’s conclusions. So whilst I have borne the same in mind, I find it unnecessary to elaborate on this any further.
ANALYSIS
79.In this case there is no dispute that the Plaintiff shipped the Cargos nor that the Cargos were released without production of the original CBs/L.
80.Throughout this judgment, the Court bears in mind two important and primary aspects.
81.First, although this is a case of “misdelivery”, the cargos in question were eventually delivered to the buyer, Koodoo, and indeed on the Plaintiff’s case Koodoo has made part payment in respect of some of the Cargos.
82.Second, except for “adopting” the Joint Expert Report (upon which the Plaintiff and the 1st Defendant have placed little reliance) the Plaintiff has called no evidence whatsoever in support of its case.
83.On the last day of trial and after the evidence closed, I heard an application by the Plaintiff, purportedly under Order 24, Rule 2 of the High Court Rules (Cap. 4A), to place before the Court an affirmation verifying a further and better list of documents and a second affirmation purportedly explaining why such late discovery was being attempted.
84.I had no hesitation in dismissing this application and gave my reasons at the time, which included the fact that the Plaintiff had informed the Court, and the Court had so ordered on 6 August 2019, that the Plaintiff would not rely on any factual witness statement, nor adduce factual witness evidence at the trial. The Plaintiff maintained this position until making this application, which sought to produce evidence, by way of affirmation, which went well beyond merely verifying and explaining the lateness of “recently discovered documents”. The application was in my view a last-minute attempt to get in evidence which, in such circumstances, would have been grossly unfair and prejudicial to the 1st Defendant and would, in my view, have inevitably resulted in an adjournment of the trial.
85.The Court thus decides the issues in this case upon the evidence before it, and absent any factual witness called by the Plaintiff to assist it.
(i) Trading Conditions
86.I have no doubt that the 1st Defendant’s Trading Conditions did not apply where, as here, a CB/L has been issued. The Plaintiff’s reliance on Clause 2.1 of the CBs/L (see para 47 herein) is in my view well-founded. The same plainly excludes any possible application of the Trading Conditions. Furthermore, I agree with Mr Alder that Clause 2.3 of the Trading Conditions themselves (see para 48 herein) makes clear that the terms of the CB/L will prevail over those contained in the Trading Conditions.
87.Further, Mr Alder has relied upon Bewise Motors Co Ltd v Hoi Kong Container Services Co Ltd [1997] HKLRD 986, 995 B-D per Bokhary PJ, for the proposition that the 1st Defendant must establish that its Trading Conditions were brought sufficiently to the Plaintiff’s attention and that the Plaintiff was able to access the same. I have seen no persuasive evidence that this occurred, and no evidence that any alleged website containing the 1st Defendant’s Trading Conditions existed or was accessible at the relevant times.
(ii) 1st Defendant as Agent
88.Similarly, I have no doubt that the 1st Defendant at the relevant times was not the authorised agent or sub-contractor of Yang Ming. Mr Alder’s submissions in this regard, with which I agree, are set out in paragraphs 52 to 55 herein.
89.Furthermore, the 1st Defendant’s witness, Mr Choi agreed that there was no formal agency agreement with Yang Ming, and this is echoed in the 1st Defendant’s solicitor’s letter dated 18 December 2018 in which the solicitors had confirmed that there was no written authority authorising the 1st Defendant to act as Yang Ming’s agent.[42]
90.Mr Brown relied heavily on the fact that each relevant CB/L has “AS AGENT” printed on it. Although this caused me pause for thought, I have concluded that this does not assist the 1st Defendant’s case. The inscription does not say whose agent the 1st Defendant was supposed to be, and the 1st Defendant originally ran two arguments: that this was the agent of Yang Ming and/or it was the Plaintiff’s agent. Mr Brown eventually elected to concentrate on Yang Ming, but when Mr Choi gave his evidence, he too seemed uncertain as to whom the agency actually related to.
91.As Mr Alder points out, the 1st Defendant took the two OBs/L from Yang Ming in the 1st Defendant’s own name as shipper, and that if the 1st Defendant was the agent of Yang Ming, it would make no sense that the 1st Defendant was listed as shipper on the OBs/L. Mr Alder submits that a carrier would never list its own agent, who acts for the carrier, as shipper, as this would mean the carrier was the shipper, which is nonsensical. I agree.
92.Mr Alder also submits that by its email dated 22 December 2014,[43] the 1st Defendant sought to hold Yang Ming and/or the 2nd Defendant liable for the misdeliveries, which itself is inconsistent with the agency defence now advanced.
93.In all these circumstances, I find that the 1st Defendant was not acting as the agent of Yang Ming, and this defence fails. In consequence, the 1st Defendant’s defence based on Clause 9.3.1 of the CBs/L by which the Plaintiff as shipper undertakes not to sue any agent or subcontractor of the CTO also fails.
(iii) The Telex Release Issue
94.As noted, the 1st Defendant’s case is that the YMU Containers were released pursuant to the Plaintiff’s explicit authority to do so, as provided in the 30 September 2014 Email. Furthermore, that while the 1st Defendant was unable to find a similar email for the HB Containers, there must have been an instruction like the 30 September 2014 Email because the telex release fee was also included for the HB Containers. The 1st Defendant relied upon the evidence of its witness Mr Choi in this respect.
95.I found Mr Choi to be an intelligent witness well able to speak English (although, as was his right, he gave evidence in Cantonese). He was also able to read in English complicated contractual documentation that he was referred to. He was also clearly very experienced in the freight business.
96.A preliminary but important matter arose during Mr Choi’s evidence as to the surrender of the original CBs/L.
97.The Plaintiff still retains the originals of the CBs/L (which were produced by the Plaintiff to the Court). The Plaintiff submits that this would not be the case if it had authorised telex releases of the Cargos.
98.However, Mr Choi in his oral evidence alleged for the first time that the Plaintiff had surrendered the CBs/L and that Mr Choi had returned them to the Plaintiff in March 2016.
99.This important matter was never pleaded by the 1st Defendant. Nor did it find its way into Mr Choi’s extensive witness statement. Given Mr Choi’s experience and familiarity with the critical importance of the custody of the CBs/L, I find this part of his evidence, to say the least, surprising.
100.When challenged, Mr Choi, with something of a flourish, alleged that he could “prove” that what he was saying about this matter was true. The Court indulged this exercise which, in the end, amounted to no more than that Mr Choi had asked for copies of the CBs/L to be chopped with the Plaintiff’s company seal and returned to him. This exercise, in my view, in no way assisted Mr Choi’s evidence.
101.One email from Ms Kei Li of the 1st Defendant to Mr Ben Tang of YM HK dated 22 December 2014 (“the 22 December 2014 Email”) states that:
“the actual shipper still holding the original B/L in HK and they are still waiting the payment from the consignee.”
102.Mr Choi disagreed that this email shows that the Plaintiff held the original CB/L at that time, and said that the term “actual shipper” here means the 1st Defendant. He however accepted that at that time, the 1st Defendant was not waiting for payment from the 2nd Defendant.
103.According to Mr Choi’s understanding, the sentence means that the 1st Defendant was still holding the OB/L, whilst the Plaintiff had yet received payment.
104.I am unable to accept Mr Choi’s evidence relating to the surrender of the CBs/L.
105.Mr Choi gave evidence on the second and third days of the trial. His examination-in-chief, which adopted his witness statement dated 28 February 2019, can be summarised as follows:
105.1 It had always been the understanding that throughout its course of dealing with the Plaintiff, the 1st Defendant only acted as an agent for the actual ocean carrier, which the Plaintiff must have known.
105.2 Under the telex release system, whilst the release instruction was preferably done with an official telex release letter, in reality the letter usually only followed after the cargos had been delivered. In practice, the original house Bs/L issued by the 1st Defendant would usually be kept in the 1st Defendant’s files. Much of the release authorisations came in via phone calls. [44]
105.3 Mr Choi understood the 30 September 2014 Email to be an explicit authorisation from the Plaintiff to release the YMU Containers. As no similar email could be found in respect of the HB Containers, it is likely that Western Shipping gave the release instruction by telephone.[45]
105.4 If the Cargos were not authorised for release by the Plaintiff, they would either be returned or stored somewhere, incurring a storage cost which could be claimed against the Plaintiff. As such, had the Cargos been wrongfully released, the Plaintiff would have been made aware.[46]
106.During cross-examination:
106.1 Mr Choi explained that in the 30 September 2014 Email and an email dated 14 January 2015,[47] the addition of 2 English words - “(telex release)” - meant that the Plaintiff asked the 1st Defendant to go ahead to have telex release.
106.2 Mr Choi said that he was unable to locate any authorisation email in respect of the HB Containers because there might have been instructions on the phone, or that the email simply could not be found. Mr Choi stated that he enquired with colleagues about it, and he was certain that an explanation could be found in one of the emails not produced in this trial.
106.3 Mr Choi explained that there are 3 stages for the telex release arrangement. First, an instruction on telex release. Second, the client to surrender B/L to the 1st Defendant. Thirdly, the shipper to pay for telex release charges.
106.4 Mr Choi said that the Plaintiff often did not follow the 1st Defendant’s request, and things would be done retrospectively or even forgotten. Not in every case did Mr Choi make sure there is a telex release letter before the release of cargos.
106.5 Mr Choi agreed that if a shipper wants to send goods to a named consignee for immediate release, it will instead use seaway bills so that goods would be delivered to the named consignee upon identification. No telex release fee would arise.
106.6 Nevertheless, Mr Choi explained that in the present case, telex release fee arose only because the 1st Defendant was charged by the carrier / liner of the same.
106.7 Mr Choi accepted that if the Plaintiff had always intended to ship the Cargos to the designated consignee in Finland for immediate release, the Plaintiff could have simply used a seaway bill.
106.8 Mr Choi was referred to an email from Tiffany to Yang Ming dated 4 December 2014[48], in which Tiffany questioned why Yang Ming had released the Cargos when they had not done the telex release.
106.9 Mr Choi disagreed that such email contradicted his evidence about the 1st Defendant having obtained authorisation from the Plaintiff. He explained that the email was sent because Yang Ming did not obtain authorisations from the 1st Defendant.
107.I found Mr Choi to be an unhelpful witness. His evidence was replete with generalities unsupported by documentation. The somewhat chaotic and casual course of dealing which he alleged existed between the parties was neither properly pleaded nor supported by documentation.
108.No documentation was produced to support storage charges being charged to the Plaintiff. No documentation was produced which supported his allegation of any prior release of the Plaintiff’s goods without a telex release letter or a telex release letter being submitted subsequently. No documentation was produced to support his allegation that oral telex releases were “not all that uncommon”.
109.Mr Choi’s answers about the 22 December 2014 Email by which the 1st Defendant purported to hold Yang Ming responsible, that “shipper” meant the 1st Defendant and “the original B/L” meant OBs/L were wholly without merit.
110.I also bear in mind the admission made by the 1st Defendant in the 22 December 2014 Email, that Yang Ming’s own Finland agent had released the Cargos without the 1st Defendant’s authorisation. Furthermore, as I have found, the Plaintiff retained the originals of the CBs/L which would not have occurred if the Plaintiff had in fact authorised telex releases of the Cargos.
111.Having carefully considered the evidence, and counsel’s submissions, I have no doubt that there must be in place an actual telex request for the actual release of goods. The brief wording in the 30 September 2014 Email amounted to no more than the first step together with the telex release payment which provided the foundation for a telex release. This of itself did not amount to an actual telex request for release of the Cargos.
112.The 1st Defendant’s telex release defence fails.
(iv) Time Bar
113.In closing, Mr Brown abandoned his reliance in relation to the time bars contained in the 1st Defendant’s Trading Conditions. The time bar defence thus rests on CBs/L Clause 8.2.1 and the HVR Article III, rule 6.
114.There was a preliminary objection by Mr Brown that as the Plaintiff had not pleaded the construction of the time bar provisions, that Mr Alder was now precluded from arguing the same. I rejected this argument as the construction and scope of these provisions are, in my view, proper legal arguments for trial. If I am wrong about this, I have no doubt that in all the circumstances Mr Brown was neither surprised nor prejudiced by the arguments advanced by Mr Alder.
114.1 Clause 8.2.1 of the CBs/L:
114.1.1 This provision is set out in paragraph 39.1.1 herein. As noted, Mr Brown relies on the “total loss” limb. In short, he has submitted that “if the Plaintiff cannot get its goods, then to that plaintiff the goods are lost.” Mr Brown confirmed that he had no direct authority to offer in support of this proposition, although he did refer the Court to Hong Kong and Kowloon Wharf and Godown Co Ltd v Bank Negara Indonesia [1980] HKLR 161 where the carrier misdelivered the goods shipped to Hong Kong to a person with a forged delivery note. McMullin JA remarked at p.169 that:
“It is not denied that it was failure to check the signatures which occasioned the misdelivery and hence the total loss of the plaintiff of these drums.”
114.1.2 It is to be noted however that in that case, the goods disappeared as a result of fraudulent conversion. In that sense, there was a total loss to the plaintiff. As noted, in the present case, the goods concerned ended up in the possession of the contractual buyer who on the Plaintiff’s case made at least a part payment for them.
114.1.3 Mr Brown referred the Court to Waterfront Shipping Co Ltd v Trafigura AG (The Sabrewing) [2007] 2 CLC 763; [2007] EWHC 2482 (Comm) at §15 (which was followed in Hong Kong by Maeda Kensetsu Kogyo Kabushiki Kaisha also known as Maeda Corporation and Another v Bauer Hong Kong Ltd [2019] HKCFI 916 at §§24 – 26), and also Amalie Essberger Tankreederei GmbH & Co KG v Marubeni Corp [2019] EWHC 3402 (Comm); [2020] 1 CLC 15 at §15, for the approach to construing time bars.
114.1.4 I proceed on the basis submitted by Mr Alder that if there is any doubt about Clause 8.2.1, the Court will exercise the doubt against the 1st Defendant, and in the Plaintiff’s favour as shipper. Further, I bear in mind that these are the 1st Defendant’s own standard terms utilising the 1st Defendant’s own wording. If the 1st Defendant had wanted to exclude liability altogether, it could do so, but would need to use very clear wording to achieve this.
114.1.5 Mr Alder addressed the contra proferentem principle and relied first at Arab Lawyers Network Co Ltd v Thomson Reuters (Professional) UK Ltd [2021] EWHC 1728 (Comm) at §44. Mr Alder stressed, and I agree, that in construing the relevant contractual provision, regard must be had to its language, purpose, contextual background, and its place in the contract as a whole.
114.1.6 Mr Alder relied upon Carewins Development (China) Ltd v Bright Fortune Shipping Ltd (2009) 12 HKCFAR 185 in which Ribeiro PJ held as follows:
“62. An essential purpose of the contract is, as previously discussed, that the goods should be delivered by the carrier only against surrender of an original bill of lading. If, therefore, clause 2(b) is given a construction reflecting the full width of the words used, it would mean that the carrier could with impunity consciously disregard that primary contractual purpose by releasing the goods well knowing that the recipient has not provided any bill of lading relative to the cargo. That is a construction which the court inclines against as it would deprive the shipper of an essential protective obligation and seriously undermine the purpose of bills of lading.
63. One must therefore ask whether clause 2(b) is wholly unambiguous in conferring such a purported exemption on the carrier. Is it clear and fairly susceptible of that one meaning only? Or is it also fairly susceptible of a meaning which does not result in the negation of that primary contractual purpose?
64. In my view, it is plain that clause 2(b) is susceptible to more than one meaning and that it can be given adequate content as an exemption clause which operates without nullifying the cardinal obligation embodied in the presentation rule. Given its natural and ordinary meaning, the word “misdelivery” is capable of covering a range of situations which all involve the cargo being delivered to the wrong person. But many of those situations will not involve a conscious disregard of the presentation rule on the carrier’s part.”
114.1.7 Mr Alder submitted that “total loss” in the context here means a maritime loss under a shipping contract where, for example, the vessel has sunk with total loss of all cargo aboard with much publicity such that the recipient of the cargo will know about it (a notorious loss).
114.1.8 Mr Alder further submitted that the Clause does not apply, or at least does not obviously apply, to situations where (a) the goods are not lawfully delivered in return for original Bs/L, (b) the goods are not notoriously lost, (c) the goods are lost but not in the usual maritime sense of that word but rather by secret and unlawful release, (d) the 1st Defendant does not tell the shipper so the shipper does not know, and (e) the 1st Defendant has not exercised its rights to give the shipper notice under Clause 16.3 which deals with deemed delivery in case of non-collection.
114.1.9 With regard to the Plaintiff’s absence of knowledge, and therefore inability to mount a claim in time, Mr Alder points to the fact that the 1st Defendant has never pleaded knowledge of the Plaintiff, and that the important emails passing between the parties in December 2014[49] were not copied to the Plaintiff.
114.1.10 In my view, the expression “total loss”, on the face of it, could apply to all claims, even claims for breach of the presentation rule. Furthermore, it could be read as applying (or not) to claims the shipper does not know about. To this extent at least, the Clause is ambiguous, and as such I construe it narrowly and, where appropriate, in favour of the shipper, taking into account the contract’s nature and purpose.
114.1.11 In Carewins, Litton NPJ at para 89 said this:
“Fundamental to the tripartite arrangement between the shipper, the carrier and the consignee was that the carrier would only deliver the 23 containers on production of the bill of lading. The question then is: Are the general words in clause 2(b) precise enough to exempt the carrier from liability in such a case? It would seem very odd if that were so. On the face of the document the carrier acts at his peril by delivering the goods without production of the bill of lading; turn the document over, and it says the carrier acts with impunity by so doing. The parties cannot be deemed to have achieved such a bizarre result, by the general words used in clause 2(b). In my judgment the words in clause 2(b) are not precise enough to exempt the carrier from liability when, with eyes open, it delivers the 23 containers without production of the bill of lading.”
114.1.12 In my view and considering this in the context of maritime loss under a shipping contract, the general words used in Clause 8.2.1 are not precise enough to cover a breach of the presentation rule. Furthermore, the wording is ambiguous as to whether or not the shipper must be aware of such loss. As Mr Alder submitted, to clear up the ambiguity, the 1st Defendant’s draftsman could have added “whether or not the Merchant is aware of such loss”. The 1st Defendant did not do so. Even if there is no such ambiguity, the 1st Defendant has not pleaded that the Plaintiff had knowledge of the same. Mr Alder further submitted that taken in context, it is not a “total loss” where the goods are delivered without surrender of an original bill of lading and the shipper is not told about this for eleven months. I agree.
114.1.13 In my view, the 1st Defendant’s reliance on CBs/L Clause 8.2.1 fails.
114.2 The HVR Time Bar:
114.2.1 The relevant clause is set out in para 39.3 herein.
114.2.2 Mr Alder relied principally on the Court of Appeal judgement of Cheong Yuk Fai & Another v China International Freight Forwarders (HK) Co Ltd [2005] 4 HKLRD 544, at §§30 – 50, for the proposition that HVR obligations only apply during ocean carriage and discharge operations, and not during carriage or handling after discharge from the vessel.
114.2.3 Furthermore, the 1st Defendant cannot bring itself within the wording of rule 6 because this is not a case where the goods were either delivered or should have been delivered by an identifiable date.
114.2.4 Mr Brown seeks to distinguish Cheong Yuk Fai and Trafigura Beheer BV v Mediterranean Shipping Co SA [2007] 2 CLC 379; [2007] EWCA Civ 794 (also relied on by Mr Alder), and relies on The Alhani [2018] 2 CLC 63; [2018] EWHC 1495 (Comm) for the proposition that HVR obligations do apply to misdelivery.
114.2.5 The Alhani case was unique in that the cargo (bunker fuel) was discharged and misdelivered at the same time. Although the Cheong Yuk Fai case involved a land leg, I agree with Mr Alder that this makes no appreciable difference. There is no evidence from the 1st Defendant as to how and when Yang Ming parted with the Cargos, or how and when the Cargos were then handed to the 2nd Defendant. However, whatever the situation might have been, this Court is bound by Cheong Yuk Fai, and there is no evidence that the eventual transmission of the Cargos to the 2nd Defendant was part of the “discharge operations”.
114.2.6 I further accept Mr Alder’s submission that there is no evidence of any date when the Cargos “should have been delivered”.
114.2.7 The 1st Defendant’s reliance on the HVR time bar fails. As such it is unnecessary to consider the consequences flowing from the 1st Defendant’s requests that the Plaintiff defer legal action.
(v) Damages
115.As noted, the Plaintiff claims that it has suffered damages in the sum of US$1,299,189.87 together with interest thereon.
116.In response, the 1st Defendant pleads that the Cargos have all been paid for, anddenies that the Plaintiff has suffered any loss or damage and puts the Plaintiff to strict proof thereof.[50]
116.1 Onus
116.1.1 Mr Alder submits that the Plaintiff’s loss was incurred and the various causes of action were all complete when the 1st Defendant or its agent parted with the Cargos without permission. Mr Alder further submits that the Plaintiff has proven its loss by “proving loss of dominion of the Cargos by reason of the 1st Defendant’s acts or omissions.”
116.1.2 Mr Alder then submits that the 1st Defendant bears the onus of pleading and proving that Koodoo paid any of the unpaid invoices, e.g. by interrogatories.
116.1.3 Mr Alder also submits that the 1st Defendant faces the burden of persuading the Court that the Plaintiff is “perpetuating a pointless, risky, and costly fraud on the Court to recover unmerited double-payment”.
116.1.4 I do not accept Mr Alder’s characterisation that the 1st Defendant is in any way alleging a fraud upon the Court. The Plaintiff has pleaded that it has suffered damages, and the 1st Defendant has simply put the Plaintiff to strict proof of this. There is no question of any fraud upon the Court.
116.1.5 In relation to the Plaintiff’s argument as to loss of dominion over the 7 containers being a loss in itself, Mr Alder relied on the decision of Stone J in Trafigura Beheer BV Amsterdam v China Navigation Co Ltd [2001] 1 HKLRD 17 wherein the judge observed at p.31A-B:
“In my view, the loss in this case was caused by and consequent upon the misdelivery, the cause of action vesting the plaintiff was not a "windfall", and the plaintiff is entitled to recover therefor.”
116.1.6 Further, at p.24J-25A, the Judge observed:
“The plaintiff pursues its claim for misdelivery in terms of contract, conversion and bailment, and quantifies its primary loss in the sum of US$953,037.47, representing the agreed value of the cargo … as at 29 April 1998, the date of the misdelivery.”
116.1.7 In my view, there is no doubt that the cause of action vested in the Plaintiff upon misdelivery of its goods. In the Trafigura Beheer case, the loss was calculated by reference to the invoice value of the cargo.
116.1.8 As noted, in the present case, however, the Cargos were in fact delivered to the rightful buyer and indeed on the Plaintiff’s case, part payment was made in respect of the same by that buyer.
116.1.9 Sucre Export SA v Northern River Shipping Ltd (‘The Sormovskiy 3068’) [1994] C.L.C. 433 involved the misdelivery of 3,000 metric tons of sugar. Discharge from the vessel began without the original Bs/L or the knowledge or consent of the Plaintiff. Upon learning of the discharge, the Plaintiff gave instructions that it stop. After negotiations, and substituted Bs/L, the remaining cargo was discharged with the Plaintiff’s consent. The cargo had been delivered to the correct buyer. Clarke J held at 442:-
“Where the master or shipowner delivers the cargo in breach of contract otherwise than in return for an original bill of lading the person entitled to possession will of course only be entitled to recover substantial damages if he proves that he has suffered loss and damage as a result. So for example if the cargo is delivered to the person entitled to possession he will not ordinarily be able to show that he has suffered a loss.”
116.1.10 The Court of Appeal considered this matter in Kuwait Petroleum Corp v I & D Oil Carriers Ltd (“The Houda”) [1994] C.L.C. 1037. The Court held at 1050:-
“I can see no good reason to depart from the general rule that the owners do not fulfil their contractual obligations if the cargo is delivered to a person who cannot produce the bill of lading. Of course, if such a delivery is made and the person to whom the cargo is delivered proves to be the true owner no damages would be recoverable. In this context, it is helpful to draw attention to the speech of Lord Blackburn in Glyn Mills Currie & Co v East and West India Dock Co (1882) 7 App Cas 591 at p. 610:
‘[The master] would not fulfil his contract if he delivered [the goods] to anyone [other than someone producing the bill of lading], though if the person to whom he delivered was really entitled to the possession of the goods, no one might be entitled to recover damages from him for that breach of contract.’”
116.1.11 The Sucre and the Houda are also cited in Aikens on Bills of Lading, 3rd Edn, at §5.33.
116.1.12 Considering the particular facts of this case, where the Cargos were in fact delivered to the correct buyer (Koodoo), and where it is undisputed that the buyer then made at least part payment to the Plaintiff, it is in my view incumbent upon the Plaintiff to prove that it had in fact suffered loss and damage as a result of the misdelivery. The onus of proving its loss plainly resides with the Plaintiff.
116.2 The Documentary Evidence
116.2.1 As noted, no factual evidence has been called and there is a paucity of the documentary evidence consisting mainly of email chains (which on occasion appear to be incomplete. There is also the Payment Record in relation to the Cargos in question. The Plaintiff did not make discovery of this document, which was produced by the 1st Defendant.
116.3 Payment Record
116.3.1 The Payment Record was sent under cover of an email from Amy Zheng of A4 Tech, the Plaintiff’s associated company, to Mr Vasily Tarasevich of Koodoo on 22 January 2016.[51] It reads:
“Dear Vasily
I have updated the balance sheet to you, please have a check.
Best Regard
[Amy]”
116.3.2 This Payment Record is a crucial document. In short it discloses that all 7 containers, the subject matter of these proceedings, had been paid for, and that at least 5 of them had been released. The document is a detailed one. It contains the precise dates the final payments were made and the details of the deposits in respect of all 7 containers.
116.3.3 It is not alleged that this Payment Record is in any way a forgery. Mr Alder submitted there were various “problems” with the Payment Record, but these problems, if they be such, were simply as to what certain wording had in fact meant.
116.3.4 The Court proceeds on the basis that as at 22 January 2016, this Payment Record, being the Plaintiff’s own document, unequivocally disclosed that full payment had been made for the 7 containers in question.
116.4 The Emails
116.4.1 There are a number of important emails passing between the Plaintiff (through its associated company A4 Tech) and Koodoo in April and May 2016.
116.4.2 There are two emails between “Anna” of Koodoo and “Annie” of the Plaintiff, on 12 and 19 April 2016. As Mr Alder notes, there is no suggestion in those emails that payment had been made for the 7 containers.
116.4.3 The next email from Anna is dated 25 April 2016 to Annie[52], in which Koodoo states:-
“However, last week we received a notification from ADL, saying, that you are retrieving the same amount from
them as well. That means that you are retrieving the payments from ADL, which you had received from Buyer. Twice.
That made us feel very confused, as we were thinking, that we are discussing everything in transparent way…
According to the record with your confirmation, all the 2014, including “7 ADL containers” were paid by us.”
116.4.4 In reply to Anna’s email of 25 April 2016, Annie replies, again on 25 April 2016:-
“Dear Anna,
Thank you for your long email and concern.
1. According to the record, Koodoo has paid for the amount of the 7 containers (ADL issue), but this has nothing to do with the legal issue. Why? Because although Koodoo has “supposedly’ paid for the 7 containers, but the management in Koodoo company has requested our sales to release other containers, not the 7 containers. That is perfectly why we still hold “the original B/L paper on our hand for the 7 containers.”
116.4.5 Pausing at this stage, quite apart from the Plaintiff’s Payment Record, the Court has evidence of an assertion, from the buyer Koodoo, that it had paid for the 7 containers and, crucially, an admission by the Plaintiff that according to its own records, Koodoo had paid for the 7 containers.
116.4.6 Mr Alder then relied on an email from Anna to Annie dated 4 May 2016,[53] in which Anna attaches a “Payment Agreement”[54] which proposes payment dates for the 7 containers. Mr Alder submits that this is evidence “from the horse’s mouth” that the 7 containers remain unpaid, and that there can be no better evidence than an offer from the debtor to pay.
116.4.7 Although the Court was initially informed that Annie had long left the employment of A4 Tech, Mr Alder, with his customary fairness, later informed the Court that in fact Annie had remained with and still in the employ of the Plaintiff’s associated company, A4 Tech. In the event, she was not called to give evidence. Had she done so, the Court may have been assisted as to the meanings of the emails she had sent to Koodoo and indeed the accounting exercise which produced the Payment Record.
116.4.8 Annie was apparently available however, on very short notice, to prepare two substantial draft affirmations shortly before closing submissions, in an attempt to place further evidence before the Court.
116.4.9 Furthermore, Mr Cheng of the Plaintiff felt able to sign the Statements of Truth appended to the RASOC and the Re-amended Reply, both of which contained numerous factual averments. Despite this, Mr Cheng, too, was not called to assist the Court with the evidence.
116.4.10 Mr Alder, in a valiant effort to plug this evidential gap, made submissions as to what Koodoo may or may not have done or thought in connection with its payment obligations. Similarly, Mr Alder advanced submissions as to what the Plaintiff may or may not have believed or done in relation to its account with Koodoo. As polished as the submissions were, I am unable to attach any significant weight to them, amounting as they do to speculation and guesswork.
116.4.11 Instead, the Court restricts itself to considering the evidence before it. The Plaintiff has the onus of proving its loss. It has called no evidence in order to do this. By contrast, the Court has before it the Plaintiff’s own Payment Record, which unequivocally records that the 7 containers in question have all been paid for by Koodoo. Added to this is the admission by Annie on behalf of the Plaintiff that according to the Plaintiff’s record, Koodoo has paid for the 7 containers.
116.4.12 As noted, both Annie and Mr Cheng would have been able to give significant and relevant evidence to the Court concerning the alleged loss to the Plaintiff. The Plaintiff has declined to call them. There is no credible explanation provided for the absence of these witnesses, and in all the circumstances I draw adverse inferences from their absence and silence. It is reasonable to infer that these witnesses had not been called because if they were, their evidence would be unfavourable to the Plaintiff. I should add that even absent these inferences, I would have found, as I do, that the Plaintiff has failed to discharge its burden of proving that it had suffered loss and damage as a result of the 1st Defendant’s acts or omissions.
116.4.13 I have considered carefully Mr Alder’s submission that by its email dated 4 May 2016, Koodoo has acknowledged that it has not made payment for the 7 containers, and provides a payment agreement setting out the details for proposed future payments for the Cargos. Again, this correspondence is addressed to Annie, who, as noted, has not given evidence about this matter.
116.4.14 I put little weight on this email. First, Mr Alder has described Koodoo as being itself “deceptive”, having he says deceived the Plaintiff by its silence. Second, there is no evidence as to the how the payments admitted by the Plaintiff in its Payment Record and email exchange were somehow discarded in favour of the Payment Agreement proffered by Koodoo in its 4 May 2016 Email. Third, even if there was an offer by Koodoo to make future payments, the Plaintiff has advanced no evidence to establish whether or not such payments were made.
116.4.15 The Court concludes that the Plaintiff has failed to establish its claim of loss and damage.
DISPOSITION
117.The Plaintiff has succeeded in establishing the 1st Defendant’s liability in this case and there be judgment for the Plaintiff in this respect.
118.The Plaintiff has failed, however, to establish that it has suffered the loss and damages claimed. In consequence, its claim for damages is dismissed.
119.The Plaintiff is awarded nominal damages in the sum of $1,000.
120.The Plaintiff’s action against the 2nd Defendant is dismissed.
COSTS
121.The Parties have not had the opportunity to address the Court on the question of costs. As such, I direct that the parties do file their respective submissions with the Court within 14 days of this Judgment, and replies thereto (if any) within 7 days thereafter. Written submissions are to be limited to 4 pages, with font size 14.
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(Robert Whitehead, SC)
Deputy High Court Judge |
Mr Edward Alder and Mr Edward Chin, instructed by Messrs Addleshaw Goddard (Hong Kong) LLP, for the plaintiff
Mr Toby Brown, instructed by Messrs Clyde & Co, for the 1st defendant
The 2nd Defendant was not represented and did not appear
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