Heung-a Shipping Co. Ltd. v. New Rank (Holdings) Ltd. and Others
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HCCL000234/1997 HCCL234/1997 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMMERCIAL ACTION NO.234 OF 1997 ---------------
--------------- Coram: Hon Stone J in Court Dates of Hearing: 3, 4 and 5 January 2001 Date of Judgment: 12 February 2001 ________________ J U D G M E N T ________________ 1. This is a case about the delayed return of 37 forty foot containers. The plaintiff herein, a Korean shipping company, is the owner/lessee of these containers, and the 1st, 2nd and 3rd defendants are Hong Kong companies which became involved in the events spawning this litigation, and which are said by the plaintiff to be responsible for its losses consequent upon the non-return of the containers by the due date. 2. At this trial, only the 3rd defendant appeared and was represented. Default judgment, with damages to be assessed, was entered against the 1st defendant on 2 February 1998, whilst the 2nd defendant appears to have dropped out of the picture altogether at some point subsequent to the filing of its witness statements; it did not attend at this trial, and is now thought to have ceased business. The consequences of the non-appearance of the 1st and 2nd defendants at the hearing has rendered assembly of the primary facts more difficult than otherwise would have been the case, albeit with the assistance of counsel a reasonably coherent picture has emerged in terms of what happened to these containers, when, and, to a certain extent, why. THE FACTUAL BACKGROUND 3. The plaintiff, Heung-A Shipping Company Limited, is a ship owner. It uses containers, which it either owns or leases, in the course of its business. One hundred and thirty five of these containers were employed on a voyage from Indonesia to Hong Kong on board the M.V. "Choyang Challenger" to carry a cargo of newsprint paper, which was shipped pursuant to the plaintiff's bill of lading No.JKHKD37-0124 dated 29 March 1997. Under this bill of lading, the shipper was one P.T. Aspex Paper, the 1st defendant herein, New Rank (Holdings) Limited ("New Rank"), was the Notify Party, and the goods were consigned to the order of the Bank of East Asia. 4. The "Choyang Challenger" arrived in Hong Kong at the beginning of April 1997, and shortly thereafter began to offload its cargo mid-stream. The offloading and disposition of cargo was handled by the plaintiff's Hong Kong agent, Kong Hing Agency Limited ("Kong Hing"). On 4 April 1997 Kong Hing issued a Delivery Order to enable the 1st defendant, New Rank, to take delivery of the goods in the 135 containers which, it seems fair to assume (albeit there is no evidence directly on the point) New Rank had purchased from the Indonesian seller, P.T. Aspex Paper; in this connection it also seems reasonable to assume that the issuance of the Delivery Order to New Rank had been made against an original bill of lading duly endorsed by the Bank of East Asia. 5. In any event, this particular Delivery Order also contained on its reverse a Guarantee signed by New Rank and addressed to Kong Hing. This recited, inter alia, that in consideration of 10 days of "container free use", New Rank guaranteed to return the containers within this 10 day period, and if not so returned to pay a "container detention charge" at the rate of HK$200 per day per 40 foot container, to be responsible for repair costs in case of container damage caused by them, and to compensate for replacement value of any containers which were totally lost, such loss being deemed to have occurred if the containers were not returned to the appointed depot within 30 days. The Guarantee lastly provided for the placement with Kong Hing of a blank cheque as security for settlement of these various charges, although there is no evidence of whether such a cheque indeed was so posted. 6. What happened next was that, also on 7 April 1997, New Rank permitted Kong Hing to release all 135 containers to four designated vessels, and Kong Hing duly arranged for lighters provided by Hoi Kong Container Services ("Hoi Kong") to do so; in particular, the tranche of 45 containers that provide the starting point for this litigation were stored upon one of the Hoi Kong lighters until 11 April 1997, upon which date they were placed on board the "Chen Da 816" for onward transit pursuant to bill of lading No.SE9710518 issued by the 2nd defendant herein, Excel World Container Line Limited ("Excel"). Under this bill of lading, the final destination is stated to be Nanhai, and the Shipper is named as one Good Trade Shipping Limited ("Good Trade"). Once again there is no direct evidence on the point, but it seems highly likely that New Rank, the 1st defendant, had onsold the cargo within these 45 containers to Good Trade, which then had contracted with the 2nd defendant to ship them up the Pearl River to its own purchaser in China. 7. As matters transpired, however, these 45 containers were not discharged in Nanhai (there is reference in the case papers to the fact that they were unable to clear Customs), but were returned to Hong Kong in the custody of the 2nd defendant, Excel, which as from 17 April 1997 made arrangements with the 3rd defendant, Best Trend Enterprises Limited ("Best Trend"), to store them on a barge hired for that purpose by Best Trend pending collection by Good Trade. It seems established that at the outset all 45 containers were so stored, but that on or about 10 May 1997 eight were released to the 2nd defendant, and thence to Good Trade, thereby reducing the remaining number to 37 containers, the alleged wrongful detention of which forms the subject-matter of this claim. 8. It is common ground that these 37 containers remained stored by the 3rd defendant until 21 March 1998 when the containers, which hitherto had remained stuffed with their cargo of newsprint paper, were de-stuffed on the storage barge, the "Hoi Kong 5", which had been moored at a berth in Kwun Tong, and the empty containers removed therefrom and transported to the Shun Fat Container Terminal in Tuen Mun, wherein they were stored under the 2nd defendant's control pending arrangements to be agreed with the plaintiff. 9. In the event, release of the 37 containers from the Shun Fat Depot to the plaintiff was effected on 15 May 1998, pursuant to a tripartite Agreement of 14 May 1998 entered into between the plaintiff and the 2nd and 3rd defendants. This Agreement was designed to effect the "prompt release" of the containers, as variously had been demanded in correspondence by the plaintiff's solicitors, pending final determination of the present proceedings. In particular, Clauses 4, 5 and 6 of this Agreement specifically provide thus :-
10. Against this background, therefore, it falls now to consider the plaintiff's case as advanced against the 2nd and 3rd defendants, judgment in default of acknowledgment of service and notice of intention to defend, as I have earlier indicated, already having been entered against the 1st defendant. Given that only the 3rd defendant actually has taken part in this trial, I take this aspect of the case first. THE CASE AGAINST THE 3RD DEFENDANT 11. Although not formally abandoning conversion, from the outset Mr Thomson on behalf of the plaintiff recognized difficulties in the conversion plea and put his case squarely upon the basis of detinue, the crucial element here being the letter of demand sent to Best Trend by the plaintiff's solicitors dated 1 December 1997, the relevant part of which reads thus :-
12. Mr Thomson says that it was unreasonable in the circumstances for the 3rd defendant not to have returned the containers to the plaintiff within 14 days of this demand, namely from 15 December, and in any event this did not happen. In fact, the evidence showed that the 37 containers were released by the 3rd defendant to the 2nd defendant, Excel, on 21 March 1998, when they were transported from the storage barge to the Shun Fat Container Terminal, and indeed the containers themselves were only returned to the plaintiff by the 2nd defendant on 17 May 1998. Accordingly, said Mr Thomson, the period for which he sought damages in detinue against the 3rd defendant was for some 95 days, that is, from 15 December 1997 to 20 March 1998, which in turn yielded alternative assessments : either the sum of HK$703,000 (based on the contractual rate agreed with the 1st defendant of $200 per day x 37 containers x 95 days) or the sum of US$10,545 (based upon the per diem hire rate for each 40 foot container of US$3 x 37 containers x 95 days). I advert to quantum more specifically under separate head later in this judgment, but this at any rate was the approach canvassed by Mr Thomson in his final submission. 13. To a considerable extent, Mr Thomson was constrained by not having direct evidence of his own in terms of the main events which took place. Indeed, the only direct oral evidence of what had actually occurred came from the 3rd defendant in the person of Mr Leung Yiu Lam ("Mr Leung"), a director of and, I gather, the owner of the 3rd defendant, Best Trend. Mr Leung gave extensive evidence, elaborating on that which was in his two witness statements, and thereafter being subjected to searching cross-examination. I accept his evidence, which in my view, he gave in a down to earth and obviously truthful manner which did little to conceal his surprise at his company being impleaded in this litigation at all. 14. Mr Leung told the court that Best Trend was in the general business of the lifting, transportation and storage of cargo containers. He had had many prior dealings with the 2nd defendant, Excel, which he estimated to be roughly in the region of 300 transactions within the previous year, and the events giving rise to this case commenced unexceptionally. A Mr Cheung from Excel had contacted him on the telephone, and requested that Best Trend store some containers for him. Given their size, weight and number, these containers needed to be stored on a "special barge", and a price of HK$5,500 per day was agreed with Mr Cheung; in turn, Mr Leung contracted with the barge owner to pay a hire charge of $5,100 per day which, had matters worked out as they should, would have yielded a daily profit of $400. He ended up storing these containers, which he had been told contained a cargo of paper, from about 17 April 1997 until their return to Excel on 21 March 1998; in fact, originally 45 had been so stored, but on about 10 May 1997 eight of these 45 containers had been released in accordance with the 2nd defendant's instructions, leaving 37 loaded 40 foot containers on the barge, the "Hoi Kong 5", which was berthed in Kwun Tong. 15. In the event, said Mr Leung, this transaction was not a success financially. To the contrary, he ended up being owed a substantial amount of money by the 2nd defendant, Excel, an amount he estimated to be in the region of HK$700,000 to HK$800,000 in unpaid storage charges (for the recovery of which he had issued separate legal proceedings), whilst at the same time he had had to pay the barge owner a sum in excess of $520,000 for the barge hire; indeed, this amount would have been greater had the barge owner not latterly agreed to discount the full sum due in light of the difficult position in which he, Mr Leung, had found himself. 16. Throughout the storage period, said Mr Leung, he had had no contact with the plaintiff. So that when he received the letter of demand on 2 December 1997 he became concerned, and immediately contacted Mr Tsin, Mr Cheung and Mr Poon of Excel to ask what was happening, and to ask them "to dispose of this matter as soon as possible". Mr Leung said that two days later he received a telephone call from Excel and was told that he need not be concerned about this solicitor's letter and that the 2nd defendant "would deal with it"; he was also told that the containers should be retained pending Excel's further instructions on the matter. 17. A constant refrain within Mr Leung's evidence was that he was highly concerned about the situation, not only in light of the plaintiff's demand but also because Excel was not paying him anything for the storage whilst he was continuing to incur significant debt for the barge hire, so that he requested the 2nd defendant "to have the containers back as soon as possible". He made it clear, he said, that he did not wish to become involved in this case, and repeatedly asked the 2nd defendant "to negotiate this matter with the plaintiff" and to return the containers to the plaintiff. Nor did Mr Leung consider it possible simply to have complied with the plaintiff's letter of demand, as in cross-examination it was suggested that he should have done, given that he had received these containers from and upon the instructions of the 2nd defendant, and in any event he was well aware that these 37 containers remained stuffed with cargo and he did not know "who were the actual owners" of this cargo. 18. Mr Leung's evidence was that the issue of the containers bothered him sufficiently to discuss the question with Excel "on most Saturdays", together with the issue of the non-payment of his storage fees. He recalled an agreement was reached with Excel either at the end of February or at the beginning of March 1998 - in fact, judging from the contemporary solicitors' correspondence, this seems more likely to have occurred in early March - which resulted in the cargo in the 37 containers being de-stuffed on the storage barge itself and placed into other containers, the empty 37 containers then immediately being taken to the Shun Fat depot and into the custody of Excel. It was his understanding, said Mr Leung, that the 2nd defendant was thereafter going to return the containers to the plaintiff. He reconfirmed that at no time did he or his company had any direct contact with the plaintiff, Best Trend at all times receiving its information from the 2nd defendant; as he put it "the 2nd defendant asked us to return the containers to them, so we did". 19. On behalf of the 3rd defendant, Mr Kerr strongly attacked the case as now brought against his clients, suggesting that, in effect, the plaintiff had sought to visit its contractual claim against the 1st defendant upon Best Trend, and he submitted that the case against the 3rd defendant be dismissed. In my view he made three valid points : first, that the matrix of facts to support a claim in detinue did not exist in this case, second, that the bailment on terms which had arisen served to preclude any claim for detinue on the present facts, and third, and in any event, that the plaintiff manifestly had failed to prove any loss. I did not agree however, with his other submission to the effect that the 3rd defendant was at all material times the agent of the 2nd defendant, and in reality never was actually in possession or control of the containers. On the facts before the court this is not an attractive proposition, and I reject it; Best Trend clearly was an independent contractor, who took receipt of these containers from the 2nd defendant on the basis of its own terms and conditions. 20. Looking at the case overall, in my judgment Mr Kerr has some justification for his argument that the main focus of this action was always the 1st defendant, New Rank, with whom the plaintiff had a contractual link via the Guarantee - indeed, absent such contractual terms I totally fail to see how the large damages figures appearing on the face of the pleadings otherwise could have been put forward - and that the claim over against the 3rd defendant (and to some extent the 2nd defendant) represented a claim of last resort in terms of the plaintiff's remedies. 21. The plaintiff's case rests solely upon the non-compliance, upon expiry of a 14 day period (which Mr Thomson accepted to be reasonable), with the letter of demand of 1 December 1997. I consider that there is much in the submission that at the time of this demand the plaintiff was aware that cargo was in the containers (the plaintiff had earlier made a demand upon the 2nd defendant on 29 September 1997 which the 2nd defendant had refused, claiming a lien over the containers and their contents), so that, in effect, the demand involved the obligation to incur expense and to de-stuff the containers, which I accept is not and should not be part and parcel of a demand sufficient to trigger a claim in detinue. I also accept the submission that in the circumstances there was no unconditional refusal to comply on the part of the 3rd defendant, and that this situation prevailed at the date of the issuance of the writ, on 15 December 1997, which on the authorities appears a necessary ingredient for the establishment of the tort. 22. Nor do I accept, if and in so far as the demand be valid, that in the circumstances prevailing the time taken post-demand by the 3rd defendant to consider the matter with the 2nd defendant can be categorised as other than reasonable, given the position of the 3rd defendant as sub-bailee of the containers and their contents; self-evidently the matter could not have been legitimately resolved without discussion / negotiation between the 2nd and 3rd defendants. In fact, when taxed in cross-examination about the delay which had occurred, Mr Leung emphatically made the point that such delay as there may have occurred was caused by the 2nd defendant, who had the problem of making arrangements for the disposal of the cargo within the containers before dealing with the containers themselves, and that this problem ultimately was resolved by de-stuffing the containers on the barge itself. So that even if the 3rd defendant's conduct inferentially can be regarded as a refusal, it was certainly not unconditional, and if "inferentially qualified", to adopt a phrase of Mr Kerr's, in my view such course as was adopted by the 3rd defendant was essentially reasonable. 23. In this latter connection I bear in mind Mr Thomson's stricture that, in the position in which it found itself, Best Trend should have interpleaded. I agree that this may have been a counsel of prudence, although given the amount of money the subject of any realistic claim against the 3rd defendant, the expense of such an application would have made little commercial sense when compared with the attractions of negotiating with the 2nd defendant and procuring the return of the containers in that way; in this context Mr Kerr is probably right in suggesting that had interpleader proceedings been commenced in January or February 1998 (which would have been unexceptional) such proceedings probably would not have been resolved in any event earlier than May, by which time the containers had been returned to the plaintiff anyway. In all the circumstances, therefore, even if a claim in detinue validly could be raised by the date of the writ, I am satisfied that the 3rd defendant acted reasonably in the situation that had arisen in the attempt - successful as it turned out - to procure resolution of the problem absent resort to legal action, particularly bearing in mind the financial position in which the defendant found itself as a consequence of storing these containers. 24. Issues of loss and quantum apart, Mr Kerr's other main line of argument revolved around bailment on terms. His submission was that subsequent to the decision in The Pioneer Container, [1994] AC 324 (PC), the principles of bailment on terms were now tolerably well established, the consequence being that authority, whether ostensible or actual, is conferred by the head bailor to its bailees to sub-contract on terms. Mr Kerr submitted that it was abundantly clear from the available documentary evidence that the plaintiff, through its agent, Kong Hing, in fact authorised delivery of the containers to the 2nd defendant upon production of the relevant Delivery Order. 25. Mr Kerr also submitted that it was clear from the evidence of the plaintiff's two witnesses, Mr Ma Kin Ming and Mr Chan Che Leung, that Kong Hing was well aware that any subsequent carriage or storage would be subject to terms and conditions, so that by delivering or authorising the delivery of the containers, and the cargo therein, to the 2nd defendant, authority was established for the 2nd defendant itself to deal with them upon such terms and conditions as may be applicable, in this case the terms and conditions contained in the 2nd defendant's bill of lading. In fact, in this instance the 2nd defendant - which had not been paid its freight by Good Trade for the carriage of the containers up the Pearl River to Nanhai - had asserted a lien over these containers and their cargo and, said Mr Kerr, the 3rd defendant was entitled through the Himalaya clause to the benefit of that lien, so that any claim in detinue, if otherwise good, would be defeasible given that the plaintiff was bound by the terms of the bailment / sub-bailment in the hands of the 2nd and 3rd defendants. 26. In my view these arguments are correct. Mr Thomson clearly recognised the difficulty posed to his case by this approach, but on reflection I decline to accept his submission that in delivering the containers to Excel, Kong Hing was acting solely as agent of the 1st defendant, New Rank, thereby, as he put it, "breaking the chain" and "precluding the plaintiff from being subject to a bailment on terms argument". It seems clear that Kong Hing, acting throughout on behalf of the plaintiff (albeit at some juncture it may have been wearing two hats), consented to the delivery of the containers to the 2nd defendant upon presentation of the Delivery Order, that thereby the 2nd defendant obtained authority further to deal with the containers and their cargo, and that Kong Hing was affixed with the knowledge that the containers and their cargo were to be transported elsewhere upon the 2nd defendant's own terms and conditions. 27. If this conclusion be right, as I believe it to be, there is no need to go on to consider Mr Kerr's alternative point that in any event the sub-bailment was also subject to the 3rd defendant's own terms and conditions, and in particular Clause 10 thereof relating to general lien, not least since in any event I have accepted Mr Leung's consistent assertion in his evidence (albeit not reflected in his pleading) that at no stage had he purported to invoke such a lien as against the 2nd defendant, nor indeed as against the plaintiff. Nor do I consider (as was perhaps impliedly suggested) that acceptance of this bailment on terms argument in effect denies the plaintiff a remedy in the type of situation that had arisen in this case. The short point is that the plaintiff had a ready contractual remedy from the 1st defendant for the non-return / late return of its containers, via the execution of the Guarantee, even if in this instance it turned out not to be worth powder and shot; in my view the fact that a commercial risk has gone bad is no reason arbitrarily to attempt to extend a remedy in detinue to other parties whose authority to deal with the containers emanated from Kong Hing and who dealt with the containers and their cargo in good faith and subject to their own trading terms and conditions. The fact further remains that, in authorising and affecting onward delivery of the containers to Excel, it was always open to Kong Hing, had it so desired, to secure a Guarantee in like terms to that which had been initially secured from New Rank. 28. Finally, and without prejudice to his other arguments, Mr Kerr submitted that, quite simply, the plaintiff had failed to prove any loss. I agree, and hold for the 3rd defendant on this basis also for the reasons set out later in this judgment. Since however considerations of quantum relate in substantial part also to the situation of the 2nd defendant, I turn first to consider the claim against Excel. THE CASE AGAINST THE 2ND DEFENDANT 29. This was an aspect of the case that Mr Thomson did not develop in opening, having primarily focused on the case against the 3rd defendant, albeit he made it clear at the outset that the plaintiff indeed sought judgment against both the 2nd and 3rd defendants. In the circumstances, in the situation wherein the 2nd defendant had not appeared at trial, the court permitted a written summary of the plaintiff's case against the 2nd defendant to be submitted shortly after the conclusion of the hearing. 30. In that summary, the plaintiff made it clear that it pursued the 2nd defendant, Excel, in conversion and/or detinue. More particularly, the plaintiff claimed against the 2nd defendant in conversion for the period before 14 October 1997, and thereafter in conversion and/or detinue until the containers were released to the plaintiff on 17 May 1998. It is conceded that if the plaintiff were to be successful in claiming damages in detinue against the 3rd defendant for the 95 days from 15 December 1997 to 21 March 1998, the plaintiff made no overlapping claim against the 2nd defendant, albeit an additional claim for this 95 day period is maintained if the court were to find (as is the case) that the 3rd defendant is not liable to the plaintiff. 31. There is, of course, no direct oral evidence bearing upon the 2nd defendant's position, save in so far as Mr Leung of the 3rd defendant made reference to his own dealings with Excel. In pursuing the 2nd defendant, Mr Thomson has posited a number of alternative scenarios, variously claiming damages in conversion or detinue from 21 June 1997 (when Excel appears first to have asserted a lien against Good Trade over the containers and their contents), or from 12 August 1997 (when, it is said, Excel maintained that lien against the plaintiff), or from 14 October 1997 (14 days after the plaintiff's letter of demand to the 2nd defendant dated 29 September 1997) until, in each case, 16 May 1998 (taken as the date of the containers' eventual return to the plaintiff), thereby seeking damages at $200 per day for alternative periods of 329, 277 and 212 days respectively. 32. I decline such relief, for the like reasons underpinning the refusal of relief against the 3rd defendant. In my view no factual matrix has been demonstrated to underpin detinue, and I fail to see how there can be a viable claim in conversion / detinue at least until 22 March 1998, given the bailment on terms which I have found to exist, and in any event (and not least) even if I be wrong in these conclusions, in my judgment the plaintiff has failed to establish causative loss. 33. However, if and in so far as proof of loss had not been an issue, I would in principle have allowed a claim against the 2nd defendant for the limited period between 22 March 1998 (after which date the 2nd defendant began to store the empty containers) to 16 May 1998 (the date the containers in fact were so returned) because, as Mr Thomson put it, the 2nd defendant did not release them when they were returned by Best Trend "but insisted on storing them further". In my view, at least on the evidence before the court, no justification existed for this continued retention of the empty containers by Excel. 34. As to quantum for this latter period, I unreservedly reject the claim accruing at $200 per day for each container but (had such been satisfactorily proved) I should have allowed damages to accrue at the rate of US$3 per day, thereby producing the figure of US$6,105.00 (55 days x 37 containers x US$3). I indicate this figure, however, solely with reference to the conclusion I should have reached were I to be wrong in terms of my conclusions as to proof of loss. In this connection also I would have allowed restitution of the storage charges in the sum of HK$22,505, which represents half of the storage charges for the period of container storage at the Shun Fat Depot, Tuen Mun, which sum was paid by the 2nd defendant as a condition of the ultimate release of the containers to the plaintiff on 17 May 1998. 35. As matters presently stand, however, I decline to allow the plaintiff's claim against the 2nd defendant, which is also dismissed. LOSS AND DAMAGE 36. In his closing address Mr Kerr submitted that the plaintiff had simply failed to prove any loss. I agree with this contention, and now briefly set out my reasons for so doing. 37. In this connection, Mr Kerr drew my attention to passages in two cases which are relevant in terms of general approach. In World Realty Ltd v. Kwan Ngan Yin, [1987] 3 HKC 148 at 151, the Hong Kong Court of Appeal cited with approval the following observations of Lord Goddard in Bonham-Carter v. Hyde Park Hotel Ltd, (1948) 64 TLR 177 at 178 :-
words which Kempster JA (who in the course of his judgment in that case concluded that there was no evidence warranting the findings as to quantum by the judge below) observed were also quoted with approval by Edmund-Davies LJ in Ashcroft v. Curtin, [1971] 1 WLR 1731 at 1738. 38. Further, in Brandeis Ltd v. Western Transport Ltd, [1981] 1 QB 864 at 870, Brandon LJ (as he then was) stated :-
39. In my view, these two extracts are particularly pertinent given the circumstances prevailing in this case. (i) Losses said to arise from the delayed return of the containers 40. The plaintiff puts its case on primary loss in two ways : first, that the contractual rate of $200 per day should apply to the 2nd and 3rd defendants just as it had applied - pursuant to the contractual terms in the Guarantee - to the 1st defendant; and second, and in the alternative, that the loss is to be calculated at the rate of US$3 per day per container, this being the sum expended to hire replacement containers for the 37 that were not available for use in the period in which they were with the 2nd and 3rd defendants. 41. In my judgment the visitation of the contractual rate agreed to by the 1st defendant upon the other two defendants is a non-starter; indeed, were I to be wrong in my conclusions as to the liability of these defendants to the plaintiff, nevertheless I should firmly have declined to assess quantum on this particular basis. Whilst a party may choose (as did the 1st defendant) to agree to such a rate as a matter of private contract, I fail to see why this rate should be applicable to third parties absent such agreement, nor how this can be characterized as a genuine pre-estimate of loss, notwithstanding that the figure is said to be used in the shipping industry; in fact, Mr Chan Che Leung, the Claims Manager of Kong Hing (and one of the two employees of Kong Hing who gave evidence for the plaintiff) specifically accepted, when put to him, that there was no evidence other than his opinion that the $200 per day as claimed was a reasonable pre-estimate of loss. To the contrary. The very existence of this alternative claim, at the rate of US$3 per container per day, neatly suggests that it is not, and in fact Mr Ma Kin Ming, the other witness for the plaintiff and the Inventory Manager of Kong Hing, also accepted that if the plaintiff had been short of containers it could easily have hired them at US$3 per day. 42. As for the alternative claim for the hire of replacement containers at the latter rate, Mr Ma accepted in cross-examination that actually he did not know if his principal, that is, the plaintiff, had had to hire in extra containers as the result of the events the subject of this action. Nor was he aware of whether there was a surplus or shortage of containers on the market at the material time, a salient consideration given the uncontradicted evidence that the plaintiff had at its disposal, whether owned or hired, "about 20,000 containers at any one time". He further accepted that there was no document in existence which related to the alleged hire of 37 substitute containers as the result of these 37 containers being retained, and he reconfirmed in re-examination that he did not know about the hire of such replacement containers. 43. For his part, also, Mr Chan Che Leung, the Claims Manager of Kong Hing, when asked in chief whether, as the result of the plaintiff not having the 37 containers, the plaintiff had had to hire out replacement containers, equally did not know : "I presume my principal had to do so, but I can't be sure". Nor did Mr Chan know whether there was any spare container capacity to be utilised at that time. 44. Further, in so far as any claim is advanced (and it is far from clear that it is, given Mr Ma's evidence regarding the hire of substitute containers) for loss of rent paid by the plaintiff upon these containers at the rate of US$3 per day, I note that Mr Chan referred to some documents "supplied by Head Office", the arrow-markings on which were (I think) to designate those amongst the 37 containers (14 such arrows are visible) which were allegedly leased and not owned by the plaintiff. However, when questioned about this Mr Chan "frankly" admitted that he "did not go into detail in this document", and when it was specifically suggested that he did not know what had been paid by Head Office, accepted that he did not know save that he believed "what the principal produced was genuine". 45. In light of evidence of this quality, I decline to find that the plaintiff has discharged the burden of proof as to causative loss suffered as the result of that which occurred to the 37 containers in this case, and I regret that it is simply not sufficient to proceed on the basis of indeterminate second hand assertion coupled with a vague brandishing of papers obtained from a source other than the witness. Resultant damage is an integral part of the cause of action in tort, and in my judgment this has not been established to the satisfaction of the court in this case. 46. I turn lastly to collateral heads of damage which were also asserted by the plaintiff. (ii) Repairs to damaged containers 47. This claim is expressed to be in Korean Won, the relevant sum I am told amounting to US$2,500 approximately. Once again, evidence in this regard is tenuous to say the least. As I understand the position from the evidence of Mr Chan, the sub-agent hired by Kong Hing to redeliver the 37 containers collected from the 2nd defendant, namely Hoi Kong, drew up an Estimate of Repair relevant to these containers, but rather than affect such repairs in Hong Kong the plaintiff instructed Kong Hing to return the containers to Korea, where it is said that these repairs were effected. Apart from the fact that no-one from Hoi Kong or the Korean repairer has been called, the court has no idea when and by whom such alleged defects as are said to have needed repair were caused, not least because the alleged damage appears to involve, in substantial part at least, basic wear and tear, and in my view no basis has been established for visiting such alleged loss upon either the 2nd or 3rd defendants. I refuse this head of claim also. (iii) Haulage charges 48. This was a claim for haulage charges from the Shun Fat Depot. However, Mr Thomson did not pursue this, Mr Kerr pointing out that such a claim is misconceived when made under a claim for detinue : see Capital Finance Co. Ltd v. Bray, [1964] 1 WLR 323 (CA), which held that no-one is bound, save by contract, to take a chattel to the owner of it, his only obligation being not to prevent the owner from getting it when he comes for it. (iv) Storage charges 49. I fail to see how this element of the case can concern the 3rd defendant. It is for storage charges in the sum of $22,505 paid by the plaintiff pursuant to agreement with the 2nd defendant with recourse to the 2nd defendant reserved. Had liability been otherwise established against the 2nd defendant (which in my view it has not) as I have observed earlier in this judgment I should have awarded the return of this sum to the plaintiff. ORDER 50. As the result of the foregoing, the Order of the court in this case is as follows :
51. I thank counsel for their assistance.
Representation: Mr James Thomson, instructed by Messrs Koo & Partners, for the Plaintiff Mr John Kerr, instructed by Messrs W.K. To & Co., for the 3rd Defendant The 1st and 2nd Defendants were not represented and did not appear |
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