Deks Air (Hong Kong) Ltd v. Freight Management International (A Firm) and Another
Read the full judgment text of HCA 4261/1980 on BabelCite. This High Court CFI judgment.
1. This is an appeal from an order of the Registrar given on the 4th of September 1980 whereby summary judgment was entered for the Plaintiff against the Defendant in this action in the sum of $64,681 and costs.
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HCA004261/1980
IN THE SUPREME COURT OF HONG KONG HIGH COURT -----------------
----------------- Coram: Mr. Commissioner Litton, Q.C. in Chambers. Date of Judgment: 19th December, 1980 ----------------- JUDGMENT ----------------- ORDER 14 APPEAL 1. This is an appeal from an order of the Registrar given on the 4th of September 1980 whereby summary judgment was entered for the Plaintiff against the Defendant in this action in the sum of $64,681 and costs. 2. Order 14 rule 2 of the Rules of the Supreme Court requires that an application for summary judgment be supported by an affidavit verifying the facts upon which the claim is based. For the nature of the Plaintiff's claim, a court looks at the averments in the statement of claim. 3. The statement of claim in this case is bare to the extreme. It reads:
It is signed by the solicitors for the Plaintiff. 4. Only invoice No. C-1727 is now relevant in these proceedings. That invoice was exhibited to the affidavit of Mr. Eric Wong, (the Plaintiff's sales representative), filed in support of the application for summary judgment. The invoice is exhibit C annexed to that affidavit. 5. An invoice by its nature is a demand for money and does not normally express the whole picture of the contractual relationship between the parties. Nor does it do so in this case. The invoice No. C-1727 (exhibit C) refers to a shipment under air way-bill No. 512-04462883. That air way-bill is exhibit D. It was issued by the Royal Jordanian Airline. It evidences the shipment of 245 cartons of Wearing Apparels from Hong Kong to Beirut. 6. The shipper in the air way-bill is Dorman International Ltd. the third party in these proceedings. The Defendant (Freight Management International) is stated to be the issuing carrier's agent. The freight came to $77,504.16 and there is then a sum under the heading "Due Carrier" of $1,325.50 and these two sums make up the amount of the invoice exhibit C totalling $78,829.66. Apparently, the goods were sent by air to Beirut but arrived late and accordingly the shipper refused to pay the amount due. 7. In the affidavit in support of the application for summary judgment the deponent refers to Clause 5 of the "conditions of contract" seen on the reverse side of the air way-bill and points out that no time was fixed for the completion of carriage and the Plaintiff had an absolute discretion to "select and/or deviate from the routes of shipment". How this is relevant to the Plaintiff's claim has not been explained. 8. The documents exhibited in that affidavit, in my judgment, in no way supports the Plaintiff's contention that the Defendant is liable to the Plaintiff for the sum claimed in the Statement of Claim. 9. The invoices, as I have mentioned above, are merely the Plaintiff's demands and constitute no admission of liability by the Defendant. The air way-bill in no way fixes the Defendant the liability for the carriage of the goods. 10. In what way then can it be said that the Defendant is liable to the Plaintiff in these proceedings? 11. Mr. Patrick Chan for the Plaintiff relies upon a number of matters in the subsequent affidavit filed which he says constitute admissions by the Defendant, the chief of which is a letter dated the 5th July 1980 from the Defendant's solicitors to the Plaintiff's solicitors. Having heard Mr. Sammy Lee for the Defendant on that matter, I am satisfied that it cannot be said to be incapable of a different construction. 12. The Defendant's case is simply this: the Defendant, in soliciting goods for carriage by air, contracts with shippers as principals. But vis-a-vis the Plaintiff the Defendant acts merely as an agent. This contention is to some extent supported by the terms of the air way-bill itself. The Defendant's case is that when freight has been collected, then the Defendants are liable to account to the Plaintiff for such amount, but they say they have no liability to the Plaintiff when shippers fail to pay. 13. I cannot see how, on the material before me, it can be said that the issue is unarguable. 14. I am told that the Registrar, in entertaining the application for summary judgment, might have been mistaken when he thought that the freight had been collected by the Defendant. This might have led him to give summary judgment against the Defendant in this case. But for my part, assuming those to be the facts (and they are now admitted not to be so) I would have hesitated to give judgment in view of the way the Plaintiff's case is pleaded in the Statement of Claim. If the Plaintiff's rights against the Defendant depend upon a contract of agency and a liability on the part of the Defendant to account to the Plaintiff as agent, that is in no way pleaded. 15. It is not the function of the court, on an Order 14 application, to roam over a mass of affidavit evidence to see whether, on such material, the Plaintiff might be entitled to some sort of judgment. The court is confined to the averments in the Statement of Claim which are required to be verified by affidavit; see order 14 Rule 2(1). If solicitors acting for Plaintiffs plead the client's case in the way as the Plaintiff's case has been pleaded here, the court is bound (subject to any amendment which might be made) to entertain those averments and nothing else. 16. In my judgment, it is wholly inappropriate to explore the relationship between the parties concerned in this transaction on the bare averments in the Statement of Claim; and on affidavit evidence in entertaining an application for summary judgment. 17. The Defendant may well, when the relationship is explored, be proved correct in their assertion that their sole liability to the Plaintiff is to account as agent for freight received, and that they have not assumed the legal liability of shippers to pay freight when goods have been carried by air to their destination. I express no view on these matters. Suffice it for me to say that I am satisfied that there is a triable issue in this case. Accordingly the appeal is allowed. The Judgment is set aside and unconditional leave is given to the Defendant to defend this action. I will now hear counsel as to what other orders flow from my judgment. THIRD PARTY DIRECTIONS 18. I now deal with the summons under Order 16 rule 4 for directions in relation to the third party issues. Mr. Warren Chan on behalf of the third party says that on the material before the Court the only order I should make is an order under Rule 4(3)(c) to determine the third party proceedings summarily on the ground that the third party notice does not disclose any grounds of complaint by the Defendant against the third party. Mr. Warren Chan puts his points ably but on analysis I am persuaded that they are really technical objections. Perhaps the third party notice might have been drafted with greater clarity. On reading the third party notice it is not quite clear whether the Defendant is saying that as the Plaintiff's agent the Defendant nevertheless has certain rights as such agent against the third party or whether the Defendant is saying that as between itself and the third party there is a dealing on a principal-and-principal basis. The third party notice refers to a debit note No. 1013 in which a claim for $67,281.30 is made for "agreed freight charges" which tends to suggest that the defendant is asserting an independent contractual claim against the third party. This, as Mr. Warren Chan points out, is somewhat contradicted in paragraph 2 of Mr. Joseph Cheung's affidavit where he appears to say that the sole capacity of the Defendant is as the Plaintiff's agent. However, paragraph 3 of that affidavit does confirm the contents of the third party notice and having heard Mr. Sammy Lee for the Defendant I am satisfied that the third party claim is not restricted in the way Mr. Warren Chan suggests. It is not the function of a third party notice under Order 16 rule 1 to state every material averment on which the Defendant relies for his third party claim. All that the notice needs to do is to contain a 'statement of the nature of the claim made against him and, as the case may be, either of the nature and grounds of the claim made by him or of the question or issue required to be determined'. Although some of the criticisms of Mr. Warren Chan as regards the wording of the third party notice are, as I think, justified, I do not think he has made out such a strong case as to require me to determine these proceedings summarily under the third party notice. Any defect in the notice will undoubtedly be cured in the pleadings as between the Defendants and the third party. Accordingly the application of Mr. Warren Chan is dismissed and I will now entertain the Defendant's application as regards what order I should make in the third party proceedings. 19. Having heard Counsel, the order I make on the third party summons is that the summons for third party directions be adjourned to be dealt with by the Registrar with liberty to the parties to restore the summons for hearing before the Registrar upon two clear days notice to the other parties; the costs of the hearing in the third party summons be reserved with a certificate for Counsel.
Representation: Mr. Sammy Lee (W.S. Lo & Co.) for (Appellant) Defendant. Mr. Patrick Chan (Edmund W.H. Chow & Co.) for (Respondent) Plaintiff. Mr. Warren Chan (Deacons) for Third Party. |