Bhojsons & Co (HK) Ltd v. E.M.G. Air Services (HK) Ltd

HCA002575/1975

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 2575 OF 1975

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Coram: Trainor, J.

Date of Judgment: 20th October, 1977.

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JUDGMENT

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1. The plaintiff alleges that on the 26th April, 1975 the defendant acting through its agent, Gulrajaney Hasso, entered into a contract with the plaintiff to air freight a quantity of goods for the plaintiff to Lagos, Nigeria. The plaintiff alleges that it was expressly provided that the goods would arrive in Lagos in 4 or 5 days and that the delivery of the goods would in any event be made in Lagos not later than 10 days. It pleaded alternatively delivery within a reasonable time.

2. According to the Statement of Claim the defendant "and/or its agent" collected the goods on the 28th April but they were not delivered to the consignee until the 22nd July. The plaintiff alleges that the consignee is "presently claiming" $US 30,000 from it for breach of contract and the plaintiff seeks:

3. A declaration that the defendant is liable to indemnify the plaintiff against the claim of the consignee for $30,000, or such damages as may be awarded, and costs; or such sum as the plaintiff might reasonably pay to the consignee.

4. There was also a claim for the sum of $1,125 (adjusted to $1,125 at the hearing) for an excess payment made by the plaintiff to the defendant.

5. A Defence was delivered which ran to three pages of what was almost entirely evidence. It went into great detail as how Mr. Hasso "at or about April, 1975" made enquiries and was given information about air freight rates; that he was "specifically informed" that the rates were for charter flights; that no delivery dates could be guaranteed by the defendant; and that there were delays "in shipments to Lagos, Nigeria pending clearance by the Nigeria Customs Authorities."

6. Nowhere in the verbiage of the Defence was it specifically stated that Mr. Hasso was not the agent of the defendant but it was possible to discern from it that there would be evidence to show he was not. The 5th paragraph of the Defence reads:

"Save as hereinbefore pleaded, paragraphs 1, 2 and 3 of the Statement of Claim are denied."

7. I raise this matter because time after time pleadings are presented that are so prolix that frequently it is difficult to ascertain with certainty what precisely is the issue between the parties. Indeed, at times it would appear that the drafters of pleadings had never heard of Odgers' excellent work on the Principles of Pleading And Practice, and considered Bullen and Leake to be the title of a leading case.

8. I would like to draw attention to Order 17 rule 7 of the Rules of the Supreme Court the heading of which is: "Facts, not evidence, to be pleaded".

9. During the hearing I have referred to the pleadings of the plaintiff as appalling. I make no apology for this as it must have been obvious to whomsoever took instructions from the plaintiff's representative, who knew Mr. Hasso before the date of the transaction, that Mr. Hasso was acting independently and, as he described himself in the witness-box, a middle man, a broker, and not an agent. Mr. Hasso also described himself as the manager of Worldwide Business and Insurance Services. Indeed, part of a letter from the plaintiff to Worldwide Business and Insurance Services which was exhibited reads:

"We wish you to confirm that in your capacity as a broker you had assured us .... that the maximum delay would not exceed 10 days."

10. Had the defendant only pleaded to the allegation that the contract was made by its agent the case must have been dismissed at the close of the plaintiffs case. But the Defence, in the mass of material it contained, did disclose a contract between it and the plaintiff and on that basis the case proceeded.

11. Having heard both sides it is now for me to decide whether the declaration sought is a relief the court should grant.

12. It was alleged by the plaintiff that Mr. Hasso, in an interview with a Mr. Tommy Cheng of the defendant company made the arrangement for the carriage of goods of the plaintiff from Hong Kong to a company called Eros Enterprises Limited in Lagos. It was said by Mr. Hasso that when he approached Mr. Cheng to negotiate this transaction Mr. Cheng told him that the goods would be delivered in Lagos within four or five days, or at a maximum of ten days. The goods were collected by the defendant on the 29th of April and left Hong Kong on the 10th May en route for London. At London they were diverted from their anticipated airport of arrival, Gatwick, to Stanstead where they arrived in the morning of the 12th/13th May. They were ultimately consigned from London to Lagos on, I think, the 21st July and reached there on the 22nd. The plaintiff alleges that by reason of that delay, which indeed is a very considerable delay, the consignee of the goods suffered damage in that the prices at which it had contracted to resell the goods was no longer available because similar, but much cheaper, goods had arrived in Lagos causing the price to drop very considerably as a consequence of which the consignee's purchasers were unwilling to accept the goods. A witness from Eros Enterprises Ltd. gave evidence to the effect that his company had contracted to sell the goods about the time that the contract between his company and the plaintiff had been entered into, but certainly ahead of arrival, at $US 48 per piece approximately. He said when the goods arrived the price had dropped by 60%. He said his company was only able to sell a small quantity at that reduced price.

13. The plaintiff in its Statement of Claim states that Eros is presently claiming damages for breach of contract (the date of the Statement of Claim is the 21st October, 1975); it is because of that it is seeking this declaration.

14. Eros has paid the plaintiff the agreed price of the goods.

15. The goods were consigned to a bank, the bank released the relevant papers to the defendant's agent at Lagos which cleared them and delivered them to Eros. But the position is, the plaintiff alleges, that Eros is claiming against it for failure to deliver in time and it blames that failure on the defendant.

16. The granting of a declaration is an equitable remedy that is seldom given in anticipation of events. It may be and has been granted, but the court will only grant it with the greatest of hesitation. It is a remedy that the Court will be very slow to apply if there is an easier or a better way of solving differences. It is a remedy that the Court will not apply if all relevant representations are not at its disposal.

17. This is an application in anticipation. It is a vague anticipation, because at no time when the witness of Eros was in the witness-box did he say that Eros intended to sue the plaintiff. Indeed he was not even asked if it intended to asked for compensation from the plaintiff. So if this declaratory order is made and no proceedings are to follow it will be a pointless order hanging over the defendant until time to sue the plaintiff runs out; even then the plaintiff might not rely on the Limitation Ordinance. Secondly, there is, in my opinion, a much more expeditious and suitable procedure to deal with the matter should a claim be made by Eros against the plaintiff. If Eros sues the plaintiff the plaintiff can take out a third party summons to have the defendant added as a defendant in the proceedings, and the entire dispute could be disposed of at one hearing. In other words the cherry could be consumed in one bite; instead of which we have a nibble at a cherry which is rather like the apple at Hallowe'en swinging at the end of a string; it may never come in contact with teeth at all.

18. There is another aspect of this case that was pleaded and argued before me and that was that this was an international carriage by air and therefore the Warsaw Convention applied to it as a result of which the consignor, that is the plaintiffs, are entitled to succeed. Beyond question there was a contract of carriage by air which fell within the definition of international carriage by air, and to which the Warsaw Convention applies since Hong Kong and Nigeria are subscribers to that Convention. But whether the consignor is a proper person to take these proceedings is another matter. In a decision of my own, Cordial Manufacturing Co.Ltd. and Another v. Hong Kong-America Air Transport Ltd. (1976) H.K.L.R. 555, I held that once the rights of the consignee arise by virtue of the Convention, as they have in this case, the rights of the consignor under the Convention are extinguished, and any claim that he might then have is governed by common law. Mr. Yam has endeavoured to persuade me that my interpretation of Articles 12, 13 and 14 of the First Annex to Schedule of the Carriage by Air (Overseas Territories) Order 1967 was incorrect; but with great respect to him I cannot accept that that is so. Although I am not bound by a decision of this Court I would be extremely hesitant in departing from it; but there was nothing said to me that would persuade me that the judgment in that case was wrong. That being so as the property in the goods had passed the plaintiff would have no right of action in common law and, certainly, no right to the declaration sought.

19. If proceedings are brought by Eros against the present defendant there are certain circumstances of which I have had some, but vague, evidence which if brought to the court's attention might well result in the case being dismissed. Whether those facts would be presented and as effectively argued were the case between Eros and the plaintiff only as they would be by the defendant in this case if it were a party to that case is a moot point. What I am thinking of is that I have heard some evidence that when the goods arrived in London a very considerable delay in forwarding them was caused by the failure of the Bank of America, the bank with which Eros did business and to which the goods were consigned, to release documents to Holts, the agents of the defendant, which would have enabled the goods to be pre-cleared in Lagos before their dispatch from London, a pre-requisite to them being allowed to be landed in Lagos which had been introduced by the Nigerian Government. I have not had anything like sufficient evidence to enable me to adjudicate on this question. I have not had any satisfactory evidence as to when the necessity of pre-clearance prior to the departure of the goods from London was introduced by the Nigerian Government or when it ceased. The evidence that I have had with regard to the difficulties at Lagos Airport have been scanty. I have been told about planes coming in and dumping their cargo practically on the tarmac with the result that an embargo was imposed on air cargo coming into Lagos at all. All these are factors which would influence a decision in a case of Eros against the plaintiff. There are other matters on which I have not had sufficient evidence that would justify me in concluding that an action by Eros against the plaintiff might succeed. I am not satisfied at all that the evidence that has been led by the plaintiff against the defendant would warrant the conclusion that the plaintiff might be liable for damages to Eros. Indeed there is much evidence, that only the defendant could supply, to the contrary.

20. Repeating what I said earlier, a declaratory order is an equitable remedy very much in the discretion of the Court and which the Court will not grant in anticipation unless all relevant representations are before it. This is such a case and without any hesitation I refuse to exercise my discretion to grant the Order. In so far as that part of the plaintiff's claim is concerned I dismiss it.

21. It is however pleaded that there is a certain sum of money $1,125 due by the defendant to the plaintiff and that has been conceded so the plaintiff will have judgment for the sum of $1,125. It is also entitled to such costs as would follow a successful claim for that amount in the appropriate court.

Representation:

Mr. David Yam (H.A. Hoosenally & Co.) for plaintiff.

Mr. William Lane (Deacons) for defendant.