Transocean Grabbulk Pool Pte Ltd v. Lucky Accord Co Ltd
Read the full judgment text of DCCJ 716/2004 on BabelCite. This District Court judgment.
1. In this action, the Plaintiff claims against the Defendant for final payment of hire charges in the sum of US$84,222.40.
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DCCJ 716/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 716 OF 2004 __________ BETWEEN
__________ Coram : Her Honour Judge H.C. Wong in Court Dates of Hearing : 13th to 15th October 2004 Date of Handing Down Judgment : 8th December 2004
______________________ JUDGMENT ______________________ 1.In this action, the Plaintiff claims against the Defendant for final payment of hire charges in the sum of US$84,222.40. 2.The Plaintiff (“TGP”) carries on the business of fixing and chartering out its vessels. It chartered out one of its ships M.V. Maritime Lapis from 29 October 2002 for 20-30 days at a daily rate of US$8,600 for one time charter via Japan to India under a charterparty on the New York Produce Exchange form (“the charterparty”). The Defendant denies that it was the charterer, it claims that a company by the name of Lucky Accord Shipping Company Limited (“Lucky Accord Shipping”) was the charterer. Background 3.The Plaintiff’s action was taken out in the High Court under HCA 825 of 2003 on 5 March 2003, the proceedings were transferred to the District Court by a consent order dated 4 February 2004. On 19 March 2003, the Plaintiff issued a writ of summons in HCA 1017 of 2003 against Lucky Accord Shipping Company Limited under the same charterparty of 29 October 2002 for the same hire charge of US$84,222.40. Judgment was entered in default of defence by the Plaintiff on 29 April 2003 (p.240 of bundle); it was subsequently set aside on 7 October 2004, one week before the trial of this action (see p. 334 and 341 of the agreed bundle). 4.It is not disputed that the parties negotiated the charter through a shipbroker PC Li Shipbrokers Ltd. (“PC Li”) and all their correspondences were directed to and through PC Li. The Plaintiff’s case 5.The Plaintiff relies on an email from P C Li to the Plaintiff of 24 October 2002 in which the charterer proposed to use the “Selendang Nilam” charterparty as a pro forma for the chartering of the M.V. Maritime Lapis as the basis of the terms with further terms to be negotiated. It is the Plaintiff’s case that it relies on the full recap dated 30 October 2002 from the Defendant forwarded to the Plaintiff by P C Li. The said full recap forwarded provided that “other terms and condition as per MV Selendang Nilam/Lucky Accord C/P dated 26 September 2000”. Therefore, it is the Plaintiff’s understanding throughout that the vessel was chartered to the Defendant. 6.Miss Lo, Counsel for the Plaintiff, submitted that the Plaintiff’s alternative case is that, but for Lucky Accord’s mispresentation that it was the charterer, the Plaintiff would not have entered into the charterparty at all. Furthermore, the person in charge at the Defendant was Mr. Zeng Suming who was the only common director of both the Defendant and Lucky Accord Shipping Company Ltd. It was also Mr. Zeng who had been in charge of the hire of the MV “Maritime Lapis” in October 2002 and who was the responsible person at the Defendant on this and previous charters of the Plaintiff’s ships. Therefore, the Defendant should be liable to the Plaintiff for its loss. The Defence case 7.Madam Wong Hang, a director of the Defendant, gave evidence in Court producing its accounts in support of the Defendant’s claim that the Defendant had ceased trading in 2001. She denied the Defendant was a party to the charterparty. Mr. Zeng Suming gave evidence on the Defendant’s behalf and admitted he was a director and general manager of the Defendant before it ceased trading in 2001. He was also a director of Lucky Accord Shipping since 2001 with over 50 years experience in the business of chartering vessels. 8.Mr. Zeng denied that the charterparty of 29 October 2002 was between the Plaintiff and the Defendant. He claimed it was entered between the Plaintiff and Lucky Accord Shipping Co. Ltd. He also claimed that Lucky Accord Shipping was incorporated after the Defendant ceased business in 2001. The Defendant ceased trading in 2001 and had remained so to date. Mr. Zeng admitted he named the new company and adopted the name Lucky According Shipping Co. Ltd. because he helped establish the goodwill in the Defendant and he hoped to develop further goodwill in Lucky Accord Shipping Co. Ltd. 9.Mr. Zeng admitted that he had informed Mr. PC Li of PC Li Shipbrokers Ltd. over a lunch meeting in early May 2001 that he had left the Defendant and established a new company called Lucky Accord Shipping Co. Ltd. with a partner Leung Kwok Sun. Furthermore, since May 2001 he had on behalf of Lucky Accord Shipping hired two vessels through PC Li prior to the hiring of “Maritime Lapis”. They were the “M/V Wadi Halfa” charterparty of 3 August 2001 (p. 241-259) and “MV Pan Ambition” charterparty of 19 July 2001 (p. 260-274). It is therefore the Defendant’s case that PC Li knew the hirer was Lucky Accord Shipping not the Defendant when negotiations opened for the chartering of “MV Maritime Lapis” on or about 21 October 2002. 10.As Mr. Zeng had been involved as a general manager of the Defendant in September 2000 with the charter of another of Plaintiff’s vessel “Selendang Nilam”, he thought it would be more convenient to use the charterparty for that vessel as the basis of negotiation of the MV “Maritime Lapis”, it would simplify negotiations. The shipping agent of the Plaintiff for the previous “Salendang Nilam” hiring was New Concord Shipping Ltd. Mr. Zeng requested Ms. Joanna Leung of New Concord Shipping Ltd. to fax over to him the working copy of the Time Charter of the “Selendang Nilam” which was also based on the New York Produce Exchange form on 24 October 2002. 11.Mr. Zeng pointed out that in the parties’ previous hiring of the “Selendang Nilam” and “Pacific Emerald”, New Concord Shipping Ltd. had subsequently emailed the Plaintiff on two occasions that the refund by the Plaintiff should be paid to the account of Lucky Accord Shipping (p. 53-54 of bundle). They were issued after Mr. Zeng had informed Ms. Joanna Leung that the Defendant had ceased its business. 12.Mr. Zeng also claimed that so far as the “Maritime Lapis” charter is concerned all email and fax correspondences were sent by PC Li to Lucky Accord Shipping’s address and all correspondences to P.C. Li forwarded to the Plaintiff bore the letter-head of Lucky Accord Shipping Limited. 13.Mr. Zeng referred to an email dated 29 October 2002 that he sent to PC Li regarding the terms of the said charterparty (p.173-175). The email of 30 October 2002 (p.176-178) which gave the contact details of the charterer belonging to Lucky Accord Shipping. He further referred to a letter of 31 October 2002 from Lucky Accord Shipping to PC Li enclosing the “General Instructions to master of M.V. ‘Maritime Lapis’” (p.179-181) which named Lucky Accord Shipping Co. Ltd. as the charterer of the charterparty, it further set out its fax number and telex address. The 3 telexes from the master of M.V. “Maritime Lapis” in reply to Lucky Accord Shipping on 5th and 6th November 2002 confirmed the receipt of instructions from Lucky Accord Shipping (p.295-297). 14.Mr. Zeng further denied that he had at any time acted as an agent for the Defendant in the negotiation for and contracted with the Plaintiff for the hire of the “Maritime Lapis”. The full recap was concluded on 30 October 2002 when PC Li emailed to Lucky Accord Shipping the fixture of the charterparty, but no document was ever signed. 15.Mr. Zeng further produced a Letter of Indemnity issued by Mitsubishi Corporation in early December 2002 (p.189-196) to the Plaintiff and to Lucky Accord Shipping; it acknowledged Lucky Accord Shipping as the charterer of the charterparty. The Letter of Indemnity (L0I) was requested by the Plaintiff. 16.Mr. Zeng claimed that upon checking the working copy of the charterparty enclosed in the email from PC Li to Lucky Accord Shipping on 4 December 2002, he noticed it wrongly named the Defendant as the charterer. He amended the name by adding the word ‘Shipping’ in clauses 12 and 58 and faxed it back to P.C. Li (p.198 and p.207). 17.Mr. Zeng also produced evidence of part payments of hire in the form of two Interbank Fund Transfer Applications (pp. 182-183, 187-188 and p.302) by Lucky Accord Shipping to the Plaintiff. 18.On 23 January 2003, the Plaintiff’s P & I Club, China Shipowners Mutual Assurance Association issued a letter to Lucky Accord Shipping Co. Ltd. requesting it to pay the balance of hire under the charterparty to the Plaintiff (p.236). On 24 January 2003, a second letter of similar contents containing an amendment of the Plaintiff’s name was sent to Lucky Accord Shipping Co. (p.234). Findings 19.The issue in the present case is whether the Defendant was the hirer of the M.V. ‘Maritime Lapis’. And whether Mr. Zeng and/or Lucky Accord Shipping was contracting on behalf of the Defendant. Mr. Zeng acting as agent for the Defendant 20.The Plaintiff failed to plead it was relying on the agency of Mr. Zeng in the Plaintiff’s Statement of Claim. In spite of the re-amendment of the Statement of Claim on the first day of trial, the point was not referred to or pleaded in the re-amended Statement of Claim. Therefore, I do not consider agency an issue raised in the Plaintiff’s case against the Defendant. Was the Defendant the hirer? 21.As to the remaining issue of whether the Defendant was the hirer. The Plaintiff relies on the full recap and the unsigned charterparty. While the Defendant relies on the evidence of Mr. Zeng and the documents produced by him that it was Lucky Accord Shipping that was the hirer. 22. It is unfortunate that the Plaintiff failed to call the shipbroker PC Li or his staff to give evidence. It is obvious that the only person that was responsible for and communicated with the owner of the vessel TGP and the hirer was PC Li shipbrokers. Mr. Zeng was the hirer’s representative who possessed personal and direct knowledge of the communication between the shipbroker and the hirer. His evidence in Court and the documents produced by him clearly showed that Mr. Zeng’s company Lucky Accord Shipping was the hirer. There may have been confusion over the similarity of the name that the two are related companies, it is, however, the duty of the Plaintiff (TGP) and the shipbroker to find out with which company TGP was contracting. 23.I am satisfied on a balance of probability that Mr. Zeng did not conceal the fact that he had since 2001, after the Defendant ceased its vessel chartering business, been chartering vessels in the name of Lucky Accord Shipping Co. Ltd. He had produced records of Time Charters by Lucky Accord Shipping of the vessel “Wadi Halfa” dated on 3 August 2001 (p.254) and the vessel “Pan Ambition” dated 19 July 2001 (p.268). Both charters were negotiated through PC Li Shipbrokers. It is therefore unlikely that PC Li Shipbrokers could have mistaken the charterer of M.V. ‘Maritime Lapis’ in October 2002 to be the Defendant. 24.Further documentary evidence produced included the emails from Ms. Joanna Leung of New Concord Shipping Ltd. regarding a refund of US$792.42 in respect of a previous hire of “Selendang Nilam” and “Pacific Emerald” (pp.53 and 54). The two emails disclosed the following to the Plaintiff:
25. These two emails showed that the Plaintiff knew of the existence of Lucky Accord Shipping Co. Ltd. previously and had dealt with it in 2001 through New Concord Shipping Ltd. It is not known if Ms. Joanna Leung had informed the Plaintiff that the Defendant had ceased its vessel chartering business in 2001, but the communication by these emails should have alerted the Plaintiff as to make further enquiries to ascertain the identity of the hirer of M.V. “Maritime Lapis” in October 2002. 26.Further, PC Li shipbrokers clearly possessed full knowledge that Mr. Zeng had began working for Lucky Accord Shipping Co. Ltd. in the chartering of M.V. “Pan Ambition” and “Wadi Halfa” in July and August 2001 as the two Time Charters presented ample evidence in support. 27.The charterparty produced was never signed; the full recap represented evidence of the negotiations between the parties. One therefore would have to look into the evidence of witnesses and the documentary evidence to find out if the identity of the hirer had been given to PC Li. I am satisfied that Mr. Zeng did disclose the identity of the hirer to be Lucky Accord Shipping to PC Li. These included support from letters with Lucky Accord Shipping’s letterheads, the emails from 22 October 2002 onwards (p.170-178) to PC Li identifying Lucky Accord Shipping Co. Ltd. as the sender. Further evidence came from the general instructions to master of M.V. “Maritime Lapis” (p.179-181), the Interbank Transfer Application Form copied to PC Li (p.182-183 and 187-188). Correspondences with the master of the “Maritime Lapis” (p.184-185) and the Letter of Indemnity to the Plaintiff copied to PC Li of 29 November 2002 (p.189-196) further identified the hirer to be Lucky Accord Shipping and not the Defendant. Most important of all, the letter from the Plaintiff’s own P & I Club China Shipowners Mutual Assurance Association further recognised the hirer to be Lucky Accord Shipping Co. Ltd. Its letters dated 23 and 24 January 2003 are clear evidence of this fact. Based on this evidence, I find there was no misrepresentation by Mr. Zeng or the Defendant. 28.I am satisfied that not only PC Li shipbrokers well knew the hirer was Lucky Accord Shipping Co. Ltd., but also the master of Maritime Lapis had full knowledge of this fact, and furthermore, the Plaintiff’s P & I Club was fully aware of it. It follows that it is impossible for the Plaintiff to be ignorant of the identity of the charterer. 29.Mr. Zeng frankly admitted that his company Lucky Accord Shipping did not defend the claim in HCA1017/2003; he admitted it is unable to pay the outstanding balance of hire charges at the present moment, that was why no defence was filed in those proceedings. Clearly, the Plaintiff decided to go after the Defendant for payment because the Defendant is solvent though dormant. This may be the reason why the Plaintiff decided to set aside the judgment entered against Lucky Accord one week before the trial of this action. This shows further that the Plaintiff considered Lucky Accord Shipping to be the hirer up to one week before the trial. 30.For the aforesaid reasons, I find the Plaintiff has failed to prove its claim against the Defendant to be a contracting party for the hire of M.V. “Maritime Lapis”. I therefore dismiss the Plaintiff’s claim against the Defendant. 31.Costs nisi – costs to follow the event. Defendant’s costs to be borne by the Plaintiff to be taxed if not agreed with certificate for Counsel.
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