Intraline Resources Sdn Bhd v. The Owners of the Ship or Vessel "Hua Tian Long"

cacv 131/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 131 of 2008

(on appeal from HCAJ NO. 59 of 2008)

Admiralty action in rem against: the ship or vessel

“HUA TIAN LONG” (People’s Republic of China Flag)

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BETWEEN

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Before: Hon Rogers VP and Le Pichon JA in Court

Date of Hearing: 25 July 2008

Date of Judgment: 25 July 2008

J U D G M E N T

Hon Rogers VP:

1.This is an application under the provisions of the order nisi as to costs which this court made on 30 May.  The short point is this:  that the plaintiffs came to this court on the appeal with new evidence and a clarified case.  Mr Sussex’s point is quite simple that, on that footing, it might be right to deprive his clients of the costs but he should not have to pay the costs and, in view of the way this case went - the fact that the matter was resisted and, indeed, there was a respondent’s notice - I am inclined to the view that Mr Sussex’s argument is probably correct and that there should be no order as to costs, thus depriving the plaintiffs of their costs because of the extra expense that has been incurred.  Nevertheless, they did succeed on the application and therefore the order as to costs will be varied to no order as to costs.

Hon Le Pichon JA:

2.I agree.

(Application for leave to appeal to Court of Final Appeal)

Hon Rogers VP:

3.This is an application for leave to appeal to the Court of Final Appeal.  Mr Wright has set out the three questions which I will now recite.

(1)       Whether a plaintiff which has invoked the Court’s Admiralty jurisdiction to arrest a vessel should only be entitled to require that security in a particular sum be given before the vessel is released from arrest if such plaintiff places admissible evidence before the Court which, if accepted at trial, would establish an entitlement to an in rem judgment in the amount demanded by way of security;

(2)       Whether the Court, when ordering that a vessel only be released from arrest on provision of security in a particular sum, has power to require the plaintiff to give an undertaking that should the Court later find the value of the plaintiff’s claim was such that the defendants ought not to have been required to provide security in the sum ordered, the plaintiff will abide any order that the Court may make for the payment of the costs incurred by the defendant in providing that part of the security held to be excessive;

(3)       If the Court has power to order the plaintiff to give an undertaking in terms stated in paragraph 1(2) hereof, whether in the proper exercise of the Court’s discretion, such an undertaking should ordinarily be given by a plaintiff as a condition for requiring a vessel under arrest only to be released from arrest on the provision of the security of the plaintiff’s claim.

4.These were all matters which were canvassed during the course of appeal.  The first relates, if I can summarise it, as to the quality of the plaintiff’s evidence as to its existing claim when the ship is arrested.  The other two points relate to a matter of a cross-undertaking as to damages which was a point which was raised by this court and Mr Sussex, in the course of his argument, pointed out that this was an erroneous approach and, as I hope has been expressed in the judgment, the question of cross-undertaking does not arise because the exercise of the court’s jurisdiction is not a discretionary matter.  It is a matter of right.

5.What Mr Wright has said is that whilst he accepts what the Admiralty practice has been to date, he says that it has taken a wrong turn, probably many centuries ago.  Nevertheless, he says that these are matters of importance and should be considered by the Court of Final Appeal.

6.In my view, the approach that I take is that, as seems to be the case, this court has followed the existing law and practice of the Admiralty jurisdiction and Mr Wright does not demur from that.  What he has said is that these matters are matters of such grave importance, particularly nowadays where a vessel such as the one with which this case is concerned, is a very valuable vessel and to arrest it and keep it out of work for a period of time is a very serious matter, these matters should be looked at again.

7.In view of the fact that what is being sought on this application is really that the Court of Final Appeal should be asked to change the existing law, I consider that this application is one that must be considered by the Court of Final Appeal and not by this court and if the Court of Final Appeal considers it right to take this case up and state what the law is, well, so be it.  But I consider that it would be wrong for this court to give leave in these circumstances.  It is not a matter which this court should send to the Court of Final Appeal to consider as a matter of great general or public importance.

8.For those reasons, I would not grant leave to appeal to the Court of Final Appeal and leave it to the defendants to renew their application before that court if they see so fit.

Hon Le Pichon JA:

9.I agree.

Mr Charles Sussex SC, instructed by Messrs Holman, Fenwick & Willan, for the Plaintiffs/Respondents

Mr Colin Wright, instructed by Messrs DLA Piper Hong Kong, for the Defendants/Applicants