Stellar Ocean Transport Llc v. The Owners and/or Demise Charterers of the Ship or Vessel “Ruby Star"

CACV 133/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 133 OF 2014

(ON APPEAL FROM HCAJ NO. 126 OF 2013)

________________________

________________________

Before: Hon Cheung, Kwan and Barma JJA in Court

Date of Hearing: 13 March 2015

Date of Decision: 13 March 2015

_______________

D E C I S I O N
_______________

Hon Cheung JA (giving Decision of the Court) :

1.The plaintiff applies for leave to appeal to the Court of Final Appeal against our judgment of 23 December 2014 based on the ‘great general or public importance’ and the ‘or otherwise’ grounds.

‘Great general or public importance’ ground

2.In respect of the former, the following five questions are relied upon :

‘ 1) Can a creditor exercise his right to appropriate payments received to debts owed in any way that makes his intention plain and clear?

2) Assuming appropriation can be made in any way as long as the intention is plain and clear, what is the test to ascertain if an appropriation has been made?  In particular, can an express reservation of rights to bring a claim in a certain manner, such as so as to rely upon a maritime lien and/or to assert an in rem claim against the vessel, or the issuing of an in rem Writ, amount to an act of appropriation of funds in a manner consistent with the intention to leave only in rem claims to be advanced?

3) If appropriation is explained or particularized by way of service of Answers to a Request for Further and Better Particulars of a Statement of Claim, at what point does the appropriation take place?  Is it at the time of the service of the Answers to the Request for Further and Better Particulars of the Statement of Claim or at (or before) the issuing of the Writ endorsed with the claim to which the Answers to the Request for Further and Better Particulars ultimately refer?

4) Does the Hong Kong Admiralty Court have in rem jurisdiction in respect of a dispute over a debt, or part of a debt, which at the time of the commencement of proceedings comprised both in rem and in personam claims?

5) Does the Hong Kong Admiralty Court have in rem jurisdiction in respect of a dispute over a debt which, at the commencement of proceedings comprises solely in  rem claims pleaded by way of a generally indorsed Writ, or must each in rem claim be specifically identified, pleaded and fully particularised in the endorsement to the Writ at the time of the commencement of proceedings?’

3.The focus of the appeal before us and Ng J was on the two sums of US$3,593,902 and US$769,593.  Our decision is that these two sums are debts.  We held that there was no appropriation of these sums specifically to the in rem bunker claims.  Ng J was of the same view as well.  What we differed from Ng J was on the timing of the appropriation.  He held that it was sufficient for the appropriation to be made by the service of the Further and Better Particulars.  We held that it must be done at the time of the writ in order to found Admiralty jurisdiction which must exist at the time of the commencement of the action.

4.Our decision on the nature of the claim and the timing of appropriation are clearly fact specific and contextual.  The questions now raised are couched in general terms and cannot be properly described as questions involving ‘great general or public importance.’

‘Or otherwise’ ground

5.As to the ‘or otherwise’ ground the plaintiff says that we had made a fundamental error in assuming that the plaintiff’s claim is confined to the two sums when the Statement of Claim also pleaded a claim for the costs and expenses for July 2013 of US$100,000 and the costs of bunkers on board Ruby Star at redelivery in the sum of US$422,000 (‘the July 2013 claim’).  This led to us wrongly concluding that at paragraph 14 of our judgment that if there was indeed appropriation of the bunker costs there was no need to plead in the Statement of Claim other claims in respect of section 12A(2)(m), (n) or (o) of the High Court Ordinance.

6.The practice adopted by the Court of Appeal is that it will usually leave to the Court of Final Appeal to decide whether to grant leave on the ‘or otherwise’ ground.  However, as the present complaint touches on this Court’s understanding of the plaintiff’s case, we would also state our position.  As we have mentioned earlier the focus before us and below was on the two specific sums.  The plaintiff did not respond to the jurisdictional challenge by saying categorically right at the beginning that the application was totally misconceived because the July 2013 claim was sufficient to ground Admiralty jurisdiction.  Ng J’s judgment at paragraph 31 that ‘at the very least, the bulk of [the plaintiff’s] claim i.e. US$3,593,902 and US$769,593 out of a total claim of US$4,885,921 is within the court’s in rem jurisdiction’ points to the lack of reliance on the July 2013 claim.  We are not prepared to grant leave to appeal on the ‘or otherwise’ ground in respect of a matter that the plaintiff had chosen not to rely upon in its response to the jurisdictional challenge at two levels of court.  Even up to now, it has not specified how this claim comes within the Admiralty jurisdiction.

7.Accordingly the application is dismissed with costs to the intervener.  

Mr Russell Coleman, SC, instructed by Ince & Co., for the plaintiff

Mr Charles Sussex, SC, instructed by Reed Smith Richards Butler, for the intervener