Summa International Ltd v. Accidental Shipping Co Ltd

1986, No. A6492

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Master McInnes in Chambers

Date of Hearing: 27^th January 1987

Date of Delivery: 17^th February 1987

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ASSESSMENT OF DAMAGES

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1.  This action arises as a result of financial loss suffered by the Plaintiff in consequence of breaches of duty and care by the Defendant under Time Charters for the carriage of goods.

2.  The particulars are that Defendant, a company incorporated in Hong Kong, acting as a Broker for the fixing of Charter Parties, contracted with the Plaintiff on 3^rd September 1984 to provide exclusive brokerage services to the Plaintiff for the carriage of cargoes of cement from Taiwan and Indonesia to Bangladesh.

3.  Between April and September 1985, the Defendant fixed 5 vessels on time charter for the carriage of bagged cement on behalf of the Plaintiff to the port of Chalna.

In 4 cases, owing to a combination of 3 factors, namely:

(a) Serials draft problems at Chalna due to a sand bar across the mouth of the river; and

(b) The monsoon season in Bangladesh between April and September with consequent heavy rainfall and rough seas; and

(c) The deadweight tonnages of each vessel being in excess of 14,661 tones.

4.  Four of the vessels upon arrival in the vicinity of Chalna had to anchor in open sea and discharge cargo into barges, resulting in loss of considerable time and the cost of hiring such special sea going barges and purchasing diesel oil

5.  As a result of the particulars aforementioned, the Plaintiff, also a company incorporated in Hong Kong in the business of chartering vessels for the carriage of goods, suffered loss and damage.

6.  No notice of intention to defend was filed and interlocutory judgment was entered for the Plaintiff on 9^th December 1986 for damages to be assessed and costs to be taxed.

7.  At the assessment, whereat the Defendant was absent, Counsel for the Plaintiff called a Mr. Torstein Hallaraken, the Senior Manager Shipping of Summa International Limited, an expert in the field of Shipping and Marine Insurance, to give evidence.

8.  His evidence was that he had been instructed by the Plaintiff to study and analyse the problems that had occurred with the 4 problem charters. He testified that he had carried out investigations in respect of each to include examination (inter alia) of Port Agents records, the log books of each vessel, the charter Agreements and fuel and hire invoices.

9.  Specifically, Mr. Hallaraken gave evidence of loss in respect of each of the 4 vessels as follows.

10.  M.V. “Caroline”. The time lost due to rough seas in the outer harbour of Chalna was 32 days 23 hours and 35 minutes. The daily cost of hire of barges and diesel bought and consumed over that period was $3,990 U.S. The total cost was therefore $131,600.17 U.S.

11.  Mr. Hallaraken gave similar evidence in respect of the otehr 3 vessels which I summarise as follows.

12.  M.V. “Oceanic Kinship”. 7 days 4 hours 25 minutes. Hire and diesel charges daily $3,223 U.S. Total $23,120.51 U.S.

13.  M.V. “Dimitrakis”. 12 days 9 hours 50 minutes. Daily charges $3,592.50 U.S. Total $44,581.92 U.S.

14.  M.V. “World Oceanic”. 19 days 16 hours 20 minutes. Daily charges $3,292.50 U.S. Total $64,798.18 U.S.

15.  The total quantifiable pecuniary loss was $264,100.78 U.S. on the basis of Mr. Hallaraken’s figures.

16.  Mr. Hallaraken testified that in his opinion, it had been a wholly wrong decision in each case for the Defendant to send the 4 vessels into Chalna in monsoon conditions. Each vessel loaded would weight in excess of 20,000 tons. He opined the maximum tonnage to avoid the problems which occurred would be 11,000 tons.

17.  He said the problems should have been foreseen. They were not, and the financial losses were thereby directly incurred.

18.  In assessing the damages claimed through the evidence of Mr. Hallaraken, his was the only available evidence.

19.  The Plaintiff relied upon the Defendant to apply skill and knowledge in these Charters and the Defendant clearly owed a duty of care to the Plaintiff to so perform its obligations.

20.  In that regard, the Defendant has clearly failed. The Plaintiff has incurred quantifiable expense amounting to loss. There is nothing I can see that the Plaintiff could have done to mitigate that loss. The Plaintiff relied wholly on the Defendant Owing to the Defendant’s failure to legislate for what occurred, the Defendant is liable for the consequential loss suffered by the Plaintiff.

21.  That loss is assessed by me in the sum of $264,100.78 U.S. being specific damages.

22.  Interest will run on that sum from 14^th November 1986 being the date of issue of the writ until the date of this assessment at the rate of 8% per annum.

23.  The plaintiffs costs are to be taxed and paid by the Defendant, unless agreed between the parties.

24.  Finally, paragraph 10 of the writ of summons claims separate loss and damage against the Defendant. At the commencement of this Assessment, Counsel for the Plaintiff informed me that he did not propose to proceed with an assessment of that claim before me. Accordingly, at his request, I adjourn any assessment of damages under paragraph 10 sine die with liberty to restore.