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ASCOBA CO LTD v. SAFCO INTERNATIONAL FREIGHT CORPORATION AND OTHERS

Judgment Cited in Precedent Map Related
Vincent
Judgment Date20 June 2005
CourtDistrict Court (Hong Kong)
Judgement NumberDCCJ1463/2004
Subject MatterCivil Action
DCCJ001463/2004 ASCOBA CO LTD v. SAFCO INTERNATIONAL FREIGHT CORPORATION AND OTHERS

DCCJ 1463/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1463 OF 2004

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BETWEEN

ASCOBA COMPANY LIMITED Plaintiff
and
SAFCO INTERNATIONAL FREIGHT CORPORATION 1st Defendant
SAFCO LOGISTICS (H.K.) LIMITED
formerly known as SAFCO INTERNATIONAL FREIGHT (H.K.) LIMITED		 2nd Defendant
PACIFIC INTERNATIONAL LINES (PTE) LTD 3rd Defendant
GARDENIA SERVICES also known as IDEAL FREIGHT SERVICES 4th Defendant

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Coram: Deputy Judge W. Lam in Court

Date of Hearing : 13th and 14th June 2005

Date of Handing Down of Judgment : 20th June 2005

Judgment

Background

1. At trial the dispute was only between D2 and the Plaintiff (“P”). P was the exporter of 1501 containers of telephones to buyer Dabouqi in Jordan. D2 was the freight forwarder for P, and D2’s agent in Jordan was Gardenia: Documents Bundle (“DB”) at pages 034, 035. P’s case is that a contract for carriage was made with D2 before D2 (or D1 as D2’s agent) issued the relevant three Bills of Lading (“BL”) to P. P paid D2 the necessary fees e.g. terminal charges, after which D2 issued original BL to P. P instructed D2 that delivery of goods beyond Gardenia be only made upon the claimant producing the original BL. P gave the BL to HSBC in Hong Kong with the same instructions: see DB 012 and 032. In other words buyer Dabouqi would obtain the BL after he had paid to Union Bank at Jordan. HSBC sent the original BL to Union Bank in Jordan for Dabouqi or agent to collect upon payment. The goods were shipped out of Hong Kong on 31st July 1999. However P never received any payment. On making inquiries P discovered from D2 by letter dated 7th April 2000 that D2’s agent in Jordan had released the goods on 24th August 1999, i.e. 3 weeks after leaving Hong Kong. The delivery was obviously allowed without Dabouqi or any other claimant producing to PIL or Gardenia the original BL. HSBC in the end received the original BL back from Union Bank hence P now has possession thereof. P therefore sues D2 for breach of contract of carriage, and/or negligence as a bailee, in the sum of USD 74,700 representing the value of the goods.

The issues

2. D2 raises two defences: (1) that D2 was a mere secretary for the original D1, i.e not a principal, so that P is suing the wrong person, and (2) P’s claim is time-barred because Clause 19 in the BL gave P only 9 months to issue proceedings, but proceedings were issued a few days short of 12 months: P on the other hand relies on Clause 7 of the BL, being “Paramount Clause” referring to the Hague-Visby Rules which gave P 12 months to sue. The issue here is which clause should be used. The Writ was issued on 22nd August 2000, 2 days within the time limit of 12 months after delivery.

3. D2 has not raised any defence as a bailee for negligence, but as Counsel for the Plaintiff concedes, the Plaintiff in truth bases its case on breach of contract, not bailment.

The evidence

4. P adopts the witness statements of 2 shipping clerks (PW1-2) and its director (PW3). PW3’s evidence included an assertion that P had always dealt with D2 as a principal. This is supported by documents such as found in the Annexes to the witness statements, the following not being an exhaustive list:

(1) D2’s name card when dealing with P: DB 002.
(2) Shipping Order in D2’s name: DB 005.
(3) Equipment Booking Confirmation in D2’s name: DB 007, 008.
(4) P’s staff Ms LEUNG dealt directly with D2, not D1: DB 011.
(5) The BL although at the lower right says D1, it has D2’s chop on the top left: DB 012, 014. In any event, as to the signature on DB 012, I give weight to the statement of handwriting expert Mr Novotny, and I find on the balance of probabilities that the signature was by the same person as the invoice issued by D2 to P: DB 026.
(6) The “PIL bill” shows D2 engaging PIL as carrier, with D2 giving indemnity to PIL: DB 031.
(7) It was D2 who instructed PIL to surrender the goods: Pleadings bundle page 88.
(8) Gardenia wrote to D2 (not to D1): DB 034.
(9) D2 wrote as principal to Gardenia: DB 035.

5. Accordingly, all the documents point to D2 being a principal. There is not a single document which points to the fact that D2 was a mere agent (secretary) of D1.

6. D2’s representative Mr LEE testified. He adopted his witness statement in the Bundle as evidence. He also asserted that the HAFFA Standard Trading Conditions (“HSTC”) applied to the present contract, relying on the “time...

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