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Hong Kong Hua Guang Industrial Co. (A Firm) v Midway International Ltd. And Another And Coastrand Shipping Ltd. (Third Party)

Judgment Cited authorities 5 Cited in Precedent Map Related
Judgment Date16 March 2000
Year2000
Judgement NumberCACV207/1999
CourtCourt of Appeal (Hong Kong)
CACV000207/1999 HONG KONG HUA GUANG INDUSTRIAL CO. (a firm) v. MIDWAY INTERNATIONAL LTD. AND ANOTHER and COASTRAND SHIPPING LTD. (Third Party)

CACV000207/1999

CACV 207/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 207 OF 1999

(ON APPEAL FROM HCA 7671/1996)

BETWEEN
HONG KONG HUA GUANG INDUSTRIAL COMPANY (a firm) Plaintiff
AND
MIDWAY INTERNATIONAL LIMITED 1st Defendant
COASTRAND SHIPPING LIMITED 2nd Defendant
and
COASTRAND SHIPPING LIMITED Third Party

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Coram: Hon Godfrey VP, Rogers JA and Ribeiro JA in Court

Dates of Hearing: 9 and 10 February 2000

Date of Judgment: 16 March 2000

----------------------

J U D G M E N T

----------------------

Hon Rogers JA :

Introduction

1. This is an appeal from a judgment of Deputy Judge de Souza handed down on 19 May 1999 following a trial lasting some 5 days.

2. The plaintiff was the purchaser of 9,840 quartz clocks which it had ordered from Seiko Hong Kong Ltd ("Seiko"). The contract with Seiko contained what is referred to as a "Romalpa" clause, to which I shall refer briefly below.

3. The plaintiff contracted to sell those clocks to a customer in Huangpu in the Mainland. That contract of sale was probably on CIF terms, but that is not certain.

4. The plaintiff arranged with the 1st defendant to ship the clocks to Huangpu. They were to be shipped in two containers. The judge found that the contract between the plaintiff and the 1st defendant was one which was partly oral and partly in writing. The only written document from the plaintiff seems to have been a fax to the 1st defendant dated 22 November 1995 giving the details of the required shipment . It provided the names of the shipper, the consignee, the goods and the shipping marks. There is also an invoice dated 28 November 1995 from the 1st defendant to the plaintiff but this relates only to drayage of the two forty-foot containers which were used.

5. Mr Eric Cheung, who gave evidence on behalf of the plaintiff, said that the cost of shipping the containers to Huangpu was not discussed when he spoke to Mr Tam, of the 1st defendant, on the telephone because the plaintiff was aware of roughly what the freight price would be, namely approximately HK$15,000 for the two containers. The plaintiff was also well aware that the 1st defendant would not be transporting the containers itself but would be employing others to do so. The plaintiff did not know the terms on which the 1st defendant would be contracting with others and does not seem to have concerned itself with those terms.

6. It is noteworthy that the 1st defendant did not issue any bill of lading in respect of the shipment of the goods. Indeed, no bill of lading was issued in respect of the carriage of the goods to Huangpu at all.

7. The 1st defendant contacted the 2nd defendant to arrange for the shipment of the goods. A shipping order was issued on the 2nd defendant's form naming the plaintiff as the shipper, the customer in the Mainland as the consignee, the port of loading as Hong Kong and the port of discharge and the final destination as Huangpu. The body of the document contains the notation "To : Coastrand Shipping Ltd/Mr Wong. From : Midway International Ltd/Alan Tam."

8. The 1st defendant had dealt with the 2nd defendant once before. On that occasion, the 2nd defendant had issued one of its bills of lading. There were 5 clauses in Chinese at the foot of the face of that bill of lading. The translation of the third clause is :-

"The carrier will not be responsible for any natural wear or force majeur."

9. On the previous occasion on which the 1st defendant had dealt with the 2nd defendant, the invoice which was issued read at the bottom :-

"We undertake all business subject to our trading conditions, copies of which are available on request."

10. Mr Tam, who gave evidence on behalf of the 1st defendant, was asked about the invoice. Clearly he had not paid very much attention to it because he said that it was something which was given to the accounts department. When questioned about the 2nd defendant's terms, on more than one occasion, he answered in terms of the bill of lading. It was by no means clear from those answers that Mr Tam was aware of the 2nd defendant's "Standard Trading Conditions" or indeed that clause 14(i) thereof reads :-

"The Company shall only be responsible for any loss of or damage to goods or for any non-delivery or mis-delivery if it is proved that the loss, damage, non-delivery or mis-delivery occurred whilst the goods were in the actual custody of the Company and under its actual control and that such loss, damage, non-delivery or mis-delivery was due to the wilful neglect or default of the Company or its own servants."

11. Still less does it seem that Mr Tam of the 1st defendant was aware of the difference between clause 14(i) of the 2nd defendant's "Standard Trading Conditions" and clause 3 at the foot of the bill of lading.

12. The 2nd defendant did not intend to ship the goods itself. The transfer of the goods from Hong Kong to Huangpu was to be effected by Ceroilfood Intertrans Co. and the containers which were to hold the goods were to be transferred to the Ceroilfood ship by yet another company, Hango Maritime Ltd ("Hango").

The events leading up to the loss

13. The clocks which the plaintiff had ordered from Seiko were released by Seiko to a Mr Chan. The evidence was that the plaintiff had instructed Mr Chan to take delivery of the goods. There was no written contract with Mr Chan. The delivery instructions from Seiko were addressed to Mr Chan. The clocks were apparently released by Seiko to Mr Chan on 27 November 1996.

14. The 1st defendant arranged for Waga Container Ltd ("Waga") to stuff the quartz clocks into two containers. It is not known who owned the containers. They were, however, provided by the 2nd defendant. Mr. Ip, who gave evidence on behalf of the 2nd defendant, said that the 2nd defendant would supply the containers to Waga.

15. The 2nd defendant had a set of what were termed "haulage documents". These were printed forms which come in sets of 6 sheets on carbonless copy paper which are superimposed. Their purpose seems to be a combination of giving authorisations and instructions and keeping records.

16. There was some suggestion that a number of sets of haulage documents may have been given to Waga by the 2nd defendant pre-signed, but it is unnecessary to go into that. It suffices to say that underneath the printed instructions or authorisations on each sheet, there is the printed legend "For Coastrand Shipping Limited" and a space for signature. Whereas only one completed sheet in respect of each container was in evidence, there is no dispute that a full set was used in this case for each container and the way these forms operated, or should have operated, is as follows :-

17. The top sheet was a collection order for use when the Waga driver collected the empty container from the container yard. There were printed instructions to the container yard to release the container, and to the "CONTRACTOR" to collect the specific container empty, to return it full, to obtain the shipping order from the shipper and to sign the dock receipt. There was a box for the driver to sign to acknowledge the receipt of the container in good condition. That document would be given by the Waga driver to the responsible person at the container yard when the container was first collected.

18. The second sheet contained the same printed directions and box for the Waga driver's signature which would be copied through from the top sheet but it also contained a box for a signature acknowledging the receipt by Hango of the stuffed container. This sheet would be kept by the Hango personnel and would be returned to the 2nd defendant when Hango wished to receive payment from it.

19. The third sheet was similar to the second save that the printed direction to release the container was omitted. Apparently it was intended to be given to the Waga driver, doubtless to acknowledge receipt in good condition of the stuffed container as there was another box for signature for this purpose.

20. The fourth sheet again was similar to the third. The printed direction at the top, however, was a direction to the container yard to accept the container and send "us" the supplementary dock receipt duly endorsed. This was also apparently to be kept by the Waga driver but to be given to the 1st defendant, no doubt, in order to enable Waga to receive payment from the 1st defendant.

21. The fifth sheet, which was similar to the fourth, would be kept by the barge personnel, namely Hango and the last copy was the record copy for the 2nd defendant.

22. I do not consider it is unfair to say that for someone not used to them, these documents require a little explanation. It would appear that, at times, and on this occasion apparently, the wrong sheet from the haulage documents was used. This is perhaps not surprising and more so since the documents were written in English.

23. It appears that, initially, all went well with the transfer of the clocks. They were collected by Mr Chan, stuffed into containers which had been collected by the Waga driver from the container yard as directed by the 2nd defendant, the containers, once stuffed, were taken back by the Waga driver to the container yard and handed over to the Hango barge personnel who loaded them onto a barge owned by Hango by means of a derrick on the Hango barge.

24. Since the container yard was a public yard, the stuffed containers had to be taken out and loaded onto the Ceroilfood ship offshore. Unfortunately, before that happened, the two containers,...

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