Kind Respect Ltd v Apex Logistics Ltd

CourtDistrict Court (Hong Kong)
Judgment Date16 October 2006
Judgement NumberDCCJ502/2004
Subject MatterCivil Action
DCCJ000502A/2004 KIND RESPECT LTD v. APEX LOGISTICS LTD

DCCJ 502/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 502 OF 2004

____________________

BETWEEN:

KIND RESPECT LIMITED Plaintiff
and
APEX LOGISTICS LIMITED Defendant

___________________

Coram : HH Judge Lok in Court

Date of hearing : 14, 15, 16, 18 & 21 August 2006

Date of handing down of Judgment : 16 October 2006

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JUDGMENT

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1. This is a dispute arising out of 2 bill of ladings issued by the Defendant.

2. Pai Hung Sporting Goods Co. Ltd. (“Pai Hung”) is a company in Taiwan which carries on the business of supplying skateboards and ice-skating blades with a production line in the Mainland. The Plaintiff is an associated company of Pai Hung incorporated in Hong Kong responsible for handling the sales transactions of Pai Hung, including the issuance of invoices and collection of payment. On the other hand, the Defendant carries on the business of a freight forwarder in Hong Kong.

3. In or about July 2003, the Plaintiff received order from one Pacific Extreme Skateboard Co. (“Pacific Extreme”) to supply two lots of skateboards produced by Pai Hung to Mexico and the United States respectively. The parties agreed that the sales transactions would be conducted on term “f.o.b. Hong Kong”, and Pacific Extreme would be responsible for engaging a carrier to ship the goods from Hong Kong to Mexico and the United States.

4. On 16 September 2003, the Plaintiff received a call from one Mr. Roger Lin of the Defendant. Mr. Lin told the Plaintiff that the Defendant was engaged by Pacific Extreme to transport the goods, and so the Plaintiff handed the goods to the Defendant for shipment. After the goods were placed on board the vessels, the Defendant issued 2 respective bill of ladings (“Both Bills of Lading”) to the Plaintiff with the particulars as follows:

Bill of Lading No. 2003100012 dated 8 October 2003 (“the Mexico Bill of Lading”)
Shipper: the Plaintiff
Consignee and Notifying Party: Pacific Extreme S.A. De C.V.
(“the Mexico Consignee”)
Freight Forwarder for the Consignee: Sistemas De Fletes
Internacionales S.A. De C.V.
Port of Loading: Hong Kong
Port of Discharge: Manzanillo, Mexico
Name of Vessel: “Ikoma”
Goods transported: 152 cartons
Bill of Lading No. 2003100024 dated 14 October 2003 (“the US Bill of Lading”)
Shipper: the Plaintiff
Consignee and Notifying Party: Pacific Extreme U.S.A. Inc.
(“the US Consignee”)
Freight Forwarder for the Consignee: Fax Cargo Corporation
Port of Loading: Hong Kong
Port of Discharge: Long Beach, California,
the United States
Name of Vessel: “P & O Nedlloyd”
Goods transported: 350 cartons
Both Bills of lading were signed by the Defendant as agent for “the carrier”.

5. The Defendant was only engaged by the freight forwarder in Mexico, Sistemas De Fletes Internacionales S.A. De C.V. (“Sistemas”), to arrange for the shipment of the goods both to the United States and Mexico, and so the Defendant’s service charges would be paid by Sistemas. The latter also gave instructions to the Plaintiff regarding the contents of Both Bills of Ladings. Sistemas belonged to a large group of freight forwarders called the “Vitrans Group”.

6. The destinies for the two lots of goods were very different. For the goods shipped to the United States, they were released by the freight forwarder engaged by Pacific Extreme to the US Consignee without the production of the original bill of lading. The Plaintiff claims that the release of the goods was wrongful, and as the Plaintiff has not received the price of the goods, the Plaintiff claims for such damages against the Defendant in the sum of US$13,650.

7. For the goods shipped to Mexico, they arrived safely at the destination. However, for some unknown reasons, the Mexico Consignee did not obtain delivery of the goods. The goods were then left in the Custom authority in Mexico for quite some time, and finally they were auctioned by the Custom authority. The Plaintiff alleges that the Defendant has not rendered the necessary assistance to the Plaintiff to get back the goods, and so the Plaintiff claims for damages for such loss in the sum of US$13,500.

Plaintiff’s causes of action as pleaded in the Statement of Claim and the issues in the present case

8. The Plaintiff has all along been represented by solicitors, but only a few days before the trial, the Plaintiff decided to fight the case without legal representation and appointed its director Madam Hou Jei Mei to act on its behalf. According to the Statement of Claim drafted by its former solicitors, it is not clear as to what causes of action that the Plaintiff intends to rely on in its claim. However, it seems from paragraph 6 of the Statement of Claim that the Plaintiff’s claim for wrongful release of the goods is one based on breach of contract. It is arguably that the claim is also one based on conversion. For the loss of the goods shipped to Mexico, the Plaintiff is apparently relying on the same two causes of action as pleaded in paragraph 7 of the Statement of Claim. According to the pleading, the Plaintiff is not relying on negligence or breach of duty as bailee as the basis for its claim.

9. After the first day of the trial, I pointed out the confusion in the pleading to the Plaintiff, and as a result an adjournment was granted to allow the Plaintiff to seek legal advice. Unfortunately, the Plaintiff decided, after the adjournment, to continue with the case without legal representation. In the absence of proper legal advice, the Plaintiff then made an application to amend the Statement of Claim, and submitted to the court a home-made pleading with the amendments in Chinese to the otherwise English Statement of Claim. However, I took the view that the proposed amended Statement of Claim did not serve the purpose of clarifying the causes of action relied on by the Plaintiff. Further, taking into account the relatively small amount of the claim, it would be unfair to the Defendant to have further adjournment to deal with any possible new causes of action relied on by the Plaintiff. I therefore refused the Plaintiff’s application, and proceed on the basis that the Plaintiff’s claim is one based on breach of contract and conversion. However, even if negligence and breach of duty as bailee have been pleaded, I do not think that the result of the case would be different.

10. Since the Defendant was appointed by Sistemas to carry the goods to Mexico and the United States, there was no contractual relationship between the Plaintiff and the Defendant. However, the Plaintiff claims that Both Bills of Lading issued by the Defendant were documents of title. As there was a commercial practice that freight forwarder handling the goods would not release the goods to anyone without the production of the original bill of lading, the Plaintiff claims that the Defendant was guilty of conversion by releasing the goods to the US Consignee. For the goods shipped to Mexico, it is the Plaintiff’s case that the Defendant had to return a document known as “master bill of lading” to the Plaintiff in order to enable it to obtain the goods from the Custom authority in Mexico. This was a document issued by the carrier to the Defendant after the goods were shipped on board the vessel. As the Defendant did not supply such document to the Plaintiff, the Plaintiff says that the Defendant was guilty of conversion.

11. To oppose the Plaintiff’s claim for wrongful release of the goods in the United States, it is the Defendant’s case that the US Bill of Lading was consigned to a named consignee without the addition of the words “or order or assigns”. In such circumstances, the US Bill of...

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