CAREWINS DEVELOPMENT (CHINA) LTD v. HECNY SHIPPING LTD

CACV 328/2006 & 329/2006

CACV 328/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 328 OF 2006

(ON APPEAL FROM HCCL NO. 49 OF 2004)

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BETWEEN

CAREWINS DEVELOPMENT (CHINA) LIMITED Plaintiff
and
BRIGHT FORTUNE SHIPPING LTD Defendant

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AND

CACV 329/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 329 OF 2006

(ON APPEAL FROM HCCL NO. 50 OF 2004)

______________________

BETWEEN

CAREWINS DEVELOPMENT (CHINA) LIMITED Plaintiff
and
HECNY SHIPPING LTD Defendant

______________________

(Heard Together)

Before : Hon Ma CJHC, Barma & Reyes JJ in Court

Date of Hearing : 6 November 2007

Date of Judgment : 6 November 2007

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J U D G M E N T

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Hon Ma CJHC :

1. There are two applications before the court this morning : first, the Plaintiff’s application for interest on the sums awardedto it as damages against the two Defendants and secondly, the Defendants’ application for leave to appeal to the Court of FinalAppeal under section 22(1) of the Hong Kong Court of Final Appeal Ordinance, Cap.484 (“the Ordinance”).

Interest

2. In the judgment of this court handed down on 13 July 2007, damages in the sum of US$111,788.10 were awarded in the Plaintiff’sfavour in HCCL 49/2004 and US$761,239.90 in HCCL 50/2004. These damages, unliquidated in nature, were in respect of the misdeliverythat took place when the Plaintiff’s goods were handed to a consignee without the production of the bills of lading.

3. In a contractual claim, interest usually runs from the date of breach (the date when the cause of action accrued) but the courtsare of course entitled, in the exercise of the broad discretion they have regarding interest, to use a date which may be more appropriate,for example, where the loss does not immediately arise : see McGregor on Damages (17th Edition) at paragraph 15-065 to 15-066. In the present case, the cause of action (both the breach of contract and conversion)accrued at the time when the misdelivery took place (which was the time that the Plaintiff sustained its loss when it lost the relevantgoods). Although there is no precise date for this, it is clear from the judgment of Stone J in the court below that this was nolater than 22 April 2003. I am content to use this date.

4. As for the rate of interest, I see no reason to depart from what is the usual : 1% above prime. Although Mr Benjamin Chain (forthe Plaintiff) has contended for a higher rate, there is very little, if any, evidence to justify this.

5. Accordingly, there will be interest at the rate of 1% above prime rate for the period from 22 April 2003 to 13 July 2007 (the datewhen the judgment of this court was handed down) and thereafter at judgment rate until payment. “Prime rate” means the primerate of lending of the Hong Kong and Shanghai Banking Corporation from time to time during the relevant period.

Application for leave to the Court of Final Appeal

6. The damages awarded against the Defendants being in the nature of unliquidated damages, there is no appeal as of right under section 22(1)(a) of the Ordinance.

7. As for the application under section 22(1)(b) of the Ordinance, Mr Colin Wright (for the Defendants) has advanced seven grounds said to be points of great general or public importance.

8. For my part, I would refuse leave under section 22(1)(b) of the Ordinance. For convenience, I will refer to the Grounds of Appeal set out in the Notice of Motion taken out by Bright FortuneShipping Ltd : –

(1) The first two grounds relate to the argument on the differences between straight and negotiable bills of lading. While I accept thatthis does involve an area of law that is important, I do not see that the contentions raised by the Defendants are reasonably arguablefor the reasons gone into in the judgment of this court given by Reyes J.
(2) The next three grounds relate to the construction of the particular bills of lading that had to be considered in the present case. I see no points of great general or public importance here : the outcome depended on the particular language used in the terms themselves. It seems at the end of the day that the Defendants were simply contending that the court had construed the terms too strictly.
(3) The final two grounds deal with the Defendants’ counterclaim relating to freight. This claim was resolved on the facts. I repeatparagraphs 134-144 of our judgment. Mr Wright advanced a number of points based on pleading practice and set off but, in my view,no points of great general or public importance arise here.

9. Mr Wright finally relies on the “or otherwise” ground in section 22(1)(b) of the Ordinance. But exceptional circumstances have to be shown : see Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260. None exist in the present case.

10. For the above reasons, I would dismiss the Defendants’ application for leave to appeal to the Court of Final Appeal.

Hon Barma J :

11. I agree with the judgment delivered by the Chief Judge in relation to both applications before us.

Hon Reyes J :

12. I also agree.

(Geoffrey Ma)
Chief Judge, High Court
(Aarif Barma)
Judge of the Court of First Instance
(A. T. Reyes)
Judge of the Court of First Instance

Mr Benjamin Chain, instructed by Messrs Ho, Tse, Wai & Partners for the Plaintiff in both appeals

Mr Colin Wright, instructed by Messrs H.H. Lau & Co for the Defendants in both appeals

(I) Appeal dismissed: see FACV13/2008 dated 12 May 2009 (II) Defendants’ application for leave to appeal to Court of Final Appealgranted by Court of Final Appeal. Please refer to FAMV65/2007 dted 28 April 2008