KERRY FOODSTUFFS CO. LTD. v. PHULSAWAT NAVAL CO. LTD. AND OTHERS

HCCL000001A/1992

HCCL 1/1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST NO. 1 OF 1992

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BETWEEN
	KERRY FOODSTUFFS CO. LIMITED (formerly GILCHESTER COMPANY LIMITED)	Plaintiff
	AND
	PHULSAWAT NAVAL COMPANY LIMITED	1st Defendant
	MRS SUBBAMMAL RAMASAMY RAMASAMY SIVASUBRAMANIAN RAMASAMY RAMALINGAM RAMASAMY VEERABAGU All carrying on business in partnership At 128 Old Moor Street, Colombo 12, Sri Lanka under the name and style of "S. ARUMUGAM AND BROTHERS"	2nd Defendant
	SUPER BULK CARGO LANKA (PRIVATE) LIMITED	3rd Defendant
	and
	MRS SUBBAMMAL RAMASAMY RAMASAMY SIVASUBRAMANIAN RAMASAMY RAMALINGAM RAMASAMY VEERABAGU All carrying on business in partnership At 128 Old Moor Street, Colombo 12, Sri Lanka under the name and style of "S. ARUMUGAM AND BROTHERS"	1st Third Party
	SUPER BULK CARGO LANKA (PRIVATE) LIMITED	2nd Third Party

__________

Coram: Hon Chung J in Court

Dates of Hearing: 4 to 8 and 11 to 12 September 2000

Date of Judgment: 12 September 2000

Date of Handing Down Reasons for Judgment: 27 September 2000

 

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REASONS FOR JUDGMENT

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Introduction

1. The Plaintiff brings this action against the 3 Defendants for payment of US$969,000, representing the price of 3,000 metric tons of Thai sugar ("the subject goods"). In order to facilitate the comprehension of this Judgment, the parties herein will be referred to respectively as:-

(a) the Plaintiff, "Kerry";

(b) D1, "the Shipowner";

(c) D2 (same as the 1st Third Party), "Arumugam";

(d) D3 (same as the 2nd Third Party), "Super Bulk".

2. In brief, Kerry's claim against the Shipowner is for damages for:-

(1) breach of the charterparty;

(2) conversion;

(3) negligence.

3. Kerry's claim against Arumugam (as the recipient of the subject goods) is for damages for conversion. Alternatively, Kerry claims that Arumugam is liable for the price of the subject goods.

4. Kerry's claim against Super Bulk (as Arumugam's cargo handling agent) is for damages for conversion.

5. The Shipowner's claim against Arumugam and Super Bulk is in essence for an indemnity (should it be held liable for Kerry's claim). By an order of Mayo, J (as he then was) made on 4 March 1993 (the order was however not drawn up), the Third Party claim was to be tried at the trial of this action.

6. Arumugam and Super Bulk failed to turn up at the trial despite having been notified of the trial dates (through their former solicitors). I consider it appropriate to exercise my discretion to allow the trial to proceed in their absence: R.H.C. Ord. 35 r. 1(2).

7. At the end of the trial on 12 September 2000,

(a) judgment was entered in Kerry's favour against the Shipowner, Arumugam and Super Bulk in the sum of US$969,000 (with interest thereon as agreed between Kerry and the Shipowner);

(b) the Shipowner's counterclaim is dismissed;

(c) judgment was entered in the Shipowner's favour against Arumugam and Super Bulk in the same terms as (a) above;

(d) costs of this action are to be paid by the Shipowner, Arumugam and Super Bulk to Kerry to be taxed if not agreed;

(e) Arumugam and Super Bulk are to indemnify the Shipowner's costs of defending Kerry's claim herein;

(f) costs of the Third Party Proceedings are to be paid by Arumugam and Super Bulk to the Shipowner to be taxed if not agreed.

The reasons for the above decision are as follows.

Summary of Facts

8. The facts related to this action are largely undisputed by the time of trial and are as follows:-

(a) by a contract dated 2 May 1991, a total quantity of 5,000 metric tons of Thai sugar was sold by a Thai company (Thailand Sugar Corporation Ltd. ("Thailand Sugar")) to Kerry;

(b) the Shipowner was also a Thai company and the owner of a vessel "Bangkhuntien" ("the Vessel");

(c) the said 5,000 metric tons of sugar was loaded onto the Vessel on 15 June 1991 at Bangkok;

(d) on 26 June 1991, the Vessel arrived at Colombo, Sri Lanka and commenced discharge of the Thai sugar which was completed by 1 July 1991;

(e) from 28 June 1991, Super Bulk started to release 3,000 metric tons of the Thai sugar (that is, the subject goods) to Arumugam based on stamped invoices. Arumugam was able to obtain delivery of the subject goods without the production of a bill of lading.

The other 2,000 metric tons of the Thai Sugar were sub-sold by Kerry to a Jones Overseas Limited in Sri Lanka ("Jones"). That sub-sale was duly completed and does not form part of this action.

9. Arumugam opened a letter of credit in Kerry's favour covering the subject goods. The letter of credit was issued on 30 May 1991 by the Bank of Credit and Commerce International ("BCCI"), Colombo office and payable through a Security Pacific International Bank ("SecPac") in New York. As is now widely known (and undisputed by the parties herein), BCCI ceased to operate in 1991. The documentary evidence herein shows that funds were unavailable to meet the BCCI letter of credit because (among other possible reasons) the SecPac account was frozen by the U.S. Government.

Issues

(1) Issues Between Kerry and the Shipowner

10. As the lines of defence raised in the Shipowner's pleading are different from those raised by Mr Smith for the Shipowner at the time of trial, I will set out the respective lines of defence below under separate headings. Further, the Shipowner no longer disputes the quantum of damages nor does it dispute the causation of damages.

11. Although the issues raised are set out below, it does not mean that they necessarily have to be proved by the Shipowner. In fact, it should be assumed that I consider the burden of proof to rest on Kerry unless it is expressly stated otherwise in the Reasons for Judgment.

(1)(a) Issues Raised in the Pleadings

12. The lines of defence raised in the Shipowner's Further Re-Amended Defence dated 7 July 1999 include the following:-

(a) it is denied that Kerry had purchased the documents under the BCCI letter of credit or made payment to Thailand Sugar. Hence, property in the 5,000 metric tons of Thai sugar either belonged to a Union Bank of Bangkok in London (which purchased the relevant documents from Thailand Sugar) or to some party other than Kerry ("the no title defence"): para. 10 thereof, especially para. 10(b)(i), (iii) and (iv);

(b) Kerry was not named in the bills of lading relating to the subject goods. Instead, Thailand Sugar was named as the Shipper, Arumugam was named as the Notified Party and the Consignee was "to the order of BCCI". In the absence of an endorsement in Kerry's favour, Kerry has no right to sue the Shipowner and it has no right to the immediate possession of the subject goods ("the no right to sue defence"): para. 9 thereof, especially para. 9(a) and (b);

(c) property in the subject goods passed to BCCI upon (1) shipment of the subject goods or (2) Thailand Sugar presenting the bills of lading with other documents for negotiation and payment by the negotiating bank ("the passing of property to BCCI defence"): para. 9 thereof, especially para. 9(c);

(d) on about 25 or 27 June 1991, Kerry negotiated the documents (including the bills of lading) under the BCCI letter of credit with the ANZ Bank ("ANZ") and ANZ purchased the said documents by making payment for the same to Kerry on about 27 June 1991 ("the payment by ANZ defence"): para. 12 thereof, especially para. 12(b)(i);

(e) by virtue of Sri Lankan law, property in the subject goods has passed to Arumugam under the sale contract between Kerry and Arumugam ("the Sri Lankan law defence"): para. 13 thereof;

(f) property in the subject goods passed to Arumugam on about 28 June 1991 upon Arumugam paying for the same when the Arumugam's account with BCCI was debited in the full value of the BCCI letter of credit on that day ("the payment by Arumugam defence"): para. 13 thereof;

(g) property in the subject goods passed to Arumugam by virtue of a course of dealing between Kerry and Arumugam (since 1986) whereby property in sugar purchased from Kerry would pass to Arumugam upon the said debiting of Arumugam's account with BCCI ("the course of dealing defence"): para. 13A thereof;

(h) the alleged acts of conversion are not actionable under Sri Lankan law and hence not actionable under Hong Kong law ("the conflict of laws defence"): para. 20 thereof;

(i) it is illegal under Sri Lankan law for the Shipowner to give possession of the subject goods to Kerry as Kerry did not have the appropriate Sri Lankan import licence ("the illegality defence"): para. 21 thereof;

(j) the duty of care in negligence was not a duty known to Sri Lankan law and hence not actionable under Hong Kong law ("the conflict of laws defence"): para. 22 thereof;

(k) the loss and damage claimed did not flow directly from the acts of the Shipowner ("the no causation defence"): para. 23 thereof.

13. Of these lines of defence, the following are no longer pursued at trial:-

(1) "the no title defence" (para. (a) above);

(2) "the payment by ANZ defence" (para. (d) above);

(3) "the Sri Lankan law defence" (para. (e) above);

(4) "the payment by Arumugam defence" (para. (f) above);

(5) "the conflict of laws defence" (para. (h) and (j) above);

(6) "the illegality defence" (para. (i) above);

(7) "the no causation defence" (para. (k) above).

Although no express indication was made, it also appears that the Shipowner no longer disputes that Kerry and Arumugam were respectively the seller and buyer of the subject goods.

14. The above conclusion was based on the arguments raised in the document headed "1st Defendant's Case" handed in by the Shipowner at the close of Kerry's case.

15. It is unclear whether "the passing of property to BCCI defence" (see (c) above) is still relied upon. It may well be that this line of defence is raised as part of "the no right to sue defence" (see (b) above). I shall assume that it is still relied upon and will deal with it further under the heading "(1)(d) Whether Kerry Has the Locus Standi in Tort".

16. Not only was "the no title defence" not raised by the Shipowner, Mr Smith informed me that when I consider the issues raised at the time of trial, I could assume that property in the subject goods had passed from Thailand Sugar to Kerry. In any event, I consider the evidence adduced at trial justifies such a conclusion to be made.

(1)(b) Issues Raised at Trial

17. After Kerry closed its case, Mr Smith handed in a "1st Defendant's Case". He also confirms to me that this document serves both as the Shipowner's opening speech as well as its closing speech (no evidence was called by the Shipowner). The lines of defence relied upon therein include the following:-

(a) Kerry and Arumugam intended property in the subject goods to pass to Arumugam upon shipment ("the property passed with shipment defence");

(b) alternatively, they intended property in the subject goods to pass to Arumugam when Kerry "negotiated" (or "collected") under the terms of the BCCI letter of credit when Kerry asked ANZ to present the relevant documents to BCCI/SecPac and to claim reimbursement on 1 July 1991 ("the property passed with presentation of documents defence");

(c) by reason of the matters set out in (b) above, it is immaterial whether ANZ's presentation of the relevant documents and claim for reimbursement be called a "negotiation" of (or "collection" under) the BCCI letter of credit. However, as a fact, ANZ negotiated the BCCI letter of credit by giving value in that ANZ incurred an obligation to transmit the documents to BCCI. This obligation arose out of ANZ's certification that the documents were in order and complied with the terms of the BCCI letter of credit.

18. Alternatively, if the Court should find that property has not passed to Arumugam and still vests with Kerry, the Shipowner argues that Kerry has failed to establish its claim herein. First, Kerry has not established a valid claim based on any contract entered into with the Shipowner. Secondly, Kerry does not have the necessary locus standi to make out a claim based on tort.

19. These lines of defence will be dealt with under separate sub-headings below. As stated above (under the sub-heading "(1)(a) Issues Raised in the Pleadings"), the Shipowner no longer relies on the "no title defence" and agrees that I can assume that property in the subject goods had passed from Thailand Sugar to Kerry. In any event, I already stated that I consider the evidence justifies such a finding to be made. The burden therefore lies with the Shipowner to establish that property in the subject goods passed from Kerry to some other party, or no longer rests with it.

(1)(b)(i) The Property Passed with Shipment Defence

20. Not only is there no proper evidential basis to support such a defence, the evidence adduced at trial militates against it. The contract between Kerry and Arumugam was a c & f contract. The usual inference from such a contract is that property in the goods is not intended to pass until payment has been made: see, for example, Smyth v. Bailey [1940] 3 All E.R. 60, 65-8; The Kronprinsessan Margareta [1921] 1 A.C. 486, 515, 517; The Glenroy [1945] A.C. 124, 134-5; The Future Express [1993] 2 Ll. Rep. 542, 547; Leigh and Sillavan v. Aliakmon [1986] 1 A.C. 785, 808. I do not find that there is evidential basis to justify departing from this inference.

21. Further, the subject goods was part of the bulk of the sugar loaded onto the Vessel before it departed Bangkok. S. 18 of the Sale of Goods Ordinance, Cap. 26 provides:-

"Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained" (emphasis supplied).

S. 20 of Cap. 26 further provides:-

"Rule 5. (1) Where there is a contract for the sale of unascertained ...goods by description, and goods of that description, and in a deliverable state, are unconditionallyappropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made" (emphasis supplied).

Thus, I agree with Kerry's argument that property in the subject goods, being part of the bulk at the time of shipment, did not pass to Arumugam unless and until they had become ascertained by being separated from the bulk: see also Benjamin's Sale of Goods (1997) 5th Ed., para. 5-060, The Elafi [1981] 2 Ll. Rep. 679, 681-2. As the subject goods have not been separated from the bulk at the time of shipment, property therein did not pass to Arumugam.

22. Mr Smith has raised a number of matters regarding this defence. They will be dealt with under the sub-heading "(1)(b)(ii) The Property Passed with Presentation of Documents Defence". For the reasons given therein, I do not find that these matters show that Kerry and Arumugam intended property in the subject goods to pass at the time of shipment.

(1)(b)(ii) The Property Passed with Presentation of Documents Defence

23. It is common ground that when property in the subject goods should pass from Kerry to Arumugam is a matter of intention which is to be inferred from the relevant circumstances.

24. The Shipowner contends that Kerry and Arumugam intended property to pass on 1 July 1991 when ANZ (on behalf of Kerry) presented the relevant documents to and claimed reimbursement from BCCI pursuant to the terms of the BCCI letter of credit. The circumstances relied on by the Shipowner in support of this contention are:-

(1) payment was to be by letter of credit and the voyage was short and hence the bills of lading might not reach Arumugam before the discharge of the subject goods;

(2) Kerry and Arumugam both wished to have a speedy and efficient loading and discharge of the subject goods;

(3) such an intention is consistent with Kerry's correspondence relating to 2 previous transactions, one in about June 1989 and another in May 1990 involving a vessel "Hang Wan";

(4) the bills of lading were made out to the order of BCCI and hence there was not even a prima facie case of Kerry reserving its right of disposal of the subject goods;

(5) where, as in this case, an irrevocable letter of credit has been established, the Court will readily infer that property is to pass when the seller is equipped to operate the letter of credit or when it presents the relevant documents to the issuing bank. The establishment of a letter of credit is an indication that the seller did not intend to reserve its right of disposal of the goods.

25. I shall deal with these circumstances under separate sub-headings below but this does not mean that they have not been considered collectively (and cumulatively). This is only to facilitate setting out the reasons for my findings. I have considered them collectively (and cumulatively) when I find that this defence should be rejected.

Short Voyage

26. The Shipowner relies on The Filiatra Legacy [1991] 2 Ll. Rep. 337 in support of this point. The facts of that case were as follows. The bill of lading was made out to the order of the seller. This gave rise to the presumption under s. 18 rule 5(2) of the Sale of Goods Act 1979 (same as our s. 21(2), Cap. 26) that the seller had reserved its right of disposal of the goods. Because of the short duration of the voyage and the parties' contemplation that the cargo would be discharged before the arrival of the bill of lading, the court held that the said presumption was rebutted on the facts of that case. Mr Smith submits the Court of Appeal in that case distinguished The Glenroy (entirely) on the ground that The Glenroy was not concerned with a short voyage.

27. In the present case, the sugar was loaded onto the Vessel on 15 June 1991 and it arrived at Colombo on 26 June. Discharge commenced on 28 June and was completed by 1 July (the date on which ANZ informed BCCI that the documents complied with the letter of credit and claimed reimbursement). The Shipowner contends the parties could not have intended the subject goods should remain on the Vessel pending the availability of the bills of lading. On the contrary, they intended to have speedy discharge of the goods. Further,

(a) Kerry's witness agreed that any demurrage and despatch was to be shared by the parties;

(b) Kerry's contemporaneous documents show that Kerry wanted the cargo to be speedily loaded, carried and discharged;

(c) Kerry's witness agreed that Kerry understood that the cargo might be discharged and delivered to the buyer before the arrival of the bill of lading.

28. 2 terms in the contract in The Filiatra Legacy were important. One term provided that the seller was to instruct the shipowner/master to deliver the cargo without presentation of the bill of lading and the other provided that payment was to be by telegraphic transfer within 30 days from bill of lading date. The Court of Appeal concluded from these terms that it was the parties' contemplation that property was to pass before payment: see especially p. 343 of The Filiatra Legacy.

29. As will be further discussed, the bills of lading were held by Kerry at all times. The terms of the contract in this case were different from those in The Filiatra Legacy. The voyage in that case lasted 5 days whereas that in this case lasted about 12 days. Lastly, there was direct evidence from the testimony of Kerry's witnesses that Kerry would only pass title to Arumugam upon receipt of payment under the letter of credit. I therefore consider The Filiatra Legacy to be distinguishable and Davy v. Emerald Field Contracting [1992] 2 Ll. Rep. 142 can be distinguished for the same reason.

30. I do not find the sharing of demurrage and despatch should affect my decision. The question relating to speedy delivery and the bills of lading will be dealt with below. In short, I also do not find they should affect my decision either.

31. For the above reasons, I do not agree with the Shipowner's argument relating to this matter.

Speedy Discharge of Goods

32. In commerce, maximum efficiency is almost invariably a major consideration in every transaction. There is no evidence in this action that Kerry desired to achieve efficiency such that it intended property should pass to Arumugam before Kerry received payment from Arumugam (or the issuing bank). In fact, the testimony of the witnesses is to the contrary. For these reasons, I do not find that there is substance in the Shipowner's argument regarding this matter.

Previous Transactions

33. In support of its argument, the Shipowner relies on a telex relating to one of Kerry's earlier sales to Arumugam. It was a telex dated 30 June 1989 (from Kerry to Arumugam):-

"Since we are going to negotiate the L/C, we shall no longer be the B/L holders, and we shall no longer have the title of goods".

The other document relied upon is a telex from Kerry dated 23 May 1990 suggesting Arumugam to request the Bangkok Bank in London (Kerry's banker) to send the original bill of lading to Arumugam to take delivery of the cargo. This telex stated (among other things):-

"I think there was discussion regarding B/L. They wanted documents to arrive asap but Kerry could not comply without receipt of payment ...".

34. The Shipowner argues that these documents show that Kerry knew that the relevant documents would be presented to the issuing bank for payment but actual payment would not be made yet. I rather agree with Kerry's argument that the 1989 document shows that Kerry regarded the bills of lading as documents of title. Further, both documents show that Kerry regarded the bills of lading to be crucial to its interest in securing payment. The 1990 document clearly shows that Kerry was not agreeable to parting with these documents before obtaining payment.

35. In these circumstances, I do not consider that the argument regarding this matter to be valid.

Bills of Lading

36. If the bill of lading is made out to the order of the seller, there is a presumption that the seller reserves the right of disposal of the goods: see, for example, The Filiatra Legacy, p. 342 citing The Glenroy, p. 135 and Mitsui & Co. Ltd. v. Flota Mercante [1988] 2 Ll. Rep. 208, 214. In this action, the bills of lading were made out to the order of BCCI, the issuing bank. The Shipowner argues that this presumption therefore does not arise and shows further that Kerry did not intend to reserve the right of disposal.

37. One does not need to go further than the decisions in The Glenroy, pp. 127 and 135 and Kronprinsessan Margareta, pp. 510 -2 and 514-7 to conclude that merely because the bill of lading was made out to the order of the buyer's bank does not indicate an intention to pass property in the goods to the buyer. The retention of the bills of lading has been considered as an indication that the holder intends to retain title and control over the goods: Smith v. Bailey, p. 66-8. As will be dealt with below, I find as a fact that Kerry held onto the bills of lading (through ANZ) at all times until now.

38. Further, in this action:-

(a) there were contemporaneous documents showing that the parties were aware Kerry would not part with the documents (including the bills of lading) until it receives payment: see, for example, those referred to in para. 6 and 7 of the Plaintiff's submissions in reply;

(b) there is direct testimony evidence from Kerry's witness to the same effect.

39. For the above reasons, I reject the Shipowner's argument regarding this matter.

Payment by Letter of Credit

40. The Shipowner submitted inter alia in "The 1st Defendant's Case" that:-

"Where an irrevocable L/C has been established the court will readily infer, in the absence of contrary indications, that property is to pass when the seller is equipped to operate the L/C or when the seller presents documents to the bank":

see para. 10 thereof.

41. The Shipowner relies on Benjamin, para. 18-165 which states:-

"A further situation in which it is arguable that the seller does not intend to retain his right of disposal (and hence the property in the goods) is that in which the contract provides for payment by documentary credit. A number of dicta support the view that, in such cases, the seller relies on the bank's promise, rather than on his right of property in the goods, as security for payment of the price ... The difficult case is that in which the bank has accepted the documents against a time draft. In such a case property may pass on the bank's acceptance of the draft ... A seller who parts with documents against such a draft can be regarded as giving credit and so displacing the prima facie rule that property passes only on payment ... ".

42.Benjamin said in the same paragraph:-

"The only conclusion which can, in the present state of the authorities, be drawn from these conflicting dicta, is that the issue of a letter of credit is relevant, but not decisive, to the seller's intention to transfer property. Where it is so relevant, the question exactly when property passes is, further more, an open one ... ".

In view of this observation, I do not find that the Shipowner's argument correctly reflects the state of the law.

43. Further, by reason of:-

(a) Kerry's retention of the bills of lading;

(b) the contemporaneous documents between the parties regarding Kerry's intention as to when property should pass;

(c) the testimony of Kerry's witnesses regarding Kerry's said intention,

(see the related paragraphs under the previous sub-heading) I find that Kerry did not intend property to pass before payment has been received despite the opening of an irrevocable letter of credit by Arumugam/BCCI.

(1)(b)(iii) The Course of Dealing Defence

44. The documentary evidence adduced at trial falls far short of establishing such a defence. Arumugam has filed a witness statement from Mr Ramasamy Verrabagu. This defence (among others) was set out in his witness statement. However, neither Mr Ramasamy nor anyone from Arumugam/Super Bulk appeared at the trial to contest the Plaintiff's claim or to adduce evidence relating to their pleaded case. No reason has been given as to why they failed to do so. In these circumstances, I consider it appropriate to attach no weight to Mr Ramasamy's witness statement.

45. For the above reason, there is no satisfactory evidence to support this line of defence and it is rejected.

(1)(c) Whether Kerry can Establish a Claim Based on Contract

46. As stated above, I find that property in the subject goods remained with Kerry after 1 July 1991. The Shipowner argues that Kerry's claim based on breach of the charterparty fails nevertheless.

47. Mr Smith submits that there were only 2 contracts which Kerry could possibly rely on: a contract by way of the bills of lading and another by way of the charterparty. As Kerry was not the consignee or endorsee of the bills of lading, it therefore cannot sue on this contract.

48. Kerry's pleaded case is premised on a breach of the charterparty: see para. 16A of the Further Re-Amended Statement of Claim. Clauses 5, 9 and 16 of the charterparty are relied on by Kerry:-

"5. ... [the Vessel] shall with all convenient speed sail and proceed to ... BANGKOK and there load ... [5,000 MT] ... which [the Shipowner] bind themselves to ship ...

9. ... and there deliver the same ...as ordered

16. ... Clean Mate's receipts to be signed for each parcel of sugar ... and Master to sign bills of lading in accordance therewith as requested by Charterer or Shippers ... ".

49. The Shipowner submits that none of the terms relied upon gives rise to a valid claim in contract:-

(a) Clause 16 was intended to bring into being a contractual relationship between the shipowner and persons who ship goods on the vessel (consignors or shippers) and not to create an obligation on the shipowner to deliver goods only on production of the bills of lading;

(b) Clauses 5 and 9 were only intended to define the charterparty.

The duty of the Shipowner (so it argues) to deliver on production of the bills of lading is "an incident of the contract of carriage contained in the bills of lading" rather than the charterparty. Hence, since the bills of lading in this action were made to the order of BCCI, the proper person to sue would be BCCI and not Kerry.

50. It is true that there was no express term in the charterparty as to whether the Shipowner could only deliver the subject goods to the person named in, or the holder of, the bills of lading. However, Kerry was named (by its former name) as the Charterer. The relationship between Kerry and the Shipowner was thus in essence one of bailor and bailee: Chitty on Contracts (1999) 28th Ed., para. 36-001, esp. text to nn. 1 and 2. It is a term implied by law that a bailee is under a duty to deliver the goods to the bailor or to his order: Chitty, para. 33-010, esp. text to n. 49. Without the need to go into authorities, a similar duty is implied in a contract for carriage of goods. Thus, if the carrier delivers the goods to the wrong person, he is liable for breach of contract and for conversion: Chitty, para. 36-046, esp. text to n.66.

51. Further to the above, I agree with Kerry's arguments set out in para. 33 to 37 of the "Plaintiff's submissions in reply". In particular, I agree with the argument that BCCI does not have the right to sue the Shipowner in contract, not having paid for the subject goods nor being the holder of the bills of lading.

52. For the above reasons, I find that Kerry has established its case against the Shipowner in contract.

(1)(d) Whether Kerry Has the Locus Standi in Tort

53. The Shipowner argues that in order for Kerry to be able to sue in conversion, it must have possession, or the right to immediate possession, of the subject goods: Clerk & Lindsell on Torts (1995) 17th Ed., para. 13-51 to 13-57; The Gemini [1999] 2 Ll. L.R. 255, 256, 262.

54. I have already found that:-

(a) the relationship between Kerry and the Shipowner was in substance a bailment whereby Kerry was the bailor and the Shipowner the bailee. To uphold this line of defence will in effect be to allow the Shipowner to put forward a defence of jus tertii: see Chitty, para. 33-013, esp. text to n. 74. There is an estoppel in law prohibiting the bailee from doing so;

(b) neither Arumugam nor BCCI has title or right to possession of the subject goods.

55. Further, I also agree with the matters set out in para. 38 of the "Plaintiff's submissions in reply".

56. For the above reasons, I do not find there is any substance in "the no right to sue defence" or "the passing of property to BCCI defence". I also find that Kerry has established its claim against the Shipowner in negligence for failing to ensure that the subject goods were properly delivered.

(1)(e) Whether the Letter of Credit was Negotiated

57. In view of:-

(a) the nature of the arguments raised by the Shipowner set out above (in particular, "the payment by ANZ defence" has been abandoned and only "the property passed with presentation of documents defence" is relied upon);

(b) the conclusions reached in relation to those arguments,

it is strictly irrelevant (and therefore unnecessary to consider) whether the BCCI letter of credit was negotiated by Kerry with ANZ. Originally, the significance of the negotiation of the BCCI letter of credit was said (in the defence pleadings) to show that:-

(1) Kerry has thereby been paid by ANZ;

(2) hence, property has passed (upon payment) to ANZ, BCCI or Arumugam

(that is, "the payment by ANZ defence"). However, payment by ANZ to Kerry has not been proved (in fact, the contrary has been established). The Shipowner accepts that whether there was a negotiation of the BCCI letter of credit is irrelevant: see para. 13 of the "1st Defendant's Case". I shall nevertheless deal with this issue for completeness.

58. The Shipowner's argument over this point is as follows:-

(a) the BCCI letter of credit contained a clause regarding the negotiating bank:-

"[BCCI] hereby give our undertaking to the drawers endorsers and bona-fide holders of all drafts drawn under and in compliance with this credit that such drafts will be duly honoured upon presentation";

(b) the above clause amounted to BCCI's assurance of payment both to Kerry as the drawer of the draft and to the negotiating bank which claims reimbursement in accordance with that clause;

(c) on 25 June 1991, Kerry signed a form requesting ANZ to "negotiate" the BCCI letter of credit;

(d) on 1 July 1991, ANZ sent telexes to SecPac and BCCI respectively in essence (1) informing them ANZ had "negotiated" the letter of credit, (2) certifying the documents were in order and strictly in terms of the credit and (3) claiming for "reimbursement";

(e) in these circumstances, BCCI was under a duty to ensure payment to ANZ;

(f) further, ANZ promised and thus was obliged to transmit the documents to BCCI. ANZ has therefore "purchased" the documents and/or given value for them.

59. In short, I conclude that there is insufficient evidence to support the Shipowner's argument set out in sub-para. (f) above. There is thus no need to consider its validity. If it had been necessary to do so, I would have found that it is invalid. Without actual payment being made by ANZ in Kerry's favour (as in the normal case of a "classical" negotiation situation), ANZ's telexes were nothing more than "offers" to SecPac and/or BCCI. Neither ANZ, SecPac nor BCCI would have intended "negotiation" to involve the situation described in the Shipowner's argument set out above: see the testimony of Professor Ellinger on the true meaning of "negotiation" of a letter of credit in the banking industry, namely, payment by the negotiating bank to purchase the documents from the beneficiary.

60. In any event, even if ANZ had "purchased" and/or given value for the documents in the way contended for by the Shipowner, I do not find that Kerry and Arumugam intended property in the subject goods to pass upon that event.

(2) Issues Between Kerry and Arumugam/Super Bulk

61. The lines of defence relied upon by Arumugam are similar to the ones relied upon by the Shipowner (set out above). They include:-

(a) "the payment by Arumugam defence": para. 7(ii) and (iii) of Arumugam's Amended Defence;

(b) "the no title defence", "the no right to sue defence", "the passing of property to BCCI defence", "the payment by ANZ defence" and "the Sri Lankan law defence": para. 8(ii) thereof;

(c) "the course of dealing defence": para. 9 thereof;

(d) Kerry failed to mitigate its damages by failing to lodge a proof of debt in the liquidation of BCCI ("the failure to mitigate defence"): para. 18 thereof.

62. As stated below, I find as a fact that Kerry has lodged a proof of debt in BCCI's liquidation but no payment was obtained.

63. By reason of the matters set out above, I also find that Arumugam has no defence to the Kerry's claim. By reason of the finding of facts set out below, I find that Super Bulk is liable to Kerry in conversion.

Findings

64. The Shipowner has not disputed the credibility and reliability of Kerry's witnesses. In any event, I find their testimony to be truthful and reliable. I do not consider there are any real inconsistencies between their testimony given in evidence-in-chief and in cross-examination but insofar as there are any inconsistencies, I prefer their testimony given in evidence-in-chief.

65. Various findings of fact have been set out in the preceding paragraphs. In order to avoid any doubt, I will set out the findings of fact which I made (in addition to those already set out above) including the following:-

(1) Kerry was the purchaser of 5,000 metric tons of Thai sugar (of which the subject goods formed part) from Thailand Sugar in May 1991;

(2) by a charterparty dated 22 May 1991 between Kerry as the charterer and the Shipowner as the owner of the Vessel, the Shipowner agreed to load the said Thai sugar and deliver the same at Colombo, Sri Lanka;

(3) it was an implied term that the Shipowner was to deliver the Thai sugar to its true owner, alternatively, to Kerry or to its order;

(4) the said Thai sugar was loaded onto the Vessel on 15 June 1991 at Bangkok;

(5) on 24 June 1991, Thailand sugar received payment for the Thai sugar;

(6) on 26 June 1991, the Vessel arrived at Colombo and commenced discharge of the Thai sugar on 28 June 1991 which was completed by 1 July 1991;

(7) on 28 June 1991, Kerry made payment of US$1,176,750 against Thailand Sugar's draft drawn under Kerry's letter of credit;

(8) by reason of (5) and (7) above, property in the Thai sugar passed to Kerry on about 24 June 1991 (and latest by 28 June 1991);

(9) by a contract made between Kerry and Arumugam in about May 1991, Kerry agreed to sell the subject goods to Arumugam at US$969,000;

(10) US$969,000 was the fair market price of the subject goods;

(11) payment by Arumugam to Kerry was to be by way of the BCCI letter of credit;

(12) the bills of lading were retained by Kerry pending payment by Arumugam and/or BCCI;

(13) it was Kerry's intention to reserve the right of disposal of the subject goods until actual payment is received;

(14) it was the intention of Kerry and Arumugam that property in the subject goods was only to pass to Arumugam upon actual payment to Kerry;

(15) Kerry instructed ANZ to act as its collecting agent under the BCCI letter of credit and ANZ made the collection claim to BCCI and/or SecPac on 1 July 1991;

(16) Kerry did not receive any payment from Arumugam or BCCI regarding the subject goods;

(17) the subject goods were wrongfully delivered by the Shipowner to Arumugam from about 28 June 1991 to about 1 July 1991 without the production of the bills of lading;

(18) Super Bulk effected, alternatively assisted in or facilitated, the said mis-delivery of the subject goods;

(19) by reason of the said mis-delivery, the Shipowner was: (1) in breach of the charterparty, (2) liable in conversion and (3) liable in negligence;

(20) by reason of the said mis-delivery, Arumugam was liable: (1) for the price of the subject goods and (2) liable in conversion;

(21) by reason of the said mis-delivery, Super Bulk was liable in conversion;

(22) US$969,000 was the reasonable amount of loss suffered by Kerry;

(23) this amount of loss was caused by the said act of conversion (and negligence on the Shipowner's part);

(24) Kerry has mitigated its loss by lodging a proof of debt in BCCI's liquidation.

(1) Against the Shipowner

66. In view of the findings above, I find that Kerry has established its claim against the Shipowner regarding:-

(a) Kerry's claim based on contract;

(b) Kerry's claim based on conversion;

(c) Kerry's claim based on negligence.

(2) Against Arumugam and Super Bulk

67. Further, by reason of the findings above, I find that Kerry has established its claims against Arumugam and Super Bulk regarding:-

(a) Kerry's claim based on conversion;

(b) Kerry's claim for the price of the subject goods (only as against Arumugam ).

(3) The Shipowner's Third Party Claim against Arumugam and Super Bulk

68. I also find that the Shipowner has established its Third Party claim against Arumugam and Super Bulk.

Costs

69. There is no reason not to adopt the usual rule that costs of the action should follow the event. Those costs should therefore be paid by the Shipowner, Arumugam and Super Bulk to Kerry. For the same reason, the costs of the Third Party claim should be paid by Arumugam and Super Bulk to the Shipowner.

 

 

 

Representation:

Mr B Yu, SC leading Mr A Chow, instructed by Messrs Richards Butler, for the Plaintiff

Mr C Smith, instructed by Messrs Ince & Co., for the 1st Defendant

The 2nd and 3rd Defendants/1st and 2nd Third Parties act in person and absent

HCCL000001/1992

HCCL No. 1 of 1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST

ACTION NO. 1 OF 1992

__________

BETWEEN
	KERRY FOODSTUFFS CO. LIMITED (formerly GILCHESTER COMPANY LIMITED)	Plaintiff
	AND
	PHULSAWAT NAVY COMPANY LIMITED	1st Defendant
	MRS. SUBBAMAL RAMASAMY RAMASAMY SIVASUBRAMANIAN RAMASAMY RAMALINGAM RAMASAMY VEERABAGU all carrying on business in partnership at 128 Old Moor Street, Colombo 12, Sri Lanka under the name and style of "S. ARUMUGAM AND BROTHERS"	2nd Defendant
	SUPER BULK CARGO LANKA (PRIVATE) LIMITED	3rd Defendant

__________

Coram: Deputy Judge A. Chung in Chambers

Date(s) of Hearing: 14, 15, 16 and 17 September 1998

Date of Handing Down Decision: 28 September 1998

_________________

D E C I S I O N

_________________

1. Introduction

In July, 1991, some 5,000 metric tons of Thai sugar were shipped to Sri Lanka by the Plaintiff. About 3,000 metric tons of the lot were then handed over by the 3rd Defendant ("D3"), acting as the 1st Defendant's ("D1") shipping agent, to the 2nd Defendant ("D2"). The Plaintiff claims that the goods were its property and commenced this action against all the Defendants for conversion. There is an additional claim against D2 for price of goods sold and delivered.

D1 defends the claim principally on the ground that the goods no longer belonged to the Plaintiff. D2-3 defended the claim mainly on the basis that property in those goods had already passed from the Plaintiff to D2. In October, 1997, D2-3 amended their Defence by adding a further defence that by virtue of a pre-existing course of dealing, property in the said goods passed from the Plaintiff to D2-3 at the time when D2' bank account was debited. Although D1's Defence has not been amended to incorporate this additional line of defence, D1 indicated its intention to do so if these proceedings progress further.

2. Was there a Delay?

A detailed chronology of the history of these proceedings was provided by the Plaintiff. I have made revisions to it to include only steps taken by either the Plaintiff or the Defendants in the proceedings. This is attached at the end of this Decision as "Schedule 1". There were also other matters related to, but were not steps taken in, these proceedings. These include settlement discussions, renewals of a bank guarantee by D1 and correspondence over other subjects. They are set out in "Schedule 2" which will be referred to later in this Decision.

The more important events in relation to the court proceedings are summarized below:-

(a) the cause of action accrued sometime in about July, 1991;

(b) the Writ was issued on 3.1.92 against D1;

(c) on 11.5.92, D1's Defence and Counterclaim was filed after D1 made specific discovery before defence;

(d) on 11.7.92, the Plaintiff filed Points of Reply and Defence to Counterclaim and Further and Better Particulars of the Points of Claim;

(e) application to join D2-3 and leave to serve out of jurisdiction was made on 28.7.92;

(f) D1 filed a summons for directions and Third Party summons on 22.9.92;

(g) application for leave to amend Statement of Claim to join D2-3 on 24.9.92;

(h) Amended Statement of Claim was filed on 9.10.92;

(i) Plaintiff filed Further and Better Particulars of the Amended Statement of Claim on 29.12.92;

(j) D2-3 filed Defence on 9.1.93;

(k) Plaintiff applied for summons for directions on 4.2.93;

(l) Points of Reply and Defence to Counterclaim was filed on 9.3.93;

(m) Lists of Documents were exchanged and filed on 27.5.93;

(n) D2-3 filed a Supplemental List of Documents on 11.6.93;

(o) Plaintiff filed Supplemental List of Documents on 6.11.95;

(p) Plaintiff applied for summons for directions on 24.1.96;

(q) there was a series of consent orders for service of witness statements and expert reports from about June, 1996 to about June, 1997;

(r) Plaintiff applied for a Further and Better List of Documents of D2-3 on 16.9.96;

[ limitation period expired in about July / August, 1997 ]

(s) exchange of witness statements took place on 16.9.97;

(t) D2-3 applied for leave to amend their Defence on 21.10.97;

(u) D2-3 applied to strike out the claim on 10.12.97;

(v) D1 applied to strike out the claim on 5.2.98;

(w) Plaintiff applied to set down the case on 6.5.98.

Based on the history of the proceedings, D1 argued that there was a general delay and also the following specific periods of delay:-

(a) 27.5.93 to 6.11.95 (called "Periods A and B"): 2 years and 5 months;

(b) 7.2.96 to 5.7.96 (called "Period C"): 5 months;

(c) 5.7.96 to 11.8.97 (called "Period D"): 10 months.

Based on that history, D2-3 also argued that there was a general delay but the specific periods of delay in relation to them were:-

(a) pre-writ delay from July, 1991 to January, 1992;

(b) 3.1.92 to 9.10.92 (called "1st Period"): 9 months;

(c) 3.8.93 to 24.1.95 (called "2nd Period"): 1 year and 5 months;

(d) 24.1.95 to 25.10.95 (called "3rd Period"): 9 months;

(e) 9.2.96 to 7.96 (called "4th Period"): 4 months;

(f) 20.9.96 to 7.97 (called "5th Period"): 10 months;

(g) 8.97 to 11.97 (called "6th Period"): 3 months.

The following periods overlap:-

(a) D1's "Periods A and B" and D2-3's "2nd Period" and "3rd Period";

(b) D1's "Period C" and D2-3's "4th Period"; and

(c) D1's "Period D" and D2-3's "5th Period".

It is not disputed by the parties that the basic principle relevant to the determination of this application is: a plaintiff's claim is liable to be struck out for want of prosecution if the plaintiff (or the plaintiff's solicitors) have been responsible for inordinate and inexcusable delay which has caused substantial prejudice to the defendant(s). This is subject to the qualification that generally an application made prior to the expiration of the limitation period will not be granted because it will be open for the plaintiff to take out a fresh action after the original claim was dismissed and this will only serve to aggravate the original delay.

The limitation period of the Plaintiff's claim expired by about August, 1997 at the latest. Hence, by the time when the Defendants took out their applications for striking out, the limitation period has expired.

Having considered the overall circumstances of this case, I agree with the Defendants' submissions that during the above-mentioned specific periods of delay (except D2-3's "6th Period"), no effective steps have been taken by the Plaintiff in the proceedings (save perhaps a few brief/uncontested interlocutory applications). I do note that from about June 1996 to about June, 1997, there has been a series of consent orders extending the time for filing and serving witness statements and expert reports. However, I do not regard, in the context of this case, these consent orders as "effective" steps in the further progress of these proceedings.

The Plaintiff argued that these periods cannot be regarded as periods of delay even though no effective steps have been taken because:-

(a) in order for the Defendants to properly ground an application for striking out the Plaintiff's claim, they must be able to pinpoint what specific procedural step(s) the Plaintiff has delayed in taking, for example, a failure to file document(s), or a failure to set down the case for trial. It is insufficient for the Defendants merely to say that the Plaintiff has delayed the proceedings so that the period taken far exceeded that usually recognized by the profession and the courts to be an acceptable one for bringing the case to trial;

(b) any period which was covered by an order extending time cannot be regarded as delay;

(c) even though there be delay by the Plaintiff before the expiration of the limitation period, if the Defendants cannot establish any period of delay after the expiration of the limitation period, there is nothing for the pre-limitation period to attach to. The Defendants' applications will therefore fail.

I do not agree with the Plaintiff's point (a) above. The rules of court do not prescribe time limits for all conceivable procedural steps which may need to be taken by litigants. There may therefore be cases where it would not be possible to say that a plaintiff has fallen foul of any specific time periods prescribed by the rules and yet a clear delay is easily identifiable. I also do not agree with Mr. Barlow's argument that in Hong Kong there is no period recognized by the profession and the Court as to what is an acceptable one for bringing the case to trial. Naturally the question must be decided after taking into account a wide range of factors (some of which have been referred to by Mr. Barlow) such as the nature of the case, the number and location of parties, the need for (and the time spent on) interlocutory applications, the number and location of witnesses, whether expert witnesses are involved as well as the cause for the delay (if any).

Further, the lack of progress in legal proceedings, save where the time involved is really trivial as to fall within the de minimis category is in effect a delay. Merely because a step is permitted to be taken within a specified period of time (for example, by the rules of court or by a court order) does not mean that it ought to be taken only at or near the end of that period. Whilst such specified period may prevent the delay from being an inordinate or inexcusable one, I consider that the taking of a step only at or near the end of that period would nevertheless turn such period of inactivity into a "period of delay". In this connection, I refer to the observations made by Mr. Justice Fuad, V.P. (as he then was) in United Venture Navigation v. Shum Yuen Nim [1991] 2 H.K.C. 73:-

"It seems to me quite clear from the passage of Lord Diplock's speech in Birkett v. James ... which I have cited above, that utilizing periods allowed by the rules of court cannot be prayed in aid as culpable delay in a striking out application. ... I think that Lord Griffiths was tacitly recognizing the impact of both limitation statutes and rules of court on the exercise of the court's discretion in these matters in D.O.T. v. Chris Smaller Ltd. ... This dicta fortifies my view that delay cannot, at one and the same time, be permitted by the rules and be inexcusable." (at p. 88) (underline and emphasis supplied).

Having said so, in cases where the "delay" is minor, it is unlikely that it will be regarded as "inordinate" or "inexcusable". However, these last-mentioned matters involving different considerations will have to be dealt with under separate headings below.

I also do not agree with the Plaintiff's point (b) above. There is a fundamental difference between the period allowed by the rules of court for a procedural step to be taken and that allowed by a court order for doing so. An order allowing further time to take a step is usually an act of indulgence granted by the Court on the application of one or more of the parties. The reason why there was the need to apply for such an order may be a relevant factor in deciding on whether the delay was inordinate or inexcusable. Even though the Court may have granted this period of indulgence, the extra time incurred is still a period of delay.

The need to deal with the Plaintiff's point (c) above depends on a finding as to whether the periods of delay (if any) occurred before or after the expiration of the limitation period. As set out below, I find that they almost all fell before that time. In D1's written submissions, Mr. Smith argued that:-

"Provided the limitation period has expired when the application to dismiss for want of prosecution is made, the court is entitled to pay regard to any period(s) of delay after the commencement of action, whether the limitation period had expired in relation to the said period(s) of delay: Rath v. Lawrence [1991] 1 W.L.R. 399.".

On the other hand, in Mr. Barlow's written submissions, he contended for the Plaintiff that:-

"the Defendants have not established a case of post-limitation inordinate delay. There is thus nothing upon which their doubtful allegations of pre-limitation delay can attach itself.".

I do not agree with Mr. Barlow over this issue. While it is true that it will generally be useless for the Court to strike out a claim when it is still possible for a plaintiff to commence a fresh action for the same claim, it does not follow that in order to succeed in a striking out application, a defendant must establish post-limitation delay. An example will demonstrate the fallacy of this argument.

Take for instance a personal injury case which occurred in January, 1994. The limitation period would expire in January, 1997. The writ was issued in February, 1994 followed by total inactivity by the plaintiff until the beginning of December, 1996. However, since that time the plaintiff has prosecuted his case with utmost diligence. The case involved no documentary evidence on liability. The defendant's only witness passed away in mid-December, 1996. If those were the only factors present, I cannot see how, as a matter of law, an application for striking out the plaintiff's claim taken out in, say, February, 1997 is bound to fail. I therefore concur with the observations of Farquharson, L.J. in Rath v. Lawrence when he said:-

"The position of the plaintiff who has delayed the issue of his writ until the last moment of the limitation period is, it is true, in one sense more advantageous than that of the plaintiff who issues his writ without delay. The former has exploited the period given to him by Parliament to the fullest extent, and cannot be criticized unless he is guilty of further delay after the limitation period has expired. The position of the latter is, however, quite different. Once the plaintiff has issued his writ and set the treadmill of litigation into motion, he is bound to observe the rules of the court. If he flouts them to the extent that the plaintiffs have in the present case I can see no reason why the defendants should not rely upon it, after the limitation period has expired, to support an application to strike out." (at p. 406).

Although the facts in the Rath case involved post- and pre-limitation delay, I do not consider the above observations as having laid down a legal principle that post-limitation delay is a prerequisite to an application for striking out.

For the above reasons, and taking into account all the circumstances, I find that there was delay on the part of the Plaintiff in relation to the following periods:-

(a) in relation to D1

(1) from August, 1993 to October, 1995, a period of about 2 years and 2 months;

(2) from February, 1996 to July, 1996, a period of about 5 months;

(3) from July, 1996 to July, 1997, a period of about 10 months;

(b) in relation to D2-3

(1) from January, 1992 to October, 1992, a period of about 9 months;

(2) from August, 1993 to October, 1995, a period of about 2 years and 2 months;

(3) from February, 1996 to July, 1996, a period of about 4 months;

(4) from September, 1996 to July, 1997, a period of about 10 months.

I further consider that these were relevant periods of delay for the purposes of the 2 applications for striking out for want of prosecution.

3. Was the Delay Inordinate?

I agree with the proposition in The Supreme Court Practice 1997, Vol. 1, para. 25/1/8 that "'inordinate' means 'materially longer than the time usually regarded by the profession and courts as an acceptable period. It is easier to recognize than to define.".

Even taking into account that this action involved 3 Defendants and that 2 of them are residing overseas, I do not consider that it should take over 6 years (from January, 1992 (the date of Writ) to May, 1998 (the date of application for setting down) for this action to be set down for trial. This is a commercial case and the nature of the Plaintiff's case, as far as I understand, rests primarily on documents.

Thus, even allowing for the usual heavy workload of solicitors in Hong Kong, I consider that there has been an overall delay of about 3-1/2 years to 4 years. In other words, if there had not been this delay, the trial of this action would have taken place by about September, 1994, or by about March, 1995 at the latest. I consider that this overall period of delay of about 3-1/2 years to 4 years was inordinate but do not find it necessary to distinguish between D1 and D2-3 over this issue.

Quite some evidence has been filed by both sides on the reason for the delay. In essence, both sides said that the delay was caused by the other side. I do not consider this to be relevant to the question of whether the delay was inordinate, but it may be relevant to the issue of whether the delay was inexcusable.

4. Was the Delay Inexcusable?

The Supreme Court Practice 1997 stated at para. 25/1/6: "'inexcusable'?This ought to be looked at primarily from the defendant's point of view or, at least, objectively; some reasonable allowance, for illness and accidents may be made. But the best excuse is usually the agreement of the defendant or difficulties created by him.". I consider this to be the correct test to be adopted for deciding this issue.

4(a) Relevance of the Defendants' Conduct

For this reason, I agree with the Plaintiff's submission that inordinate delay which is attributable to the defendant or to both parties cannot be relied upon for applying for dismissal. This view was shared by the learned authors of The Supreme Court Practice 1997 when they observed that: "The Court will look at the conduct of both parties. If the defendant has considerably contributed to the delay or, a fortiori, has actually agreed to it, he will seldom obtain the dismissal of the action ..." (at para. 25/1/8).

The above observations were consistent with the Judgment of the House of Lords in Roebuck v. Mungovin [1994] 2 W.L.R. 290 where Lord Browne-Wilkinson said:-

"... subsequent conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action ... is, of course, a relevant factor to be taken into account by the judge in exercising his discretion ... At one extreme, there will be cases like the present where the defendant's actions are minor (as compared with the inordinate delay by the plaintiff) and cannot have lulled the plaintiff into any major additional expenditure: in such a case a judge ... will be likely to attach only slight weight ... At the other extreme one can conceive of a case where ... the defendant has for years thereafter continued with the action thereby leading the plaintiff to incur substantial legal costs: in such a case the judge may attach considerable weight to the defendant's activities ..." (at p. 298).

The defendant's conduct referred to was his seeking to obtain proper particulars, discovery and information as to the quantum of the plaintiff's claim from about April to May, 1990. This occurred in the context of the plaintiff's delay spanning from 1984 (date of injury) to October, 1991 (date of application to strike out).

Adopting the same approach, the Court of Appeal in Hunter v. Skingley [1997] 1 W.L.R. 1466 said:-

"... where both the defendant and the plaintiff were responsible for delays which might prejudice a fair trial, it was proper and necessary to consider the various periods of delay and items of alleged prejudice, and to decide, where possible, to whose fault they were attributable ..." (headnote at p. 1466).

The defendant's conduct in that case was his disappearance for 2 years. The judge found his culpable delay to be 5-1/2 years while that of the plaintiff to be 3-1/2 years. Judgment was already entered against the defendant and the delay was related to the assessment of damages. The Court of Appeal concluded that only 1 year of the overall delay from 1987 to 1996 was attributable to the plaintiff.

On the strength of these remarks from the Courts, the Plaintiff submitted that even if there be any inordinate delay, the Defendants in this case have condoned or acquiesced in the Plaintiff's inordinate delay, so as to encourage the Plaintiff to incur further expense in pursuing its action. For this reason I should consider their conduct when deciding how to exercise my discretion.

While the Defendants do not dispute the above principles, they submitted that the Defendants' conduct when compared to the Plaintiff's delay was minimal and therefore should attract little weight in the balancing exercise. In relation to settlement negotiations in particular, they relied on The "Finnrose" [1994] 1 Ll. L.R. 559. In that case, Mr. Justice Rix said:-

"Sporadic attempts at a settlement are no excuse for letting an action go to sleep. Litigants who mislead themselves into thinking that fruitless negotiations are going somewhere have only themselves to blame if they allow time to pass them by. There is no reason in any event why negotiations cannot be pursued simultaneously with the advancement of the litigation. There was no evidence in this case that the negotiations were making progress, let alone evidence of any agreement or representation on the part of the defendants that the action could be stalled pending discussions between the parties" (at p. 564).

The settlement negotiation in that case took place in May, 1991, February, 1992 to mid-May, 1992, once in July, once in August and once in October, 1992. These were in the context of an action commenced in 1990 for a cause of action accrued in about January, 1988. The striking out application was made in 1993 by which time discovery of documents was about to take place.

The Defendants argued that their conduct fell within the "slight weight" category referred to in the Roebuck case and the "sporadic settlement" category referred to in The "Finnrose" case.

As can be seen in "Schedule 2", the Defendants' relevant conduct in this case included the following:-

(a) correspondence with D1 regarding the renewal of the bank guarantee to be provided by D1's bank. This occurred around September/October from 1991 to 1997;

(b) settlement discussions with D1 during September and December, 1991, October, 1995 to June, 1996 and with D2/3 in February to March, 1992 and October, 1995 to June, 1996;

(c) correspondence with D2-3 regarding further discovery in June, 1993, November, 1993 to April, 1994 and July to October, 1996.

Further to the above, in "Schedule 1", the Defendants took (or agreed to) the following steps:-

(a) a series of some 10 consent orders relating to time extensions for the exchange of witness statements and expert reports from about June, 1996 to about June, 1997;

(b) further, D2-3:-

(1) filed List of Documents in May, 1993, Supplemental List of Documents in June, 1993 and 2nd Supplemental List of Documents in August, 1993;

(2) requested for further and better particulars of the Amended Statement of Claim in May, 1996;

(3) applied for specific discovery in May, 1996;

(4) applied for leave to amend their Defence in October, 1997.

Having considered all the above circumstances, I do not agree with the Defendants' submissions over this point. On the contrary, I agree with the Plaintiff's submissions that the Defendants' conduct in this case fell within the category "... the defendants have for [considerable periods of time] continued with the action thereby [led] the plaintiff to incur substantial legal costs ...". The legal costs so incurred would include preparing the witness statements, expert report, discovery of documents of both sides, and filing and serving various documents including further and better particulars.

For these reasons, I consider that the delay in this case was not inexcusable. Since I am already able to reach a conclusion based on condonation and acquiescence, I do not find it necessary to adopt the approach in the Hunter case and determine who was at fault in causing the various periods of delay in this case. If I had to do so, I would have concluded that on an overview, both sides were equally blameworthy. The overall period of delay would have to be split between the Plaintiff and the Defendants. I would also have dismissed the applications by reason that the parties were equally to be blamed for the delay.

5. Was there Prejudice Caused by the Delay?

Having reached the above conclusion, it is unnecessary for me to consider whether the delay has caused substantial prejudice to the Defendants. I shall however do so for the sake of completeness.

5(a) Vis-à-vis D1

D1 argued that it suffered from the following prejudice:-

(a) financial prejudice:-

(1) while it may be true that D2 is now financially insolvent, from the materials disclosed in the affidavits filed by the Plaintiff, D2 was probably financially able to answer any order for contribution or indemnity made in these proceedings if the matter was concluded in 1994 or 1995. Thus, even though D2 has been made a Third Party, D1 is now financially prejudiced by the delay;

(2) it is common ground that D3 is now a shell of a company having no assets. Similar to D2, even though D3 has been made a Third Party, there is no likelihood that D1 would be able to recover anything by way of indemnity or contribution;

(3) prior to the hand-over of the sovereignty on 1 July, 1997, it was possible to enforce a Hong Kong judgment in Sri Lanka. However, the evidence filed by D2-3 shows that it is now impossible for such a judgment to be enforced there;

(b) prejudice relating to the lack of evidence:-

this relates to the "new defence" which was introduced by D2-3 by way of the amendment made in October, 1997. I shall deal with this more fully in relation to D2-3.

As to D1's point (a)(1) above, I agree with Mr. Smith's submissions that prejudice to a defendant's financial position can in law be relevant prejudice in an application for striking out: see Antcliffe v. Gloucester [1992] 1 W.L.R. 1044, Biss v. Lambeth, Southwark and Lewisham Health Authority [1978] 1 W.L.R. 382, 387, and D.O.T. v. Chris Smaller [1989] A.C. 1197, 1209. I also agree with him that the evidence in this case shows that it was possible D2 was financially able to answer any order for indemnity/contribution in 1994 or 1995 but it is quite possible that D2 is unable to do so now. In fact, Mr. Ramasamy Veerabagu is no longer in Sri Lanka and the affidavit he made only shows a "care-of" address. The same reasoning would apply to D3 save that it is unknown whether D3 was financially in a better position in 1994 or 1995 than now.

I agree that the evidence filed on behalf of D1 shows that it is impossible for a post-hand-over Hong Kong judgment to be enforced in Sri Lanka (see D1's point (a)(3) above). Mr. Barlow submitted that the advice from the Sri Lankan lawyers should be read as limited to reciprocal enforcement of judgments only. In such a case, the presumption that foreign law is the same as Hong Kong law applies. Since it is possible to enforce a foreign judgment by way of a common law action, it is presumed that this is also possible in Sri Lanka. With respect, I do not see any valid basis to so limit the advice given by the Sri Lankan lawyers when they have expressly given any unqualified advice.

For the above reasons, I would have found that D1 has suffered financial prejudice if the delay had been inexcusable.

As to D1's point (b) above, since I opine that the prejudice relating to the "new defence" of D2-3 was not caused by the Plaintiff's delay (see below), I do not find that D1 can successfully rely on this alleged prejudice in this application.

5(b) Vis-à-vis D2-3

By the amendment made to their Defence in October, 1997, D2-3 introduced a new line of defence. This "new defence" is basically that there was a pre-existing course of dealing between D2 and the Plaintiff. Because of this course of dealing, it was agreed by conduct that property in the goods sold by the Plaintiff to D2 would pass to D2 at the time when D2's bank account was debited by its bank. D2 stated in evidence that although documents and witnesses were available to support this defence until about 1993, since about 1996 they were unavailable because the documents could not be located and witnesses were either missing or unwilling to testify.

The Defence of D2-3 was filed and served in January, 1993. There is no explanation given as to why the "new defence" was not raised in the pleadings until October, 1997 (although it was mentioned in correspondence in 1996). It is also difficult to understand the assertion that supporting witnesses and documents were available in about 1993 but somehow this defence was either omitted (or concealed) by D2-3 until much later. As this case may shortly be set down for trial, I shall refrain from commenting further on this aspect save to remark that I find the assertion relating to the alleged existence of supporting documents and witnesses rather hard to believe.

Even if these supporting documents and witness did exist in 1993, I do not consider that their absence now was caused by the Plaintiff's delay. I agree with Mr. Barlow's submissions over this point that any prejudice relating to the "new defence" was self-induced. I understand that discovery was ordered as early as in February, 1993. All relevant documents should have been disclosed then or (because there is a continuing duty to discover) since then. Even if the prejudice relating to the "new defence" could not be regarded as self-induced, it would at least be a prejudice caused equally by D1's fault. I would still have dismissed the application on this basis.

There were also other alleged prejudice but I do not propose to set out all of them. One alleged prejudice is the death of Mrs. Subbamal Ramasamy, the mother of Ramasamy Veerabagu. She was described to have been "an integral part" of the partnership. This is a vague term which does not define what her role in the partnership was, let alone her role in relation to the transaction in this action. According to the witness statement of Mr. Veerabagu, he was the person solely responsible for dealing with the Plaintiff. I therefore do not find the death of Mrs. Ramasamy to be relevant at all to this application. For similar reasons, I do not consider the lack of communication between Mr. Veerabagu and his two brothers to be relevant either.

D3 was described in the affidavits as "a shell" or "the shell of a company". I understand this to mean that D3 does not carry on any business, has no employee or assets, and in essence has but a fictional existence. In this circumstances, I do not understand how it can realistically be argued that D3 will suffer any prejudice. Any prejudice can only be theoretical: the worst that can happen is that an "empty" judgment will be entered against D3.

6. Other Matters

Mr. Barlow attributed part of the delay to the listing procedure of this Court. He said that part of the reason why the Plaintiff was unable to set down this case was because of the Listing Judge's refusal to do so if it was asserted by any party at the checklist hearing that the case was somehow not ready for trial. I do not accept this to be a valid criticism. The Listing Judge will not tolerate any attempt by any litigant to avoid the case from being tried nor, in fact, would any tribunal in Hong Kong. All that the legal representatives need to do is to make the appropriate application timely to prevent such attempts. Preemptory orders are regularly made by the Courts without hesitation in appropriate cases.

Mr. Barlow also argued that D1 should not be allowed to rely on D2-3's "new defence" in this application because D1 has not yet amended its Defence to incorporate it. Mr. Smith informed me, and I accept what he said, that D1 will do so should the case proceed further. I consider that it is quite possible that D1 will be able to obtain leave to incorporate this defence, since it has already been allowed in relation to D2-3. For this reason, I find that the "new defence" ought also to be considered in relation to D1 even though technically this has not yet been set out in D1's Defence.

7. Conclusion

To conclude, both applications are dismissed. The parties agreed that in such case I should give leave for the Plaintiff to set down the case for trial. However, I consider that this may be a matter more appropriate for the Listing Judge and therefore leave it to the parties to make such application before him.

8. Costs

There is no reason why a costs order nisi should not be made pursuant to Ord. 42 r. 5B(6) or why costs should not follow the event. Costs of D1's application are to be paid by D1 to the Plaintiff while those of D2-3's application are to be paid by D2-3 to the Plaintiff. As the hearing for the two applications took approximately the same time, the costs of the hearing are to be split equally between D1 on the one hand and D2-3 on the other. All costs are to be taxed if not agreed in any event.

(Andrew Chung)

Deputy Judge of the Court of First Instance

Representation:

Mr. Barrie Barlow i/s by Messrs. Richards Butler for the Plaintiff

Mr. Clifford Smith i/s by Messrs. Ince & Co. for the 1st Defendant

Mr. Ashley Burns i/s by Messrs. Stephenson Harwood & Lo for the 2nd and 3rd Defendants

HCCL No. 1 of 1992

SCHEDULE 1

CHRONOLOGY OF EVENTS: COURT RELATED PROCEDURE

Date

Events

	vs. D1	vs. all Ds	vs. D2-3
1992 3.1	Writ and Statement of Claim
15.1	A/S
16.1 to 1.4	D1 Specific discovery before Defence and related time extensions
11.5	Defence and Counterclaim
16.5	D1 Request for F & B Particulars
11.7	Points of Reply and Defence to Counterclaim
28.7			Affidavit to join and leave to serve out of jurisdiction
22.9	D1 filed summons for directions and 3rd party directions
24.9		Leave to amend S/C to join D2/3
9.10		Amended S/C
3.12		Time extension for serving Amended S/C etc.
19.12			A/S
23.12			D2/3 Request for F & B Particulars
1993 7.1	Apply for leave to amended Defence
9.1			Defence filed
18.1			F & B Particulars of Amended S/C filed
21.2	Amended Defence filed
4.2		Summons for directions
9.3			Points of Reply and Defence to Counterclaim
27.5		List of Documents
	D1 List of Documents		D2/3 List of Documents

[ D1's "Periods of Delay A and B": 5.93 to 7.96 ]

[ D2-3's "2nd and 3rd Periods of Delay": 8.93 to 10.95 ]

1993 11.6			D2/3 Supp. List
13.7			Order for F & B List
3.8 & 13.8			D2/3 2nd Supp. List and verifying affd.
1995 1		Notice to Proceed

[ D1's "Period of Delay C": 2.96 to 7.96 ]

[ D2-3's "4th Period of Delay": 2.96 to 7.97 ]

1995 6.11		Supp. List
1996 24.1		Summons for directions
27.3		Consent order for time extension for serving witness statements and expert reports
3.5			D2/3 Request for F & B Particulars of Amended S/C
9.5			D2/3 Consent order for time extension for serving witness statements and expert reports
21.5			D2/3 application for specific discovery
12.6		Consent order for service of witness statements and expert reports
22.6			F & B Particulars of Amended S/C
19.7
9.9
16.9			Summons for F & B List
9	Renewed guarantee
23.10
25.11
1997 6.1
24.2
15.4
31.5
2.6
27.6

[ D1's "Period of Delay D": 7.96 to 8.97 ]

[ D2-3's "5th Period of Delay": 9.96 to 7.97 ]

1997 11.8			Exchange of W/S
21.10			Leave to amend Defence
30.10		Served expert report
27.11		Leave to re-amend Amended S/C
10.12			D2/3 application to strike out
1998 5.2	D1 application to strike out
6.5		Summons to set down
29.4		Notice of hearing
15.5		Checklist filed
19.5	D1 filed checklist		D2/3 filed checklist

HCCL No. 1 of 1992

SCHEDULE 2

CHRONOLOGY OF EVENTS: OUT-OF-COURT STEPS

Date

Events

	vs. D1	vs. all Ds	vs. D2-3
1991 27.8	Vessel arrested
8 - 9	Discussion re: provision of security
18.9	D1 provision of bank guarantee
12	Settlement discussion
1992 2 - 3			(D2 only)
16.1	Time extension by correspondence
7.9 - 14.10	Renewal of bank guarantee
1993 3.6			Correspondence re: further discovery by D2/3
15.6
8 - 9
1993 - 94 11 - 4			Correspondence re: provision of further discovery by D2
1994 8 - 9
1995 9 - 11
10	Settlement discussion
1995 - 96 10 - 6		Settlement discussion
1996 2 - 6
7 - 10			Correspondence re: further discovery by D2/3
9	Renewal of bank guarantee
1997 9 - 12
14.11			Interrogatories to be answered by D2

HCCL No. 1 of 1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST

ACTION NO. HCCL 1 OF 1992

____________

BETWEEN
	KERRY FOODSTUFFS CO. LIMITED (formerly GILCHESTER COMPANY LIMITED)	Plaintiff
	AND
	PHULSAWAT NAVY COMPANY LIMITED	1st Defendant
	MRS. SUBBAMAL RAMASAMY RAMASAMY SIVASUBRAMANIAN RAMASAMY RAMALINGAM RAMASAMY VEERABAGU all carrying on business in partnership at 128 Old Moor Street, Colombo 12, Sri Lanka under the name and style of "S. ARUMUGAM AND BROTHERS"	2nd Defendant
	SUPER BULK CARGO LANKA (PRIVATE) LIMITED	3rd Defendant

___________________

CHRONOLOGY

___________________

Date
08/91 - 09/91	Settlement discussions between Plaintiff, 1st, 2nd and 3rd Defendants
28/07/91	1st Defendant's vessel "BANGBUA" arrested
08/91 - 09/91	Extensive correspondence between Richards Butler, solicitors for the Plaintiff ("RB") and 1st Defendant's solicitors Ince & Co. ("Ince") regarding provision of security
12/91	Settlement discussions between Plaintiff and 1st Defendant
02/92 - 03/92	Settlement discussions between Plaintiff and 1st and 2nd Defendants
18/09/91	Bank Guarantee provided by 1st Defendant as security and vessel released
03/01/92	Writ of Summons and Statement of Claim issued and served on 1st Defendant
15/01/92	Acknowledgement of Service of Writ of Summons
16/01/92	Plaintiff grants 1st Defendant 21 day extension of time for service of Defence (no court application)
25/02/92	1st Defendant obtains 14 day time extension for filing and service of Defendant (Consent Order of Mr. Justice Mayo)
06/03/92	Plaintiff supplies documents to 1st Defendant referred to in Statement of Claim
09/03/92	1st Defendant obtains 21 day time extension for filing and service of Defence (Consent Order of Mr. Justice Mayo)
11/03/92	Plaintiff provides further documents to 1st Defendant
20/03/92	1st Defendant applies for 21 day time extension for filing and service of Defence
20/03/92	Plaintiff provides further documents to 1st Defendant
23/03/92	1st Defendant issues Summons seeking further documents referred to in Statement of Claim and seeking leave to serve Defence 21 days after service by Plaintiff of documents
01/04/92	Order of Mr. Justice Mayo (relating to Summons filed 23/03/92): Plaintiff ordered to produce further documents
15/04/92	Documents referred to in Order of Mr. Justice Mayo dated 01/04/92 provided by Plaintiff to 1st Defendant
11/05/92	1st Defendant obtains leave to file and serve Defence on or before 09/05/92 (Order of Mr. Justice Mayo)
11/05/02	Defence and Counterclaim (of 1st Defendant) filed
11/05/92	Third-Party Notice issued by 1st Defendant
16/05/92	1st Defendant files Request for Further and Better Particulars of Statement of Claim
17/06/92	Plaintiff obtains 21 day extension of time for filing Reply and Defence to Counterclaim together with Reply to Defendant's Request for Further and Better Particulars (Consent Order of Mr. Justice Mayo)
10/07/92	1st Defendant obtains leave to issue concurrent Third-Party Notice against 1st and 2nd Third Parties and to serve copy Third Party Notice on 1st and 2nd Third Parties at addresses in Sri Lanka (Order of Mr. Justice Chan)
11/07/92	Plaintiff files Points of Reply and Defence to Counterclaim
11/07/92	Plaintiff files Further and Better Particulars of the Points of Claim
28/07/92	RB receives instructions to add 1st and 2nd Third Parties as Defendants : Affidavit of Michael Melwood Smith sworn in support of application to join 2nd and 3rd Defendants and for leave to serve Writ out of jurisdiction (see paragraph 16 of the Fourth Affidavit of M. Melwood Smith dated 01/04/98 ("MMS Affidavit")
07/09/92 - 14/10/92	RB seeks renewal of Guarantee provided by 1st Defendant (see paragraph 17 of MMS Affidavit)
22/09/92	1st Defendant files Summons for Directions
22/09/92	1st Defendant files Summons for Third Party Directions
24/09/92	Plaintiff applies leave to amend Writ and Statement of Claim by joining 1st and 2nd Third Parties as Defendants and to issue Concurrent Amended Writ and serve on 1st and 2nd Third Parties at addresses in Sri Lanka
09/10/92	Order of the Honourable Mr. Justice Mayo (relating to Summons dated 24/09/92)
03/12/92	Plaintiff obtains time extension for filing and service of Amended Writ and Statement of Claim, the 1st Defendant to serve Amended Defence and Counterclaim within 14 days thereafter the 2nd and 3rd Defendants to serve their Defences within 14 days thereafter (Consent Order of Mr. Justice Kaplan)
09/10/92	Plaintiff files and serves Amended Writ of Summons and Statement of Claim
18/12/92	2nd and 3rd Defendants apply for extension of time to file and serve Defence
19/12/92	Acknowledgement of Service of Originating Summons of 2nd Defendant
19/12/92	Acknowledgement of Service of Originating Summons of 3rd Defendant
23/12/92	2nd and 3rd Defendants file Request for Further and Better particulars of the Statement of Claim
29/12/92	Plaintiff files Further and Better Particulars of the Amended Statement of Claim
31/12/92	2nd and 3rd Defendants' apply for extension of time for filing and service of Defence
07/01/93	1st Defendant applies for leave to file and serve Amended Defence
09/01/93	2nd and 3rd Defendants file Defence
21/02/93	1st Defendant files Amended Defence and Counterclaim
28/01/93	Plaintiff files Request for Further and Better Particulars of the 2nd and 3rd Defendants' Defence to the Amended Statement of Claim
04/02/93	Plaintiff files Summons for Directions
10/02/93	Order of Mr. Justice Mayo (relating to Summons filed 4/2/93)
25/02/93	2nd and 3rd Defendants' file for extension of time for filing and service of Further and Better Particulars
25/02/93	Plaintiff files Summons for Directions
03/03/93	2nd and 3rd Defendants file Further and Better Particulars of the Defence to the Amended Statement of Claim
04/03/93	Order of Mr. Justice Mayo (relating to Summons filed 25/2/93)
09/03/93	Plaintiff files Points of Reply to Defence of 2nd and 3rd Defendants
29/03/93	1st Defendant files Third-Party Statement of Claim
13/05/93	1st and 2nd Third Parties file Defence to the Third-Party Statement of Claim
27/05/93	Plaintiff files and exchanges List of Documents
27/05/93	1st Defendant files and exchanges List of Documents
27/05/93	2nd and 3rd Defendants file and exchange List of Documents
03/06/93	RB writes to solicitors for 2nd and 3rd Defendants, Stephenson Harwood & Lo ("SHL") requesting further discovery (see paragraph 21 of MMS Affidavit)
11/06/93	2nd and 3rd Defendants file Supplemental List of Documents
15/06/93	RB write again to SHL requiring further discovery
13/07/93	Plaintiff obtains Order that 2nd and 3rd Defendants make and serve a Further and Better List of Documents within 21 days of Order (Order of Mr. Justice Kaplan)
01/07/93	Affidavit of Michael Melwood Smith filed on behalf of Plaintiff
03/08/93	2nd and 3rd Defendants' file Second Supplemental List of Documents
13/08/93	Affirmation of Mohamed Sulaiman Mohamed Feroze Inham
13/08/93	Affirmation of Ramasamy Veerabahu
08/93 - 09/93	RB seek renewal by 1st Defendant of Guarantee
11/93 - 04/94	Correspondence between RB and SHL regarding provision of further discovery by 2nd Defendant (see paragraphs 25 - 29 of MMS Affidavit)
04/94 - 01/95	Correspondence between RB and Professor Ellinger regarding the provision of expert evidence by Professor Ellinger and preparation of expert evidence (see paragraph 29 of MMS Affidavit)
08/94 - 09/94	RB seek renewal of Guarantee by 1st Defendant
18/01/95	Plaintiff files Notice of Intention to Proceed
02/95 - 09/95	RB prepare witness statements (see paragraph 32 of MMS Affidavit)
09/95 - 11/95	RB seek renewal of 1st Defendant Guarantee (see paragraphs 33 - 35 of MMS Affidavit)
10/95	Settlement discussions between Plaintiff and 1st Defendant
10/95 - 06/96	Settlement discussions between Plaintiff, 1st, 2nd and 3rd Defendants
06/11/95	Plaintiff files Supplemental List of Documents
24/01/96	Plaintiff files Summons for Directions
07/02/96	Order of Mr. Justice Findlay (relating to Summons filed 24/01/96)
02/96 - 08/96	Settlement discussions between 1st Defendant and Plaintiff (see paragraph 37 of MMS Affidavit)
27/03/96	Plaintiff obtains extension of time for service of Witnesses' Statements and exchange of Experts' Reports (Consent Order of Mr. Justice Findlay)
27/03/96	1st Defendant files Further and Better Particular of Third Party Statement of Claim
03/05/96	2nd and 3rd Defendants file Request for Further and Better Particulars of the Amended Statement of Claim
09/05/96	2nd and 3rd Defendants obtain time extension for service of Witnesses' Statements and exchange of Experts' Reports (Consent Order of Mr. Justice Findlay)
21/05/96	2nd/3rd Defendants file Summons & Affidavit seeking specific discovery
27/05/96	Consent Order of Mr. Justice Yeung relating to Summons of 21/05/96
12/06/96	1st Defendant files Consent Summons for extension of time for service of witness statements
12/06/96	Consent Order of Mr. Justice Findlay extending time for service of witness statements and expert reports
22/06/96	Plaintiff files Further and Better Particulars of the Amended Statement of Claim
08/07/96	Affidavit of James Lim Kiam Leng filed on behalf of Plaintiff
07/96 - 10/96	Correspondence between RB and SHL regarding the provision by 2nd and 3rd Defendants of further discovery (see paragraphs 42-45 and paragraph 48 of MMS Affidavit)
18/07/96	2nd and 3rd Defendant file Consent Summons extending time for service of witness statements and expert reports
19/07/96	Consent Order of Mr. Justice Findlay extending time for service of witness statements and expert reports
09/09/96	Consent Order of Mr. Justice Findlay extending time for service of witness statements and expert reports
16/09/96	Plaintiff files Summons seeking an Order that 2nd & 3rd Defendants serve Further and Better List of Documents with 14 days (see paragraph 44-46 of MMS Affidavit)
09/96	RB seeks renewal of Guarantee by 1st Defendant
20/09/96	3rd Affidavit of Michael Melwood Smith filed on behalf of Plaintiff
20/09/96	Consent Order of Mr. Justice Woo dismissing Summons dated 16/09/96
23/10/96	Consent Order of Mr. Justice Findlay extending time for service of witness statements and expert reports
25/11/96	Consent Order of Mr. Justice Woo extending time for service of witness statements and expert reports
06/01/97	Consent Order of Mr. Justice Woo extending time for service of witness statement and expert reports
24/02/97	Consent Order of Mr. Justice Stone extending time for service of witness statements and expert reports
15/04/97	Consent Order of Mr. Justice Stone extending time for service of witness statements and expert reports
31/05/97	Plaintiff files Summons seeking extension of time for service of witness statements and expert reports
02/06/97	Plaintiff files Summons seeking extension of time for service of witness statements and expert reports
27/06/97	Consent Order extending time for service of witness statements and expert reports
07/97	RB seeks Counsel's advice on evidence
11/08/97	Plaintiff exchanges witness statements with 2nd and 3rd Defendants
12/09/97	2nd and 3rd Defendants file Summons for leave to file Amended Defence
09/07 - 12/97	Correspondence between RB and Ince regarding renewal of Guarantee (see paragraphs 11-12 of the 1st Affidavit of Alison Vera Scott dated 1st April 1998)
21/10/97	Order of Mr. Justice Barnett granting leave to amend the Defence of 2nd and 3rd Defendants
30/10/97	Plaintiff serves expert reports on 1st, 2nd and 3rd Defendants. No expert reports filed by 1st, 2nd or 3rd Defendants
14/11/97	Plaintiff seek Interrogatories To Be Answered By The 2nd Defendant (see paragraph 14 of AVS Affidavit)
26/11/97	2nd Affidavit of Malcolm Bernard Kemp filed on behalf of 2nd Defendant
27/11/97	Plaintiff files Summons for leave to re-amend Amended Statement of Claim
27/11/97	2nd and 3rd Defendants file Summons seeking withdrawal of Plaintiff's Interrogatories
10/12/97	2nd and 3rd Defendants file Summons seeking strike out of Plaintiff's claim
10/12/97	2nd and 3rd Defendants file 3rd Affidavit of Malcolm Bernard Kemp
11/12/97	Order of Mr. Justice Sears relating to Plaintiffs' Summons dated 27/11/97 and Summons of 2nd and 3rd Defendants dated 09/12/97
17/12/97	Affirmation of Ramasamy Veerabagu
15/01/98	Consent Order of Mr. Justice Sears extending time for filing and service of 1st Defendant's Affirmation in Reply pursuant to Order of Mr. Justice Sears dated 11/12/97
02/02/98	Consent Order of Mr. Justice Sears extending time for filing and service of 1st Defendant's Affirmation in Reply pursuant to Order of Mr. Justice Sears dated 11/12/97
04/02/98	Affirmation of Ampika Phulsawat
05/02/98	1st Defendant files Summons seeking strike out of Plaintiff's claim
14/03/98	Plaintiff files Consent Summons extending time for filing of Plaintiff's Affidavit in Reply
02/04/98	Plaintiff files 4th Affidavit of Michael Melwood Smith
02/04/98	Plaintiff files 1st Affidavit of Alison Vera Scott
06/05/98	Plaintiff files Summons to set down (RHC Order 34 rule 2A)
29/04/98	Notice of Hearing
15/05/98	Plaintiff files Checklist
19/05/98	1st Defendant files Checklist
19/05/98	2nd and 3rd Defendants file Checklist
19/05/98	Affirmation of James Lim Kiam-Leng filed on behalf of Plaintiff
20/05/98	Order of Mr. Justice Suffiad adjourning Plaintiff's application to set down
03/06/98	Order of Mr. Justice Sears granting leave to file and serve further Affirmation in Reply
09/07/98	1st Defendant files Consent Summons seeking further time for filing Affidavit in Reply
15/07/98	1st Defendant files 1st Affidavit of Simon John Church

Remarks:
On appeal by the 1st Defendant to the Court of Appeal: Appeal dismissed. Please refer to judgment CACV000262/1998.