KAROCHEM INTERNATIONAL LTD. v. RICHARD LIU & CO. LTD t/s KAYO PACIFIC INC.

CACV000206B/1998

CACV 206/98

香港特別行政區

高等法院

上訴法庭

高院民事上訴1998年第206號

（原本案件編號：高院民事訴訟1997年第12537號）

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申請人	RICHARD LIU & CO. LTD t/s KAYO PACIFIC INC.
	對
答辯人	KAROCHEM INTERNATIONAL LTD

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主審法官:	高等法院首席法官陳兆愷
	高等法院上訴法庭法官梁紹中

聆訊日期：2000年6月14日

宣判日期：2000年6月14日

 

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判 決 書

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上訴法庭法官梁紹中宣讀上訴法庭判決書:

1. 申請人與答辯人簽立買賣合約。由申請人賣出一批貨物給予答辯人。其後收貨人發現貨不對辦，答辯人於是控告申請人。答辯人其後在原訟法庭班立德法官處獲判勝訴。申請人就班立德法官的判決向上訴庭提出上訴，但答辯人要求申請人繳存法庭上訴訟費保証金。上訴法庭羅傑志法官命令申請人須於1998年11月16日前繳存法庭港幣130,000元之上訴訟費保証金。如果申請人未能在時限內依照羅法官的命令繳存上訴訟費保証金，則申請人的上訴案會被撤銷。但申請人沒有在時限內遵照法庭命令提交法庭上訴訟費保証金，上訴因此被撤銷。

2. 申請人於本年3月9日向本庭就羅法官的命令提出上訴，但上訴是在有效上訴期限屆滿之後提出，上訴遂被本庭撤銷。現申請人向本庭申請許可上訴終審法院。香港法例第484章《香港終審法院條例》第22條(1)(a)段規定有關民事上訴事項必須是就上訴法庭的最終判決提出，但本庭就羅法官有關上訴訟費保証金的判決，不是最終判決。第22條(1)(b)段又規定上訴終審法院所涉及的問題應具有重大廣泛或關乎公眾的重要性或有其他原因，須由終審法院審理。申請人的上訴並未涉及這類問題。因此申請不符合《香港終審法院條例》的規定，本庭拒絕申請。

 

 

 

申請人：由劉震寰代表

答辯人：KAROCHEM INTERNATIONAL LTD缺席

 

CACV000206A/1998

CACV 206/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 206 OF 1998

(ON APPEAL FROM HCA No. 12537 of 1997)

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BETWEEN
	KAROCHEM INTERNATIONAL LTD	Respondent
	AND
	RICHARD LIU & CO. LTD t/s KAYO PACIFIC INC.	Appellant

________________________________

Coram: Hon Chan CJHC and Leong JA in Court

Date of Hearing: 9 March 2000

Date of Judgment: 9 March 2000

 

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J U D G M E N T

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Hon Leong JA:

1. The appellant Richard Liu and Co. Ltd trading as Kayo Pacific Inc. through one German company Otto Brandes GmbH sold 100 metric tons of melamine to the respondent Karochem International Ltd. The value of the goods was approximately US$157,000. The goods were packed in 4,000 polypropylene bags and were shipped from Shanghai in five sealed containers. When the containers arrived at Suffolk, U. K. they were stored in a warehouse for about a month and when the containers were unsealed and opened and an inspection of the goods was made, the bags were found to contain a different substance. There was no evidence that the seals on the containers had been interfered or tampered with.

2. The respondent subsequently issued a writ against the appellant claiming damages for breach of contract.

3. The appellant in a self-made defence, put up a general denial of the claim and specifically denied that it had entered into a contract with the respondent and asserted that the contract was with the German company which resold the goods to the respondent. In his affidavits, the appellant's director asserted that the goods were inspected and certified to be melamine before they were shipped. He also asserted that the Bill of Lading had named the respondent as the owner of the goods and if there was any loss or damage to the goods in transit, according to international commercial law and trade practices, the appellant should not be made liable for the loss.

4. The respondent applied for summary judgment on the ground that the appellant had no defence on that basis. The master gave the appellant unconditional leave to defend. The respondent appealed to the Court of First Instance against the master's decision.

5. On 5 August 1998, Barnett J of the Court of First Instance, reversed the decision of the master and gave summary judgment against the appellant. In his judgment, the Judge rejected the appellant's suggestion that there had been a switch of the goods while they were in transit. He found that suggestion implausible. He also rejected the certificates from the Shanghai Authorities on the ground that they were wholly unsatisfactory. He considered that the problem, if any, arose at the port of embarkation. He also concluded there was clear evidence of exchange of faxes between the appellant and the respondent that there was a contract between them.

6. The appellant appealed against the judgment of Barnett J. The respondent applied for security for the costs of the appeal on the basis that the appellant was impecunious. Rogers JA considered that there was justification for that allegation because nothing was recovered from the appellant's bank account on the respondent executing a Garnishee Order; there was only US$600 in the balance and all the appellant's banking facilities had been withdrawn. Further, the appellant was allowed to be represented by a director in the proceedings because the appellant was unable to afford legal representation. The Judge found that on the whole of the evidence, the best the appellant could hope for in the case as a matter of defence would be conditional leave to defend with payment into court of the amount claimed.

7. On 16 October 1998, Rogers JA granted the application and ordered that the applicant provide security for costs in the sum of $130,000 on or before 16 November 1998 and the appeal proceedings be stayed in the meantime. He ordered that if it was certified that the appellant was in default in complying with the order, the appellant's appeal would be dismissed. The appellant defaulted in providing security within the time limit as ordered. The appeal was therefore dismissed on 18 November 1998.

8. The appellant now appeals out of time against Rogers JA's judgment. The grounds are merely that he had a defence on the line he stated in the earlier proceedings and that the respondent's execution of the summary judgment had frozen his bank account and all the banking facilities were as a result withdrawn, making it impossible for him to carry on trading and to comply with the order for security. He said that the order made by the Judge had deprived him of his opportunity to appeal. As to the delay, he said that he was ignorant of his right and the procedure to appeal as Rogers JA did not inform him of it when he gave judgment. He had to consult others before he knew he had the right to appeal. In addition, he said he was out of Hong Kong frequently and that was the reason for the delay.

9. In our view there was every justification for the conclusions reached by Rogers JA. There was evidence that the appellant made no profit since the year 1995/1996, and in all the circumstances the appellant would not be able to meet the costs of the appeal if the appeal is dismissed. On the merits of his appeal, the appellant's defence has little chance of success. Even if conditional leave to defend had been granted, this would not prevent an order for security from being made on the ground of the appellant's impecuniosity. The present notice of appeal was lodged in January 2000. It would appear that this was more than a year late. However, on a search of the court file, the appellant had earlier lodged with the court a notice of appeal in January 1999 and the present notice of appeal is the second one. It would appear that the 2nd notice of appeal was necessitated because there was a mix up as regards the first notice of appeal. The end result was that the first notice of appeal had not been dealt with in the sense that a date for hearing the appeal had not been fixed. Be that as it may, the first notice was also out of time. We do not think that the appellant's explanation before us today for the delay can be regarded as a reasonable excuse. We do not accept that explanation. As we said since there was evidence to conclude that he was impecunious and the chance of success in his appeal against Barnett J's judgment is slim, the question of delay is of little significance. Accordingly, we dismiss this appeal out of time with costs to the respondent.

 

 

 

Representation:

Mr Richard Leung, instructed by Messrs Holman, Fenwick and Willian for the plaintiff

Richard Liu & Co. Ltd. t/s Kayo Pacific Inc., is represented by Liu Zhen Huan, Richard

CACV000206/1998

1998, No. 206
(Civil)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

BETWEEN
	KAROCHEM INTERNATIONAL LIMITED	Plaintiff (Respondent)
	AND
	RICHARD LIU & CO. LTD, trading as KAYO PACIFIC INC.	Defendant (Appellant)

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Coram : Hon. Rogers, J.A. in Chambers

Date of hearing : 16 October 1998

Date of judgment : 16 October 1998

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D E C I S I O N

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Rogers, J.A. :

1. This is an application for security for costs in an appeal by Richard Liu & Co. Ltd, trading as Kayo Pacific Inc. from a decision under Order 14 of Barnett, J., who gave judgment for the Plaintiff.

2. There were two defences. First, the Defendant had not contracted directly with the Plaintiff and secondly, the commodity, which was supposed to be melamine but was not melamine, had, at some stage, been swapped. The Defendant said that it was not responsible. Having considered the matter, the Judge had no hesitation in giving judgment for the Plaintiff.

3. The application is made on the basis that the Defendant is impecunious. There is justification for alleging that because having attempted to enforce judgment by Garnishee Order on the Defendant's bank account nothing was recovered. As a result of that, the banking facilities with the Defendant's bank appear to have been withdrawn. The Defendant has not, throughout the proceedings, as far as I am aware, been able to afford legal representation despite the fact that it is a company. It was on the basis of impecuniosity, that it sought leave to be represented by its director.

4. In an effort to show that the Defendant has money, the Tax Demand Note issued on 18th November 1996 has been exhibited. This shows that having taken into account previous year's losses, a profit for the year 1995-96 of $308,951 was the figure which the Inland Revenue accepted. When I inquired as to where the assessment in respect of later years was, I was told that the accounts for the present year are with the auditors and as regards the year 1996-97, there was no profit shown and hence no tax.

5. Mr. Liu tells me that the Defendant anticipates being able to make substantial profits out of deals which are being made despite the fact that it is in a difficult position because the banking facilities have been withdrawn.

6. On the basis of this, I have no hesitation in saying that the Plaintiff has shown that the Defendant company is impecunious to the extent that the Plaintiff should be protected as to the costs.

7. As to the merits of the appeal, the only point that was argued was that the Defendant might not be responsible for the loss. It was said that the insurers should be the persons who should bear the loss since on the Defendant's argument melamine was shipped and the fact that salt and chalk was received at the other end, was no responsibility of the Defendant.

8. There are other documents in the case which would indicate that there may well have been difficulties with the manufacturers in the People's Republic of China. However, Mr. Liu says that his contemporaneous faxes to that effect saying that the manufacturers in China were under police investigation were factually wrong and incorrect.

9. It seems to me on the whole of the evidence that the best the Defendant could possibly hope for would be conditional leave to defend with a payment into Court of the full amount claimed. It seems to me that however would be an act of mercy, if it could be called mercy.

10. As regards the security for costs, I propose to order security for costs to be given in the sum of $130,000, the security to be given on or before 16th November 1998 by cash or banker's draft to be paid into Court or by the provision of a bank guarantee of the like amount which guarantee will have to be approved by the Registrar and until such payment is made or guarantee provided and notice of that is given to the Registrar and the solicitors for the Plaintiff, all proceedings in this appeal are to be stayed. In default of giving security within the time specified or any further time as this Court may allow and upon the Plaintiff's solicitors certifying the default to the Registrar, the appeal will be dismissed.

(Anthony Rogers)

Justice of Appeal

Representation:

Mr. Liu Zhen Huan, Richard, Appellant in person

Mr. Kenneth Ng instructed by M/s Holman Fenwick & Willan for Respondent