Moguntia-Est Epices SA v Sea-Hawk Freight Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 08 October 2003
• Date: 08 October 2003
• Docket Number: Suit No 8 of 2001 (Registrar's
• Court: High Court (Singapore)

Moguntia-Est Epices SA

Plaintiff

and

Sea-Hawk Freight Pte Ltd

Defendant

[2003] SGHC 231

Judith Prakash J

Suit No 8 of 2001 (Registrar's Appeal No 282 of 2003)

High Court

Civil Procedure–Discontinuance–Without leave–Application to reinstate discontinued action–Manner in which court should exercise discretion given by O 21 r 2 (8) of the Rules of Court (Cap 322, R 5, 1997 Rev Ed) to reinstate discontinued action

This action arose from the loss of certain cargo that PT Putrabali Adyamulia (“Putrabali”) had agreed to sell to the plaintiffs. The defendants, were the contractual carriers. The plaintiffs refused to pay for the cargo, so Putrabali commenced arbitration proceedings against them in London and obtained an award in its favour (“the arbitral award”). The plaintiffs appealed.

To preserve time, both Putrabali and the plaintiffs instituted proceedings against the defendants in the High Court of Singapore. The plaintiffs did so by filing a writ in this suit on 3 January 2001 but refrained from serving the writ on the defendants. This was to save costs while they awaited the outcome of their appeal against the arbitral award.

However, at a pre-trial conference on 7 February 2001, the plaintiffs were ordered to serve the writ by 21 March 2001. Service was duly effected on 20 March 2001. In their letter accompanying the writ, the plaintiffs' solicitors confirmed their agreement to “hold [their] respective hands in the proceedings pending settlement negotiations”.

On 10 April 2001, the plaintiffs' appeal against the arbitral award succeeded. No efforts were made to move this suit in Singapore forward.

On 20 February 2002, the defendants settled claims made against them by various other cargo owners on the advice that this action may have already been automatically discontinued by operation of law.

On 14 May 2003, the plaintiffs' solicitors informed the defendants' solicitors that the plaintiffs intended to reinstate the action. This was because Putrabali had successfully appealed to the English High Court against the arbitral award.

On 12 June 2003, the plaintiffs filed an application for this action to be reinstated pursuant to O 21 r 2 (8) of the Rules of Court. The assistant registrar dismissed their application. The plaintiffs appealed, arguing that exceptional circumstances existed which justified reinstatement.

Held, dismissing the appeal:

(1) The guidelines to be applied to an application under O 21 r 2 (8) were: (a) whether the plaintiff was innocent of any significant failure to conduct the case with expedition prior to the “trigger date”, ie the date of the last step in the action; (b) whether his failure to take any step in the action since the trigger date was excusable; and (c) whether the balance of justice indicated that the action should be reinstated: at [19].

(2) There was no merit in the plaintiffs' argument that there was an agreement for a moratorium after service. Even if the parties had the automatic discontinuance rule in mind on 20 March 2001, there was nothing in O 21 r 2 (8) to indicate that parties could suspend its operation by agreement: at [23].

(3) The plaintiffs' failure to serve the writ before 7 February 2001 was not a significant failure to conduct the case with expedition: at [25].

(4) The plaintiffs had not shown that their inaction before June 2003 was excusable. No explanation was offered for their failure to do anything before that time: at [26] to [29].

(5) The justice of the case was against reinstatement. The defendants were prejudiced since they had already settled the other claims against them. They would lose an accrued defence of time bar if the action was reinstated. There was also some doubt as to whether the plaintiffs did have title to sue the defendants, which meant that any action which the plaintiffs might bring against the defendants would be fatally flawed: at [30].

Bannister v SGB plc [1998] 1 WLR 1123; [1997] 4 All ER 129 (folld)

Rastin v British Steel plc [1994] 1 WLR 732; [1994] 2 All ER 641 (folld)

Rules of Court (Cap 322, R 5, 1997 Rev Ed) O 21 r2 (8) (consd);O 21 rr 2 (6), 2 (6B)

Michael Lai with Wendy Tan (Haq & Selvam) for the plaintiffs

Koh Kok Kwang (CTLC Law Corporation) for the defendants.

Judgment reserved.

Judith Prakash J

1 As it is well known, over the last decade, the courts of Singapore have adopted a proactive approach towards the conduct and control of litigation proceedings. The philosophy manifested in the case management practice we follow is that it is in the best interests of litigants, and the public at large who have an interest in the proper disposition of scarce judicial resources, if every case commenced in the courts is conducted expeditiously and efficiently. To that end, one of the steps adopted was the amendment of O 21 r 2 (6) of the Rules of the Supreme Court so as to provide for the automatic discontinuance of any action, cause or matter where no step has been taken by any party for more than one year. The Registrar's appeal before me involves a consideration of that rule and of the manner in which the court should exercise the power given to it by sub-r (8) to reinstate such action, cause or matter.

Background

2 On 27 January 2000, Sea-Hawk Freight Pte Ltd, the defendants in this action, issued two bills of lading, each acknowledging shipment of a container of white pepper on board the barge Intan 6 at Pankal Balam, Pangkal Pinang, Indonesia for carriage to Singapore. The barge was towed by the tug ASL Progress.En route the barge sank and the cargo was lost. The defendants were the contractual carriers but they were not the owners of the barge nor of the tug. The barge was owned by Sindo-Damai Marine Pte Ltd (“Sindo”) and the tug by Capitol Marine Pte Ltd (“Capitol”).

3 The barge sank on 1 February 2000. The cargo should have been delivered in Singapore in early February 2000. As the bills of lading were subject to the Hague Rules, any claim for loss of cargo against the defendants as contracting carriers had to be filed within one year from the date on which delivery should have been effected, ie by early February 2001.

4 There was some doubt after the barge sank as to the ownership of the cargo. It had been shipped by an Indonesian concern, PT Putrabali Adyamulia (“Putrabali”) who had agreed to sell the cargo to Moguntia-Est Epices SA, a French company and the plaintiffs herein. After the sinking the plaintiffs disputed their liability to pay for the cargo. Therefore, pursuant to the sale and purchase contract which followed a standard form issued by the International General Produce Association Ltd (“IGPA”), Putrabali commenced arbitration proceedings against the plaintiffs before the IGPA in London for the price of the cargo.

5 Putrabali preserved its position against the defendants by starting an admiralty action against them in this court on 25 August 2000. That action is Adm 414 of 2000. On 3 January 2001, the plaintiffs filed the writ in this action for a similar purpose. Some time before that date, Putrabali had obtained an award in its favour and the plaintiffs had been ordered to pay it the contract price of the cargo together with interest. The plaintiffs lodged an appeal against the award and it was while awaiting the hearing of the appeal that they started this action. The plaintiffs' action was based on the same two bills of lading as were relied on by Putrabali in Adm 414 of 2000.

6 The appeal came on for hearing on 30 January 2001. The plaintiffs argued that Putrabali was in breach of the shipment clause of the sale contract and/or that as buyers they had not been...