Federal Court Decisions

Date: 20040211

Docket: T-2269-03

Citation: 2004 FC 225

ADMIRALTY ACTION IN REM AND IN PERSONAM

BETWEEN:

                                           ASIAN EXPORTS INTERNATIONAL LTD.

                                                                                                                                                         Plaintiff

                                                                                 and

                                               ZIM ISREAL NAVIGATION CO., LTD.,

SHENZHEN HENG KAI TONG INDUSTRY CO., LTD.,

PAUL MANG,

AND THE OWNERS AND OTHERS INTERESTED IN

THE CARGO CONTAINER TOLU3800293

                                                                                                                                               Defendants

                                                            REASONS FOR ORDER

HARGRAVE P.

[1]                  The Plaintiff, Asian Exports International Ltd., paid for and received a receipt from the manufacturer, in China, for a container of bailed bed springs. However, either the manufacturer, Shenzhen Heng Kai Tong Industry Co., Ltd., who received the price of the bed springs, or Paul Mang, who perhaps brokered the transaction, refused to give the Plaintiff one of the bills of lading, for the container, for which it had paid. Thus the Plaintiff, which had commitments for the bed springs, could not obtain them, by presenting the bill of lading, when the container arrived in Vancouver.

[2]                  In this action counsel for the Plaintiff, exhibiting some enterprise, arrested the container and then posted a bank guarantee as security in order to obtain its release to the Plaintiff.

[3]                  While the Defendants were properly served, only Zim Israel Navigation Co., Ltd. (referred to as "Zim Israel") has appeared, in a timely manner or at all: I note that Zim Israel has filed a defence, which has some bearing on the present motion.

[4]                  By the present motion the Plaintiff seeks the return of the bank guarantee securing the release of the container. Zim Israel appeared on the motion, not to oppose the release of the security, but to seek a hold harmless agreement from the Plaintiff for, as counsel for Zim Israel pointed out, the container had been released to the Plaintiff, who is both a consignee and notified party under the non-negotiable bill of lading, without production of the bill of lading.

[5]                  In granting this motion to allow the return of security, a bank guarantee held by the Court, I considered the relief sought by the carrier, Zim Israel, a hold harmless agreement. A hold harmless agreement would provide Zim Israel with a measure of security in the event that other Defendants, or perhaps some other entity claimed, alleging wrongful delivery of the container without the production of a bill of lading. The suggestion here is that a court in some other jurisdiction might not take into account or recognize a Federal Court decision and the rights acquired, as would normally be done on the principle of comity between states. Counsel for Zim Israel acknowledges that the chances of this occurring are not great. I agree that there is perhaps some imaginable possibility of a claim against Zim Israel, because the principle of comity is not an absolute:

"Comity," in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws. Hilton v. Guyot, (1895) 159 U.S. 113, at 163-64

Mr Justice Gray went on, at pages 202 - 203, to point out that a matter should not be tried afresh, in another country, in that instance in the United States, after due citation of the defendant, merely upon the assertion that a judge of another court in another country was erroneous in law or in fact.

[6]                  A court should not fetter itself or circumscribe the substance of its decisions by looking over its shoulder to take into account a slim chance that a court of some other jurisdiction will not observe the comity concept of courtesy between courts. I say this notwithstanding Voss v. APL [2002] 2 Lloyd's Rep. 707 (Singapore Court of Appeal) and The Rafaela S [2003] 2 Lloyd's Rep. 114 (C.A.), which I understand is under appeal. The Court of Appeal, in The Rafaela S, touched on the Voss case and the need for delivery up of cargo against a bill of lading which, like the present bill of lading, was not negotiable. Certainly, in Voss, the Singapore Court of Appeal held that the cargo ought not to have been delivered without presentation of such a bill of lading. The Court of Appeal in The Rafaela S was not faced with an instance of delivery up of goods without a bill of lading, but did consider the point at length, in its consideration of the effect of a non-negotiable bill of lading and whether it fell within the Hague Rules as a sea bill of lading. However, essentially, what the Court of Appeal had to say was dictum.

[7]                  While counsel for Zim Israel quite properly and interestingly brought up these cases, they are distinguishable. Voss would certainly be on point if Zim Israel had succumbed to blandishments of the Plaintiff and had voluntarily delivered up the container of bed springs without receiving a bill of lading. In such an instance Zim Israel could well be liable for a claim of miss-delivery. However, in the present instance, all concerned had the opportunity to intervene. The Plaintiff presented unchallenged evidence that it had paid for the bed springs. Most important, delivery up by Zim Israel was not voluntary, but was by court order, as is the present return of security to the Plaintiff.

[8]                  Returning to the position of Zim Israel, it may well be in need of some provision of comfort in the order accompanying these reasons. Thus in the Order I have briefly set out relevant facts and have pointed out that the Order bars Shenzhen Heng Kai Tong Industry Co. Ltd. and Paul Mang from making any claim against Zim Israel, as to the container, including for non-delivery, miss-delivery or delivery without production of the non-negotiable bill of lading.

[9]                  I thank counsel for interesting submissions. It is appropriate that each side bears its own costs.

(Sgd.) "John A. Hargrave"

                                                                                               Prothonotary

Vancouver, British Columbia

11 February 2004

                                                                 FEDERAL COURT

                             NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                            T-2269-03

STYLE OF CAUSE:                        Asian Exports International Ltd. v. Zim Israel Navigation Co., Ltd. et al.

DATE OF HEARING:                      9 February 2004

REASONS FOR ORDER BY:     Hargrave P.

DATED:                                              11 February 2004

APPEARANCES:                          

                                         

SOLICITORS OF RECORD: