YANG MING MARINE TRANSPORT CORPORATION AND ANOTHER v. SHING LEE ENGINEERING CONTAINER CO LTD AND OTHERS

YANG MING MARINE TRANSPORT CORPORATION AND ANOTHER v. SHING LEE ENGINEERING CONTAINER CO LTD AND OTHERS

Court found on balance that the letters of indemnity were signed by the 1st Defendant as agent for the 2nd Defendant but without disclosing the principal to the Plaintiffs; under law of undisclosed principal both agent and principal are liable to the contracting third party; the letters were in favour only of the 1st Plaintiff so only the 1st Plaintiff suffered recoverable loss; there was no conversion because possession was obtained with plaintiffs' consent; damages equal the settled sum US$253,655.50 plus interest and costs.

Citation
YANG MING MARINE TRANSPORT CORPORATION AND ANOTHER v. SHING LEE ENGINEERING CONTAINER CO LTD AND OTHERS
Parties
1st Plaintiff: YANG MING MARINE TRANSPORT CORPORATION; 2nd Plaintiff: YANG MING LINE (HONG KONG) LIMITED; 1st Defendant: SHING LEE ENGINEERING CONTAINER COMPANY LIMITED; 2nd Defendant / Third Party: STRONGER (H.K.) TRADE LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 August 2009
Case Number
HCA208/2008
Procedural Posture
Civil Shipping/contract and Tort (indemnity and Conversion) / Trial Judgment (court of First Instance)
Outcome
Judgment for 1st Plaintiff against 1st and 2nd Defendants joint and several for US$253,655.50; 2nd Plaintiff's claim dismissed; Third Party proceedings treated as not pursued and dismissed.
Legal Topics
Letter of Indemnity, Undisclosed Principal, Conversion, Settlement
Source Language
EN
Shipping Law Agency Contract Law Tort (conversion) Letter of Indemnity Undisclosed Principal Conversion Settlement

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Parties

YANG MING MARINE TRANSPORT CORPORATION

1st Plaintiff

YANG MING LINE (HONG KONG) LIMITED

2nd Plaintiff

SHING LEE ENGINEERING CONTAINER COMPANY LIMITED

1st Defendant

STRONGER (H.K.) TRADE LIMITED

2nd Defendant / Third Party

Procedural Posture

Civil Shipping/contract and Tort (indemnity and Conversion) / Trial Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the letters of indemnity were issued by the 1st Defendant as agent for the 2nd Defendant
  2. 2 Whether the Plaintiffs knew of any agency relationship (i.e. whether the principal was disclosed)
  3. 3 Whether the 1st and/or 2nd Defendant are liable under the letters of indemnity

Ratio Decidendi

Court found on balance that the letters of indemnity were signed by the 1st Defendant as agent for the 2nd Defendant but without disclosing the principal to the Plaintiffs; under law of undisclosed principal both agent and principal are liable to the contracting third party; the letters were in favour only of the 1st Plaintiff so only the 1st Plaintiff suffered recoverable loss; there was no conversion because possession was obtained with plaintiffs' consent; damages equal the settled sum US$253,655.50 plus interest and costs.

Court Disposition

Judgment for 1st Plaintiff against 1st and 2nd Defendants joint and several for US$253,655.50; 2nd Plaintiff's claim dismissed; Third Party proceedings treated as not pursued and dismissed.

Orders

  • 1st and 2nd Defendants to pay 1st Plaintiff US$253,655.50
  • Interest on the sum at 1% above the Hongkong and Shanghai Bank prime rate from 8 July 2008 until today and thereafter at judgment rate until payment