Morpol SA v Blue Anchor Line
Court of First Instance
Admiralty Action No. 150 of 2014
Godfrey Lam J in Chambers
22 May 2017

Jurisdiction – District Court – characterisation of claims in bailment – transfer of admiralty action from High Court to District Court – nature of discretion involved when transfer of action from High Court to District Court sought

Ps, being the shippers, consignees, sellers and subrogated insurers of the cargo, brought an action in the High Court against Ds, said to be carriers under the bills of lading and bailees for reward of the cargo, to recover the loss said to have been occasioned by Ds having negligently damaged the cargo. Such loss was particularised to total approximately HK$629,000, and therefore came within the monetary limit of the District Court’s jurisdiction of HK$1 million. Ds applied for the transfer of the action to the District Court. Such transfer was opposed by Ps. They contended that: (a) the District Court had no admiralty jurisdiction and no jurisdiction over claims in bailment; (b) they had an absolute right to proceed with the action in the High Court by virtue of s. 12B of the High Court Ordinance (Cap. 4) (the “HCO”), which right could not or should not be frustrated by a transfer; and (c) in any event, the High Court should exercise its discretion not to order a transfer.

Held, ordering a transfer of the action to the District Court, that:

  • Provided the matters fell within the jurisdiction conferred by the District Court Ordinance, the District Court had jurisdiction over matters that fell within the admiralty jurisdiction of the Court of First Instance, for the legislation conferring admiralty jurisdiction on the High Court did not confer such jurisdiction exclusively on the High Court. Even on the footing that Ps’ claim included a claim in bailment, it would nevertheless fall within the legislation conferring jurisdiction on the District Court. A claim in bailment should, depending on the facts, be characterised as either a claim founded on contract or a claim founded on tort rather than as being sui generis. A claim in bailment therefore came within the words “any action founded on contract, quasi-contract or tort” in s. 32(1) of the District Court Ordinance (Cap. 336) (the “DCO”).
  • Section 12B of the HCO was concerned with the mode of exercise of the admiralty jurisdiction, particularly whether an action might be brought in personam or in rem and, if in rem, against what ship and property. It did not confer the absolute right contended for by Ps, and it does not detract from the provisions on transfer of proceedings in s. 43 of the DCO.
  • While the power to transfer was discretionary by virtue of the word “may” in s. 43(1) of the DCO, s. 43(3) makes it clear that the High Court was required to order a transfer unless the case ought to remain in the High Court “by reason of the importance or complexity of any issue arising” or “for any other reason”. The burden was on Ps to demonstrate that the case positively ought to so remain. The issues on the Hague-Visby Rules in the present case were not so important or complex as to show that the case ought to remain in the High Court. Nor was the existence of the Admiralty List with a specific judge in charge of it a reason for retaining the case in the High Court.

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