M-Power Development Pte Ltd v Goodway Agencies (Shipping) Pte Ltd

1. The plaintiffs, M-Power Development Pte Ltd (“M-Power”), who obtained judgment in default of appearance against the defendants, Goodway Agencies (Shipping) Pte Ltd (“Goodway”), appealed against the decision of the Assistant Registrar, who set aside the default judgment. I dismissed the appeal and now set out the reasons for my decision.

2. The facts in this case, shorn of details, are as follows. M-Power are the indorsees or holders of a combined transport bill of lading dated 29 December 2002 issued by VT Co Ltd (“VTC”), a freight forwarder in Vietnam, with respect to a shipment of 19 containers said to contain 457.0944 metric tonnes of Vietnamese white rice. The cargo was to be shipped from Ho Chi Minh City to Port Klang, Malaysia, on board the vessel, Konlink.

3. The parties named in the said bill of lading are as follows:

4. An ocean bill of lading dated 29 December 2002 was issued by Regional Container Lines at Ho Chih Minh City with respect to the cargo of rice. In this document, VTC were named as the shippers while Alfro were named the consignees and notify party.

5. In January 2003, M-Power wanted, for their own reasons, a switch bill of lading to be issued to replace VTC’s bill of lading to reflect two changes. First, the shipper’s name was to be changed from An Giang to M-Power. Secondly, the cargo was to be described as “Vietnam white rice 25% broken”. Goodway, who issued the switch bill of lading on 10 January 2003, contended that they did so as the Singapore agents of VTC. The original bill of lading was collected by Goodway from M-Power in exchange for the new document and the only fee charged by Goodway was a documentation fee of $100.

6. After the new bill of lading was issued, it was discovered that the cargo in question had already been released by Alfro to Northport on 8 January 2003 without requiring the presentation of bills of lading. Northport had managed to take delivery of the cargo by presenting a letter of indemnity to Alfro. The circumstances under which the cargo was misdelivered are not clear. According to Goodway, VTC did not authorise Alfro to release the cargo against a letter of indemnity issued by Northport and were unaware of the misdelivery.

7. After having not been compensated for the misdelivery of their cargo at Port Klang, M-Power demanded that Goodway pay for the loss of the said cargo. When Goodway refused to do so, M-Power instituted the present action to recover damages from the former. The writ of summons was served on Goodway on 12 March 2003. In their writ, M-Power pleaded as follows:

8. M-Power obtained judgment in default of appearance on 21 March 2003. Goodway claimed that this judgment was entered against them as a result of their ignorance. Their managing director, Mr Ng Teck Soon, explained the position as follows in paragraphs 37 and 38 of his affidavit filed on 25 April 2003.

9. On 16 May 2003, the Assistant Registrar set aside the default judgment. She ordered that Goodway be allowed to enter an appearance within 7 days and defend the action.

10. Goodway’s application to set aside the default judgment against them was made pursuant to O 13 r 8 of the Rules of Court, which provides as follows:

11. The principles which must be borne in mind when exercising the discretionary power under O 13 r 8 to set aside a default judgment have been considered by the courts on numerous occasions. In Abdul Gaffer v Chua Kwang Yong [1995] 1 SLR 484, 488, Chao Hick Tin J, as he then was, who delivered the judgement of the Court of Appeal, said:

12. At the start of the hearing of this appeal, counsel for M-Power made it clear that the appeal against the Assistant Registrar’s decision rests solely on the assertion that Goodway’s defence to his clients’ claim has no real prospect of success.

13. Goodway contended that they had a valid defence to M-Power’s claim as that they were not the carriers of the missing cargo of rice. They pointed out that they had merely acted as VTC’s agents in relation to the issuance of the switch bill of lading. Their managing director, Mr Ng, explained the position in paragraph 5 of his affidavit filed on 16 July 2003 in the following terms:

14. Goodway also pointed out that Alfro were not their agents and they did not instruct the latter to release the cargo to Northport. They asserted that as M-Power were suing, as owners of the cargo, for breach of the contract of carriage and/or for conversion, compensation should be claimed from the carriers or the persons who had converted their goods.

15. M-Power asserted that there was nothing in Goodway’s bill of lading that showed that they were acting as VTC’s agents. They added that as they had a document of title to the cargo of rice, they were entitled to claim damages from Goodway for the misdelivery of their cargo of rice. It is trite law that a bill of lading is a document of title which, in the hands of the rightful owner, is a key that is intended to unlock the door to the floating or fixed warehouse in which the goods in respect of which it was issued may chance to be (per Bowen LJ in Sanders v Maclean & Co (1883) 11 QBD 327, 341). However, the question in this case is not whether or not M-Power may rely on a bill of lading as a document of title. Instead, it is whether or not M-Power has sued the right party, namely the party who issued the bill of lading. Surely, this is a matter that must, in the circumstances of this case, be considered at a trial.

16. Taking all circumstances into account, the Assistant Registrar’s decision to set aside the default judgment cannot be faulted. As such, I dismissed M-Power’s appeal with costs.