Classic Maritime Inc. v Limbungan Makmur Sdn Bhd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Butcher |
| Judgment Date | 11 March 2020 |
| Neutral Citation | [2020] EWHC 619 (Comm) |
| Date | 11 March 2020 |
| Docket Number | Claim No. CL-2018-000352 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 619 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC2A 1NL
Mr Justice Butcher
Claim No. CL-2018-000352
Richard Southern QC and Andrew Pearson (Instructed by Winter Scott LLP) appeared on behalf of the Claimant
The Defendants did not appear and were not represented
Wednesday, 11 March 2020
Introduction
This has been the trial of a claim for damages made by the Claimant, Classic Maritime Inc, in respect of unperformed shipments under a contract of affreightment. The claim is brought against the First Defendant, Limbungan Makmur Sendirian Berhad, which I will refer to as Limbungan, as the charterer under the COA, and against the Second Defendant, Lion Diversified Holdings Berhad, to which I will refer as Lion Diversified, as guarantor of Limbungan's performance under the COA.
No separate defences have been put forward under the guarantee, and the only issue concerning Lion Diversified is whether Limbungan is in breach of contract.
Only the Claimant, to which I will refer as Classic, has appeared or been represented at this trial.
Both the Defendants are Malaysian companies. On 15 October 2019, the Malaysian court ordered that Lion Diversified be wound up pursuant to the provisions of the Companies Act 2016 of Malaysia. The liquidator of Lion Diversified has not accepted Classic's claim in this action.
Hill Dickinson LLP, who had represented both Defendants, continued to do so after the liquidator was appointed. They served factual and expert evidence, and experts in both the disciplines of iron ore trading and chartering met and agreed joint memoranda.
Hill Dickinson LLP came off the record on 25 January 2020. No solicitors have been appointed to replace them.
On 26 February 2020, the liquidator of Lion Diversified applied for recognition of the insolvency proceedings in Malaysia as a foreign main proceeding in accordance with the UNCITRAL Model Law on Cross-Border Insolvency as set out in Schedule 1 to the Cross-Border Insolvency Regulations 2006.
On 27 February 2020, Insolvency and Companies Court Judge Burton, sitting on the Insolvency and Companies list of the Business and Property Courts of England and Wales, granted that application and also ordered that the commencement or continuation of individual actions or proceedings concerning Lion Diversified's assets, rights, obligations or liabilities were stayed.
That stay was, however, expressly and at the instigation of Classic, made subject to an exception in relation to this action. The order of ICC Judge Burton provided that Lion Diversified should have liberty to apply to the trial judge in this action for the stay to apply to it, but no such application has been made to me.
The action has accordingly proceeded but, as I have said, with only one side participating at the trial. It is necessary, accordingly, to say something about the shape that the hearing has taken.
Guidance as to what is or may be required in circumstances such as these is provided by the decision of the Court of Appeal in Clarke v Lighting & Lamps UK Limited [2016] EWCA Civ 5, especially at paragraphs 37 to 42 per Vos LJ. Omitting material which is specific to the case which was then being considered, the following is helpful guidance:
“ 37. […] It is important to understand that there will not be a “one size fits all” approach to the steps that a judge should take in this situation; different cases will demand different approaches. Here, however, the judge started by suggesting that the appropriate course was to strike out the defence and counterclaim […]
38. […] That having happened, the judge had to determine what was necessary for her to decide the trial in the absence of any defence or counterclaim […]
39. […] [the Defendant] does not submit that the judge should have gone through the charade of requiring the claimants to call their witnesses when there was nobody present to challenge their evidence. I see no reason why that could have been needed to be done in this case […]
40. I can quite see that in some cases the particulars of claim or the witness statements might raise inconsistencies that the judge feels it necessary to clarify by the calling of one or more witnesses to give oral evidence, but no such suggestion has been made in this case. Here, the claim was straightforward and the judge understood what it was […]
41. As a matter of principle, the court is perfectly entitled to dispense with the calling of oral evidence under CPR Parts 32.2(2)(b) and 32.5(1)(b) where witness statements have been served. The court does not have to follow a pointless procedure in an undefended claim. If it were otherwise, undefended cases up and down the country would be delayed and subjected to inappropriate scrutiny when there was no defence raised and no substantive argument about the claimants' entitlement.
42. In this case the claimants had to prove their case. They did so by presenting both their statement of case verified by a statement of truth, and also their witness statements. There was no need for the judge to require the witnesses to be called.”
It is also relevant to note what was said in the case of Williams v Hinton [2011] EWCA Civ 1123 about a case in which witness statements were served by a party but not put in under CEA notices and where the witnesses were not called.
At paragraphs 42 to 46 Gross LJ said this:
“42. As will be recollected, Ground II involves the complaint that, having decided to hear the case in the Appellants' absence, the Judge failed to ensure that the Appellants' evidence and case was fully considered. In my judgment, this Ground lacks substance and I would dismiss it for the reasons which follow.
43. First and by way of starting point, the appellants' witness statements did not constitute “evidence”. CPR r.32.5 provides as follows:
“Use at trial of witness statements which have been served
32.5–
(1) If—
(a) a party has served a witness statement; and
(b) he wishes to rely at trial on the evidence of the witness who made the statement,
he must call the witness to give oral evidence unless the court orders otherwise or he puts in the statement as hearsay evidence.
…
(5) If a party who has served a witness statement does not—
(a) call the witness to give evidence at trial; or
(b) put the witness statement in as hearsay evidence, any other party may put the witness statement in as hearsay evidence.”
As it seems to me, this provision is clear. The appellants did not attend the trial. They neither called the witnesses who had given statements nor did they put in those statements as hearsay evidence. The respondents could have adduced the appellants' witness statements as evidence but wholly understandably did not do so. Those witness statements thus never became evidence at the trial.
44. Secondly, the Judge was obliged and only obliged to consider evidence. In fact, the Judge did consider the appellants' witness statements (at [12]). It follows that the Judge did more than he was obliged to do; the basis for this complaint by the appellants thus disappears. There is no duty in our adversarial system to adopt a “wider approach” as Mr Mason at one point suggested.
45. Thirdly and in any event, there is no reason to doubt what the Judge said at [12] of the judgment. Thus, on any view of the status of the appellants' witness statements and the scope of the Judge's duty to consider materials before him, he had considered those witness statements. There is no requirement on a Judge to set out in any particular manner or at length his views on the evidence of a party who has not attended the hearing. Still less does the fact of a succinct reference to such evidence (a fortiori if it is not “evidence” at all) serve to found a ground of appeal.
46. Fourthly, nothing in art.6.1 ECHR or Van de Hurk (supra) at [59] begins to suggest otherwise. What is fair depends, inevitably, on all the circumstances. Here the Judge paid more than adequate regard to the “submissions, arguments and evidence adduced by the parties”: Van de Hurk, loc cit. The point requires no further elaboration.”
In the present case, Classic has served CEA notices in respect of its factual witness statement and expert reports. The Defendants have served no CEA notices and have called no witnesses. In the circumstances, the witness statement of Mr Lu of 17 October 2019 is not evidence in the case and nor are the reports from the experts which were served by the Defendants. I have, however, read all that material.
Given that there would be no one to cross-examine them and given that I did not consider that there were questions which I needed to put to them myself, I indicated that I did not require Classic to call their factual and expert witnesses to give oral evidence.
I was addressed over two days by Mr Southern QC for Classic. He assured me that he and junior counsel for Classic had had in mind and been guided by the observations of HHJ Waksman QC, as he then was, in CMOC Sales & Marketing Limited v Persons Unknown [2018] EWHC 2230 Comm as to their obligations in the presentation of the case in the absence of participation by the Defendants at the trial.
Factual background and the previous action
This is not the first time that a dispute relating to the COA at issue here has come before these courts. A previous action involved seven unperformed shipments that should have been performed under the COA between July 2015 and June 2016. The trial was heard by Teare J in July 2018. His judgment is dated 13 September 2018.
That...
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