FEDERAL COURT OF AUSTRALIA

International Bunker Services K.K. v Ship “Hai Shi” [2013] FCA 524

THE COURT ORDERS THAT:

1.    Judgment for the plaintiff against the ship Hai Shi (IMO 9127485) and Yuan Sheng Shipping (SGP) Pte Ltd, jointly and severally, in the sum of USD664,485.73 including interest up to and including the date of judgment.

2.    The judgment sum in order 1 shall carry interest pursuant to s 52 of the Federal Court of Australia Act 1976 (Cth).

3.    The ship Hai Shi (IMO 9127485) and Yuan Sheng Shipping (SGP) Pte Ltd shall, jointly and severally, pay the plaintiff’s costs of these proceedings, as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

1    This is an application for judgment under r 5.23(2)(b) of the Federal Court Rules 2011 (Cth) against the defendant ship, Hai Shi, and the relevant person, Yuan Sheng Shipping (SGP) Pte Limited, based on the default of Yuan Sheng, as the relevant person, and or the defendant, in complying with an order made on 22 February 2013 that the defendant file and serve a defence by 26 March 2013.

The litigious context

2    The claim arises in the following way. The plaintiff, International Bunker Services K.K., commenced the proceedings by writ filed on 14 January 2013 seeking USD609,900 plus interest and costs in respect of bunkers supplied to the ship at Qingdao in China on 15 July 2012. The contract for the supply of bunkers was formed on 13 July 2013 when International Bunker emailed a revised order confirmation to Yang Sheng for the supply of about 950 metric tons of bunkers at USD642 per metric ton FOB. The email stated that the standard terms and conditions of International Bunker were applicable to the supply. Those terms provided in cl 7(b) that all outstanding payments were subject to interest accruing monthly as per the terms of the agreement or invoice, and accrued interest, costs and expenses incurred by International Bunker would be added at monthly intervals and become part of the outstanding sum. That is, interest would accrue and compound monthly.

3    On 20 July 2012, International Bunker issued Yuan Sheng with an invoice for USD609,900 in respect of the bunkers delivered. The invoice provided that payment was due on 13 August 2012 and that interest of 3% per month would apply. On 12 October 2012, Yuan Sheng paid USD60,000, and on 8 November 2012 Yuan Sheng paid a further USD50,000, reducing the original principal sum outstanding to USD499,000, excluding interest that might have accrued.

4    The marshal arrested Hai Shi on 14 January 2013. On 22 January 2013, Yuan Sheng entered an appearance as the relevant person, saying it was the owner of Hai Shi. That notice of appearance gave an address for service care of Pacific King Ship Management (HK) Co Ltd in Connaught Road, Hong Kong, together with an email address.

5    Negotiations occurred between International Bunker and Yuan Sheng that resulted in them entering into an agreement of acknowledgement of debt and payment plan. That agreement provided for International Bunker to agree to the release of Hai Shi from arrest by the Court. The agreement recited that the original debt included interest that compounded monthly at 3% per month calculated from 13 August 2012, based on the invoice and terms of contract set out above. The agreement acknowledged the partial payments made in the reduction of the debt. It then provided for the release of the ship and for Yang Sheng to make a number of payments of the balance of the outstanding debt, the first to occur on 15 February 2013 in the amount of USD200,000.

6    I am satisfied by the evidence of Nathan Cecil, the solicitor for International Bunker, that no payments had been made by or on behalf of the ship Hai Shi or Yuan Sheng since service of the statement of claim to reduce the debt beyond the amount presently claimed of USD499,000 plus interest.

7    I am also satisfied by the evidence of Yuen Chui Ho, a Hong Kong process server, that on 5 March 2013 he served three documents, the statement of claim, a copy of the orders made on 22 February 2013 and a letter addressed to Yuen Sheng, at both its address for service in Connaught Road, Hong Kong given in its notice of appearance and another copy of those documents on Yuan Sheng at an address in Queens Road, Hong Kong recorded as its principal place of business in its annual return of a non Hong Kong company filed in the Companies Registry of Hong Kong on 10 March 2012. Mr Cecil also emailed a copy of the statement of claim and the orders made on 22 February 2013 to the email address of Yuan Sheng given in the notice of appearance on 5 March 2013. It appears that that email was received by Yuan Sheng but no response resulted.

Consideration

8    Where an agreement provides that interest may be compounded, the Court can make an award that includes such a figure: s 51A(2)(b) of the Federal Court of Australia Act 1976 (Cth). The total interest due having regard to the two reductions made last year in the principal outstanding up to and including today, is USD164,583.73 based on the interest rate of 3% per month compounding as provided in the agreement. I am satisfied on the evidence before me, that the sum now claimed of US664,483.73 is due, comprising the outstanding unpaid debt and interest accrued pursuant to the agreements in the original contract and the more recent agreement entered into for the release of the ship from arrest.

Conclusion

9    For these reasons I will order that there be judgment for International Bunker against the ship Hai Shi and Yuan Sheng, jointly and severally, in the sum of USD664,485.73 including interest up to and including today together with costs.

Associate:

Dated:    28 May 2013